Nashville Population Boom Creates Condo Shortage but Investor Opportunities

NASHVILLE, July 10, 2018 /PRNewswire-PRWeb/ -- Nashville has experienced a population boom in recent years; the metro area is averaging a net gain of 94 people per day(1) and ranks 7th on Forbes' list of "America's Fastest-Growing Cities 2018".(2) A rush to build apartments to accommodate this influx has led to an oversupply of rental properties;(3, 4) meanwhile, soaring demand for condos(5) and an "extremely low supply" of resale units(6) has posed ongoing challenges for prospective homebuyers. Meg Epstein, founder of Nashville-based CA South Development, believes the current imbalance presents exceptional opportunities for those who recognize the market potential of young urbanites. Epstein is actively working to meet the city's rising demand for downtown condominiums, with over $200 million in condo projects funded and under development and hundreds more units in the pipeline awaiting entitlement and funding.

Downtown Nashville housed 3,388 rental units and 2,358 condo units as of July 2017; from that date through the end of 2018, developers were projected to add 2,213 new apartment units and only 71 new condos.(6) Of the 123 multifamily projects currently in progress throughout the metro area, fewer than 1 in 5 are condos or townhomes—the majority of buildings, and a far greater proportion of individual units, are apartments.(7)

Consequently, industry observers predict apartments will experience "limited rent growth and a drop in occupancy"—which is already down 160 basis points this year—due to pockets of oversupply and a continued supply imbalance.(4) Meanwhile, realtors expect demand for downtown condos to grow even stronger,(5) with the "extremely low supply" of units leading to escalating prices and a sellers' market.(6) Citywide, Nashville has only a two-month inventory of condo units,(8) whereas a six-month supply is considered a balanced market.(6)

"Nashville's disproportionate emphasis on apartment construction simply isn't sustainable over the long-term," said Epstein. "Though people relocating here may initially lease an apartment while they get acclimated to the city, most will eventually seek a place of their own. Banks tend to favor apartment projects, since they don't mind recouping their investment over a period of years, so developers keep building rental units. However, current market trends indicate condos are a far better investment option."

The Wall Street Journal reports that millennials have "flocked to downtowns to live closer to jobs, transit and urban amenities,"(9) and the National Realtors Association reports that millennials now represent 36% of recent homebuyers.(10) The fact that 29% of Nashville's population falls into the 20 to 39 age group(11) may help to explain the rising demand for urban condos. As center-city properties have become increasingly costly and overbuilt, some developers have reclaimed "forgotten waterfronts" such as Brooklyn's Gowanus Canal, Boston's Seaport district and Tampa's Garrison Channel.(9) Epstein adopted that strategy for her forward-looking Nashville condo project, River Tower. Perched on the banks of the Cumberland River adjacent to Germantown, the 35-unit development features expansive balconies overhanging the water and a modern aesthetic designed to appeal to young professionals relocating from other urban centers such as Los Angeles, San Francisco, Chicago, Miami and New York City.

Epstein anticipates a continued population surge in Nashville and believes residential development will remain a smart bet. PwC ranks Nashville #9 for "Overall Real Estate Prospects" and #5 for "Investment",(12) and Forbes lists it at #6 in its "Where to Invest in Housing in 2018" analysis.(13) Now that River Tower is under construction, CA South is working on new projects in some of Nashville's most popular neighborhoods, including a mixed-use office, retail and 132-unit condo development in the Downtown Core, a 140-unit condo tower in Chestnut Hill, two mid-rise condo buildings just south of The Gulch and near 8th Avenue South, and a 38-unit townhome community in Belmont/Hillsboro. Epstein's ambitious vision for the city's condominium market, backed by a decade of development and construction expertise, is earning her a reputation as the "Condo Queen" of Nashville.

"There is such incredible potential for condominium development in Nashville. I relish the challenge of transforming empty lots and outdated buildings into inspiring, modern residences that will enhance the cityscape and thrill homeowners," noted Epstein. "We already have site plans, architectural renderings and expert development teams lined up for multiple projects, and we're excited to bring them to life."

Meg Epstein has successfully completed a number of complex, large-scale projects in the Los Angeles, San Francisco Bay and Nashville markets. By understanding her buyers and catering to their wants and needs, Epstein has been able to maximize her partners' return on investment. Since relocating to Tennessee, her firm—CA South—is now redefining urban living in Nashville and fulfilling rising demand for condominiums with modern-style developments that break from the city's architectural tradition and reflect its vibrant new outlook. Her development teams are interested in partnering with investors who share the same vision for Nashville's bright future and see the opportunity in capitalizing on the market's current imbalance of apartments and condos.

To review Epstein's project portfolio, credentials and recent press coverage or to learn more about current investment opportunities, visit http://www.caSouthDevelopment.com.

About CA South Development:
Founded by Meg Epstein in 2014 and currently based in Nashville, CA South is a boutique real estate development firm on a mission to expand and enhance urban revitalization. Epstein has over a decade of industry experience and a wide breadth of expertise in real estate development, fund management, project underwriting, investment, site acquisition and planning, construction management, project funding, entitlement and architectural supervision. She has overseen more than $250 million in real estate projects, from the construction of a 60,000-square-foot Bel-Air chateau to the renovation of Tammy Wynette's legendary "First Lady Acres" estate to the development of Nashville's first waterfront condo tower. Epstein is a licensed real estate agent and a licensed Residential and Commercial General Contractor, and is currently pursuing her Certified Commercial Investment Member (CCIM) designation. She serves on the board of the Nashville Civic Design Center and is an active member of the NAIOP Commercial Real Estate Development Association and the CCIM Nashville Chapter. Her charitable work includes Habitat for Humanity and the Citizens Commission on Human Rights (CCHR) Nashville. To learn more about Meg Epstein and CA South, visit http://www.caSouthDevelopment.com.

(1)    U.S. Census Bureau. "Estimates of the Components of Resident Population Change"; American Fact Finder; 2017 Population Estimates released March 2018.
(2)    Sharf, Samantha. "America's Fastest-Growing Cities 2018"; Forbes; February 28, 2018.
(3)    Gagiuc, Anca. "Supply Moderates Rent Growth in Nashville"; Multi-Housing News; February 6, 2018.
(4)    Gagiuc, Anca. "Construction Surge Stalls Rent Growth in Nashville"; Multi-Housing News; July 2, 2018.
(5)    Lewis, Bill. "Demand for Condos Soars in Nashville Region"; Tennessean; November 24, 2017.
(6)    Nashville Downtown Partnership. 2017 Residential Report; July 2017.
(7)    Sichko, Adam. "Nashville Crane Watch: The Big Map of Projects"; Nashville Business Journal; updated June 8, 2018.
(8)    Greater Nashville Realtors. May 2018 Market Stats; June 7, 2018.
(9)    Korte, Lara. "As Urban Housing Boom Continues, Developers Reclaim Forgotten Waterfronts"; The Wall Street Journal; June 19, 2018.
(10)    National Association of Realtors. "Millennials Lead All Homebuyers, Even as Some Can't Escape Their Parents"; press release issued March 14, 2018.
(11)    U.S. Census Bureau. "Age and Sex: 2012-2016 American Community Survey 5-Year Estimates"; American Fact Finder; released December 2017.
(12)    PwC and the Urban Land Institute. Emerging Trends in Real Estate: United States and Canada; September 2017.
(13)    Sharf, Samantha. "Where to Invest in Housing in 2018"; Forbes; February 1, 2018.

SOURCE CA South Development