NASHVILLE DOWNTOWN PARTNERSHIP 150 4th Avenue North, G-150 Nashville, Tennessee 37219 615-743-3090 www.nashvilledowntown.com

RESIDENTIAL REPORT: JULY 2015 Pent-up demand yields rising rents & prices while residential projects slowly deliver in downtown Nashville Unprecedented demand for downtown housing product continues to yield increased rental rates and condo prices. Rental occupancy has remained at 97% and above for the fourth consecutive year. Housing prices have significantly increased over the past 24 months, while inventory has decreased to only a 1.2 month supply of resale units (down from a 2-month supply in 2014). While product delivery is imminent over the next three years, demand for rental product continues to grow. Demand for purchase product will have little relief unless existing or under construction projects convert. Existing demand combined with area job growth and increasing preferences for urban living options will sustain demand for housing in the downtown area for the immediate future. Nashville Housing Market: The Greater Nashville Association of Realtors mid-year report states that sales in June, second quarter and year-to-date are all up compared to the same time period in 2014. June sales are up 14.4% and mid-year sales are up 12.2%. Sales pending toward the end of June reveal that home sales are positioned to increase again in July. “It has been a decade since our area has experienced as strong a month of June as we did this year. The continued growth with jobs, the economy and consumer confidence indicates we can expect this trend to remain.”1 Nashville is ranked #1 on a list of cities whose housing markets have had the strongest recoveries following the Great Recession, according to data from the Federal Housing Finance Agency and the National Association of Realtors.2 The city’s housing market is also touted as the “third-hottest in the U.S.” according to a new report from Auction.com that looked at a variety of indicators for the 49 largest U.S. cities including growth in each city’s overall economy and population and growth in home prices.3 Greater Nashville Association of Realtors, “Greater Nashville Home Sales Gain Through Mid-Year,” July 6, 2015 https://smartasset.com/mortgage/cities-strongest-housing-recoveries, April 22, 2015 3 http://www.auction.com/blog/wp-content/uploads/2015/04/Top-Housing-Markets-Spring-2015.pdf 1 2

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE A study conducted by Forbes.com listed Nashville as one of the fastest growing cities in America with rankings based on factors such as estimated population growth, year-overyear job growth, gross metro product growth, federal unemployment rate and median annual pay for college educated workers for America’s 100 most popular MSAs.4 In addition to having a burgeoning housing market and rapid growth, Nashville is nationally acclaimed in a variety of other areas, advancing its competitiveness. Nashville was recently ranked in the “Top Ten Cities for Creatives,” out of 176 of the largest cities in the country. Rankings were based on the cost of living and the concentration of people working in a creative field.5 This summer Nashville was also ranked #9 on a list of best “upand-coming cities for tech jobs,” by ZipRecruiter.6 Also, a study by Dice.com, reported by Fortune, rated Nashville as the country’s second fastest-growing market for creating tech jobs.7 For the fifth year in a row, POLICOM, an independent research firm that analyzes local and state economies, has ranked Nashville as one of the top ten (#7) strongest economies out of 381 U.S. Metropolitan Statistical Areas (MSAs) on factors such as per capita income and wage growth.8 Men’s Journal ranked Nashville as #2 on the list of top 10 cities to live now due to quality of life, construction boom, thriving tech scene and affordability.9 According to 2Q data released by Axiometrics and reported by Reuters, Nashville continues to exceed the national average for rental growth, annual effective rent growth and occupancy. The national annual effective rent growth is 5% and occupancy is 95.2%. Currently Nashville’s annual effective rent growth is 6.1% and the region’s occupancy rate is 95.9%.10

4 http://www.forbes.com/sites/erincarlyle/2015/01/27/americas-fastest-growing-cities-2015/ 5 https://smartasset.com/mortgage/the-top-ten-cities-for-creatives,

July 7, 2015 Business Journal, “Congrats, Nashville techies: You’re helping build an “up and coming’ tech scene,” July 2, 2015 7 http://fortune.com/2014/12/23/tech-job-trends-2015/ 8 POLICOM Corporation, Economic Strength Rankings, June 2015 9http://www.mensjournal.com/expert-advice/the-10-best-places-to-live-now-20150312/nashville-tennessee 10 Reuters, “Apartment Market Strength Continues in Second Quarter with 5% Annual Effective Rent Growth and 95.2% Occupancy,” July 1, 2015 6 Nashville

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE Peer City Comparison Downtown Nashville’s population and residential units continue to trail peer cities with over 8,600 residents and 5,096 units by the end of 2015. Lack of residential zoning until the mid-1990’s put downtown Nashville behind in urban residential development. Figure 1 Year End Projections– Downtown Residents*

Nashville Austin Charlotte Indianapolis Memphis

2014 7,840 10,741 11,842 23,758 24,300

2015 8,663 13,536 12,600 24,994 24,367

2016 10,254 13,851 14,089 NA 25,402

Figure 2 Year End Projections–Downtown Housing Units*

Nashville Austin Charlotte Indianapolis Memphis

2014 4,612 6,754 7,690 14,306 14,500

2015 5,096 8,668 8,182 15,189 14,548

2016 6,032 8,884 9,155 NA 15,238

In 2014, downtown Nashville’s downtown population grew 6% which was higher than its peer cities. By year-end 2015, Austin is estimated to lead peer city population growth at 26%, followed by Nashville at 10.5% Charlotte ranks at 6.4% growth followed by 4% in both Indianapolis and Memphis. Housing units and residents are both expected to increase 18% in downtown Nashville from year-end 2015 to year-end 2016. Austin expects to slow down to only 2% growth in both housing and residents while Charlotte trails Nashville at 11.8% growth. Peer city downtown land area comparisons show that Nashville, Austin and Charlotte are the most comparable. Figure 3 Rental Occupancy Rate*

2015 97% 93% 96.3% 95.4% 93%

Nashville Austin Charlotte Indianapolis Memphis Figure 4 Land Area Comparisons*

Nashville Austin Charlotte Indianapolis Memphis

Square Miles 1.8 1 2 6.5 6.5

Acres 1,180 640 1,300 4,160 4,160

Density per Acre 7.3 21 9.7 5.8 5.8

*Information provided by Downtown Austin Alliance, Charlotte City Center, Indianapolis Downtown Inc. and Downtown Memphis Commission (June 2015)

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE Downtown Nashville’s rental occupancy is 97%, and has remained above 95% for the past six years. (fig. 6) It also has consistently held higher rental occupancy rates than its peer cities. A survey of property managers conducted in June 2015 evaluated over 2,300 units in 27 properties. Sixteen of the properties are 100% occupied and several have waiting lists. James Robertson Apartments sold earlier this year and its 123 rental units have been taken out of inventory. Also, three rental units at the Berger Building were rehabbed into office space. This occupancy rate also does not include for-sale properties that have been rented out by their owners. Downtown Housing Categories Currently there are 4,902 downtown residential units of which 47% are rental, 49% are condo and 4% are single family units. Market rate housing constitutes 95% and affordable 5% of the housing mix, dropping three percentage points from 2014 due to the closing of the James Robertson Apartments. From 2000 through 2014, downtown has seen 300% population growth. (fig. 5) This is 13 times the percentage growth of the Nashville MSA, 18 times of Nashville, and over 20 times that of the State of Tennessee during the same time period. Figure 5 – Population Growth Comparisons

Population Growth Downtown Nashville Nashville MSA Tennessee

2000 1,960 569,891 1,453,577 5,689,283

2014 7,840 668,347 1,792,649 6,549,352

% Growth 300% 17% 23% 15%

Source: Nashville Downtown Partnership 2015, US Census Bureau 2014

Rental Market The 2,305 rental units within 27 properties in downtown Nashville make up 47% of the current downtown housing mix. Currently, there are there are six rental projects under construction and nine additional rental projects planned/announced that could deliver 4,204 units by 2018. If all planned projects are realized, the total number of rental units’ downtown would rise to 6,509, increasing rental product to 71% of the downtown housing mix. Downtown apartments have had some of the highest occupancy rental rates in the Greater Nashville area since 2007. Currently, downtown has an occupancy rate of 97%, and has been over 95% since 2010 even with the addition of new rental product entering the market. Occupancy rates remained at 92% or above even through the economic downturn (fig. 6). According to the May 2015 survey of property managers, the downtown core is effectively full at 99%, Rolling Mill Hill is 96%, Rutledge Hill/SoBro is 100% and The Gulch is 95% occupied. Figure 6 – Downtown Nashville Rental Occupancy Comparisons

Rental Occupancy Rate– Year 2007 2008 2009 2010 2011 2012 2013 2014 2015

Downtown 95% 93% 92% 95% 96% 98% 98% 98% 97%

Greater Nashville 94.84% 90.60% 90.20% 92.54% 93.36% 95.41% 95.16% 95.93% 94.95%

Source: 1Q 2015 Greater Nashville Apartment Association Market Study, NDP Property Manager Survey May 2015

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE In addition to the high downtown rental occupancy rate, the shadow market units (i.e. individual-owned units within condominium properties) continue to rent at increasing rates. At least 430+ additional condo units are leased. Most condominium properties have capped percentages for rental units and strict monitoring by property management aids in identifying this number. The popularity of Short-Term Rental Properties (STRP) has surged downtown in the past 24 months, prompting the City of Nashville to pass Ordinance No. BL2014-951 and Ordinance No. BL2014-909 to regulate this practice through a permit process. Nashville’s rising popularity coupled with a shortage of hotel rooms and growing interest in unique travel stays and amenities have created the perfect storm for the conversion of many downtown units to STRP. A STRP is “defined as a residential dwelling unit, containing not more than four sleeping rooms and that is used and / or advertised for transient occupancy.”11 The law applies to all properties (including rooms and guest houses) that are rented for less than 30 consecutive days to the same occupant. According to the Metro Nashville Codes Department, as of July 1, 2015, 75 permits have been issued for units downtown. Although difficult to track, it is more likely that STRP are conversions from rental units than from owner-occupied condos due to strict homeowner’s association rules and lack of provisions for this type of use in Master Deeds for large residential properties. Apartment rents increased over the past 36 months across the studio, one-, and two-bedroom categories. The three-bedroom rent decreased on the high end due to a single rental unit converted to a private residence, thus taken out of the mix. In the past 12 months, rents on the high-end increased 46% for studios, 10% for one-bedroom, and 6% for two-bedroom units. (fig. 7) Figure 7 – Downtown Nashville Market Rate Rental Comparisons

Rental Market SIZE

2012 419 - 4,500 SF

2013 419 - 4,500 SF

2014 419 - 4,500 SF

2015 419 – 2,059

$570 - $1,300 $670 - $1,700 $822 - $2,700 $1,400 - $4,000

$590 - $1,300 $700 - $1,899 $858 - $2,799 $1,400 - $4,000

$630 - $1,300 $730 - $2,000 $878 - $3,114 $1,400 - $4,000

$630 - $1,900 $730 - $2,200 $878 - $3,300 $1,400 - $3,200

MARKET RATE CATEGORY

Studio 1 bedroom 2 bedroom 3 bedroom

According to a survey of property managers and leasing agents in downtown rental properties, the units that yield the highest square foot prices are the studios ranging from 419 – 600 SF in newer rental properties that are walkable to restaurants and amenities. Some studio properties in The Gulch rent between $3 and $3.48 per square foot. There are 255 affordable rental units in four properties that make up 11% of the rental market and 5% of the overall downtown housing market. (fig. 8) The previously affordable property James Robertson Apartments was purchased in late 2014, taking 123 affordable rental units out of inventory.

11Nashville,

Tennessee, Municipal Code BL2014-951

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE Figure 8 – Downtown Nashville Affordable Rental Comparisons

Rental Market

2015 500 - 1,554 SF

SIZE AFFORDABLE CATEGORY

Studio 1 bedroom 2 bedroom 3 bedroom

$618 - $651 $658 - $693 $827 $905 - $953

Condominium Market Downtown Nashville currently has 2,384 condo units within 40 properties. Condominiums make up 49% of downtown housing. Twelve Twelve, the first condo project downtown since Terrazzo in 2009, began delivering units in late 2014, and is currently 71% sold. Research in early July indicates that there are only 40 re-sale units available to purchase across downtown (15 under contract) which results in a 1.2 month supply, the lowest level seen in the downtown market. An assessment of four downtown high-rise properties shows that price per square foot of condos has recovered since the recession and increased in all four properties annually since 2011 with the exception of Viridian between 2Q 2014 to 2Q 2015.* The price per square foot average in 2014 was skewed somewhat by the sale of a Penthouse unit that sold for $658 SF. With the Penthouse sale taken out of the mix, the average PPSF would have been $360. The cumulative weighted average of all four properties has risen 6% in the past 6 months and 16.5% over the past 24-months. (fig. 9-10) Figure 9 – High-Rise Square Foot Comparisons

PPSF By Building Viridian Encore

2009

2010

2011

2012

2013

2014

$317 $319

$275 $243

$258 $256

$262 $242

$287 $294

$306 $361

$360 /$398* $381

$379 $396

$303

$305

$280

$358

$383

$409

$452

$341

$259

$272

$294

$329

$375

$485

$295

$294

$274

$325

$361

$395

$420

ICON Terrazzo Weighted Average

2015 (Jan – June)

2008

$319

Source: http://realtracs.net, July 2015

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE Downtown Highrise Price Per Square Foot By Building 500 450 400 350 300 250 200 2008

2009

2010 Viridian

2011

2012

Encore

2013

ICON

2014

2015 (Jan – June)

Terrazzo

Figure 10 – Downtown High-rise Price per Square Foot Comparison by Building

Across these four properties, the highest square-foot prices so far this year have occurred at Terrazzo and ICON in The Gulch. A Terrazzo unit sold for $627 per square foot and three units sold over $500 per SF at ICON: $560, $555 and $515 per square foot. As of June 30, Twelve Twelve is 71% sold and its units have yielded some of the highest per square foot prices seen in downtown. The units in the building are approximately 55% 2bedrooms/Penthouses and 45% one-bedroom. The first units to sell included the Penthouses and premium corner units, averaging $500 per square foot. The average price per square foot of the remaining units for sale is $450. The average square footage of all units is 1,120 and average price is $545,000. The property is currently scheduled to sell out by the end of 2015.

Twelve Twelve interior

Twelve Twelve amenities level

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE Single Family Market Single-family homes make up 4% of downtown housing inventory. Of the 213 total homes downtown, 211 are in the Hope Gardens neighborhood. The other two single family homes are located in the downtown core. Nine single-family residential permits were issued for Hope Gardens over the past 12 months, and four of the sites have completed development. Downtown Geographic Boundaries The Nashville Downtown Partnership’s definition of downtown includes properties within the boundaries of the river on the east, the interstate loop on the south and west, and Jefferson Street on the north. This geographic area is termed the Greater Downtown, which includes the Central Business Improvement District (Core), The Gulch, North Capitol, Hope Gardens, Rutledge Hill, Rolling Mill Hill, and SoBro. Germantown is adjacent to downtown, but not included in the residential counts.

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE Under Construction Six rental projects that are under construction will deliver 1,443 units by 1Q 2017. Terra House, a mixed-use project at Rolling Mill Hill, will offer 194 rental units and over 12,000 SF of retail space. It is currently under construction and will deliver units this November. Four projects are scheduled to deliver in 2016: 909 Flats, located on Rosa L Parks Blvd, across from the Nashville Farmers Market, will deliver 232 units to the Hope Gardens neighborhood in January. Thirty-one rental units will come online in February at 1000 Division Street, a mixed-use project under construction in The Gulch. The Carillon Apartments, just adjacent to First Tennessee Park, will deliver 306 rental units in 2Q 2016. The SoBro, a 32-story apartment tower, will deliver in summer 2016 and have 313 rental units and almost 20,000 SF of retail/restaurant space.

Rendering of 505

Additionally, Church Street Apartments will deliver 367 units to the North Gulch area by 1Q 2017. Pipeline Projects Scheduled to begin construction this fall, an MDHA affordable rental project located at 10th Avenue and Jefferson Street would deliver 54 units by the fall of 2016. 505 would be a 45-story apartment tower with 550 rental units, set to rise at the corner of 5th & Church Street. The project would also include 45,000 SF of amenities, including a 33,000square-foot outdoor rooftop amenity level. Units are planned to deliver in late 2017. As part of the Convention Center Redevelopment at Broadway and Fifth Avenue, an apartment tower with 350 units would be built. City Lights, the only pipeline project to include for-sale units, would have 71 condos deliver in mid2017. The project would also include a 5,000 SF restaurant and rooftop deck amenity. Other planned residential projects include Capitol View Development Phase I, Crescendo, Middleton Lofts, Sixth & Lea and Stockyard residential project.

Stockyard Project Rendering

Terra House Rendering

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE Demographic Profile and Trends The Nashville Downtown Partnership’s 2015 Downtown Residential Survey had an 11% response rate. In May 2015, approximately 4,100 surveys were distributed to homeowners and renters by direct email and via building and condo managers. The survey focused on residents who live in Nashville’s downtown defined by these boundaries: Jefferson Street on the north, Cumberland River on the east and the interstate loop on the south and the west. Where Residents Moved From Downtown continues to attract professional, highly educated residents from across all age groups, elevating the city’s business talent pool. Thirty-four percent (up from 29% in 2014) of residents moved to downtown from out-of-state, and another 32% moved from outside the city. Twenty-seven percent moved from Nashville. Household Status Of the respondents, 41% are single, 45% are married, 7% are separated or divorced, and 7% have a domestic partner.(fig.11) The number of respondents in the married category has increased 14% since 2012.

Household Status

7%

7% 41%

Single Married Separated/Divorced

45%

Domestic Partner

Figure 11 – Household Status

Age and Gender Respondents exhibit a broad cross section of age groups. Thirty percent of downtown residents are considered to be Generation Y (age 34 and under). Baby Boomers (age 51-68) make up 38%, up 5% since 2012. Generation X (age 35-50) represents 28% of the downtown population, decreasing from 33% in 2012. Generation Y and Baby Boomers are the two generations expected to show the most increase in migration to urban areas going forward. Downtown residents are 52% male and 48% female. Male and female percentages continue to fluctuate from year-to-year. Household Income Eighty-two percent of downtown households earn over $60,000 annually. Fifty-eight percent earn over $100,000 annually, and 35% earn over $150,000 each year. Two percent earn less than $20,000 annually. (fig.12)

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE

Annual Household Salary Range $150K

Figure 12 – Annual Household Salary Range

Level of Education Completed Fifty-three percent of downtown residents have a college education and an additional 34% hold postgraduate degrees. (fig.13). Figure 13 – Level of Education Completed Comparisons

Downtown Nashville Nashville MSA

2 or 4 Year Degree 53% 29.7% 27.7%

Graduate or Professional Degree 34% 14.2% 11.3%

Source: Downtown Residential Survey 2015, Nashville Area Chamber of Commerce, June 2015

Work Location Sixty-four percent (up 3% from 2014) responded that their office is located outside of downtown. Being “close to work” has been in the top four positive influences of living downtown since the initial survey in 2004 when it was the #1 influence. It has steadily dropped over the years, and this year for the first time it did not make the top four. Although being close to work certainly continues to be somewhat important, there are now more compelling reasons that residents choose to live in downtown Nashville. Quality of Life Factors When residents were asked what four elements most positively influenced their continued downtown living, the top tied responses were the urban experience (46%) and locationconvenience (46%) followed by arts and cultural events (32%), restaurant selection (31%) and nightlife (30%). The urban experience has been cited for the 8th year as the top reason for living downtown, although this year is tied for the number one slot with location-convenience. This is the first year that restaurant selection (31%) has made the top four.

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE Study Area Housing Market The Greater Downtown has 4,902 existing units, and an additional 4,275 units are either planned or under construction. Figure 14 – Existing Housing Downtown Nashville

# Units

Rental

Condo/SF

Property Address

Rental/Condo

CBD

Existing Apartments/Condos/Single Family

(Downtown Core)

112 Second Avenue Lofts

4

3

1

112 Second Avenue

114 2nd Avenue

1

-

1

114 2nd Avenue

Condo

115 8th Avenue North

1

-

1

115 8th Avenue North

Condo

123 2nd Avenue

1

-

1

123 2nd Avenue

Condo

138 2nd Avenue

1

-

1

138 2nd Avenue

Condo

219 2nd Avenue

1

-

1

219 2nd Avenue

219 5th Avenue North

3

2

1

219 5th Avenue North

Condo/Rental

244 5th Avenue

2

1

1

244 5th Avenue North

Condo/Rental

320 Broadway

4

-

4

320 Broadway

Condo

420 Broadway

1

-

1

420 Broadway

Condo

423 Union Street

2

2

-

423 Union Street

Rental

425 Broadway

2

-

2

425 Broadway

Condo

Ambrose Lofts

21

-

21

162 4th Avenue North

Condo

Art Avenue Lofts

32

-

32

231 5th Avenue North

Condo

Banner Lofts on 3rd

31

31

Bennie Dillon Original Lofts

86

-

Capitol Towers

219

The Cumberland/Cumberland Penthouses

289

Church Street Lofts

17

The Kress Lofts Lofts above ICHIBAN Lofts at 160

Rental/Condo

Condo

162 3rd Avenue North

Rental

86

700 Church Street

Condo

184

35

510 Gay Street

Rental/Condo

256

33

555 Church Street

Rental/Condo

-

17

301 Church Street

Condo

29

-

29

237 5th Avenue North

Condo

8

8

-

107 Second Avenue N

Rental

32

32

-

160 2nd Avenue North

Rental

Lofts at Noel Court

4

-

4

214 3rd Avenue North

Condo

Lofts at the Exchange

47

-

47

309 Church Street

Condo

Lofts at the Reserve

62

62

301 Rosa L Parks

Rental

Market Street Apartments

74

74

-

150 Second Avenue South

Rental

Metro Manor

170

170

-

500 Fifth Avenue North

Rental

Phoenix Lofts

6

-

6

207 3rd Avenue North

Condo

Printers Alley Condos

4

-

4

211 Printers Alley

Condo

Private Residence

1

-

1

226 3rd Avenue North

Single Family

The Quarters

32

-

32

178 2nd Avenue North

Condo

Rhea Building Lofts

11

11

-

166 2nd Avenue North

Rental

Riverfront Studios - lofts above

2

2

-

210 Broadway

Smith House

1

-

1

167 Rosa L Parks

Single Family

Stahlman Building

142

142

-

222 3rd Avenue

Rental

Viridian

305

-

305

415 Church Street

Condo

Watauga House

25

-

25

222 Polk Ave.

Condo

Westview

10

-

10

179 8th Avenue North

Condo

980

703

1,683

Rental

RESIDENTIAL REPORT: JULY 2015 DOWNTOWN NASHVILLE Continued… Area

Location

North Capitol

District Lofts

69

Harrison Square

15

Harrison Square Phase II

48

Hope Gardens Residences Ireland28 Riverfront Condos Row 8.9n

Rolling Mill Hill

Condo/SF

-

Property Address

Rental/Condo

69

Corner of Harrison & 3rd Ave

Condo

-

15

Harrison & 3rd Avenue North

Condo

-

48

Harrison & 3rd Avenue

Condo

211

211

28

-

28

145

-

145

29

-

29

545

-

545

Hope Gardens

Single Family

900 Block of Ireland Street

Condo

726 1st Ave. N.

Condo

800 Block 8th Avenue North

Condo

24

24

-

210 Middleton Street

Rental

City View - Metro

36

36

-

210 Middleton Street

Rental

City View - Victorian

12

12

-

210 Middleton Street

Rental

City View Apartments

102

102

210 Middleton Street

Rental

Nance Place Apartments

109

109

-

8 Academy Place

Rental

60

60

-

100 Middleton

Rental

343

343

50

-

50

100-149 Academy Square

Condo

4

Lea Avenue and Rutledge

Condo

301 Demonbreun

Condo

401-479 2nd Ave. S.

Condo

310 - 312 Peabody Street

Rental

705 Drexel Street

Rental

Academy Square Condominiums Cardwell Place Condominiums Encore

The Gulch

Rental

City View - Art Deco

Ryman Lofts

SoBro/Rutledge Hill

# Units

4 333

-

333

Howell Park

40

-

40

Peabody Quarters

24

24

-

Room in the Inn

38

38

Rutledge House

41

-

41

656 Second Ave. S.

Condo

Rutledge Terrace

18

-

18

430 Second Ave. S.

Condo

Big Red Lofts

20

20

527 8th Avenue South

Rental

568

82

Eleven North Apartments

302

302

210 11th Avenue North

Rental

ICON

417

-

417

600 12th Avenue South

Condo

Laurel House Apartments

48

48

-

1101 Laurel Street

Rental

Mercury View Lofts

32

32

-

1209 Pine Street

Rental

Pine Street Flats

296

296

-

1055 Pine Street

Rental

Terrazzo

117

-

117

700 12th Avenue South

Condo

Twelve Twelve

286

286

1212 Laurel Street

Condo

Velocity

265

222

43

1,763

900

863

4,902

2,305

2,597

TOTAL EXISTING

486

320 11th Avenue South

Condo/Rental

RESIDENTIAL REPORT: JULY 2014 DOWNTOWN NASHVILLE Conclusion Downtown residential inventory is increasing as forecasted, but not at the rate necessary to keep up with demand. Twelve Twelve is the only condo project that has delivered since Terrazzo in 2009, and is currently 71% sold. The only other for-sale project in the pipeline is City Lights which will add only 71 units to the market in mid-2017. For the past three years there has been a two-month supply or less of re-sale units available. Having a 6-month supply is considered a “healthy market.” Downtown will continue to have pent-up demand for purchase product unless some of the planned rental projects convert to condos as Twelve Twelve did in 2014. Rental demand also continues to remain high with occupancy at 97% or above for the fourth year in a row, even with delivery of product to the market. Although there are projects in the pipeline planned to deliver over the next three years, the inflow of jobs to downtown as well as a peak in the number of millennials turning 24 years old this year will create a steady demand going forward. According to statistics released by the Greater Nashville Apartment Association, the Nashville area is not overbuilt. From 2000-2013, Nashville’s population increased by 331,555 people, or 132,622 new households, which would create a demand for 47,733 rental units. The actual amount delivered during this time frame was 19,929.12 Corporate headquarters such as Bridgestone Americas and HCA subsidiaries – Parallon and Sarah Cannon – have chosen to move and invest in downtown. Other companies such as ServiceSource and UBS continue to expand their downtown workforce. Creatives and entrepreneurial companies are beginning to populate the city as services and amenities follow. This year, 4.7 million Americans will turn 24 years old, and they will be getting jobs and moving out on their own13, with 37% of them preferring to live in an urban environment. This generation “represents the largest source of new demand for rental housing and first-time home purchases.14 Pent-up demand, resulting in higher rental rates and housing prices, creates a barrier to entry for many who want to live downtown. An integral housing product needed downtown is workforce housing for those who earn between 80% - 150% of AMI. Land prices have escalated in the past few years, making it difficult for private developers to provide this product. The Metropolitan Development & Housing Agency served as master developer of two residential communities at Rolling Mill Hill – Nance Place and Ryman Lofts – that offer affordable options downtown. Affordable rental units only make up 5% of the downtown inventory. City leaders and developers need to continue to search for creative ways to incent this type of housing product downtown.

12 Davis,

Kirby, Fourth Quarter GNAA Statistics Overview, Greater Nashville Apartment Association, 1Q 2015 Davis, Kirby, Fourth Quarter GNAA Statistics Overview, Greater Nashville Apartment Association, 1Q 2015 14 Urban Land Institute, Gen Y and Housing: What They Want and Where They Want It, 2015 13