Nashville’s Multifamily Market Continues to Perform in 1Q 2016 · Stonehenge Real Estate Group...
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Nashville MSA | Housing Permit Activity 0 5,000 10,000 15,000 20,000 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 New Housing Permits One Unit Permit Multi-Unit Permit Source: U.S. Census Bureau Nashville’s Multifamily Market Continues to Perform in 1Q 2016 Research & Forecast Report NASHVILLE | MULTIFAMILY 1st Quarter 2016 Key Takeaways > Supply totaled 4,192 at the end of 1Q 2016, more than double the 10-year average of 1,980 units. > Nashville’s multifamily market absorbed 4,797 units over the last 12 months, the largest volume since 2010. > Nashville’s annual rent growth of 6.7% in 1Q 2016 topped the averages for both the South region (4.2%) and the U.S. average (5.0%). Nashville Multifamily Market According to data from the Nashville Area Chamber of Commerce, Nashville can expect nearly 1 million more residents in the Nashville region by 2035. Nashville is boasting a 2.03% annual population growth rate with 71 people moving to the region per day. Middle Tennessee is projected to experience 65% employment growth by 2040. The combination of job growth, diversified economy, and a growing population continues to serve as a catalyst for demand in the multifamily market. Following a historic year, 2016 is off to a very strong start for Music City’s apartment market. Nashville’s development pipeline remains one of the nation’s most active. At the end of 1Q 2016, work was underway on 50 multifamily properties totalng 12,472 units. Of that total, 7,271 units are scheduled for completion in the coming year. Over 50% of these units are located in Central Nashville. Properties under construction include The Point at Waterford Crossing, a 685-unit apartment in Sumner County to be completed in July 2016, Giarratana’s 505-unit high-rise apartment downtown that will deliver in April 2018, and the 430-unit Element Music Row that is scheduled to open late second quarter. Nashville’s apartment marker recorded average occupancy of 96% over the last three years, leading to increased demand and rent growth levels. In the coming year, supply is expected to remain in record-high territory, with 7,271 units scheduled to complete within that time frame. Occupancy may decrease slightly and rent growth is likely to slow, yet market indicators suggest that based on long-term tailwinds, Nashville still has the potential to be an outperformer with regards to occupancy and rent growth. UNITS UNDER CONSTRUCTION SUBMARKET UNITS Central Nashville 6,325 West Nashville 1,000 Far East Nashville 999 Franklin/Brentwood 962 North Nashville 929 Sumner County 779 South Nashville 650 Murfreesboro/Smyrna 504 East Nashville 324 Southeast Nashville 0 Total 12,472 UNITS COMPLETING IN 12 MOS. SUBMARKET UNITS Central Nashville 3,890 Sumner County 779 West Nashville 692 Murfreesboro/Smyrna 504 Far East Nashville 432 East Nashville 324 South Nashville 320 Franklin/Brentwood 209 North Nashville 121 Southeast Nashville 0 Total 7,271 Multifamily Development - Submarket Rankings Summary Statistics 1Q 2016 Nashville Multifamily Market Existing Units 127,176 Quarterly Supply 1,458 Current Occupancy Rate 96.1% Quarterly Occupancy Change -0.3 Under Construction (units) 12,472 Monthly Rent $1,059 Rent per Square Foot $1.091 Quarterly Rent Change 0.9% Annual Rent Change 6.7% One-Year Forecast Annual Supply 7,271 units Annual Demand 5,374 units Annual Rent Change 4.2% Occupancy 94.9%
Transcript of Nashville’s Multifamily Market Continues to Perform in 1Q 2016 · Stonehenge Real Estate Group...
Nashville MSA | Housing Permit Activity
0
5,000
10,000
15,000
20,000
2017201620152014201320122011201020092008
New
Hou
sing
Per
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One Unit Permit Multi-Unit Permit
Source: U.S. Census Bureau
Nashville’s Multifamily Market Continues to Perform in 1Q 2016
Research & Forecast Report
NASHVILLE | MULTIFAMILY1st Quarter 2016
Key Takeaways > Supply totaled 4,192 at the end of 1Q 2016, more than double the 10-year average of 1,980
units.
> Nashville’s multifamily market absorbed 4,797 units over the last 12 months, the largest volume since 2010.
> Nashville’s annual rent growth of 6.7% in 1Q 2016 topped the averages for both the South region (4.2%) and the U.S. average (5.0%).
Nashville Multifamily MarketAccording to data from the Nashville Area Chamber of Commerce, Nashville can expect nearly 1 million more residents in the Nashville region by 2035. Nashville is boasting a 2.03% annual population growth rate with 71 people moving to the region per day. Middle Tennessee is projected to experience 65% employment growth by 2040. The combination of job growth, diversified economy, and a growing population continues to serve as a catalyst for demand in the multifamily market.
Following a historic year, 2016 is off to a very strong start for Music City’s apartment market. Nashville’s development pipeline remains one of the nation’s most active. At the end of 1Q 2016, work was underway on 50 multifamily properties totalng 12,472 units. Of that total, 7,271 units are scheduled for completion in the coming year. Over 50% of these units are located in Central Nashville. Properties under construction include The Point at Waterford Crossing, a 685-unit apartment in Sumner County to be completed in July 2016, Giarratana’s 505-unit high-rise apartment downtown that will deliver in April 2018, and the 430-unit Element Music Row that is scheduled to open late second quarter. Nashville’s apartment marker recorded average occupancy of 96% over the last three years, leading to increased demand and rent growth levels.
In the coming year, supply is expected to remain in record-high territory, with 7,271 units scheduled to complete within that time frame. Occupancy may decrease slightly and rent growth is likely to slow, yet market indicators suggest that based on long-term tailwinds, Nashville still has the potential to be an outperformer with regards to occupancy and rent growth.
UNITS UNDER CONSTRUCTIONSUBMARKET UNITS
Central Nashville 6,325
West Nashville 1,000
Far East Nashville 999
Franklin/Brentwood 962
North Nashville 929
Sumner County 779
South Nashville 650
Murfreesboro/Smyrna 504
East Nashville 324
Southeast Nashville 0
Total 12,472
UNITS COMPLETING IN 12 MOS.SUBMARKET UNITSCentral Nashville 3,890
Sumner County 779
West Nashville 692
Murfreesboro/Smyrna 504
Far East Nashville 432
East Nashville 324
South Nashville 320
Franklin/Brentwood 209
North Nashville 121
Southeast Nashville 0
Total 7,271
Multifamily Development - Submarket Rankings
Summary Statistics 1Q 2016 Nashville Multifamily Market
Existing Units 127,176
Quarterly Supply 1,458
Current Occupancy Rate 96.1%
Quarterly Occupancy Change -0.3
Under Construction (units) 12,472
Monthly Rent $1,059
Rent per Square Foot $1.091
Quarterly Rent Change 0.9%
Annual Rent Change 6.7%
One-Year Forecast
Annual Supply 7,271 unitsAnnual Demand 5,374 unitsAnnual Rent Change 4.2%Occupancy 94.9%
OCCUPANCY
SUBMARKET OCCUPANCY %
North Nashville 97.3%
Far East Nashville 97.3%
Southeast Nashville 97.1%
East Nashville 96.5%
Sumner County 96.5%
Murfreesboro/Smyrna 96.3%
South Nashville 96.2%
West Nashville 96.1%
Central Nashville 94.3%
Franklin/Brentwood 92.9%
MONTHLY RENT
SUBMARKET RATE
Central Nashville $1,608
Franklin/Brentwood $1,331
West Nashville $1,138
Murfreesboro/Smyrna $1,050
Far East Nashville $993
South Nashville $977
Sumner County $953
East Nashville $941
North Nashville $907
Southeast Nashville $871
Historical Rental Rates
67
8
910
3
245
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1. Central Nashville2. East Nashville3. Southeast Nashville4. South Nashville5. West Nashville6. North Nashville7. Sumner County8. Far East Nashville9. Murfreesboro/Smyrna10. Franklin/Brentwood
Submarket Overview - 1Q Rankings
QTRLY RENT CHANGE
SUBMARKET RATE
Far East Nashville 2.7%
Southeast Nashville 2.1%
North Nashville 1.9%
East Nashville 1.4%
West Nashville 1.0%
Murfreesboro/Smyrna 0.8%
South Nashville 0.7%
Central Nashville 0.7%
Sumner County 0.4%
Franklin/Brentwood -1.8%
QTRLY OCCUPANCY CHANGE
SUBMARKET RATE
Southeast Nashville 1.8%
Far East Nashville 0.7%
Sumner County 0.5%
North Nashville -0.1%
East Nashville -0.1%
Murfreesboro/Smyrna -0.1%
West Nashville -0.3%
South Nashville -0.9%
Central Nashville -1.4%
Franklin/Brentwood -3.1%
Source: MPF Research
Historical Occupancy Rates
Source: MPF Research
#11#9#1#5Cities Americans are Flocking To
-Forbes.com (October 2015)
Destination of the Year - Travel + Leisure (December 2015)
Best in Travel 2016 - Lonely Planet (October 2015)
Hottest U.S. Market in November 2015 - REALTOR.com (December 2015)
$600
$700
$800
$900
$1000
$1100
1Q164Q153Q152Q151Q154Q143Q142Q141Q144Q133Q142Q131Q134Q123Q122Q121Q124Q113Q112Q111Q11
2011 2012 2013 2014 2015 2016
1Q 2017 FORECAST - 94.9%
93.8%
94.1%
95.0%
95.6%
95.1%
95.7%95.8%
95.1%
94.9%
95.8%
96.0% 96.0%
95.8%
96.1% 96.1%
95.1%
95.5% 95.5%
96.3%
95.2%
2 Nashville Research & Forecast Report | 1Q 2016 | Multifamily | Colliers International
1Q INVESTMENT ACTIVITY
PROPERTY BUYER UNITS SALE PRICE PRICE/UNIT
Bellevue West Bascom Group 560 $63,300,000 $112,946
Grand Oak at Town Park Starlight Investments 300 $49,600,000 $165,333
Stoneridge Farms Olympus Property 364 $46,500,000 $127,747
The Grove Murfreesboro
Harrison Street RE Capital 186 $36,500,000 $196,231
Summit at Nashville West
Stratford Assisted Living LLC 190 $33,900,000 $178,553
Highlands at the Lake Bascom Group 278 $30,300,000 $108,813
Village Green Hills Champion 82 $22,500,000 $274,390
James Robertson Apartments HRI Properties 124 $18,200,000 $146,774
DEVELOPMENT LEADERS
DEVELOPER UNITS COMPLETED IN THE LAST 12 MOS.
UNITS UNDER CONSTRUCTION
TOTAL UNITS
Giarratana Nashville LLC 146 1,022 1,168
Lifestyle Communities 403 451 854
Bristol Development Group 393 392 785
Stonehenge Real Estate Group 328 390 718
Waypoint Residential/Rohdie Group 0 685 685
Source: Real Capital Analytics
Cumulative Monthly Investment Volume
Source: Real Capital Analytics
Cost of Living Index
Source: Nashville Area Chamber of Commerce
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800
1000
1200
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1600
2013201420152016
DNOSAJJMAMFJ
Cum
ulat
ive
Mon
thly
Vol
ume
($ m
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Seattle 140.3
San Francisco 176.4
Los Angeles 140.3
Austin 96.0
Tampa 91.6
Chicago 116.2
Indianapolis 91.1
Nashville 95.2
Atlanta 99.9
Raleigh 90.5
Charlotte 96.4
New York City 227.4
Boston 144.3
Source: FRED Economic Data
Employment/Unemployment
650
700
750
800
850
900
950
Jan-16Sept-15May-15Jan-15Sep-14May-14Jan-14Sep-13May-13Jan-13Sep-12May-12Jan-12Sep-11May-11Jan-11Sep-10May-10Jan-10
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4%
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ployment Rate
Unemployment RateNon-Farm Employment
3 Nashville Research & Forecast Report | 1Q 2016 | Multifamily | Colliers International
NOTABLE PROJECTS UNDER CONSTRUCTION
# NAME ADDRESS DEVELOPER UNITS # OF STORIES
ESTIMATED DELIVERY
1 505 505 Church Street Giarratana Nashville/MDHA 431 45 2Q 2018
2 Element Music Row 1515 Demonbreun Street Childress Klein Properties 376 19 2Q 2016
3 Church Street 1201 Church Street Pollack Shores Real Estate Group 352 5 2Q 2018
4 SkyHouse 1701 Broadway Novare Group/Batson-Cook Development Company
350 25 2Q 2017
5 Aertson Midtown 905 20th Ave Sout Buckingham Companies 344 17 2Q 2017
6 M Residences 814 19th Ave South Lennar Corp 342 19 3Q 2017
7 SoBro 2nd Ave S & Demonbreun Street Giarratana Nashville LLC 320 33 4Q 2016
8 One Metrocenter 45 Vantage Way The Residential Group 320 4 2Q 2016
9 Acklen 111 Acklen Park Drive Forestar Group Inc 320 6 2Q 2016
10 Carillon (The) 1001 4th Ave North Embrey Partners 306 4 3Q 2016
11 Aspire Midtown 2400 Charlotte Avenue Lincoln Property Company 301 5 2Q 2016
12 Broadstone Germantown 1100 3rd Ave North Alliance Residential Company 279 5 3Q 2016
13 Crescent Music Row 1221 Division Street Crescent Communities 276 5 4Q 2016
14 Fountains at Germantown 1407 3rd Ave North Proffitt Dixon Partners 275 5 4Q 2016
15 PDG Germantown 1309 3rd Ave North Price Development Group 268 5 2Q 2017
16 909 Flats 909 Rosa L Parks Boulevard Lincoln Property Company 262 5 3Q 2016
17 Music Square Flats 64 Music Square West Forestar Group Inc 257 6 1Q 2017
18 Opus 31 310 31st Ave North Stonehenge Real Estate Group 249 4 2Q 2017
19 Cadence (The) 107 16th Ave South Phoenix Property Company 232 6 2Q 2016
20 1818 1818 Church Street Giarratana Nashville LLC 230 6 2Q 2016
21 Village 21 1610 21st Ave South GBT Realty Corp 219 4 1Q 2017
22 Acklen on 12th 1900 12th Ave South The Mainland Companies LLC 193 5 4Q 2016
23 10th & Jefferson 941 Jefferson Street Metropolitan Development and Housing Agency 142 4 1Q 2017
24 1000 Division 1000 Division Street The Mainland Companies LLC 103 4 2Q 2016
25 26th and Clarksville 2121 26th Ave North Urban Housing Solutions 79 3 2Q 2016
26 1821 Jefferson 1821 Jefferson Street Titus Young Real Estate LLC 54 4 1Q 2017
6,325
4 Nashville Research & Forecast Report | 1Q 2016 | Multifamily | Colliers International
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