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CA South Development-01

VERTICALLY INTEGRATED. REAL ESTATE DEVELOPMENT. INVESTMENT MANAGEMENT.

The Nashville Market

High Demand For Condos

Due to local regulatory challenges, condo development within Nashville has been very limited. CA South has already begun fulfilling the unmet demand, with 77 new residential condo units set to come online in 2019 and another 50 residential condo units set to be delivered in Summer of 2020. As of July 2018, downtown Nashville had ~2,400 residential condo units, equating to approximately ~33% of the downtown housing. By the end of 2018, developers were projected to add 2,300 residential units of which only 71 would be condos. Of the 123 multifamily projects currently in progress throughout the Nashville metro area, fewer than 1 in 5 are condos or townhomes. The overwhelming majority of buildings are apartments. This has led to strong appreciation in condo sales prices which have increased 11% from $199,350 to $221,850 between 2017 to 2018.

Prime Opportunity Zones

Opportunity Zone investing is certainly a buzz word in the real estate industry nationwide. The ability to defer and discount existing capital gains AND pay no tax on the capital gains earned while invested in the Opportunity Zone Fund is a once in a generation wealth creation opportunity for individuals, family offices and institutions alike. What makes Nashville such a unique place to take advantage of this opportunity, is that the Opportunity Zones map features significant swatch of real estate centrally located around the downtown core. With global companies like Amazon, Alliance Bernstein and Oracle establishing significant operations in Nashville, the millennial workforce that they are hiring are seeking out living opportunities near the downtown core…in the Nashville opportunity zones. In many cities through the U.S., it is harder to pencil investing in the run-down or industrial neighborhoods far from the business districts that are generally featured as opportunity zone. Not in Nashville – you have the confluence of an extremely favorable tax regime and a significant migration of workers that want to live in the opportunity zones. 

Exponential Economic Growth

The Nashville, Tennessee real estate market, is robust with high levels of development activity and an influx of out-of-state capital. The Nashville economy has long been driven by large healthcare systems, however, today it is experiencing a growth in technology startups, hospitality, entertainment and smaller professional firms that support the broader local economy. These new and growing employers consume real estate at a voracious rate. While Nashville has always been a friendly economy for small “mom & pop” shops, the Millennial generation seeks to set up shop closer to the downtown area and urban in-fill development is accelerating rapidly. This is set against a backdrop of historically low vacancy rates and high demand.