BY Arthur Perlen, CCIM
As a Nashville native with almost 30 years of commercial real estate experience here, it has been profound to watch the market unfold as the city experiences monumental growth. Here are some of my observations and experiences regarding Nashville’s recent booming market.
Like many markets across the country, there is lack of supply and an increasing level of demand. The lack of supply in the housing market includes condos and single family homes. High end condos are especially hard to come by. Projects like The Four Seasons Residences has received a warm reception in the Nashville market, drawing Buyers both local and international. The success of this high-end development will surely bring other Developers into the market.
Additionally, in the suburbs and exurbs a lack of zoned land coupled with increased building costs and shortages of labor and materials has exacerbated an already tight supply market.
Regardless of the lack of supply and dramatic price increases, there continues to be major influx of people moving to Nashville. Nashville has the benefit of no state income taxes, great weather, music, and a central location near many lakes. Not to mention, there is this unique “cool vibe” in Nashville that everybody loves.
Keep in mind that even throughout this past year of the pandemic, Nashville has hardly seen any excess retail properties come to the market. In fact, we have not even seen vacancy rates for retail change much throughout this time. That is truly remarkable and a testament of the resiliency of the Nashville market.
There are many ways that this increase in new residents is influencing commercial real estate. Let’s touch upon retail specifically, since that is our specialty here at Centennial.
Right now, good retail space is in short supply. From the perspective of a tenant rep Broker, this can be a challenge at times but there are tactics and strategies that can help.
Remember the old saying about a dog chasing a car, “what are you going to do with it after you get it?” Well, that is how some tenant reps feel at times after they get a new client. Space is difficult and land is scarce and expensive, especially land which is already zoned. It is important for a tenant looking to enter or expand in the Nashville market to ensure that whoever they are working with has a comprehensive market knowledge. They must know where the opportunities are in the market both from a growth standpoint as well as where weak tenants may be ready vacate.
Many of the spaces being leased don’t even make it to the market. Brokers need to be extremely proactive to understand where future availability might be. Being a business built on relationships, it’s important that tenant rep brokers keep the lines of communication wide open with other Brokers to identify opportunities. This way, you can get a foot in the door on locations faster than anyone else. If you are merely looking on property websites or driving by looking for lease signs, you are not going to find every opportunity.
One of the many advantages of having a broker is their knowledge not only of rental rates but also other concessions offered by the Landlord. A Broker can help analyze the total economic package being offered by the Landlord to help a tenant compare various “deals” available in the market.
With good retail space in short supply Landlords also weigh whether a tenant is interesting and unique, perhaps a new entrant to the market that could bring “excitement” to a retail project. A multi-family building may use the ground floor retail space as a draw for new residents or an amenity to existing tenants.
Just as the market is ever changing, so is the Brokerage business. At Centennial we are constantly changing and adapting to better serve our clients. One of the ways we did this is by valuing the importance of marketing and social media. Though I was not on social media, I knew my clients and tenants were there so I, too, had to get there. We believe that having the best Brokers along with the best technology is a winning combination.
Centennial plans to remain a market leader and do what we’ve always done; add value to every transaction. This translates into success for our clients and for us that is the ultimate value proposition. Truly the best part of the business is the relationships and friendships we’ve made and maintained. As touched upon in my article “What Success Means to Me,” that is “what it’s all about” and what motivates me every day to help my clients and to enjoy what I’m doing.
Please feel free to contact Arthur Perlen, CCIM, author and Centennial Retail Services broker, to talk retail any time you’d like.
Leave your name and email below along with what you are looking for in the message box. Or you can call us at 615.234.4900.
© 2020 Centennial Retail. Trademarks and brands are the property of their respective owners.