After a major boom in the 2000s, the construction of large-scale condominium towers in Nashville has ground to a halt, with some in the industry predicting no such structures will be built for at least five years.
But developers of multiunit apartment buildings targeting urban districts are bullish on the city. In fact, Nashville is poised this decade for the construction a significant number — and what might be a record once the 10-year period concludes — of apartment buildings with 150 or more units in the urban core.
To date, four privately developed projects and one public venture (the Metro Development and Housing Agency is about to open the 109-unit Nance Place on Rolling Mill Hill) are either under way or slated to start construction soon. The outcome will be 1,119 for-rent units, none of which will be more than three miles from the city’s Central Business District. Two of the four are mixed-use developers, and out-of-town developers are handling each.
Already under construction is Vista Germantown, a 242-unit building anchoring Jefferson Street between Fifth and Sixth avenues north. The building will feature a commercial space that Richmond Heights, Ohio-based developer Associated Estates Realty Corp. said is slated for a restaurant/lounge.
“People want to live near where they work or go to school,” Jason Friedman, AER vice president of construction and development, said. He declined to identify the owner of the planned restaurant but noted a June announcement. “They also want to be near the action. People want efficiencies, and to be near restaurants and shopping.”
Originally, Franklin-based Bristol Development Group conceived Vista Germantown, announcing the project in 2008. But Bristol sold its development rights to AER while keeping a minority interest in the project, ground for which was broken in October 2010.
Bristol got the decade started with large-scale apartment buildings infilling the city’s core when its 1700 Midtown opened in January 2010. The 170-unit building is 94 percent leased, according to the management office. At the time it was proposed, the focus was on multiunit condo buildings. Now Nashville has an excess of condos, some of which — including those on Rolling Mill Hill and Velocity in The Gulch — have since seen their units converted to for-rent apartments.
Franklin-based Southern Land Co. is part of the trend, as it prepares to break ground in July on what is currently being called 2300 Elliston Place (a new name is forthcoming). Shopping, dining, Vanderbilt University and various medical offices will surround the 331-unit building.
Southern Land created 2300 Elliston Place LLC and paid $10.65 million for the 2.71-acre site, with JP Morgan Chase serving as its equity partner in the deal. In addition to the apartments, the 348,000-square-foot, six-story development will include about 14,000 square feet of restaurant and retail space, and is aiming for Silver LEED (Leadership in Energy and Environmental Design) certification.
Michael McNally, vice president of multifamily development at Southern Land, said Nashville’s central core is primed for large-scale apartment buildings. He said out-of-town apartment developers are bullish on Nashville, recognizing urban districts within the city — including Five Points, Germantown, The Gulch, Midtown and SoBro.
“Nashville is obviously an attractive market right now with five or six deals currently out there,” McNally said. “I think each will be different depending on their location in the submarket and degree of mixed-use components.
The four developers entering the Nashville market are known for suburban work. Their willingness to enter an urban market is telling.
The two most recently announced projects include the 302-unit, two-building Eleven North in The Gulch (preliminary work on which is under way) and West End Village, a 244-unit building to front West End Park’s Long Boulevard near 31st Avenue North. Work on that project is slated to begin by July.
Atlanta-based TriBridge Residential is developing Eleven North, while fellow Georgia developer The Residential Group of Atlanta will oversee West End Village.
AER’s Friedman said his company “got ahead of the rush” in what could end up being a trend for Nashville.
“We found a great location and a great opportunity,” he said. “And while we don’t think we can replicate a Germantown, we are always looking for new opportunities.”