Final Foreclosures for Rhythm at Music Row

Rhythm at Music Row CondosNext week the remaining developer owned condos in the Rhythm at Music Row will foreclose. This foreclosure will mark the end to a rather unconventional chapter for downtown Nashville high-rises and usher in a new, more welcomed chapter that will see market forces driving value.

On Tuesday, September 6th, Cadence Bank and Pinnacle Bank will take possession of 47 unsold condos in the Rhythm. Each bank will take control of their proportionate share of condos (Cadence Bank 39%, Pinnacle Bank 61% roughly) and plan to offer these condos to the public at reduced prices. There is no confirmation on initial pricing, but my estimates place the current value of the unsold condos at $235/ft in aggregate. One hurdle that must be overcome is the fact that the Rhythm will immediately lose FHA approval upon foreclosure. This will hurt the marketability of the condos by reducing the financing options available to new purchasers. But, there seems to be a plan. I have learned that Pinnacle Bank plans on immediately reapplying for FHA approval via HUD once the foreclosure is complete. The result will be a 30-45 day delay in a new purchaser’s ability to use a low down payment, FHA backed loan to purchase. It is my belief that each bank will allow a longer closing time in their contracts to make up for this delay, making it a moot point.

The long story short is that this foreclosure will offer condo buyers a value that has not ever been seen before in the Rhythm. I suspect there is a pent up demand for these condos as many buyers have been lying in wait for just such an opportunity. As a result, I cannot imagine a scenario, if priced correctly, where these remaining 47 condos take more than 9 months to sell.

Which Condos will be Available?

There is a complete mixture of 1-2 bedroom condos with all views on all floors from the 5th floor to the Penthouse. In my personal spreadsheet I show about 82% being 1 bedroom condos. I also show several of the premium view condos being available as well.

Is This Bad for the Rhythm?

Not at all. In fact, it may be the healthiest outcome for the Rhythm. There is no doubt that the remaining developer inventory (47 of 105 condos) has held true market forces at bay. Many buyers did not purchase in the Rhythm assuming there would be a better time to purchase in the future. This killed the momentum of sales and stunted the building’s true value. Once these remaining condos are sold, even at lower prices than market, market forces will be allowed to return. It is an imposed correction that we have seen proven many times in buildings like the Adelicia and Terrazzo.

When Can I Make an Offer?

Now. I would not wait until after the official foreclosure proceedings, you’ll be competing with too many others. If you are looking for the best view or highest floor, you better put eyes on this project asap. Contact me for complete details and to make an appointment to view these luxury high-rise condos in person.

Email: Rhythm@GrantHammond.com
Phone: (615) 945-7123

Nashville Real Estate Steal Alert – Werthan Mills

It baffles me why this 2 bedroom, 2 bath, 1,585 square foot loft at Werthan Mills has not sold.

First, it is a foreclosure. Second, it is priced at the LOWEST price recorded in Werthan Mills in the past half decade, $126.12/ft. The average price over the past 2 years has been $161.88/ft with the median price being $172.52/ft. That puts the current market value of this loft between $256,580 and $273,444. Third, this loft originally sold for $329,375 on 5-2-2006 and then resold for $350,000 on 2-27-2007. This tells me that when Nashville’s real estate market recovers in a few years, this loft is an easy sale at $299,000. Fourth, even Metro Nashville believes this loft is valuable, they have it appraised for $344,900. Fifth, the loft has a massive wall of windows on the courtyard that orients to the south for incredible light, especially for a loft. Sixth, 18 foot ceilings. Need I say more??

Call me ASAP, let’s go get this deal before someone else figures this out! Call 615-945-7123 or email Grant@GrantHammond.com

Werthan Mills Deal of the Decade

View other lofts for sale in Werthan Mills.

State of the Gulch Real Estate Market

The Gulch Nashville

The Gulch in NashvilleIf you live in the Gulch you may be acutely aware of the new and proposed activity, but for the rest of Nashvillians, it may be difficult to see just how much is happening. Since the beginning of the year, 3 new retailers have opened their doors and 2 more are planning on opening by Spring of next year. While that may not amaze the skeptics, one must realize that the lower Gulch is no larger than 3 square blocks. Additionally, these new tenants are paying well over $20/square foot, putting the Gulch on par with rents in Green Hills. Retail is not the only hot property type in the Gulch, multifamily apartment activity is crackling. There is a 302 unit multifamily project under construction, a 305 unit development announced and 2 others in some phase of their due diligence. All of this combined activity has led the two condo projects in the Gulch to sell more condos this year than any other area of downtown. Despite the Velocity converting to apartments, the Terrazzo and Icon have outsold everyone else.

Gulch Retail Space

The newest retailers are Two Old Hippies who have taken over the old Provence space in MarketStreet’s redevelopment project on 12th Avenue, Sweet CeCe’s frozen yogurt who has taken space in front of the Turnip Truck and Apricot Lane who has done the same. Both Two Old Hippies and Apricot lane are rather high end stores attracting many in Nashville’s music scene. Bar Louie, a 50 location operation, has just announced plans to take 8,000 square feet in the bottom of the Velocity and a 24 hour diner concept from New Orleans will be announced in the Icon on the Division Street side. There are several rumors of prospective retail tenants swirling through the chatterbox about the remaining space in the Velocity and Terrazzo, but no concrete details just yet. It appears to be only a matter of time before these remaining spaces fill up.

Gulch Multifamily Apartments

Murcury View Lofts in GulchFor the last decade, the 32 unit Mercury View Lofts enjoyed the benefits of being the only market rate for rent product in the Gulch. This fact led to 100% occupancy rates for the Gulch and never gave us a true indication of demand. In March of this year, Pollack Partners of Atlanta purchased and converted 220 units in the struggling Velocity condominium project to apartments. Pollack began their leasing effort in April and have already leased 85% of their units at a stabilized rent of $2/foot. This unprecedented absorption of 40 rental units per month has amazed even the biggest Gulch advocates.

Eleven North is now under construction on the far north end of the Gulch, appropriately enough, at the intersection of 11th Avenue North and Charlotte. This 302 unit multifamily development is the result of a partnership between TriBridge Residential and Stonehenge DCM, both of Atlanta. If you recognize the name TriBridge, you should, they partnered with Tony Giarratana in 1997 to build the 24 story Cumberland apartment high-rise. Eleven North will be a 4 story elevated building served by 445+/- surface parking spaces hidden from the street. This project is being built in two phases, the first will deliver in Spring 2012 and the second in Fall 2012.

Pine Street Flats ApartmentsNewly announced Pine Street Flats is a 305 apartment development located between The Icon and Velocity in the heart of the lower Gulch. This project will be developed by MarketStreet who already owns the land. A 6 story wrap style project, Pine Street Flats will feature structured parking, pool, fitness center, grilling area, cabana and club room. At the moment debt financing has not been identified, but it is likely that construction will begin in Fall 2011 and finish in Spring 2013. These 1 and 2 bedroom apartments are expected to rent between $1,000 and $2,000/mo.

Looking forward, Ray Hensler, developer of the ultra successful Adelicia high-rise, has been tweaking his proposed “renter by choice” high-rise that may be ultimately located on Eakin’s Universal Tire site on the corner of 12th Avenue and Laurel Street. This would be the first high-rise rental project constructed in Nashville since Tony Giarratana completed The Cumberland in 1999. Hensler’s project would soar 20 stories and offer up to 250 luxury condo-style apartments at rents that begin in the lower $1,000’s and reach as high as $5,000. Before the skeptics begin clearing their throats, let me remind you that private owners in the Adelicia, West End, Icon, Terrazzo, Encore and Viridian have been achieving similar rents over the past half decade. Hensler’s high-rise will be highly amenitized and set a new rental standard in Nashville.

There also seems to be activity on the failed Griffin Plaza site in the heart of the lower Gulch. While no details are available, it appears as though several out of state developers are taking a hard look at constructing a high-rise rental project in this location. The Griffin site is located directly across the street from the Turnip Truck, the Gulch’s own organic grocery store and would seem to be perfectly located.

Gulch Office Space

Let me start by saying that currently there is not a plethora of office space in the Gulch, but there’s also not much vacant either. Offering approximately 80,000 square feet, the Terrazzo is the largest office building as well as the newest. Signing 4 leases in 2011, this building is now essentially full, which amazes me given the fact that this Class A space delivered during the recession and is not cheap. It should also be mentioned that the Terrazzo is a mixed use building that houses 117 luxury condos, 4 of which remain available for sale.

The Bohan Building is a 60,000 square foot building with one 8,000 square foot vacancy on Demonbreun Street (Old Lyric Street space) and the McGavock building is a 52,000 square foot development with one 9,000 square foot vacancy (currently being negotiated). Both office buildings are considered Class B office redevelopments.

Looking to the future, Eakin Partners have a conceptual 350,000 to 400,000 square foot Class A high-rise located on the corner of 12th Avenue and Demonbreun. This is the location of the old Universal Tire, a site that Eakin purchased in February 2006 for $6.25 million. According to my sources, it would take 50-60% of the building being preleased in order to begin construction. Rumor has it that this site has made the coveted Waller Lansden Law firm relocation top 3 list, but I have no way of confirming this intel. I will say this though, it makes a ton of sense for Waller Lansden to choose this location. Once the Music City Center is completed, Demonbreun Street will become a new gateway boulevard into downtown Nashville. Highly visible, this site offers unparalleled walkability and livability, a combination not yet found in Nashville. This site makes more sense than either Alex Palmer’s site or Lionstone’s site. Of course, I am assuming the price tags are all the same.

Condos in the Gulch

Inside a Bedroom in IconWhere once there was a “glut of Gulch condos for sale” (thank you Tennessean for that rather calamitous phrase) now there are few. The 419 unit Icon is down to 65 unsold condos and the 117 unit Terrazzo is down to just 5. During 2011, both buildings have averaged a combined 10.3 closings per month. This gives the Gulch 7 months of unsold developer inventory remaining. Add this 7 months of inventory to the 1 month of resale inventory plus an unknown shadow inventory and you’ll most likely arrive at a net aggregate of one year’s worth of inventory. In other words, it will not be a buyer’s market by this time next year. Buyers waiting for the bottom of the market better start making moves now, least ye be left out in the cold. Sellers, your wait is almost over. Calculations show that prices will begin to rise in earnest as soon as January 2012 and likely will continue for the next several years. The Gulch is poised for quite a good run.

As the broker who has sold more condos than any other broker in Nashville, I look forward to the opportunity of aiding you in either purchasing or selling. Contact me for a private consultation.

I Trust and Need Your Opinion

Grant Hammond Real Estate Logo Skyline

Trusted friends, family and clients, I am in need of an honest opinion. For the last several months I have been John Kerrying (flip-flopping) over which new logo I am going to use to brand my business. I keep finding reasons not to pick one and move forward and so I am in need of a more sane opinion, yours (yes, I have driven myself insane over this decision). Both logos are very similar, but oh so different. I am showing you these with a black background because the very first place I am plastering it is on the side of my Hummer. Please vote by leaving a comment (keep it clean kiddos). At the end of the week, the populous shall have spoken and Grant Hammond’s real estate business shall finally have its new printed identity!

Logo Option #1

Grant Hammond Real Estate Logo

Logo Option #2

Grant Hammond Real Estate Logo Skyline

Thank you very much for breaking the tie between me and myself. BTW – don’t be shy about giving suggestions on how these logos could be improved.

YTD Sales for the Terrazzo Condos

2011 Sales for the Terrazzo Condos

Just past the half way mark in 2011, the Terrazzo in the Gulch has sold 17 condos totaling an impressive $6.27 million. Of the 17 recorded sales, 16 were developer owned condos and 1 was a resale (highlighted in blue). There were no foreclosures or short sales during this period. The 117 condo development is now 86.32% sold out. Of the remaining 16 condos, 7 are under contract, leaving 9 total unsold units. Of the 9 unsold condos, 5 are penthouse residences. In other words, if you are an under $800,000 buyer who would like to pursue the Terrazzo, your time is running rather short. On the flip side of the coin, current Terrazzo owners will soon see the inevitable appreciation that comes when a developer sells out of their inventory. Those who secured condos on higher floors with better views will see a greater gain than those who did not. Should you be considering selling your Terrazzo condo, call the most successful condo broker in Nashville. I can give you a true market valuation and recommendation for optimal market arrival.

View the condos for sale in the Terrazzo

Terrazzo Condos Sold in 2011

2011 Sales for the Terrazzo Condos

YTD Condos Sales in Nashville’s Icon

Icon in the Gulch Condo Sales 2011

With slightly more than 7 months gone in 2011, the Icon in the Gulch has sold 59 condos totaling over $17.46 million this year. Of the 59 recorded sales, 9 were resales (highlighted in blue) and 50 were new developer sales. Of the 9 resales, 1 was a foreclosure on the 9th floor. The 419 condo development is now just over 75% sold out. There are approximately 90 unsold developer condos remaining, but as many as 12 may already be under contract. A year ago, the Icon had recorded 51 total sales at this point, 49 were developer owned condos. The Icon is tracking to sell 85-90 total condos in 2011, this would break their record of 84 condos set in 2009 (keep in mind there was a Federal Tax Credit Incentive in 2009). Interestingly, the YTD average price of $275.30/ft is tracking 2.4% lower than this time last year. I’d like to think that my expert negotiating skills has a little to do with this fact. Should you be in the market for a condo in the Icon, talk with the most successful condo broker in Nashville.

View current condos listed for sale in the Icon

Icon Condos Sold in 2011

Icon in the Gulch Condo Sales 2011

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