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VOL. 37 | NO. 2 | Friday, January 11, 2013

Builders filling demand for luxury apartments

By Bill Lewis

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Vista Germantown, with its views of Capitol Hill, proximity to downtown, electric-car charging stations and access to Germantown’s restaurants, is 98 percent leased.

-- Lyle Graves | Nashville Ledger

Construction of new offices, retail space and apartments, knocked off the rails by the recession, is back on track in Davidson County.

And as the saying goes, when the train comes into the station, everybody rides. In Middle Tennessee’s largest county, which hasn’t seen large-scale construction of new, high-end office space in several years, developers are racing to meet pent-up demand from businesses watching the recession disappear in the rear view mirror.

And across Nashville, developers are building or planning construction of hundreds of millions of dollars worth of luxury apartments for residents who aren’t interested in owning a house or a condo.

“They like the flexibility and the amenities. They like the lifestyle,” says Dirk Melton, director of development for MarketStreet Enterprises, the chief developer of Nashville’s Gulch district.

The company is wrapping up construction of Pine Street Flats, The Gulch’s newest luxury apartments. The last of the building’s 296 apartments won’t be finished until March, but the project is already 40 percent pre-leased. Rents range from around $900 a month to $1,850. The building also has 16,600 square feet of ground-level retail space.

Eleven North, the new 302-unit luxury apartment complex at the intersection of Charlotte Pike and 11th Avenue North, was recently bought by Mesirow Financial Inc. in Chicago for $58.75 million. That equals about $195,000 per unit, which according to the new owner is a record high in the area.

High-end apartment living

Eleven North and Pine Street Flats are part of a trend of luxury apartment construction. Nashville developer Ray Hensler has plans for an $80 million, 23-story luxury apartment building in The Gulch. Construction could begin in February. The 312 apartments are expected to rent for $1,400 to $3,400 per month.

Tony Giarratana wants to build SoBro Tower, a 342-apartment high-rise, south of Broadway. It would include 378 parking spaces and more than 18,000 square feet of Class A, ground-level retail space. He developed the Cumberland apartments and the Viridian condos in the central business district on Church Street, as well as the Encore condos in SoBro.

North of Bicentennial Mall, Vista Germantown’s 242 apartments are 98 percent leased, says manager Misty Jackson. Most residents are new arrivals in Nashville attracted by Vista’s central location and amenities including electric car charging stations.

On the edge of downtown on 25th Avenue North, the ParkCentral luxury apartment development is being built by Atlanta-based North American Properties. The 200-unit midrise building will feature a rooftop saltwater swimming pool. Residents are expected to move in beginning in September.

Neighborhoods get mixed-use

In Green Hills, Southern Land Co. is getting ready to start work on a 14-story mixed-use building at one of the city’s most visible intersections, the corner of Hillsboro and Richard Jones roads. The project will feature 265 apartments ranging from 500 to 2,500 square feet and a rooftop pool. It will also have 5,000 square feet of restaurant space and 24,000 square feet of high-end office space.

H.G. Hill Realty Company and Southeast Venture are building 12 South Flats, a mixed-use development in the 12 South neighborhood composed of 82 one-bedroom and eight two-bedroom apartments and 9,870 square feet of retail space. The project is expected to be complete by summer.

A 266-unit apartment building, 23 Hundred at Berry Hill, is planned for the corner of Eighth Avenue South and Bradford Avenue. The five-story building is expected to be finished in 2014. It is being developed by New York-based Bluerock Real Estate and Atlanta-based Stonehenge.

The largest construction project in Nashville is not an apartment development. West End Summit features two 20-story towers with 900,000 square feet of space for offices, restaurants, retailers and a boutique hotel in the Midtown district west of downtown. Two divisions of HCA are taking space in the towers, which are being developed by Alex S. Palmer and Co.

The second-largest office project in Nashville is barely inside Davidson County. Highwoods Properties is building a seven-story, 203,000-square-foot building in its Seven Springs Park on Old Hickory Boulevard in Brentwood. LifePoint Hospitals is moving its headquarters there from the nearby Maryland Farms office park in Williamson County.

Highwoods also is building approximately 25,000 square feet of retail space. The company’s master plan includes a total of four office buildings and two free-standing retail buildings, encompassing approximately 715,000 square feet of space.