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SOUTHEAST SNAPSHOT, NOVEMBER 2005
Nashville Multifamily Market
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Brennon Fitzpatrick
Director of MultiFamily Land Brokerage
Grubb & Ellis| Centennial
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The multifamily rental market has been stable in Nashville, Tennessee, for the past 10 years. The average occupancy rate today is 93.6 percent and it has remained between 92 and 94 percent since 1996. Concessions have recently declined and owners are beginning to reduce rental rates rather than offer a few months of free rent. Nashville's submarket occupancy rates also range in the low- to mid-90s. The Charlotte Pike submarket, southwest of Nashville, has a 90 percent occupancy rate while the Murfreesboro Road, Hickory Hollow and Nolensville Road submarkets, southeast of Nashville, have a 95 percent occupancy rate.
While the West End submarket and Vanderbilt University have seen some condominium construction and conversion, the greatest growth area for multifamily housing continues to be southeast Nashville. In the southeast suburb of Smyrna, Flournoy Development is building Stoneridge Farms, the largest multifamily project being developed around the city of Nashville. The project will be the first Class A apartment community in Smyrna.
The availability of land in the Nashville area is scarce, thus new construction has shifted substantially to the outlying counties where zoned sites are available. Seventy percent of the 3,698 multifamily units currently under development in Nashville are located in its outlying counties. However, Nashville's suburban fringe is not seeing all the development as 60 percent of all construction is in cities which lie completely outside of Nashville. A good example is Murfreesboro, Tennessee, 30 miles south of Nashville, which is seeing active development from Tarragon Development and Gross Builders. Murfreesboro has 1,560 units under construction and more planned for the future.
Overall, the new construction in the Nashville area has meant strong sales activity as properties are selling for close to $80 per square foot. Rental rates for new communities are in the mid-$0.80 per square foot range and the average rent for a Nashville apartment is $0.75 per square foot or $694. The multifamily housing sector remains strong in Nashville and is stronger outside the city as a majority of the growth opportunity will be along the Interstate 24 corridor in southeast Nashville and in the northeast submarket of Hendersonville and Gallatin in Sumner County.
— Brennon Fitzpatrick, director of multifamily land brokerage, Grubb & Ellis|Centennial.
©2005 France Publications, Inc. Duplication
or reproduction of this article not permitted without authorization
from France Publications, Inc. For information on reprints
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