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MDHA Releases Downtown Real Estate Study | 2013-01-02
January 2, 2013
MDHA Releases Study of Downtown Nashville Real Estate Potential
Economic Analysis Shows Significant Demand for Broad Range of Land Uses
NASHVILLE, Tenn. – Metropolitan Development and Housing Agency Executive Director Phil Ryan today announced the release of an economic analysis of the potential demand for real estate in downtown Nashville, including forecasts for office, retail, hotel, residential and other uses over five- and ten-year periods. The study, by Randall Gross / Development Economics, an economic and strategic planning firm, projects demand for areas within the “inner loop” of Nashville, areas bounded by I-65, I-24 and I-40, with a particular focus on the potential for SoBro and the Rolling Mill Hill area. Key findings of the study include:
- Demand for residential uses in the downtown area remains strong in both the single family and multi-family sectors with a projected 3,535 residential units needed over the next five years.
- The market for office space is growing in downtown Nashville with a projected demand of between 294,000 to 445,000 square feet of space between 2013 and 2017. The study suggests information and media technologies, professional and technical services and management services will be the strongest demand drivers. Many of these firms can be attracted to downtown because of its strong reputation among the “creative class” of emerging technology workers.
- Occupancy rates among downtown Nashville hotels is strong and the demand for hotel rooms will grow as the Music City Center comes on line, but demand will be primarily for full-service hotels and the rapid growth in limited service hotels in downtown and mid-town may prompt an oversupply in that segment of the market.
- Strong opportunities exist for downtown to capture growing demand in certain market segments, including dining, retail, and entertainment; “artisan” industrial uses, and audience support facilities such as cinemas and musical/theatre venues.
- Capturing demand downtown for many of these uses will require policy makers to create “walkable” urban neighborhoods and to overcome negative perceptions about options for downtown parking. For example, downtown has significant unmet potential for destination retail, but still lacks walkable shopping and mixed-use districts with parking that can attract consumers from the greater Nashville region.
“This market study is the first comprehensive look we’ve taken at the downtown market in a number of years and I think it can help inform our decision making,” said Ryan. “Our goal is to build on the unique qualities of Nashville and to create a vibrant downtown that will draw people to live, work and play.”
“Downtown Nashville is at an important threshold for growth and this study forecasted significant potential for all types of development,” said Randall Gross of Randall Gross / Development Economics, the report’s author. “But, downtown will be best positioned to reach its full potential if policy makers focus on the issues which impact on the marketability of downtown and create an environment conducive to the right type of development.”
The Metropolitan Development and Housing Agency administers a variety of urban and community development projects, works to increase the availability of affordable housing, and leads and supports revitalization efforts in downtown and neighborhoods throughout the city.