An increasing number of young professionals continue to relocate to Music City, with Nashville’s multifamily market maintaining a solid performance in 2022, aided by a diverse economy and solid population growth. On an annual basis, Nashville’s rent growth rate remained the third strongest in the U.S., reaching 14.8 percent in August, according to a recent Yardi Matrix report.
In this environment, developers and construction companies have to keep up with demand. Hardaway Construction is a commercial general contracting company based in Nashville and established in 1924. We talked to the company’s CEO, David Frazier, about adapting the business to a high-demand market.
How would you describe the Nashville multifamily market now as opposed to three years ago?
Frazier: According to the moving and storage company PODS Enterprises’ second annual relocation trends report, Nashville ranked third among the most popular moving destinations over the last year. With this population influx, the city must adapt to house all these people. The increasing number of professionals relocating to Nashville creates a high demand for multifamily housing.
According to World Population Review, three years ago, the city’s population was 680,600 people. Today, it is 707,091. The additional 26,000 plus people in the city have caused a massive demand for more multifamily housing.
The Nashville multifamily market has experienced a fast-paced recovery due to the metro’s diverse economy and bid-name corporate relocations and expansions. This has drawn the attention of both renters looking to leave overpriced metros and investors interested in exploring the expanding city’s potential. In general, the price per unit has increased significantly in the past three years with the biggest recent impact of inflation.
Why do you think Nashville has become a top destination for those looking to relocate?
Frazier: The Nashville region is defined by a diverse economy, low living and business costs, a creative culture and a well-educated population. Many interested homebuyers are drawn to Nashville as a place to enter its competitive real estate market. The wide selection of neighborhoods, each with its distinct personality, gives homebuyers multiple options to fit their ideal neighborhood preference.
One of the biggest draws to the area is its potential employment prospects. Nashville’s job market is healthy, with a low cost of living compared to other large American cities such as New York City or Los Angeles. Nashville is the sixth on a list of top cities for U.S job seekers and the second-strongest job market in the nation because it is a modestly sized city with a healthy job market and a buzzing downtown area.
What efforts has Hardaway Construction made to accommodate the growing demand for housing in Nashville?
Frazier: Hardaway Construction has taken charge of housing demand with multifamily housing projects to support this explosive growth. The recently completed Accent Edgewood Apartments project in the Wedgewood-Houston neighborhood holds 236 units and has added to the development of this up-and-coming neighborhood.
We have built more than 20 other multifamily housing projects. We have also increased our staffing by 25 percent this past year due to the increase of projects needed, a consequence of the Nashville market’s growing popularity.
Are there any neighborhoods or areas in Nashville that are attracting significant multifamily development? What is making those areas so appealing?
Frazier: There has been rapid growth in the Wedgewood-Houston neighborhood because of its urban appeal with its galleries, breweries and distilleries. The area has experienced a redevelopment restoration over the last few years as many residents, families and businesses have flocked to the area. There is a strong appeal due to its location only two miles south of downtown, as well as boasting lower rent and housing prices relative to other Nashville neighborhoods and areas. A few of our multifamily projects in the area include Standard Assembly Mixed Use, 1414 4th Avenue—Emblem Park, Nashville Warehouse Company Residential Tower and Queens Mixed-Use Development.
What are people moving to Nashville looking for in a multifamily community?
Frazier: People moving to Nashville are looking for quality of life, affordability, comfort, an updated and clean-living space as well as access to amenities in a multifamily community.
Is the city’s local infrastructure ready to accommodate such large numbers of new residents?
Frazier: Nashville’s infrastructure needs to be updated with the pace of development over the last twenty years. Still, the systems are strained, and future growth will rely on an aging and limited infrastructure platform. For example, integrating vehicles and mass transit infrastructure systems should be considered.
What does competition in the multifamily market look like in this climate, in Nashville?
Frazier: Competition is mainly around the scarce amount of land that Nashville offers. It is harder to find land and prices tend to be higher due to the limited amount. Developers have found a way to work together and support each other in combatting this restriction.
Do you expect the exceptional multifamily demand to continue? If so, why and for how long?
Frazier: Yes, because according to Nashville Chamber of Commerce President Ralph Schulz, about 200,000 new residents are expected to move to the 10-county mid-state Nashville area over the next five years. The demand for multifamily living will continue, especially with many large businesses bringing their teams to Nashville and the interest in all that the city has to offer.