Nashville Designation as 18-Hour City Good For Real Estate Industry
NASHVILLE, Tenn.--Nashville is among the Top 10 "18-Hour Cities" in the country that are expected to see rapid growth and returns for the real estate industry.
A new report from PriceWaterhouseCoopers and the Urban Land Institute titled "2016 Emerging Trends in Real Estate" states based on a survey of industry analysts, the next 24 months "look doggone good for real estate."
While the big-name "24-Hour Cities" like San Francisco, Miami, Chicago and New York have see their outlooks drop the last six years, markets like Nashville, Atlanta, Charlotte, Portland and Dallas have all seen their prospects for growth rise.
These markets have been coined 18-hour cities because they are "hip," are among the top markets for entrepreneurship and provide an opportunity for "superior yields" for investors. In short, they offer all the benefits of a 24-hour gateway city but at a lower cost.
As one equity investor explains it in the report, ""In Nashville, we bought an office building for a 7.25 cap. We plan to redo the lobby, roll the leases to market, hold for four years, and then sell.
Nashville is a strong secondary market with some risk, but the price was much more reasonable than core assets in primary markets." That's an 18-hour city story, a deal that works in a vibrant downtown that is drawing residents and businesses to the core."
Other trends cited in the report that bode well for real estate investors and the industry are:
-Millennial Parents Moving to the Suburbs: Six of ten Gen-Y respondents surveyed plan to live in a single-family home five years from now.
-Office Spaces are Changing: Strong job gains have brought a need for office space even though many companies are moving to open floor plans. The move to these types of floor plans continues the need for redevelopment of existing space and the need for new locations to be found for startups.
-Increases in Rental Housing Need
-A Shift to Get Rid of Parking Lots/Spaces: AAA reports the percentage of high school seniors with a driver's license dropped from 85% to 73% from 1996-2010 and the decline has continued. Miles traveled by car for people 24-years-old and younger is also down 23 percent. The rise of Uber and Lyft only add to the diminishing need for parking lots and spaces. Market trends suggest all the current lots and spaces in major cities could be better used by creating residential or business spaces.
-Urban Agriculture Leading to a Need for Spaces to Grow Local Food
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