CRV Newsletter – April 15, 2024

 [Nashville MSA] March home sales dip 7% year-over-year:
o Closings: 2,837 in March 2024; 7% decrease from March 2023
o Median price (SF home): $493,220 in March 2024; $465,000 in March 2023
o Median price (condo): $339,900 in March 2024; $327,885 in March 2023
o Listings: 9,404 in March 2024; 8% increase from March 2023
o Average DOM: 52 in March 2024; up from 40 during most of 2023 (Nashville Post 4/8/24)

 [Nationwide] This factory represents a homebuilder’s bet on future housing-Onx Homes is a homebuilding startup aimed at reducing the time it takes to build a home to tap the need for housing across the country. The goal is to make housing more affordable by automating and simplifying as much of the construction process as possible. Right now, it takes them about 60 days to build a house, but the company is aiming to bring that time down to 30 days with its newest factory. The reduced labor costs translate into savings for the buyer, with houses ranging from $300,000 to $600,000 depending on model and neighborhood. Another benefit of these homes is their durability, with concrete walls and steel roofs that can withstand 175 MPH winds, more than a category 5 hurricane. The company’s portfolio now includes more than 5,000 homes across Florida and Texas under various stages of development (500 are already lived in). Another player in this market is Icon, a company looking to take 3D-printed housing mainstream. They made the nation’s first 3D-printed, single-family homes that were offered for sale in Austin, TX in 2021. (Costar 4/9/24)

 [Nashville] Ritz-Carlton property sold at foreclosure sale-RC Nashville Development Partners LLC, which is affiliated with the developer behind the planned Ritz-Carlton, has foreclosed on the 1.21-acre site located at 727 Korean Veterans Boulevard. The property was purchased in March 2020 for $35 million and then purchased again last week for $35 million through a credit bid, which allows a lender to bid the amount they are owed on a property. R Squared Properties was the highest and best bidder. The previous owner failed to make payment on a $10 million loan and there are also two liens on the property filed by the architect and engineer on the project. (NBJ 4/11/24)

CRV Newsletter - March 18, 2024

CRV Newsletter
March 4, 2024

 [Nationwide] Households are falling in love with their credit cards-The combination of growing household debt and higher costs of servicing that debt should be weighing on consumer sentiment and curtailing spending, but it isn’t happening yet. Household outstanding debt, including home loans, grew to $17.5 trillion in the fourth quarter of 2023, up 1.2% over the year and 3.6% higher than a year earlier, according to the Federal Reserve Bank of New York. Most of that is in mortgages which is less worrisome because of its physical collateral and because about 60% of home loans carry fixed rates below 4%. However, consumers are using credit cards and personal loans much more frequently as the excess savings from pandemic-era relief payments dwindles. Outstanding credit card debt grew by 14.5% over the past year, and debt from other personal loans increased by 9.3% over the same period.
(New York Fed)

 [Nationwide] Built-to-rent projects draw $3 billion in fresh investment as homebuyers struggle- Built-to-rent projects are becoming attractive investments nationwide as the cost of buying a home remains elevated due to interest rates. Middleburg Communities, a Virginia-based property management company, has invested $500 million in its built-to-rent portfolio while Pretium, a New York-based alternative investment firm, has invested $2.5 billion in built-to-rent houses. According to the National Rental Home Council, close to 25,000 built-to-rent houses were completed in 2023, a 62% increase from 2022. Since 2019, the number of built-to-rent completions has increased 270%. At the same time, the National Association of Home Builders said 37.7% of home sales, either new or existing, were affordable to households earning the U.S. median income in the fourth quarter. (Costar 2/13/24)

 [Nashville] Startup piloting ground lease home sales in Nashville market-Groundly is testing a new pilot program as a pathway to homeownership in the Nashville market. The startup is selling the homes while leasing the land to the homeowners with four active listings currently in Nashville, Antioch, Mt. Juliet and Madison. On each listing, Groundly claims that customers can save up to 30% on their down payment and 7% on their initial monthly payment, making the homes more affordable and reducing upfront costs. Tara DeSelms, Greater Nashville Association of Realtors president-elect, doesn’t think there will be a large market for this because the ground lease increases by 2% each year, meaning there aren’t as many benefits in the long term. (Post 2/14/24)
o Madison: Groundly purchased property for $745,000 and is under contract to sell a 3BR house for $530,000
o Sylvan Heights: Groundly purchased property for $1,350,000 and is listing the home at $960,000
o Antioch: Groundly purchased property for $430,000 and is selling the home for $305,000

 [Nationwide] Nation’s largest single-family rental landlord to buy up to $1 billion in houses this year-Invitation Homes wants to increase the size of its 80,000 single-family rental portfolio by acquiring $600 million to $1 billion of houses this year, with an additional $100 million to $300 million in purchases through its joint ventures. In 2023, Invitation Homes and its joint venture partners bought $1.1 billion of houses totaling more than 3,200 units. In fiscal 2023, Invitation Homes’ portfolio was
97.4% occupied with comparable rental rates increasing 6.3%, including renewals and new leases, from the prior year. (Costar 2/14/24)

 [Nationwide] When will interest rates fall – and how fast?-The Federal Reserve is expected to begin lowering interest rates this year as inflation further subsides. After reaching a high of 9.0% in June 2022, inflation has steadily declined, ending 2023 at 3.4%. Further progress is expected over the months ahead and inflation should near the Fed’s target of 2% by the middle of the year. This should enable Fed officials to begin lowering their overnight lending rate by the second quarter, however the first cut could come as early as March with a quarter-point decrease followed by five more quarter-point decreases by the end of the year, bringing the mid-point down to about 3.85%. Although Federal Reserve interest rate don’t always result in one-for-one changes in consumer borrowing costs, sectors of the economy that are sensitive to interest rates, particularly the housing market, should see the greatest benefit form the lower rates.

 [Nashville] One-fifth of Nashville offices sit empty: the quest for solutions intensifies-In Nashville, nearly one out of five offices are sitting empty. Vacancy rates jumped from 10.5% at the end of 2019 to 18.2% in late 2023 leaving owners to seek long-term solutions. For example, two of Nashville’s large, aging office buildings are transforming into apartments. Old office owners aren't just constrained by lack of demand, their costs are also going up because of inflation. An estimated $871.6 million in
commercial real-estate mortgage payments in Nashville will be due this year, according to CommercialEdge, as leases end and higher interest rates increase pressure on owners. Banks have tightened lending standards, while investors hold onto their cash amid concerns about widespread defaults nationwide due to plummeting office values. "Loan extensions, workouts, defaults and foreclosures will all be more common this year," said Doug Ressler, a business-intelligence manager at real-estate data firm Yardi Matrix. "In 2024, we anticipate office utilization rates will slowly creep up, even if a full-scale return will never materialize." Although post-pandemic office vacancies have remained high, Nashville’s job growth remains a positive for the market. Nashville landed sixth on Milken Institute’s 2024 Best-Performing Cities list, with 14.2% job growth from 2017-2022, 48.2% wage growth and a “relatively affordable cost of living,” among other leading metrics. (Tennessean 2/22/24)

 “While it is possible we could have a CRE driven financial catastrophe, the evidence just isn’t showing
up in the property fundamentals.” -Marcus & Millichap

We have just recently entered into a joint venture with Advanced Appraisal Services to offer commercial real estate evaluation and consultation in the East Tennessee market. This relationship also expands our ability to provide residential appraisals throughout the State of Tennessee as well.  Our certified appraisers bring years of experience and in-depth market knowledge. With over 100+ years of combined experience and 60,000+ appraisals completed, we are equipped to handle your valuation needs. 

The Lebanon-based CRV Group, Inc., is pleased to announce that company president Taylor Vandever has been appointed by Gov. Bill Lee to serve on the Tennessee Real Estate Appraiser Commission.

Read MORE here 

Below are a few "before and after" photos of the construction and renovation of our new offices!

New Office Galleries

The CRV Group is excited to announce that we will be continuing our investment in the local community by re-locating our headquarters to the Lebanon Public Square. The new address is 111 East Main Street, Lebanon, TN 37087.

The building is home to the location of Sam Houston’s original law office, here in Lebanon, TN, where he practiced law from 1818 to 1819 before he was  appointed Adjutant General with the rank of Colonel in October, 1819. He was later elected Governor of Tennessee in 1827.

The building was also subject to the March 2021 flood that impacted many local businesses. We have performed an extensive renovation to repair the damage and bring the building up to date. We are excited to share the building with our clients, friends and community as a whole.

We look forward to seeing all of you. Please take a moment to stop by and check out the changes.

New Office Galleries

From: The Nashville Post

Nashville-based developer Nathan Lyons has paid $2.9 million for a property in West Nashville’s Charlotte Park neighborhood which he is eying his next adaptive reuse project.

Lyons — perhaps best known for his Stocking 51 in The Nations — specializes in reinventing industrial buildings with retail, restaurant, residential and creative office spaces (read more about his work here). In this case, he hopes to update an existing brick warehouse (pictured) located at 6100 Robertson Ave. with commercial space and supplement it with potentially 24 townhomes. The warehouse is home to Proctor Marble and Granite, a tile contractor.

The transaction — one of the most significant recent deals for a site in what some folks specifically call Croleywood — involved four parcels with Metro records unclear as to what year the seller acquired the properties. Based on a preliminary plan seen on a document — click on View Gallery in the above image to see — submitted to Metro, the site will contain vehicular points of access from Vernon and Robertson avenues. A 202-space surface parking lot would serve the commercial businesses and some of the residences.

The image shows 16 townhomes with two-car garages. Twelve of those residences would face Vernon, with the other four located behind them. Eight other townhomes (without garages) also would be located behind the dozen. All the surface parking would be positioned behind the structures.

In addition, a new two- to three-story commercial building with a patio space would be constructed next to the existing warehouse and would front Robertson, likely the key street within this segment of Charlotte Park. A small home located at 609 Vernon Ave. would require demolition and the property will need to be acquired.

Lyons could not be reached for comment and the Post was unable to determine if brokers were involved in the deal.

Nashville-based Centric Architecture is designing the structures. No detailed color rendering had been submitted to Metro as of April.

The property sits with Metro Councilmember Mary Carolyn Roberts’ District 20.

Lyons also is underway with an addition to Stocking 51 (read here) and the reinvention of the former Vaughn Manufacturing facility in East Nashville with what will be called Highland Yards.

Also, Vintage South Development is teaming with The Legacy Companies to give new life to the site once home to Hobson United Methodist Church, also located on the east side. That project is called Eastwood Village.

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From: The Nashville Business Journal

A new adaptive project in East Nashville is set to open five new restaurant concepts this summer.

The Wash, a former East Nashville car wash property, has converted its bays into five restaurant spaces that are scheduled to open in August, Tyler Cauble of Hamilton Development and Jamie Pfeffer of Pfeffer Torode Architecture, announced this week.

“The Wash has fully booked within a couple months of announcing the project, and we’re thrilled to partner with such talented chefs and bring new culinary additions to the community,” Cauble said in a news release.

Located at 1101 McKennie Ave. (fronting Gallatin Avenue), the Wash hopes to provide a “culinary landscape within a hip environment yet to be seen in Nashville,” according to the release.

The dining experience will be anchored by a concept bar that targets the community, providing high-end fast casual cocktails.

Two Peruvian Chefs, which is said to be bringing authentic Peruvian food to Nashville, will occupy Bay 1, taking its food truck to a full-time restaurant.

Slated for Bay 2 is Soy Cubano, a new Cuban food concept focusing on traditional Cuban sandwiches and dishes merging South Florida favorites with a twist on Latin cuisine.

The Poki will be housed in Bay 3. The Poki serves Hawaiian-originated poké bowls with a twist of Japanese ingredients and flavors.

Austin-based Tootsie Lou's Tacos will set up shop in Bay 4. The chef-owned and -operated taqueria focuses on in-house “nixtamalized tortillas made from scratch with heirloom Oaxacan corn,” according to the release.

In Bay 5 will be ESP, the second concept from the team behind East Side Banh Mi, a Vietnamese sandwich shop that opened on Gallatin Avenue in August 2020. Husband and wife duo, Gracie Nguyen and Chad Newton will open a Vietnamese street food-inspired stall within The Wash, opening late summer 2021.

Bay 6 Bar will take the final spot. The space is being billed as an “approachable luxury fast casual draft cocktail bar,” according to the release.

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