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Chances of announced project construction in 2012


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These are my numbers on announced projects in Nashville and the percent of being built in 2012. Again this is my opinion and I think I may be average in my numbers. Not too high or low I don’t think. I am just trying to be realistic. Most of the office towers are around a 50/50 chance except for the 505 because it is such an ambitious project and would require a very large commitment of space and more probably a new HQ relocation to Nashville. I do know of a couple of more projects that have not been announced and a couple of more in the DT area that is rumored that could be substantial projects from my understanding. All in all I think the next year may be an exciting year for Nashville and the built fabric of the city is going to change drastically.

Possible 2012 construction

Kassam Residence Hall-6 to 7 stories 100 %

505 CST-38 stories 20%

The SoBro-30 stories 60%

Hensler Tower-23 stories 70%

Eakin Office tower-20 stories 50%

Gulch office tower-12 stories (1st possible tower or 5) 60%

Tony’s Hotel-17 stories 60%

Hyatt Place-13 stories 90%

WES office portion- 23 stories 50%

Hotel portion-14 stories 50%

Bristol apartments on broadway-7 to 9 stories 75%

Pine Street Lofts-6 stories 95%

Med Mart-12 stories 65%

Broadstone @ Centennial- 5 to 7 stories 75%

New hotel @FYE site-8 stories 50%

One city tower 1- 5 to 7 stories 70%

One city tower 2 – 5 to 7 stories 70%

Residence/ Spring Hill project on Broadway- 9 stories 30%

Park 25-8 stories 60%

Omni hotel- 22 stories U/C (Under Construction) 100%

Elliston 23- 6 stories U/C (Under Construction) 100%

Please feel free to comment

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You seem pretty bullish on Lake Palmer being drained and converted into architecture. Interesting. How awesome would it be if all these residential projects came to fruition in the next 12 to 18 months? I think the in town market, especially downtown, for rentals is vastly undeserved and these projects could spark the urban renaissance of Nashville by bringing thousands of new residents into the city.

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I think Palmer is not planning on going anywhere untill that project is out of the ground. He is as determined as Tony is to build his projects.It is not been declered DOA yet. Just as a side note, I have included some office market numbers from Cassdiy Turley below. Nashville is way behind as far as its office market is concerned as compaered to a few other cities. I did give all of the apartment projects a much higher chance of starting. Based on what I have seen happening with the economies of our friends in Europe I am a little concerned.

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CITY ------------------ TOTAL sq ft ----------------------- CBD sq ft ----------------- CBD vacancy ---------- total Vacany

Cincinnati ----------33 Million -----------13.1 Million------- 22.1% ------ 23.3 %

Louisville -----------21.2 --------------------n/a --------------- n/a --------- 15%

Indianapolis--------- 31.9 ------------------11.9 ---------------- 18.5% ------20.7%

Memphis-------------19.5 ------------------ n/a ------------------ n/a--------- 19.2%

Nashville ------------ 33.3 ----------------- 7.9 ------------------ 21.9% -------13.3%

St Louis -------------50.6 -------------------11.9 ---------------- 29.3% ------ 17%

Raleigh ------------- 45.8 -------------------n/a ------------------ n/a ---------18.5%

Charlotte ------------ 95 --------------------22 -------------------- 11% ------- 13.2%

Numbers are latest from Cassidy & Turley

Nashville is way behind Charlotte as far as total square footage go but is holding its own the total market vacancy rate. We have a long way to go to catch up with or pull in front of our peer cities. So maybe some of the office buildings will get built. With everything proposed in the West End, DT and Gulch, the total is only a little over 4 million sq feet.

We need some major corporate relocations for sure.

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Also, I think the Class A vacancy rate in Nashville is closer to 11-13% in comparison to the overall vacancy rate in the low 22%. Some believe that Nashville could stand to build more class A space, with parking, and actually absorb it. Maybe 505 has a chance. Also, I love the reuse of older buildings scattered throughout the core like Cummings Station, the CB Ragland building, the Trolley Barns and the possible renovation of the Bill Vorhees building.

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There is an old saying in the built environment world. "Nashville talks about building whereas Atlanta actually does it." If this were Atlanta, all of the above mentioned list would be built. The only proposals I am really comfortable with are the hotel proposals because cities always need to flesh out their hotel inventories. Basically 24 hour a day use buildings get old and have to be replaced to meet the demands of a new economy and a new public.

I regards to developments like Vanderbilt campus construction, 5-9 story apartment buildings, and the like, they are ongoing projects in a city with population growth that demands more urban rather than suburban development. I have not done a case study, but I can safely make the assumption suburban apartment construction is down so naturally new product is being built. There are thousands of apartments around the city that once they get to a certain age are converted to low rent, low socioeconomic housing so more newer product comes on the market.

The projects that have the lowest chance of being built are the ones that serve the least amount of the public. Skyscraper luxury apartments serve the top 1-5% of the population. Therefore their construction is not a necessity compared to projects like Pine Street Lofts.

Projects like West End Summit are commonplace and the developer who gets their product to market first are the ones who will succeed. If the demand is there for office space, it will be built.

Tony's dream tower, although an amazing project, is probably a $500,000,000 project. In a economy with 9%+ unemployment, 26,000,000 unemployed or underemployed, two wars affecting economies around the world, world hostilities, European bank crisis, and many other factors, there is little chance such a tower would be built and Tony is left with a public criticizing him even more since Signature Tower was never built. Simply put, no bank is in any position to loan him a half a billion dollars.

My guess is 10% of the list will actually be built. One has to remember, businesses are still flocking to the suburbs. America is now a suburban nation, and although studies show a large number are living in cities, that actually means people are living 25-50 miles out of the city, and they still call that city living.

Impressive work Ron by compiling the list, but I am afraid most of it will never come out of the ground. Remember, this is Nashville. We are a city, but by most standards not a large one. We are certianly not large enough to absorb that much square footage. How are all of those office buildings going to be filled? I don't know the answer which begs the question if the Medical Mart will ever be built either. This late in the game, I would say no. The original convention center at one time was to become the Renaissance Convention Center with an urban shopping mall built in the old space. I could see that happening with additional hotel rooms being built on top.

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