Nesting In Nashville Real Estate Blog

Tony Giarratana discusses the future of downtown Nashville living.

Is the Nashville downtown condo market — like the proverbial glass — half-empty or half-full? As they say, it’s all about perspective. And the same facts can be used to illustrate two very different points of view.

I was reminded of this after reading The Tennessean’s Jan. 20 article on the supposed cooling of condo sales. The Tennessean used current data to paint a picture of a half-empty, anxiety-ridden market.

Yet anyone who has closely followed the emergence of urban living in Nashville’s Central Business District, especially over the past three years, realizes that the facts tell a much different story.

Before 2004, there were only 10 condo units in the Central Business District. For a metropolitan area with a population of more than 1 million, our city was far behind the rest of the nation in providing urban living. Demand was not the culprit; residential development was prohibited in the central core 1963-93. But then-Mayor Phil Bredesen, with the support of then-Metro Development and Housing Agency Director Gerald Nicely, changed zoning laws in 1993 to permit residential. Bredesen’s successor, Mayor Bill Purcell, and current MDHA chief Phil Ryan then dared to envision downtown as a vibrant urban neighborhood, improving infrastructure and providing incentives to make that vision a reality.

Pent-up demand
Fast forward to today. The Tennessean chooses to see 300 urban units still unsold of the 1,000 new condos scattered among six new developments throughout downtown. We see that 70 percent of those same 1,000 units opening this year have been pre-sold. We also see that the high-rise Viridian is an overwhelming success. In fact, the 49 Viridian buyers who have elected to resell their units pocketed more than $2.8 million in gains.

We see a downtown neighborhood with plenty of room to expand even with 1,000 units entering the market. Consider that Memphis has more than 10,000 condo units downtown, Charlotte more than 7,000, and Indianapolis more than 15,000.

The initial “condo frenzy” The Tennessean referred to was far from a “grand experiment” — it was a thoughtful response to a superb vision and long-pent-up demand. The Tennessean declares the frenzy has cooled, but downtown developers understand that the market is still in its infancy and will have growing pains. The demand for urban living remains strong, our supply is still far behind the rest of the country, and the more deliberate sales pace we see now — even in an economic downturn — is a natural process of the market absorbing the new product.

Developers also know that more urban condos are surely coming. Demographers project Middle Tennessee’s population will reach 2 million by 2020, and many new residents will be moving from areas where urban living is the standard. From our perspective, these facts ensure that we are nowhere near the end of an urban living journey that began only a few years ago.

Indeed, the Nashville condo market is more than half-full. The cranes you see operating all over downtown Nashville signal a revitalization led by urban residential development and followed by the glorious new Schermerhorn Symphony Center and two new class A office buildings. Plans are now on the drawing board for a nearly $1 billion new hotel and convention center with crucial support from new Mayor Karl Dean.

No matter your perspective, this is all great news for the continued economic vitality of downtown Nashville. As new businesses and new residents continue to relocate to our thriving, growing city, the glass that is urban living will not only continue to fill, but grow larger.