CityNowNext Emerge hosted its first event this year which consisted of a networking session, project presentation, and panel event. The event was themed, “Retooling What’s Now & Next In Nashville”, and was hosted at the recently completed Tempo by Hilton in Downtown Nashville. The event started with a networking session where attendees were able to get one-on-one time with some of the area’s top leaders in CRE. Rebecca Ozols, VP of Growth & Strategy at Bell Construction, was emcee for the event. The program kicked off with a presentation on planned upgrades to the CityNowNext platform by Founder & Creator Robert Looper III.
Next was a presentation by Andrew Ostroski, Owner of Pontoon Saloon. Andrew discussed the idea of a Nashville River Taxi that would provide service to developments along the Cumberland River. The audience consisted of stakeholders from nearly all major development projects along the river. The event was also followed by a development river tour, also sponsored by Pontoon Saloon. The Nashville River Taxi will be covered in more detail in Part 2 of the Event Recap.
The panel consisted of Founders, Owners, and Executive leadership from companies that are active in Nashville. Moderated by Andy Zhu, the panel discussion revolved around leadership in a volatile market, portfolio diversification, the Nashville-edge, and trends in design and placemaking. Below you will find a summary of the insights from each of the panelists. To see what they had to say, tap on the banner below their individual pictures.
On Developing In Nashville
“Prior to deciding to develop in Nashville, we toured about 20 cities and landed on Nashville, Atlanta and Austin as finalists. What drew us to Nashville was the consistent immigration, sustained demand for rental housing, and the city’s long-term vision and continued growth and investment from a business perspective. I think the city especially now, with Mayor McConnell, has a very clear vision of where they want to take growth in terms of the city and housing.
That’s one thing that makes Nashville unique. There’s a clear plan on the direction of the downtown core and it’s not the plan of what gets me to the next election, it’s a 15-25 year outlook. As a developer, that’s pretty comforting to know as we plant roots here and invest in the city.”
On Turning The Cube In Suburban Markets.
“At Land Innovations, we take a distinctive approach to the Nashville real estate market. We are focused on fixing the problems that have been created through suburban sprawl by utilizing the principles of new urbanism and urban infill to make the pedestrian realm the focus of our design. Take our Nolensville project as an example; our development partners at Rochford Realty and Construction, along with the creative contributions from Smith Gee Studio, HDLA, and CSDG. Together, we have forged an innovative and historically impactful town center driven plan to a community that over their 200+ year history has never had a central gathering space.
We aim to excel by rethinking traditional industry practices to create developments that turn our attention away from the vehicle and focus on the human experience. When we turn the cube, we are asking ourselves why settle for ordinary when we can be extraordinary? Can we focus on the placemaking elements to ensure that this development in a hundred years lives better than today? The goal of creating this legacy is why we focus on connecting the land to life.”
On Leadership, Discipline, & Diversification
“CA south is a mixed-use developer based here in Nashville. We started the firm in 2016 and completed $400 million of projects working with institutional LPs. Until very recently, it’s been two years since we put anything in contract or started a project. I think the very first thing that can make you survive and thrive during times like these are being disciplined with your underwriting and staying in your lane. You also need a lot of perseverance because it takes a lot more work and time to get things funded in this capital environment.
When there’s money everywhere there are no deals, and when there are deals everywhere there’s no money. I think being contrarian and really thinking creatively pays dividends. We do a lot more research to understand the demand side of the equation because everyone can evaluate the same supply dynamics, but truly understanding your physical location, competition and unique competitive advantage is critical.
I think we’re at the end of a cycle and feel as though the bottom has happened. I’m starting to see a lot of the capital markets loosen up and we’re really positioned very well now to have the pipeline again. So the team is excited and we’re going to celebrate getting deals done and breaking ground very soon. I have always wanted to diversify my portfolio and not just be a ground-up “merchant builder”. We’ve really focused a lot more on the investment management side of the business and we are looking more toward assembling a portfolio for asset management. As much as I’d love to be able to say I’ve seen and capitalized on distress in the market, I just haven’t seen it in anything but obsolete offices that nobody wants. We’re keeping our eyes open and being opportunistic until capital markets markedly improve.”
On Entertainment & Hospitality Design Trends
“As a city centered on entertainment and hospitality, we are seeing a lot of local brands that are working to reinvent or bolster themselves. This is necessary to stay relevant as the city grows and evolves. Then there’s a large influx of out-of-town clients that are coming, moving their families here, and bringing in new concepts from other cities. They’re well-established hospitality groups that are bringing new concepts here and that’s very exciting for Remick and the City. With this new group, they want to bring multiple concepts in, and in multiple areas in the region. They see the opportunity here, and while it may appear to be a lot, Nashville is still underserved as far as restaurants and hospitality and entertainment goes.
Some of the trends we’re seeing in the hospitality world are more boutique hotels that are creating a little more relaxing atmosphere for people to hang out and socialize, as well as day clubs and nightclubs. We’re seeing some listening rooms pop up and brands with unique offerings that are very exciting for us and we’re happy and excited to work on. When it comes to Broadway, what’s happened there is incredible. Love it or hate it, it’s here and I think you’re going to see more retooling of Broadway. There’s groups down there that want to sort of change what they have and create a better experience for customers. Second Avenue will provide an opportunity as well to offer some of those new and different experiences.”
On Interior Placemaking
“The ask from clients across asset classes is to be contextual but not appropriate. So for instance if it’s a Short-Term rental project and people that are visiting for events or a short experience like a concert or bachelorette parties, then the design is going to shift towards that. However, if you’re doing something like the Banker’s Alley project where we’re working now, you have to change the approach. So, for apartments where people are coming from out of state or even people who are here, they may not necessarily want the same placemaking experience over a longer period. We are helping the client find the right balance between the two. That also shifts back to the conversation on diversity, for us it’s not just asset classes, but it’s our approach to diversity within one asset.
Other placemaking trends we are seeing are biophilic, reinforcing the indoor/outdoor communication with nature, this is especially important in markets like Nashville. Sustainability is still a strong design trend and important for the environment; this also includes incorporating vintage elements. Another design trend we focus on is weaving in stories that don’t cost anything but creates a more interesting experience for buyers and tenants. A lot of the spaces we work on as it relates to design and marketing include sales and leasing environments – whether it’s commercial or residential, model apartments, galleries, and show houses, and that’s a big reason of why being contextual is important.”
On Permitting
“Everyone here shares the same struggles and/or frustrations that we do as a team internally when it comes to permitting. However, it’s not unique to Nashville. I spent 20 years in community development on the municipal side, so I understand what Metro is going through. One of the things we have to address is the aging workforce as far as the people that work within planning, codes enforcement, and building inspection. Metro has the challenge of staffing, when their newly trained employees go to other companies. The pace that people are coming back to infill those positions makes the permitting process even harder.
I think that Metro will continue to improve their processes over time. We have to also exercise patience as they come up with new requirements and ways of doing things on a regular basis that may confuse you. For instance, one of the people we work with the other day said, to make sure they include your sign off on the dark sky ordinance. I had no clue what the dark sky ordinance was at the time but now it’s a sign off that we need to get a permit. So it’s a lot of those changes and processes that may slow you down.
Additionally, there will be a brand-new state law that’s supposed to take effect in October. It’s already passed through both houses, and it’s just the way on the governor’s signature. And this is something that’s statewide to hopefully spur development and reduce some of the red tape. To summarize it, any developer can use a third party such as my company to do their building construction plans, review, and submit those plans as approved within their local jurisdiction. That’s the same thing for stormwater to where you can use a third party to do your stormwater review. That third party will stamp the plans as approved and then you will just submit that to the jurisdiction and they will have to accept your submittal within a certain time frame.”
On Developing In The East Bank
“Our portfolio is nationwide, and we have probably anywhere from 30 to 40 development projects that we are either evaluating or actively pursuing across the country at any given time. I would start with the premise right now that it’s really, really hard to pencil out virtually any project, and it’s a function of a lot of the things we all know: construction pricing remains high, interest rates are what they are, and regulatory environments are getting more and more difficult to navigate. Investors are very discerning about where they’re putting their capital to work. For many of our development projects right now, we’re kind of in a mode of just teeing things up, so that if and when those conditions become more favorable, we will be in a position to move.
I think Nashville is kind of the outlier in a lot of ways when it comes to development; if it were up to us, we’d have a shovel in the ground yesterday. Despite the deep development pipeline of planned and upcoming projects, we know that this is where where the talent is migrating and where employers want to be. For us to consider committing capital to a market at the scale we are contemplating in Nashville, we have to be really optimistic about where the city’s going, not just in the short term but in 5, 10, or 20 years. So, while nationally things are a bit challenging, locally it’s a little bit of a breath of fresh air when we come down here.
As it relates to infrastructure, currently our site is bound to the south by the elevated James Robertson Parkway, to the north by the elevated CSX tracks. Additionally, we about North First Street, which will become the future East Bank Blvd. Today that road cannot accommodate any real amount of traffic. So, the conversations we’re having with Metro and the State right now are exclusively around, what are these infrastructure pieces going to be, how are they getting funded, and when are they going to be in place. I mentioned earlier, we’d love to break ground on our project, but we need some more clarity on, is the infrastructure piece before that can happen. And I think it’s important to note that the public sector stakeholders at both the local and state level are working extremely hard to facilitate the transformation of the East Bank, but it’s a large and complex undertaking and it’s going to take some time to figure it all out.”
