Most of you know that I keep a keen eye on the Nashville condo market and prices, but many of you don’t realize how much in-depth research I do. It is also interesting to learn that many buyers assume that the Velocity in the Gulch is the least expensive condo development in Nashville, but that is only true if you are looking at total price. A more interesting view is which condo developments offer the best price per square foot as our real estate market is heavily weighted in that direction when it comes to generating comps or ascertaining value. It’s just another way to compare condo buildings from an ‘apples to apples’ perspective.
Nashville Condo Prices Have Shifted
It should not come as shock that one of the most expensive condo buildings to build, is one of the best priced to sell. The Terrazzo is backed by an investment fund who understands the market forces and understands how to recover their development loan. Yes, the Canyon Johnson Urban Fund is exercising their rights under a forbearance agreement, but so are Fifth Third Bank, Compass Bank, Bank of America, Pinnacle Bank and Wachovia Bank. So why is the Terrazzo priced so much better than the rest?
There are several reasons, but the more interesting question is why aren’t the other banks pricing their condos as aggressively? Do they believe that they have a better condo product or that their location is more desirable? Perhaps, they have more patience; unlikely, but it is a thought. It is also important to realize that this pricing won’t last too much longer. As the development nears 60% sold out, the Terrazzo should be slowly raising pricing, or at least, that is what the economics of the forbearance agreement seem to suggest.
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