to read more about this exciting market.

Nashville, TN
Multi-Family Market Summary: Spring 2015
Presented By:
NASHVILLE
Contents
Introduction
Introduction2
Market Commentary
3
Economic Overview
4
Sales Transactions
5
Proposed Development
8
Why Choose Capstone?
10
CAPSTONE APARTMENT PARTNERS prides itself on the valuable contributions we are able
to continue to offer our industry; thus, we produce periodic Multi-Family Market Summaries to
further inform the clients and industry we serve. Capstone believes this market snapshot will
benefit current owners, operators, investors, and other industry professionals who are active in
the Nashville MSA, as well as others who are looking to break into this market.
Nashville Office
2720 Eugenia Ave.  Nashville, TN 37211
2
Adam Klenk
Eric Conklin
Andrew Klenk
Investment Advisor
c 615.861.9906
o 800.746.3175 ext. 706
[email protected]
Investment Advisor
c 615.905.1895
o 800.746.3175 ext. 713
[email protected]
Partner
c 704.231.4882
o 800.746.3175 ext. 704
[email protected]
NASHVILLE
Bridgestone: More than Tires
With the lease expiring on Bridgestone’s current location in late 2017, the
company launched a nationwide search for a new headquarters location
to support future growth. The Nashville MSA will not only benefit from
the jobs Bridgestone brings, but also from planned improvements to
the surrounding community. Based on recommendations from a traffic
study, restriping and other enhancements are planned for streets
such as Fourth Avenue South and Molloy Street. Mayor Karl Dean
also revealed that Bridgestone Americas has committed to donating
$150,000 a year for five years, or $750,000 overall, to Metro School's
Music Makes Us program.
The Vanderbilt Effect
Multi-Family Fundamentals
The region gained approximately 8,000 jobs in the past year, and
unemployment has dropped to just 5.0%. Despite 7,500 units currently
under construction and another 7,000 proposed, the market continues
to experience a low vacancy rate of 4.1% and a rent growth rate of
4.3% in the past year. Capstone expects the vacancy rate to rise slightly
as new supply is introduced; however, the Nashville MSA will likely
continue to experience higher rent growth in the 3.5-4.0% range for
the coming year. Several companies have announced major expansions
in recent months, which will continue to drive demand for apartments.
Cornelius Vanderbilt gave $1 million to create a university in 1873.
Since that time, Vanderbilt University has become an internationally
Apartment Comparison by Class
Class
Units
Vacancy Rate
Avg. Sq. Ft.
Lease-up
4,195
26.7%
944
A (1-5 Years in Age)
5,400
4.1%
990
B (6-15 Years in Age)
13,225
3.7%
1,039
C (16-30 Years in Age)
34,854
4.2%
950
C- (30+ Years in Age)
28,845
4.3%
909
Stabilized Averages
82,324
4.1%
952
Totals/Averages
86,519
5.2%
952
Avg. Rent
$1,344
$1,282
$1,042
$941
$814
$935
$955
Avg. Rent/Sq. Ft.
$1.42
$1.30
$1.00
$0.99
$0.90
$0.98
$1.00
MARKET COMMENTARY
Bridgestone Americas Inc. has broken ground on its new 30-story,
$200 million headquarters located in the SoBro area of downtown
Nashville. Upon completion in mid-to-late 2017, the new office building
will house more than 1,700 employees. This will consist of the 1,100
currently in Nashville, plus 600 new jobs stemming from three out of
state companies relocating to the city. The retail, roofing, and industrial
products business units that Bridgestone is relocating to Nashville will
generate $6 billion in annual revenue. The transition also encompasses
the leadership of the retail group, which includes 2,200 companyowned stores.
recognized research university in Nashville, Tennessee, with strong
partnerships among its 10 schools, neighboring institutions, and
the community. Vanderbilt offers undergraduate programs in the
liberal arts and sciences, engineering, music, education, and human
development, as well as a full range of graduate and professional
degrees. An independent, privately supported university, Vanderbilt
is the largest private employer in Middle Tennessee and the second
largest private employer based in the state. In fact, an Austin-based
company was able to quantify the total annual economic and tax
revenue generated by the university and medical center. The study
included factors such as operations and construction, employment,
student and visitor spending, and business spending generated by
Vanderbilt-related activities. Combined, these factors amounted to a
contribution of $8.9 billion to the state economy in the 2013-14 fiscal
year.
3
NASHVILLE
Employment
ECONOMIC OVERVIEW
Recent Employment Announcements
 Bridgestone America Inc. will bring 1,700 jobs to
the downtown area.
 Under Armour announced plans to build a $100
million distribution facility in Mt. Juliet with over
1,500 new jobs.
 Nissan North America plans to bring 1,000 new
jobs to Smyrna.
 Unipres USA expects to add 435 jobs over the
next five years.
 FedEx is building a new facility in Mt. Juliet and
adding 350 new jobs.
M-TEK is locating its new North American
headquarters to Murfreesboro bringing 250 jobs.
Comprehensive Logistics is creating 200 new
jobs.
 Healthstream plans to add 200 jobs over the next
several years.
Major Employers (non-government)
Company
Industry
Rank
Employment
1
Vanderbilt University
Education
23,021
2
Nissan North America
Automotive
8,500
3
HCA Holdings, Inc.
Healthcare
7,000
4
Saint Thomas Health
Healthcare
6,500
5
Randstad
Recruitment
3,400
6
Shoney's Inc.
Restaurant
3,000
7
Electrolux Home Products North America
Appliances
2,900
8
The Kroger Co.
Grocery
2,863
9
Community Health Systems
Healthcare
2,800
10
Cracker Barrel Old Country Store Inc.
Retail
2,750
Wages & Population
There are 819,880 employees in the MSA who earn a mean hourly wage of $21.13 and an average annual income of $43,950. In comparison, the
state and national annual income averages are $40,650 and $47,230, respectively.
Historical Population
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Hendersonville
43,581
44,363
45,746
46,755
47,554
48,332
51,589
52,349
53,080
54,068
Franklin
51,929
53,795
56,055
58,005
59,234
60,629
62,798
64,317
66,280
68,886
Murfreesboro
82,713
87,999
93,845
98,354
101,749
105,209
109,240
111,327
114,038
117,044
Nashville-Davidson
570,068
579,748
586,327
592,503
598,465
605,473
602,537
609,644
624,496
634,464
Nashville MSA
1,416,452
1,450,538
1,450,538
1,524,920
1,556,368
1,582,264
1,675,886
1,698,348
1,726,693
1,757,912
Tennessee
5,910,800
5,991,100
6,088,800
6,175,700
6,247,400
6,306,000
6,356,900
6,403,400
6,456,243
6,495,978
Source: U.S. Census Bureau
4
In February 2015, the Nashville MSA’s unemployment rate remained at a low 5.0%.
Moreover, the unemployment rate is significantly below the state’s average of 6.6%
and slightly below the national average of 5.5%.
NASHVILLE
Sales Transactions: 2014 to Present
Community
City
Sale Date
Units
Sale Price
Price Per Unit
1969
1973
1968
1977
1996
1997
1998
1989
2013
1984
1988
2007
2011
2009
1969
1976
1993
1920
1983
1981
1984
1974
1975
2002
1985
2007
1994
1995
1996
2000
2005
1984
1972
Nashville
Hermitage
Nashville
Nashville
Murfreesboro
Lebanon
Murfreesboro
Nashville
Nashville
Nashville
Murfreesboro
Mt. Juliet
Nashville
Franklin
Nashville
Nashville
Nashville
Nashville
Nashville
Nashville
Goodlettsville
Hermitage
Hendersonville
Gallatin
Nashville
Nashville
Brentwood
Goodlettsville
Antioch
Murfreesboro
Millersville
Antioch
Nashville
3/3/15
3/3/15
3/3/15
3/3/15
2/18/15
2/18/15
2/18/15
1/26/15
1/14/15
1/12/15
1/5/15
12/31/14
12/18/14
12/15/14
12/7/14
11/21/14
11/20/14
11/20/14
11/14/14
11/3/14
10/16/14
9/29/14
9/26/14
9/24/14
9/23/14
9/10/14
9/1/14
9/1/14
8/1/14
7/23/14
7/21/14
7/18/14
7/18/14
200
238
186
202
112
130
96
196
266
341
176
334
220
370
288
202
73
80
200
120
200
350
152
364
316
96
254
264
274
83
191
300
244
$18,800,000
$16,100,000
$4,554,666
$5,286,667
$3,904,000
$18,000,000
$61,200,000
$30,400,000
$47,750,000
$54,278,060
$81,100,000
$5,350,000
$14,000,000
$8,150,000
$9,150,000
$8,000,000
$25,625,000
$11,550,000
$42,368,905
$22,800,000
$15,400,000
$42,200,000
$19,900,000
$17,900,000
$4,436,000
$9,650,000
$21,400,000
$13,750,000
$78,992
$79,703
$40,667
$40,667
$40,667
$91,837
$230,075
$89,150
$142,964
$246,718
$219,189
$18,576
$69,307
$111,644
$114,375
$66,667
$73,214
$75,987
$116,398
$72,152
$160,417
$166,142
$75,379
$65,328
$53,446
$50,524
$71,333
$56,352
SALES TRANSACTIONS
Hickory Creek
Jackson Grove
Lincoya Bay
Sheffield Heights
Green Meadow
Greentree Pointe
Rutherford Woodlands
Brentwood Station
23Hundred at Berry Hill
Hawthorne South Oaks
Summerlake
Aventura at Providence
Velocity in the Gulch
Dwell at McEwen
Village West
Hampton Chase
Blackstone
Lee
Riverwood
Hickory View
Rivergate
Arbours of Hermitage
Carrington Ridge
Stoneridge Farms at Hunt Club
Creekstone
Gale Lofts
Estates at Brentwood
Lenoxgate
Abbington Heights
City Edge Flats
Ridge at Green Haven
Beechwood Terrace
Willow Grove
YOC
5
NASHVILLE
Sales Transactions: 2014 to Present
SALES TRANSACTIONS
Community
6
YOC
City
Sale Date
Units
Sale Price
Price Per Unit
Woodbridge
1978
Nashville
7/18/14
220
$16,000,000
$72,727
Stoneridge Farms at Hunt Club
2002
Gallatin
7/15/14
364
-
-
Hillwood Pointe
1995
Nashville
6/20/14
180
$14,850,000
$82,500
Meridian at Hermitage (FORMERLY GREEN LEAF AT HERMITAGE)
1974
Hermitage
6/4/14
261
$13,800,000
$52,874
Villages at Spring Hill
1994
Spring Hill
5/22/14
176
$14,200,000
$80,682
Richland Falls
2012
Murfreesboro
5/15/14
190
$21,000,000
$110,526
Alta Loma
1971
Madison
5/1/14
132
$5,500,000
$41,667
Hermitage Garden
1962
Old Hickory
4/29/14
73
$2,850,000
$39,041
Elliston 23
2013
Nashville
4/28/14
331
$95,100,000
$287,311
Pine Brook
1973
Hermitage
4/28/14
134
$6,000,000
$44,776
Vista Germantown
2011
Nashville
4/3/14
242
$53,250,000
$220,041
Wyndchase Aspen Grove
1997
Franklin
3/15/14
560
$83,000,000
$148,214
Rutherford Pointe
1996
La Vergne
2/27/14
130
$6,450,000
$49,615
Roundtree
1971
Nashville
2/26/14
144
-
-
Spinnaker Cove
1986
Hermitage
2/20/14
278
$24,750,000
$89,029
River Chase
1999
Nashville
2/14/14
212
-
-
Canterchase
1984
Nashville
2/12/14
235
-
-
Jamestown
1986
Nashville
1/15/14
101
$7,300,000
$72,277
Elliston 23
Dwell at McEwen
NASHVILLE
Average Transaction Sales Price
$45,000,000
Average Price Per Unit
$180,000
$41.9M
$40,000,000
$160,000
$35,000,000
$140,000
$30,000,000
$120,000
$97,837
$100,000
$20,000,000
$80,000
$13.3M
$15,000,000
$13.9M
$40,000
$5,000,000
$20,000
$0
$0
Class B
Class C
$62,024
Class B
Class C
$60,000
$10,000,000
Class A
$66,733
AVERAGE
Class A
AVERAGE
Average Year of Construction
Average # of Units Per Transaction
2020
300
254
2010
250
208
205
217
2008
2000
200
1993
1988
1990
150
1980
100
SALES TRANSACTIONS
$23.7M
$25,000,000
$158,532
1973
1970
50
1960
0
1950
Class A
Class B
Class C
AVERAGE
Class A
Class B
Class C
AVERAGE
Class A represents renovate properties and properties built from 2000-2015, Class B includes properties constructed from 1985-1999, and Class C signifies properties constructed in 1984 or earlier.
7
NASHVILLE
Communities Proposed (100 Units and Above)
Developer
Community
Units
Road/Intersection
Submarket
Crescendo
303
641 Division St.
Downtown
Germantown Fountains
294
Taylors St.
Downtown
Price Development
PDG Germantown
256
Monroe St.
Downtown
LIV Development
LIV West Eastland
310
1034 W. Eastland Ave.
North
St. Clair Holdings
Stacks on Main
268
5th St./Main St.
North
One City
300
Charlotte Ave.
West End
LC Germantown
450
1226 2nd Ave.
Downtown
Giarrantana Development
Paramount
300
5th Ave.
Downtown
Stonehenge Real Estate
West 46th
171
4508 Charlotte Pk.
Southwest
Bristol 12 South
164
2214 12th Ave.
West End
Alliance Residential
Broadstone Eighth South
154
2407 Franklin Pk.
West End
Crescent Resources
Crescent Music Row
280
Division St.
West End
Grace Development
Grace at Elliston Place
300
Elliston Pl.
West End
Grand Avenue
230
Music Square
West End
Heights at Charlotte Avenue
259
2700 Charlotte Ave.
West End
Lennar Multifamily
Lennar Berry Hill
320
2350 Franklin Pk.
West End
Lennar Multifamily
M Residences
300
Chet Atkins Pl.
West End
Skyhouse
352
Broadway
West End
Grove at Shadow Green
228
2000 Toll House Cir.
Franklin
North American Properties
Nichol Mill Lofts
363
Nichol Mill Ln.
Franklin
Bristol Development Group
Uptown at Ovation
392
Carother Pkwy.
Franklin
Foxland Crossing
68 (232 COMPLETE)
1391 Foxland Blvd.
Hendersonville
Hartmann Plantation
Hartman Plantation
200 (123 COMPLETE)
2000 Hartmann Plantation Ct.
Lebanon/Mt.Juliet
Universal Builders
Northtown Gardens
360
Nonaville Rd.
Lebanon/Mt.Juliet
Integra Creek
84 (264 COMPLETE)
3625 Mansion Pk.
Murfreesboro
Division Street Land Partners
PROPOSED DEVELOPMENT
Proffitt Dixon
Cambridge Holdings
Lifestyle Communities
Bristol Development Group
Forestar
Worthing Companies
Novare/Baston Cook
SWH Residential Partners
TDK Construction
Panthers Properties
8
NASHVILLE
Lincoln Property
Submarket
909 Flats
232
909 Rosa L. Parks Blvd.
Downtown
Broadstone Germantown
276
1100 3rd Ave.
Downtown
Carillon
306
5th Ave./Jackson St.
Downtown
SWH Residential Partners
Terra House
194
Middleton St.
Downtown
Giarrantana Development
Sobro
313
3rd Ave.
Downtown
Spectrum Properties
The Cameron
328
Carothers Pkwy.
Franklin
Bristol Development
Tapestry Brentwood
393
300 Centerview Dr.
Franklin
Glass Creek Village
216 (144 COMPLETE)
401 Old Pleasant Grove Rd.
Lebanon/Mt. Juliet
LC Providence
451
LC Providence
Lebanon/Mt. Juliet
Providence Central
209
Providence Pkwy.
Lebanon/Mt. Juliet
TDK Construction
3343 Memorial
196 (46 COMPLETE)
3343 Memorial Blvd.
Murfreesboro
Gross Builders
Belden Reserve
264
425 Swanholme Dr.
Murfreesboro
Everwood at the Avenue
336
Robert Rose Dr.
Murfreesboro
Hensley Station
162 (241 COMPLETE)
1206 Robert Rose Dr.
Murfreesboro
Copperfield Lodge
288
Nissan Dr.
Smyrna/ La Vergne
Carroll Companies
Heron Point
324
100 Heron Point Dr.
Southeast
TDK Construction
The Summit
190 (95 COMPLETE)
7201 Charlotte Pke.
Southwest
Sylvan Heights
262
Charlotte Ave.
Southwest
1505 Demonbreun
209 (178 COMPLETE)
1515 Demonbreun St.
West End
Artisan on 18th
63 (90 COMPLETE)
819 S 18th Ave.
West End
The Forestar Group
Acklen
320
111 Acklen Park Dr.
West End
Giarrantana Development
22 State
146
22nd Ave. N./State St.
West End
Giarrantana Development
1818 Church Street
142
1818 Church St.
West End
Aertson Midtown
350
Division St./Broadway St.
West End
Lincoln Property
Aspire Midtown
279
2400 Charlotte Ave.
West End
Phoenix Property
Cadence
193
16th Ave./McGavock St.
West End
Element Music Row
431
Element Music Row
West End
Metrocenter
320
45 Vantage Way
West End
Opus 29
139
29th Ave./Burch Ave.
West End
Alliance Residential
Embrey Partners
Carroll Companies
Lifestyle Communities
The Dobbins Group
Carroll Companies
Lifestyle Communities
Smyrna Commons Dev. Partners
HG Hill Realty
Faison
Stonehenge Real Estate
Buckingham Companies
Childress Klein
Residential Group
Stonehenge Real Estate
COMMUNITIES UNDER CONSTRUCTION
Developer
Communities Under Construction (100 Units and Above)
Community
Units
Road/Intersection
9
NASHVILLE
Carolinas
Georgia
Virginia
Tennessee
Kentucky
Alabama
Florida
West Virginia
WHY CHOOSE CAPSTONE?
The People Sell the Deal
Capstone’s Southeast & Mid-Atlantic Investment Sales Team is among the market leaders within our industry sector
and respective region. We place client service above all else, and can guarantee that no one else will work smarter
and harder in achieving the highest level of results for our clients. We don’t rely on a logo to sell the deal, but
rather utilize the industry expertise and investment acumen, tremendous drive and work ethic, and unbeatable
salesmanship of the team members assigned to each project. At the end of the day, it’s the individuals that drive
value and sell the deal, and we know the capabilities of our individual team members are second to none.
Market Expertise & Product Niche
Capstone sits atop the private capital sector of multi-family investment sales for multiple reasons. Our deliberate and concentrated focus and
expertise in not just the primary markets of the Southeast & Mid-Atlantic, but also the secondary and tertiary markets within our region, identifies
us as the ideal candidate for such assignments. Capstone’s investment sales team has completed a multitude of transactions across the primary,
secondary, and tertiary markets of the Southeast & Mid-Atlantic, and our track record of success can be attributed to our comprehensive coverage
and expertise among these markets, as well as our relationships with the owners and investors who remain active in this environment.
National Exposure via Cutting Edge Technology
Capstone has developed and maintains industry leading national databases, expansive information delivery methodologies, and various
proprietary activity tracking systems. These tools are utilized daily by the investment sales team, analysts, and back-office support staff allowing
for optimal operational efficiency. This enables Capstone’s investment brokerage team to spend nearly all of its time servicing clients, interacting
with industry players and active asset traders, and promoting transactions.
Reputation and Results
Capstone prides itself on its impeccable industry reputation and the core values and behaviors of the firm that drive daily operations. The
firm possesses an unblemished reputation and track record industry-wide, and, as such, the firm’s trusted relationships among the apartment
investment community continue to facilitate seamless, fluid, and successful sales transactions.
* Information in this report has been provided by the following: Nashville Real Data Report March 2015, U.S. Census Bureau, Costar, Business Journals, LoopNet, Bureau of Labor Statistics, county
tax records, and various multi-family industry contacts. Area images provided by Ron Cogswell (pg. 1) and Robert Claypool (pg. 2 [left]) via https://creativecommons.org/licenses/by/2.0/, as well
as Rain0975 (pg. 2 [top]) via https://creativecommons.org/licenses/by-nd/2.0/.
10
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