Office buildings. Retailers and restaurants. Multifamily units. All these — and maybe even new hotel space — will soon be coming to Nashville’s Midtown neighborhood thanks to a big acquisition from Monarch Alternative Capital and GBT Realty Corporation.
Monarch, an investment firm, recently purchased eight acres of land in Nashville’s Midtown submarket in the heart of the city’s CBD. In partnership with Brentwood, Tennessee-based development firm GBT Realty Corporation, Monarch plans to create a major mixed-use development on the land, which is zoned for 1.75 million square feet of real estate.
The site, which is currently home to Beaman Toyota, is near some of Nashville’s most popular commercial areas and attractions, including the Gulch, Music Row and Vanderbilt University. The land is also near downtown Nashville, and will bring much-needed retail and apartment space to the city’s urban center.
“This has been one of the most highly sought after and anticipated redevelopment sites in Nashville due to its importance in connecting Downtown to Midtown, its size and potential scope,” said George Tomlin, president and chief executive officer of GBT Realty.
Jeff Pape, managing director with GBT Realty Corporation, told Midwest Real Estate News that the Beaman site gives GBT and Monarch the opportunity to make a positive impact in the city.
As Pape says, this land site today sits at the epicenter of Nashville’s CBD. This is largely because of a fairly recent shift in Nashville’s urban core. For years, Nashville basically had one CBD by the Cumberland River. That area has also been a main draw for tourists. Today, that former CBD is transforming steadily into an entertainment and tourist area. At the same time, a greater number of businesses, retailers and restaurants are moving to the area surrounding this riverfront area, creating what Pape says is a true Midtown district.
“The Beaman site is the epicenter of this new business and retail growth,” Pape said. “It is becoming the core area of Nashville. We have always had an eye on this site. We always thought it was great real estate.”
GBT and Monarch closed on the land purchase Dec. 15 of last year. Pape says that GBT is now in the earliest stages of transforming the site, assembling the key teams that will work on the project and working on early concept plans.
The goal is tranform the site into a mixed-use development that includes a core of retail, multifamily, condos, office and hospitality uses.
“We are looking at a mix of everything,” Pape said. “We have the hard job of making sure we create a wonderful destination that will mix all those product types together. We want to create a place where people want to spend their time.”
It’s not surprising that GBT and Monarch are planning a mixed-use development for the site. Mixed-use projects are in demand and have shown that they can be extremely successful, drawing in both tenants and visitors.
Pape says that he expects to see developers continue to focus on mixed-use projects in the near future. The success of existing projects is all the encouragement they need.
“Places where people can live, work and play are in great demand,” Pape said. “You do need a market with vibrant growth, though, to support a product like this. Smaller markets can’t support these bigger mixed-use projects yet. The major metro growth areas like Nashville, Austin, Dallas, Houston, Atlanta and Charlotte can. In these higher-growth markets, the mixed-use product is absolutely growing like crazy.”
The Beaman site project is just one example of how strong Nashville’s commercial real estate market is today. As Pape says, not even the COVID-19 pandemic has slowed CRE activity here.
Sure, Nashville’s office market is still dealing with the uncertainty caused by COVID. Many employers here still aren’t sure when they’ll bring their workers back into the office, and many are contemplating whether they will adopt a hybrid model in which workers come into the office on some days and work remotely on others.
But other commercial sectors continue to thrive, most notably multifamily and industrial. Pape says that even the area’s hospitality sector has improved steadily since the darkest days of the pandemic.
“Commercial real estate activity is still growing aggressively in Nashville,” Pape said. “There aren’t any indications that this will stop in the future, either. Depending on the sector, most of the signs of growth are strong.”
As Pape says, more residents and jobs are coming to Nashville. Amazon is opening a headquarters building in the Nashville Yards development in downtown. Oracle has spent $254 million to buy more than 65 acres of riverfront land in Nashville.
At the same time, certain types of retailers are succeeding here, too, even during the pandemic. Pape says that restaurants are especially hot throughout the Nashville market. Experiential retailers, those offering experiences that customers can’t get online, are also doing well, Pape said.
Also in demand? New fitness centers and grocery stores. Grocery stores are especially in demand in downtown Nashville, Pape said.
“It used to be that we would see a whole cluster of national brand names located in one area or a cluster of cool local retailers in another,” Pape said. “Now we are seeing more of a mix of all types of retail uses in different areas. While everything used to be in their own clusters, we are now seeing a wider variety of retail types mixing together. That’s what helps create long-term success.”
The new multifamily that will come with development of the Beaman site is welcome, too. Pape says that Nashville 10 to 15 years ago had relatively few people living in its downtown areas. The city was largely a commuter town, with workers leaving the downtown at the end of the workday.
Today, though, there is a growing demand for apartment units in downtown Nashville and its surrounding areas. That’s largely because renters by choice are looking to simplify their lives.
“People have a desire to live somewhere where they can walk to things,” Pape said. “They don’t want to get into their cars every day. The people who are looking for this lifestyle represent a great growth opportunity.”
Pape says that GBT Realty will spend the rest of 2022 going through the entitlement process on the Beaman site. The goal, though, is to break ground on the first phase of the development in mid- to late 2023.
“That is an aggressive goal,” Pape said. “But with the growth of Nashville, we want to get that first phase out of the ground sometime in 2023.”
Joshua Acheatel, managing principal at Monarch, says that whenever this new development takes shape, it will bring a positive change to the Nashville downtown-area landscape.
“We are extremely energized to invest in a site that has the unique combination of scale and centrality that can support a transformative project,” Acheatel said. “We believe that our dynamic real estate expertise and partnership with GBT Realty will bring an exciting change to Nashville’s skyline and will benefit Nashville for generations to come. We look forward to working with the city to support its real estate needs.”