The Post asked the 2012 CRE 50 honorees — check them out here — to give the Nashville-area commercial property sector two letter grades. The first was for their segment of the market today, the second for how they expect their segment to look next spring.
The 34 folks who responded gave a collective grade of B for the current state of the market. They see things getting a little better, too: By the spring of 2013, they expect the market to earn a B+ grade. One respondent noted he would give the market on which he focuses a B+ on an absolute basis but an A++ “when viewed in relation to the rest of the national economy.”
Among the other comments we received:
• “The multi-family market segment will likely remain strong. New construction has prompted some to ask if Nashville is overbuilding. Let’s first examine where we are in order to truly answer this. The evidence shows we are behind. Currently, Middle Tennessee has about 70,000 apartment units — significantly less than other similar size cities that often have well over 100,000 units.”
• “If you’re a landlord, I’d [grade] the office market in Nashville a B-plus. It barely misses an A by having a 20 percent vacancy in the CBD submarket. There’s been good absorption, vacancies are low, rental rates are rising and there’s not a lot of product coming out of the ground. If you’re a tenant and you’re hearing of low vacancies (few choices), rental rates rising (little negotiating leverage) and not much product coming out of the ground (it’s going to be like this for a while) — I doubt that you’d give it a very high grade.”
• “I would give a B– [today]. Activity is still not sustainable — typical ‘wave motion’ to describe it — but the waves are stronger than they have been, have a little more volume and come a little more often.”