BY JOEY VAlenti
Throughout the last 18 years that I have been in commercial real estate in Tennessee, the market has changed dramatically. Historically, we did work all over the state of Tennessee. This included Knoxville, Memphis, Chattanagooa, the Tri-Cities (Kingsport, Johnson City, Bristol), and others. Given that these are all relatively small towns (from a national standpoint), it was necessary to cover a broad geography to make a good living. Now I find that with Nashville’s growth, you no longer need to travel so far for business. With that being said, the growth does add plenty of nuances to commercial real estate in Nashville. Let’s take a further look.
A Recession Proof Economy
When I look back at 2008 and 2009, it dawns on me that Nashville’s market did not hit a bump. That last recession had zero effect. This is for a simple reason: Nashville has a recession proof economy.
How so? Nashville’s biggest industry is healthcare. No matter what is happening in the market, healthcare is always relevant and of the utmost importance. Our second biggest industry is publishing. Nashville is the second biggest producer of Bibles in the country (Gideon’s Bibles are all published here). In addition to healthcare and publishing, there is no avoiding the role that tourism has played in Nashville’s growth and unwavering stability throughout market changes.
Nashville became a cheap tourism spot for people who didn’t want to spend the money to go to Las Vegas, New York or Los Angeles. When tourists discovered that Nashville is an inexpensive place to come and have a great weekend, the real estate industry really exploded. The calls from prospective tenants became a lot more interesting and different, with many more unique concepts as opposed to chains. Plus, there were new chains coming in from out of state that we had never heard of before.
Another notable change since starting in the business has been the geographical spread. When I got in the business, Franklin and Cool Springs didn’t exist. They were cow fields. I would go out to Hermitage on the East side, Madison on the North, Bellevue on the way. Then you went down to Brentwood and that was kind of it. Nashville proper was never more than ten miles from the office. That was the Nashville footprint.
We are now a nine county MSA, so if you’re in commercial real estate, you have to cover every square inch of that plus Clarksville, which is 35 miles northwest. I am now doing deals in Springfield, Lewisburg, Lawrenceburg, and Lebanon. All of these places are ones that I drove through when I first got in the business just to learn. Now they’re the destinations. I remember taking a black and white composition notebook and driving every main street in Nashville, writing down the name of the shopping center and every main tenant in the shopping center on every road. I’d have to add another couple notebooks if I did that on paper now.
The Future Awaits
As a Native Nashvillian, it has been spectacular to watch the growth. More than that, it certainly keeps us busy. Our vacancy rate remains low and we are still a recession proof economy. Even during COVID, for example, we have not seen the rush of vacancies that other cities have. We are still getting calls every day from new tenants wanting to be here. Furthermore, we are really seeing the effects of what is going on in other areas of the country. A lot of people throughout the nation are getting up and leaving their residences, and a large amount of those people are coming here. Nashville MSA is still growing at 94 people per day. It is interesting to watch this unfold and we welcome it.
Haven’t been to Nashville in 10+ Years?
Throughout this time of rapid growth, it has become really fun to drive people around Nashville and explain what has changed. People often say, “Well, I haven’t been to Nashville in 10 years!” If that is the case, then you are in for quite a surprise, and you are going to see a lot that you have not seen before. In fact, there are still 14 cranes downtown!
Being a part of the Nashville real estate industry gives me a front row seat to the changes in my hometown. There are a lot of things about this market that make it great: a stable economy, the land and geography to keep growing, and a future that looks to draw tenants and residents here from all over the country.
Please feel free to contact Joey Valenti, author and Centennial Retail Services broker, to talk any time you’d like.
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