Nashville Real Estate » Condos

Icon in the Gulch 2011 Condo Sales Review

admin — Mon, 06 Feb 2012 17:15:43 +0000

It has been just under 4 years since the Icon in the Gulch first opened its doors. One may have suspected there to be quite a lot of distress in a 418 unit condo building, but the opposite is true. The Icon had its best sales year since 2008 selling 105 total condos in 2011 - 88 developer owned condos and 17 resales. The $282.15 average sales price per foot was almost exactly what I predicted 12 months ago ($281.87 was my prediction). The developer spent much of the year focusing on selling their remaining units on the back side of the tower as well as their remaining inventory in the mid-rise section of the building leading to these lower prices. However, as a result of their 2011 focus, the developer now mostly has premium view condos on mostly higher floors which will lead to higher pricing. Of the 48 condos remaining to sell, 35 are in the tower section of the building. My 2012 prediction for average pricing tops $300 per foot, $309.41 to be specific. This prediction represents an almost 10% increase over 2011.

I was involved in more than a dozen sales in the Icon in 2011 and suspect that number to increase in 2012 as I begin to focus my efforts on helping sellers maximize their value. In the past month, I have been involved with 3 resales in the building, all over $325/ft. I have represented a seller, a buyer, and in one case, I facilitated for both the seller and the buyer. Both of my sellers have achieved a sizable profit and my buyer a significant discount.

Let me put my unmatched research to work for you in the Icon. As a buyer’s agent, I know how to negotiate with the developer, I know where the weak points exist and how to exploit them in your favor. As a listing broker, I know how to position your property to achieve its maximum sale price. My extensive knowledge and decade of experience means that I know how to avoid the mistakes a less experienced agent will make. I enlist the services of the best photographers, collateral marketing material partners and condo stagers, all at my own expense. In short, I guarantee you success.

Direct Line: 615-945-7123
Email: Icon@GrantHammond.com

View current condos listed for sale in the Icon

Icon Condos Sold in 2011

(note: the blue highlighted transactions are resales)

Navigate back to my Nashville real estate home page to see additional research I have posted this year.

This is a post from Grant Hammond's Nashville Real Estate Blog.

5th & Main Condos Regain FHA Approval

admin — Fri, 20 Jan 2012 17:42:10 +0000

It is a landmark day for ACG Equities, the investor who purchased the 5th & Main project from Wells Fargo Bank in March of 2011: The U.S. Department of Housing and Urban Development has granted the project FHA approval.

(click to see full size image)

Significance of FHA Approval

It is difficult to emphasize how important FHA approval is for a condo project in the United States. Since the collapse of our economy in 2007, lenders cut back on consumer lending practices, especially as it relates to condominiums. The availability of low downpayment conventional loans dried up resulting in a financing gap in affordability. This gap could only be bridged by FHA government back loans. FHA loans allow buyers to put down 3.5% of the purchase price and take advantage of low mortgage interest rates.

It is estimated that since 2008 more than 50% of all condo purchases in the United States have used FHA backed loans. In my experience in Nashville, the percentage may not be as high, but a great many buyers, especially first time purchasers, have taken advantage of FHA mortgages.

Status of 5th & Main Condos

Since the November 5th condo auction, ACG has sold or put 64 new units under contract. Added to the 9 condos sold prior to the auction, this number represents 57% of the 129 total units onsite. Of the 64 units sold by ACG, 18 have already closed. With FHA approval, I would expect the remaining 46 condos to all close by the end of February. Current pricing is 38.2% less than current estimated replacement cost, but this shall not last.

Effect on 5th & Main Condo Pricing

There is little doubt that the owners of 5th & Main will begin to push condo pricing for their unsold inventory. I would suspect an immediate increase in the 4-6% range plus an incremental increase for every additional condo sold. This is very good news for those who have already contracted a condo in this building, your investment just paid a dividend.

If you have not already contracted a condo in 5th & Main, but were considering doing so in the near future, I advise you to waste no time. I have sold several of these units and know the building better than any other broker. Call, text or email me ASAP and I’ll work extremely hard to negotiate base pricing with closing incentives on the best remaining units. Now is your chance to jump in on the ground floor and starting building equity in your investment!

Grant Hammond, Broker, ABR, SFR
5andM@granthammond.com
Call or text: 615-945-7123

See all condos listed for sale in 5th and Main

This is a post from Grant Hammond's Nashville Real Estate Blog.

Encore Condos in Nashville: Pricing Trend

admin — Fri, 18 Nov 2011 16:14:54 +0000

The Encore is a 333 unit, 20 story high-rise condominium building located in a pocket of downtown Nashville called SoBro (South of Broadway). The building delivered in February of 2008 in the face of the greatest economic downturn since the Savings and Loan crisis. Many wondered if the building could survive, if the developers could trudge through without losing their shirt. Some still look towards this glass behemoth and mistakenly imagine there must be distress. The condo vultures (my term of endearment for my clients who love to buy a good condo deal) have circled and lobbed offers down to the sales team, only to have them batted back at us.

The developer is down to their last 12 condos in the building, 11 one bedroom floor plans of varying size and 1 two bedroom floor plan. I am here to tell you that their asking prices are pretty firm, but they are offering a valuable incentive package to the last 12 condo buyers.

- 1 parking space per bedroom included (value $8,000)
- All appliances including the refrigerator, washer and dryer (value $2,700)
- $2,000 California closets credit
- $4,000 seller paid closing costs
- 6 months of seller paid HOA dues (value +/- $4,000)

Average Prices in the Encore Since 2008

The numbers never lie. There was a time one could “steal” a condo in the Encore with regularity and as I accurately stated in 2009, that was the year to purchase. Anyone could walk into the sales center and negotiate a very good deal. Those days are over. If you are considering a purchase in the Encore, you need an experienced negotiator who has access to not only the 12 remaining developer condos, but also to dozens of pocket listings in the building. You need the most successful outside sales condo broker in the history of Nashville…you need me.

Where are the Condo Steals Now?

There are two options at the moment. Cadence Bank has foreclosed on 16 developer owned condos in the Rhythm at Music Row. They have sold 10 of those condos, leaving 6 vulnerable to your offers. 5 remaining condos are 1 bedroom floor plans, 1 is a two bedroom. Current asking prices range from $209,000 to $269,900, but the bank is accepting offers less than the asking price. For instance, the last sale was listed for $229,000 and closed for $210,000.

Your other option is the 5th & Main development by the Titan’s Stadium in East Nashville. This 129 unit development was recently bought out of foreclosure by ACG Equities and dramatically re-priced. When I say dramatically, I mean it. The current pricing of $135-$155 per foot is even below replacement cost. I find comfort in the fact that you can buy a condo for less than what a new one could be built.

This is a post from Grant Hammond's Nashville Real Estate Blog.

Fifth and Main Auction Results and Review

admin — Mon, 07 Nov 2011 01:33:49 +0000

It was either a raving success or a necessary success, depending upon whether you were an auction buyer or you were ACG Equities, the seller.

23 condos sold at varying discounts during the auction, 2 more sold in the minutes following the final gavel bang. When the dust settled, ACG Equities met their pre-auction goal to sell 25 condos – 19 to new owner occupants and 6 to investors. The benchmark of selling 25 condos was not a number pulled from thin air, it was the number of condos required to be sold in order to meet the project’s conditional FHA approval. The Federal Housing Administration requires at least 30% of 129 condos in the project to be either sold or under contract in order to qualify for the program.

Condos Sold at the Auction

5th & Main Condo Auction Blow by Blow

The auction was held at the downtown Nashville Sheraton Hotel on Saturday at 1:00pm. Bidders began to arrive as early as an hour prior to auction time and numbered nearly 100 by the time of the auction. The very first condo auctioned was a primo 755 square foot 1 bedroom unit complete with panoramic views of the Nashville skyline. The bidding was fast, furious and frantic. When the gavel dropped, the first condo sold after more than 15 bids for $145,000 or $192.05 per square foot. It would be the highest price per square foot achieved all day.

The next 11 condos auctioned were all 1 bedroom units with views that varied between the Nashville skyline and the lush courtyard in the center of the property. With the sale of each successive condo the number of bidders began to fade and prices followed suit, falling from a high of $192.05 per foot to a low of $126.95 per foot. Sensing the momentum in the room, the auctioneers moved on to the premier 2 bedroom condos in the building, but the bidding was guarded. The next 9 sales oscillated between $116.16 and $147.88 per foot with 4 of the condos selling at the minimum bid price.

Once again, the auctioneers sensed the room deflating and moved on to auction the townhouses. At this point, 21 condos have sold and ACG Equities is very close to completing their goal of selling 25 units. If they did not have to sell 25 condos in order to meet their FHA conditional approval for financing purposes, they probably would have stopped the auction by now. Alas, they needed 4 more sales and thus the show must go on. Not long after the auctioneer began to auction the first townhome, it was clear this was going to be an uphill battle. Bidding was non-existent until an investor stepped in with the only bid, the minimum bid, and snapped up two half price townhouses back to back.

The auctioneers quickly jumped back to auction additional condos, but it was too late, the momentum was gone, Harry Potter had lost his magic wand and no bidders surfaced for the final 5 condos.

Recommendations for Buyers Moving Forward

It would appear as though there is a small window for new buyers to purchase Fifth & Main condos at auction prices. If the aftermath of the Terrazzo auction 2 years ago is any lesson, prices will begin a slow, methodical rise as this development sells out over the next 12 to 18 months. Now that 5th & Main buyers will have the ability to utilize FHA backed mortgages, I can confidently say these condos are a solid buy.

My sense is that East Nashville will regain critical momentum over the next several years, culminating in a probable resale window of 5-8 years from today for maximum profitability. There are several boutique developments in the planning stages along Main Street and Woodland Street that will greatly affect area values. Several are mixed use in nature.

I am more than happy to assist new buyers in determining which remaining condos are the best short and long term investments. I also have a more in-depth analysis that I will gladly share with my clients.

Please call or text 615-945-7123 or email 5&M@granthammond.com for information

Players Involved in the Auction and Grades

Chicago based ACG Equities, who acquired 5th & Main in late February 2011 retained Boston based, IMPACT Real Estate Solutions to create a comprehensive sales, marketing and auction strategy. Hudgins Auctions and Realty was retained to call the auction itself.

The marketing for the 5th & Main auction seemed to be omnipresent. Every time I turned around I saw another billboard or newspaper ad or Internet pay per click or something that pointed me back to the sale. The campaign assembled by IMPACT Real Estate Solutions was like a summer cold I could not shake. My final grade is an A.

The auctioneers on the day of sale looked the part, but aside from the lead auctioneer, I was not overly impressed. A few gave me that “I’ll be auctioning off farm equipment tomorrow” vibe instead of the “I’ll be auctioning off mansions and estate properties tomorrow” vibe. Somehow I wanted all of them to be as credible as the lead auctioneer. My final grade is a B.

Downtown Condos for Sale | Gulch Condos for Sale | 20 Most Expensive Condos in Nashville

This is a post from Grant Hammond's Nashville Real Estate Blog.

Final Foreclosures for Rhythm at Music Row

admin — Wed, 31 Aug 2011 20:49:04 +0000

Next week the remaining developer owned condos in the Rhythm at Music Row will foreclose. This foreclosure will mark the end to a rather unconventional chapter for downtown Nashville high-rises and usher in a new, more welcomed chapter that will see market forces driving value.

On Tuesday, September 6th, Cadence Bank and Pinnacle Bank will take possession of 47 unsold condos in the Rhythm. Each bank will take control of their proportionate share of condos (Cadence Bank 39%, Pinnacle Bank 61% roughly) and plan to offer these condos to the public at reduced prices. There is no confirmation on initial pricing, but my estimates place the current value of the unsold condos at $235/ft in aggregate. One hurdle that must be overcome is the fact that the Rhythm will immediately lose FHA approval upon foreclosure. This will hurt the marketability of the condos by reducing the financing options available to new purchasers. But, there seems to be a plan. I have learned that Pinnacle Bank plans on immediately reapplying for FHA approval via HUD once the foreclosure is complete. The result will be a 30-45 day delay in a new purchaser’s ability to use a low down payment, FHA backed loan to purchase. It is my belief that each bank will allow a longer closing time in their contracts to make up for this delay, making it a moot point.

The long story short is that this foreclosure will offer condo buyers a value that has not ever been seen before in the Rhythm. I suspect there is a pent up demand for these condos as many buyers have been lying in wait for just such an opportunity. As a result, I cannot imagine a scenario, if priced correctly, where these remaining 47 condos take more than 9 months to sell.

Which Condos will be Available?

There is a complete mixture of 1-2 bedroom condos with all views on all floors from the 5th floor to the Penthouse. In my personal spreadsheet I show about 82% being 1 bedroom condos. I also show several of the premium view condos being available as well.

Is This Bad for the Rhythm?

Not at all. In fact, it may be the healthiest outcome for the Rhythm. There is no doubt that the remaining developer inventory (47 of 105 condos) has held true market forces at bay. Many buyers did not purchase in the Rhythm assuming there would be a better time to purchase in the future. This killed the momentum of sales and stunted the building’s true value. Once these remaining condos are sold, even at lower prices than market, market forces will be allowed to return. It is an imposed correction that we have seen proven many times in buildings like the Adelicia and Terrazzo.

When Can I Make an Offer?

Now. I would not wait until after the official foreclosure proceedings, you’ll be competing with too many others. If you are looking for the best view or highest floor, you better put eyes on this project asap. Contact me for complete details and to make an appointment to view these luxury high-rise condos in person.

Email: Rhythm@GrantHammond.com
Phone: (615) 945-7123

This is a post from Grant Hammond's Nashville Real Estate Blog.

Nashville Real Estate Steal Alert – Werthan Mills

admin — Fri, 26 Aug 2011 18:51:03 +0000

It baffles me why this 2 bedroom, 2 bath, 1,585 square foot loft at Werthan Mills has not sold.

First, it is a foreclosure. Second, it is priced at the LOWEST price recorded in Werthan Mills in the past half decade, $126.12/ft. The average price over the past 2 years has been $161.88/ft with the median price being $172.52/ft. That puts the current market value of this loft between $256,580 and $273,444. Third, this loft originally sold for $329,375 on 5-2-2006 and then resold for $350,000 on 2-27-2007. This tells me that when Nashville’s real estate market recovers in a few years, this loft is an easy sale at $299,000. Fourth, even Metro Nashville believes this loft is valuable, they have it appraised for $344,900. Fifth, the loft has a massive wall of windows on the courtyard that orients to the south for incredible light, especially for a loft. Sixth, 18 foot ceilings. Need I say more??

Call me ASAP, let’s go get this deal before someone else figures this out! Call 615-945-7123 or email Grant@GrantHammond.com

Werthan Mills Deal of the Decade

We're sorry, but we couldn't find MLS # 1258400 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

View other lofts for sale in Werthan Mills.

This is a post from Grant Hammond's Nashville Real Estate Blog.

State of the Gulch Real Estate Market

admin — Mon, 22 Aug 2011 22:39:04 +0000

If you live in the Gulch you may be acutely aware of the new and proposed activity, but for the rest of Nashvillians, it may be difficult to see just how much is happening. Since the beginning of the year, 3 new retailers have opened their doors and 2 more are planning on opening by Spring of next year. While that may not amaze the skeptics, one must realize that the lower Gulch is no larger than 3 square blocks. Additionally, these new tenants are paying well over $20/square foot, putting the Gulch on par with rents in Green Hills. Retail is not the only hot property type in the Gulch, multifamily apartment activity is crackling. There is a 302 unit multifamily project under construction, a 305 unit development announced and 2 others in some phase of their due diligence. All of this combined activity has led the two condo projects in the Gulch to sell more condos this year than any other area of downtown. Despite the Velocity converting to apartments, the Terrazzo and Icon have outsold everyone else.

Gulch Retail Space

The newest retailers are Two Old Hippies who have taken over the old Provence space in MarketStreet’s redevelopment project on 12th Avenue, Sweet CeCe’s frozen yogurt who has taken space in front of the Turnip Truck and Apricot Lane who has done the same. Both Two Old Hippies and Apricot lane are rather high end stores attracting many in Nashville’s music scene. Bar Louie, a 50 location operation, has just announced plans to take 8,000 square feet in the bottom of the Velocity and a 24 hour diner concept from New Orleans will be announced in the Icon on the Division Street side. There are several rumors of prospective retail tenants swirling through the chatterbox about the remaining space in the Velocity and Terrazzo, but no concrete details just yet. It appears to be only a matter of time before these remaining spaces fill up.

Gulch Multifamily Apartments

For the last decade, the 32 unit Mercury View Lofts enjoyed the benefits of being the only market rate for rent product in the Gulch. This fact led to 100% occupancy rates for the Gulch and never gave us a true indication of demand. In March of this year, Pollack Partners of Atlanta purchased and converted 220 units in the struggling Velocity condominium project to apartments. Pollack began their leasing effort in April and have already leased 85% of their units at a stabilized rent of $2/foot. This unprecedented absorption of 40 rental units per month has amazed even the biggest Gulch advocates.

Eleven North is now under construction on the far north end of the Gulch, appropriately enough, at the intersection of 11th Avenue North and Charlotte. This 302 unit multifamily development is the result of a partnership between TriBridge Residential and Stonehenge DCM, both of Atlanta. If you recognize the name TriBridge, you should, they partnered with Tony Giarratana in 1997 to build the 24 story Cumberland apartment high-rise. Eleven North will be a 4 story elevated building served by 445+/- surface parking spaces hidden from the street. This project is being built in two phases, the first will deliver in Spring 2012 and the second in Fall 2012.

Newly announced Pine Street Flats is a 305 apartment development located between The Icon and Velocity in the heart of the lower Gulch. This project will be developed by MarketStreet who already owns the land. A 6 story wrap style project, Pine Street Flats will feature structured parking, pool, fitness center, grilling area, cabana and club room. At the moment debt financing has not been identified, but it is likely that construction will begin in Fall 2011 and finish in Spring 2013. These 1 and 2 bedroom apartments are expected to rent between $1,000 and $2,000/mo.

Looking forward, Ray Hensler, developer of the ultra successful Adelicia high-rise, has been tweaking his proposed “renter by choice” high-rise that may be ultimately located on Eakin’s Universal Tire site on the corner of 12th Avenue and Laurel Street. This would be the first high-rise rental project constructed in Nashville since Tony Giarratana completed The Cumberland in 1999. Hensler’s project would soar 20 stories and offer up to 250 luxury condo-style apartments at rents that begin in the lower $1,000’s and reach as high as $5,000. Before the skeptics begin clearing their throats, let me remind you that private owners in the Adelicia, West End, Icon, Terrazzo, Encore and Viridian have been achieving similar rents over the past half decade. Hensler’s high-rise will be highly amenitized and set a new rental standard in Nashville.

There also seems to be activity on the failed Griffin Plaza site in the heart of the lower Gulch. While no details are available, it appears as though several out of state developers are taking a hard look at constructing a high-rise rental project in this location. The Griffin site is located directly across the street from the Turnip Truck, the Gulch’s own organic grocery store and would seem to be perfectly located.

Gulch Office Space

Let me start by saying that currently there is not a plethora of office space in the Gulch, but there’s also not much vacant either. Offering approximately 80,000 square feet, the Terrazzo is the largest office building as well as the newest. Signing 4 leases in 2011, this building is now essentially full, which amazes me given the fact that this Class A space delivered during the recession and is not cheap. It should also be mentioned that the Terrazzo is a mixed use building that houses 117 luxury condos, 4 of which remain available for sale.

The Bohan Building is a 60,000 square foot building with one 8,000 square foot vacancy on Demonbreun Street (Old Lyric Street space) and the McGavock building is a 52,000 square foot development with one 9,000 square foot vacancy (currently being negotiated). Both office buildings are considered Class B office redevelopments.

Looking to the future, Eakin Partners have a conceptual 350,000 to 400,000 square foot Class A high-rise located on the corner of 12th Avenue and Demonbreun. This is the location of the old Universal Tire, a site that Eakin purchased in February 2006 for $6.25 million. According to my sources, it would take 50-60% of the building being preleased in order to begin construction. Rumor has it that this site has made the coveted Waller Lansden Law firm relocation top 3 list, but I have no way of confirming this intel. I will say this though, it makes a ton of sense for Waller Lansden to choose this location. Once the Music City Center is completed, Demonbreun Street will become a new gateway boulevard into downtown Nashville. Highly visible, this site offers unparalleled walkability and livability, a combination not yet found in Nashville. This site makes more sense than either Alex Palmer’s site or Lionstone’s site. Of course, I am assuming the price tags are all the same.

Condos in the Gulch

Where once there was a “glut of Gulch condos for sale” (thank you Tennessean for that rather calamitous phrase) now there are few. The 419 unit Icon is down to 65 unsold condos and the 117 unit Terrazzo is down to just 5. During 2011, both buildings have averaged a combined 10.3 closings per month. This gives the Gulch 7 months of unsold developer inventory remaining. Add this 7 months of inventory to the 1 month of resale inventory plus an unknown shadow inventory and you’ll most likely arrive at a net aggregate of one year’s worth of inventory. In other words, it will not be a buyer’s market by this time next year. Buyers waiting for the bottom of the market better start making moves now, least ye be left out in the cold. Sellers, your wait is almost over. Calculations show that prices will begin to rise in earnest as soon as January 2012 and likely will continue for the next several years. The Gulch is poised for quite a good run.

As the broker who has sold more condos than any other broker in Nashville, I look forward to the opportunity of aiding you in either purchasing or selling. Contact me for a private consultation.

This is a post from Grant Hammond's Nashville Real Estate Blog.

YTD Sales for the Terrazzo Condos

admin — Wed, 10 Aug 2011 16:27:40 +0000

Just past the half way mark in 2011, the Terrazzo in the Gulch has sold 17 condos totaling an impressive $6.27 million. Of the 17 recorded sales, 16 were developer owned condos and 1 was a resale (highlighted in blue). There were no foreclosures or short sales during this period. The 117 condo development is now 86.32% sold out. Of the remaining 16 condos, 7 are under contract, leaving 9 total unsold units. Of the 9 unsold condos, 5 are penthouse residences. In other words, if you are an under $800,000 buyer who would like to pursue the Terrazzo, your time is running rather short. On the flip side of the coin, current Terrazzo owners will soon see the inevitable appreciation that comes when a developer sells out of their inventory. Those who secured condos on higher floors with better views will see a greater gain than those who did not. Should you be considering selling your Terrazzo condo, call the most successful condo broker in Nashville. I can give you a true market valuation and recommendation for optimal market arrival.

View the condos for sale in the Terrazzo

Terrazzo Condos Sold in 2011

This is a post from Grant Hammond's Nashville Real Estate Blog.

YTD Condos Sales in Nashville’s Icon

admin — Tue, 09 Aug 2011 16:37:54 +0000

With slightly more than 7 months gone in 2011, the Icon in the Gulch has sold 59 condos totaling over $17.46 million this year. Of the 59 recorded sales, 9 were resales (highlighted in blue) and 50 were new developer sales. Of the 9 resales, 1 was a foreclosure on the 9th floor. The 419 condo development is now just over 75% sold out. There are approximately 90 unsold developer condos remaining, but as many as 12 may already be under contract. A year ago, the Icon had recorded 51 total sales at this point, 49 were developer owned condos. The Icon is tracking to sell 85-90 total condos in 2011, this would break their record of 84 condos set in 2009 (keep in mind there was a Federal Tax Credit Incentive in 2009). Interestingly, the YTD average price of $275.30/ft is tracking 2.4% lower than this time last year. I’d like to think that my expert negotiating skills has a little to do with this fact. Should you be in the market for a condo in the Icon, talk with the most successful condo broker in Nashville.

View current condos listed for sale in the Icon

Icon Condos Sold in 2011

This is a post from Grant Hammond's Nashville Real Estate Blog.

YTD Encore Condo Closings 2011

admin — Mon, 08 Aug 2011 22:14:25 +0000

With slightly more than half of 2011 complete, the Encore has sold 23 condos totaling just over $5.68 million. Of the 23 recorded sales, 6 are resales (highlighted in blue) and 17 are new developer sales. Of the 6 resales, 2 are foreclosures (green text). The 333 condo Encore development is now 95.8% sold out. There are 14 unsold developer condos remaining, but 3 are already under contract. It would seem that the Encore may be completely sold out by Christmas. Considering the potential favorable outcome of the downtown baseball stadium study, the Encore appeals to my sense of greed as I feel one can work the developer down on their remaining inventory. Of course, working developers down is my first love and I am more than happy to help.

View current condos for sale in Encore

Encore Condos Sold in 2011

This is a post from Grant Hammond's Nashville Real Estate Blog.