By Richard Lawson

John Nelley and Al Buckley made their mark on Nashville real estate as partners in building millions of square feet of warehouse and single-story, flexible office space.

Now, they are taking on the urban environment with a 67,000-square-foot mixed-use building in Hillsboro Village.

After working months on plans for 20th and Belcourt avenues in The Village, Nelley and Buckley will develop the parking lot across from Sunset Grill with Randy Rayburn, the owner of that restaurant as well as Midtown Café and Cabana.

Construction is scheduled to begin this summer with a completion date in September 2009, said John Keller, senior vice president of ProVenture Commercial, which is handling the building’s marketing and will manage it once it’s built.

The building will have 12,000 square feet of street-level retail space and 55,000 square feet of office space. It will wrap around a garage containing 312 spaces. Architect Manuel Zeitlin designed the building, which will have a stepped back terrace area at the top.

This building will be the second commercial building in Hillsboro Village since a conservation overlay was approved in 1998 using urban design standards. The last was built at the corner of 21st Ave. and Blakemore. It has apartments above retail, which includes Pancake Pantry.

Office space is limited in Hillsboro Village, and there’s no Class-A space.

“It’s a very tight office market,” Keller said. “You really don’t have traditional office space in Hillsboro village.”

While dozens of condominium projects have been popping up all over Nashville, in 2008, developers may have a harder time getting loans from the bank for new projects.

According to Nashville real estate experts, over the last few years less people have been buying the condos being built.

Soon, experts fear, there will be more supply than demand.

Richard Lawson, The City Paper , said, “Right now, folks are taking a step back a little bit and watching, perhaps, taking more time and care before they start to build again.”

That slow-down in the condo market is one that banks like Regions are picking up on.

Regions Bank said before backing a developer, they make sure a certain number of condos have already been sold, before construction even begins.

That is to ensure Regions will get their loan money back, once construction is complete.

If there aren’t enough of these pre-sales, Regions will not let the developer borrow money.

Jim Schmitz, Regions Bank, said, “So go the pre-sales, so go whether we make the loans or not. We’re really reacting to the market place. The national market is slowing down and Nashville will eventually follow that.”

Just because the market may be slowing now, Regions said as soon as sales pick up again, they will be willing to give out more loans. It is just a matter of time.

The chief executive of one of the nation’s largest mortgage finance companies, Fannie Mae, said that the housing market will weaken through 2009, with a turnaround unlikely until at least 2010.

Fannie Mae CEO Daniel Mudd also said that a new plan orchestrated by the bush administration to help distressed homeowners with high-priced mortgages “is an important step.”

NASHIVLLE, Tenn. - In many U.S. cities, the housing bubble has burst.

Sellers are losing big money after years of making big profits.

Middle Tennessee isn’t immune to this housing slow down.

But if the price is right, a Midstate home will sell because the region has experienced record-breaking years in real estate.

Although the days of fast sales for big profits are over for now, the housing market is far from broken.

“Even though the market’s down, this will be the perfect fit for someone,” said Tracy Hardes.

Her home is for sale during the housing slump.

“I think my house will sell because of the price I put it at,” she said. “It’s comparable.”

She has a positive attitude the night before a For Sale sign is posted in her front yard.

She is also optimistic despite the current slow down in home sales.

“Especially if you look at a lot of other cities in the United States that are taking 11-15 percent losses, having to cut prices on a major scale,” said Whitney Srouji, a real estate broker.

The Nashville market hasn’t taken as big of a hit.

“Really what we’re doing is coming down off of that high and making it a lot more balanced,” she said.

Home sales in Middle Tennessee went down 25 percent a month ago, compared to last October. Home closings were down by 12 percent.

“Real estate right now in Middle Tennessee, we’re really balanced,” Srouji said. “But there are pockets where there is quite a bit of inventory versus buyers.”

In some areas, homes sit for awhile. In other communities, they sell soon after they hit the market.

“It really just depends on the condition and price from the get go,” Srouji said.

Hardes competitively priced her house and staged it to sell.

“I removed almost every personal item, so that when someone walks into this house, they can see themselves here,” she said.

Nashville had a record-breaking year for home sales in 2006. That’s why this correction in the market makes this year’s numbers look bleak.

While sales may be down, home prices are not. The average sale price is up three percent in the eight-county area that makes up the Nashville housing market.

Despite slump, prices have increased, flooding market with unsold homes

By CHAS SISK
Staff Writer

The real estate market has slowed, but try using that to bargain with Nashville’s home sellers.

Home prices eked out a 2 percent gain in September, even though sales experienced their sharpest decline since 1991 last month, as sellers continued to hold out for more money despite a dramatically slower market.

The disconnect between rising prices and falling sales indicates a gap has developed between buyers and sellers that is driving up inventories of unsold homes, said real estate agents and observers. That could prolong the correction that is working its way through the local real estate market.

“The more prices go up, the longer it’s going to take to absorb that surplus housing,” said David Penn, director of the Business and Economic Research Center at Middle Tennessee State University.

A total of 2,587 single-family homes, condos, multifamily buildings, farms and lots were sold in September in the nine-county area tracked by the Greater Nashville Association of Realtors.

That represents the weakest September in five years, real estate data show. The decline of 25 percent year-over-year was the sharpest drop since January 1990 to January 1991, when a recession helped push sales down 35 percent here.

The most recent sales figures are down from the 3,455 homes sold in September 2006, a near-record level for the month, the Realtors group said.

Other signs look good

The drop comes even though Middle Tennessee’s economy appears to be strong. The area is growing by more than 2 percent a year, and unemployment stands at 3.5 percent, more than one full percentage point less than the nation as a whole.

Mortgage rates also have been favorable. The average quote on a 30-year, fixed-rate mortgage at the end of September was 6.32 percent, according to the Mortgage Bankers Association of America.

“In ‘91, all the trends were negative, and in this case … all the trends are stable and up,” said Richard Courtney, the GNAR’s president. “I think it (the slowdown in sales) does have something to do with pricing, and houses need to be in better condition. Last year, if a house needed a new kitchen, it would sell and the buyers would put in a new kitchen.”

Prices inch up in a year

Meanwhile, the median price for a single-family home in the region inched up to $182,291, about $3,400 more than in the same month a year ago. Condo prices rose 5.6 percent to $162,500.

The rise in the single-family median was the smallest year-over-year increase since August 2004. But it indicates that many sellers are still asking for the sizable markups they had come to expect before the real estate market began to slow a year ago, real estate agents and other industry professionals said.

“It depends on your inclination to sell,” said David Lafferty, an appraiser and senior partner in The Caldwell Group in Franklin. “Do you really need to sell your house, or do you want to put it out there at a high price and it not?”

The gap between buyers and sellers has contributed to a significant expansion in inventory. At the end of September, 22,821 homes were on the market, about two-thirds more than at the market’s peak two years ago.

At current sales rates, it would take more than eight months to sell every home.

But that’s still better than many parts of the country, said Mitzi Spann, president of the Home Builders Association of Middle Tennessee.

“I look forward to a turnaround in the spring or the fall at the latest,” she said.

Some homebuilders have cut prices to deal with the high inventory level, but many are attracting buyers through incentives, such as paying closing costs, that do not show up in the purchase price.

Credit tightening a factor

Another factor dragging down the market could be tighter credit standards. A year ago, buyers with poor credit or those who needed large sums could get a loan that would quickly be resold to investors on Wall Street.

Now, most Wall Street firms are refusing to invest in anything other than the safest of borrowers, forcing banks to find new ways to structure home loans, said Gayle Kindig, Regions Bank’s Middle Tennessee area manager for mortgage banking.

Local buyers also may be heeding the advice of financial experts who recommend staying away from the market until it stabilizes, Courtney said.

“There is some fence-sitting,” he said. “They watch the national news.”

Slicing and dicing the pie-d landscape of East Nashville

by Carrington Fox

There was a time when the notion of pizza wars in East Nashville might have sounded about as likely as the arrival of rustic French cuisine in Five Points. But gentrification happens.

As chain-link fences have yielded to manicured lawns and neglected blocks have given way to loft condos, upwardly mobile investment in East Nashville has ushered in a lot of dough—the kind that carries tomato sauce and toppings and gets delivered in a cardboard box.

Yes, East Nashville now boasts a competitive landscape of independent pizza stores. At one geographic extreme, there’s Little Italy, an unassuming family business just across the river from downtown on Woodland Street. At the other end of the map, there’s Castrillo’s Pizza, set back near the intersection of McGavock and Riverside, where a nascent nexus of stores is giving shape to a neighborhood known as Riverside Village. In between, there’s Italia on Woodland and Pizzereal at Five Points.
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Eyes on the Pies Pizzereal takes top honors in the Scene’s East Nashville Pizza Showdown.

The good news is that three out of four deliver. And three out of four (not the same three) are open for lunch. Eager to separate the semolina from the chaff, the editorial department of the Scene staged the East Nashville Pizza Showdown, an underground competition conducted at lunchtime on the low filing cabinets by the cubicle just outside the boss’s office. (Italia is not open for lunch, and thus was not part of the taste test.)

As with any competition that pits hot foods against each other, timing is key. All contenders need to arrive warm and fresh, in order to afford an apples-to-apples comparison. And you need to hold constant as much about the products as possible. In our case, we asked Little Italy, Castrillo’s and Pizzereal to bake up their finest pepperoni-and-mushroom pies and to have them at our office on 12th Avenue South, on the north lip of the Gulch, by 1 p.m. (We dispatched a team to pick up the specimen from Pizzereal, as it doesn’t deliver.)

Little Italy delivered the pizza without incident. Castrillo’s called from 12th Street in East Nashville wondering where we were. And the Pizzereal pickup was delayed when the owner realized he had forgotten to bring in his cash box to make change. (In and of itself, this delay was no big deal, and in no way did we penalize the Pizzereal pizza, but the cash-strapped transaction underscored the fact that Pizzereal runs on a slightly more erratic schedule than many larger restaurants. We’ve witnessed similar quirks on other dine-in visits, like the time the owner needed about half-an-hour for the oven to heat up. The inconsistency can be frustrating or endearing, depending on the customer.)

Once all the contenders were in position on the filing cabinet, we evaluated the products based on appearance. The Pizzereal ’za immediately stood out for its appetizingly ragged homemade rim, not quite as tall as a typical deep-dish crust. The cheese topping of the Little Italy pizza bore oven freckles of browned cheese, while the Castrillo’s pizza was virtually paved with pepperoni, leaving little cheese visible. The most salient difference among the three pizzas was the use of canned mushrooms by Castrillo’s, an egregious topping faux pas in the eyes of many judges.

When we bit into the slices, several tasters noticed a faint synthetic flavor in the Little Italy sample—described as something between plastic and metallic and suspected to be associated with the pepperoni. Castrillo’s and Little Italy shared a uniformity of texture, with the overall sensation being chewy, bready crust.

Pizzereal provided the superior sauce, accented by visible bits of diced garlic, but it was also the oiliest, a fact that became more noticeable as the pizza cooled and olive oil turned the thin, crisp underside of the pie into a soggy base.

As is often the case with such taste trials, our comments were hypercritical but did not reflect any overriding dissatisfaction. Far from it. We greedily devoured the pizzas and stored the phone numbers in our desk drawers for later days.

But our work did prove fruitful as we unanimously established a favorite East Nashville lunchtime pizza. The overall winner? Pizzereal.

Unfortunately, Pizzereal does not offer delivery at this time, though owner Paul Koumanelis says he isn’t ruling it out for the future. A Boston transplant and former commercial baker, Koumanelis opened the restaurant in October 2004. Housed in a rehabbed foursquare—complete with exposed brick walls, hardwood floors and local art—one block off Five Points, Pizzereal seats 40 inside and 20 on the new front patio. The terse menu includes shish kabobs from Koumanelis’ family recipes, a generous and crisp Greek salad with homemade vinaigrette, and specialty pizzas, including the Spinaci (baby spinach tossed in pepper-infused olive oil, basil, garlic, mozzarella, pepperoni and mushrooms for $20.95) and the Tuscan (fresh chopped kale tossed in pepper-infused olive oil, mozzarella, mushrooms and labne (yogurt cheese) for $19.95). Pizzereal serves wine and beer, including Yazoo.

With an exhaustive list of ingredients that includes peppers, sausage, blue cheese, feta, garlic, basil, Kalamata olives, banana peppers, pineapple, jalapeños, spinach, ham, pepperoni, mushrooms, anchovies, onions, Roma tomatoes and turkey, the combinations for topping Koumanelis’ homemade crust are endless. Pizzas start at $11 and toppings are $1.50 each, so choose wisely, as creative combinations can get pricey. It’s also a good idea to call ahead. Koumanelis is virtually a one-man show, and you never know when he’s going to have to pop out for minute, maybe to pick up some change for the till. Give him a buzz to let him know you’re on your way—he’ll leave the oven on for you.

Pizzereal is located at 203 North 11th St. and is open noon to 2 p.m. Monday through Friday and 5 to 11 p.m. daily. Carryout available. Phone: 226-2206.

Little Italy is located at 412 Woodland St. and opens at 10 a.m. Monday through Friday, 11 a.m. Saturday and 1 p.m. Sunday. The restaurant closes at 11 p.m. Sunday through Thursday and midnight on Friday and Saturday. Carryout and delivery only. Phone: 248-4949.

Castrillo’s Pizza is located at 1404 McGavock Pike and is open 11 a.m. to 10 p.m. Monday through Thursday, 11 a.m. to 11 p.m. Friday and Saturday and 3 to 9 p.m. on Sunday. Carryout and delivery available. Phone: 226-2900.

Forest Hills couple waits for the opening of The Adelicia, new lifestyle in Midtown

By NANCY DEVILLE | ndeville@tennessean.com | 259-8304

Published: Monday, 07/02/07 Elaine and Randolph Blake are counting the days until they can move into their brand-new Midtown condominium.After enjoying years in a spacious Forest Hills home, the 60-something couple thought it was time to consider downsizing and The Adelicia, one of Nashville’s newest condo developments, seemed to be the right fit. The Blakes are renting an apartment until construction is complete later this year.”We lived in a very wooded lot that was seemingly a little bit more than we wanted to take care of,” Elaine Blake said. “We knew that we wanted a condo but hadn’t looked at all. People told us The Adelicia was a new and interesting place to look. It offered a little more than most of the condos at the time. It seemed it was a good match for our wanting to downsize but still have amenities and a really nice place to live.”My husband will be able to walk to work, and hopefully more services will come to that area as these condos develop.”Nestled between Music Row, Vanderbilt, Peabody College and Scarritt-Bennett, the 18-story tower on 20th Avenue South will include a retail space and 186 luxury units, offering a mix of street-level brownstones, condos and penthouses. The project will include a fitness center, rooftop amenity deck, gated parking garage and a private dog park.”This area was ripe for the picking in terms of bringing in boomers and empty nesters that were interested in urban living,” said Ray Hensler of Corner Realty Partners.”This project is going to set the standard at the high end when it’s completed: for quality, attention to detail and location. The project has it all in terms of quality and offering people good value for all that.”The project is expected to be complete by this November.The units will offer private balconies, hardwood floors, granite countertops in kitchens and bathrooms and stainless steel appliances, along with views of the downtown skyline and surrounding colleges and universities.”Buyers will benefit because there is a full array of retail, restaurants and services already in Midtown,” Hensler said.”With the additional residents that move in, there will be even more retail and more restaurants. Some areas of town are starting from scratch trying to create neighborhoods. The advantage that Midtown has is that it’s already an established neighborhood. We were lucky to find one of the few sites that could be intensely developed.”Jay Pennington, owner of South Street and Bound’ry restaurants across the street from The Adelicia, welcomes the project. Although the condo tower is in a former parking lot that many restaurant patrons used, Pennington believes it’s a good addition to the area:”When we moved into the area 15 years ago there weren’t too many people living there. Now it’s going to be excellent to have more people in the neighborhood.”Midtown has changed immensely. When we first moved in, the area had gone downhill. Now it’s probably one of the most thriving areas in Nashville now.”

By Amy Griffith, agriffith@nashvillecitypaper.com
May 16, 2007

Job growth in Tennessee may be slightly lower than it was last year, according to figures announced Tuesday by the Tennessee Department of Labor.

But Tennessee is probably doing a bit better than averages for the rest of the country, and high-growth industries in Nashville are helping drive the state’s performance.

From the beginning to the end of 2006, the number of jobs available in the state increased 1.3 percent, said Martha Wettemann, a statistical analyst supervisor for the state. Tennessee’s projected figure for 2007 and 2008 is 1.2 percent annually, on average.

In total, about 75,900 jobs will be added to the state economy by the end of 2008, according to state figures.

“Some people are talking about a little bit of an adjustment in 2007, but we see it improving by the end of 2008,” Wettemann said. “We’re, in some ways, doing a little bit better than the rest of the [U.S.], and not seeing the housing drop as much as in other states.”

While the state does not calculate two-year projections for individual areas, Wettemann said job additions in Nashville and Tennessee’s other urban areas is largely responsible for the growth. Industries that are growing very rapidly in Nashville – including health care, social services and technology-related fields – are driving much of the state’s job growth.

Also contributing more jobs than average across the state is the arts industry, including the music industry, which highlights some of the growth taking place locally.

“We keep seeing more growth in the arts. The arts kind of surprise us with continuing growth, and we certainly see that in Nashville,” Wettemann said.

On the short-term decline are jobs in the manufacturing sector, which is expected to lose available jobs in the next two years but sustain long-term growth through 2014. Mining will likely decline in both the short- and long-term.

San Antonio Business Journal - 8:55 AM CDT Wednesday, May 16, 2007

San Antonio has been named one of the best big cities in the country for relocating families by Worldwide ERC and Primacy Relocation.

The Alamo City has been ranked the 12th best metropolitan area for families based on housing affordability, taxes, leisure and recreation, arts and culture, air and water quality, cost of living, unemployment rates, crime, schools and population growth.

The top city in the country on the 2007 Best Cities for Relocating Families is Fort Worth, followed by Nashville, Kansas City, Indianapolis and Austin.

Worldwide ERC, based in Washington, D.C., is a company that assists employers relocating workers throughout the United States and the world.

Primacy Relocation is a third-party employee relocation provider. It helps employees arrange home sales, movers and overall logistics.

The two companies worked with Bert Sperling of Sperling’s BestPlaces to rate the top 50 cities with a population higher than 1.25 million to compile the list.

“Without a doubt, the state of the housing market is having a huge impact on relocation decisions of both employers and the families who are being transferred,” says Michelle Vallejo, Primacy’s president for the Americas. “The cities on this list represent some of the stronger real estate markets and places that are most conducive to a successful family relocation.”

Homes for sale numbers are down nationwide.

In fact, it is the worst drop in 18 years. Home sales plunged in March showing more weakness on the market than expected.

According to the National Association of Realtors , sales of existing homes nationwide fell 8.4% to an annual rate of $6.12 million in March from February’s $6.68 million rate.

It was the biggest one-month drop since January 1989.

While the Nashville market doesn’t distinguish between existing and new home sales, overall Nashville’s March numbers are up from February.

Overall, home sales in Middle Tennessee were up by 21% but they were down 11% over last year’s record-breaking March.

Realtor Jane McCracken said her out-of-state clients are surprised by how healthy the market is in the Mid-State.

She said, “But the days on the market are longer and the inventory is up so we are really having to work with our sellers and make sure they know that how important it is to price correctly in the beginning.”

For buyers like Jerry Kennon, the higher number of homes on the market works to his advantage.

He said, “Seems like there’s plenty to look at and there’s no lack of good homes on themarket.”

Green Hills’ home builder Rogan Allen, who builds homes in the $2 million plus range, said his particular niche is not suffering a bit.

He said, “My market is a kind of immune to that… I just sold two $2 million plus homes in the last four weeks.

Greater National Board of Realtors President Richard Courtney said its important to realize the difference between the national and local figures.

He said, “The thing not to confuse is our numbers were down compared to a record-breaking year and the national numbers are down from an already down year… Right now, our numbers have rebounded andsales are vibrant.”

Courtney said he doesn’t see any signs of Nashville following those national numbers any time soon.

Existing-home sales in the south dropped 6.2% to an annual sales rate of $2.41 million in March, and are 9.7% below what they were in March 2006.

The median price in the south was $180,700, up 0.4% from a year ago.

By William Williams, wwilliams@nashvillecitypaper.com
April 16, 2007

If you love quality urban infill development, it’s a fun time to live in Nashville.

Currently, the city’s downtown, SoBro, Gulch, Midtown and Vanderbilt University campus, collectively, have in various stages of construction eight buildings of between 10 and 21 stories.

(I tried, yet failed, to recall the last time Nashville had such significant simultaneous construction of tall structures. Readers are encouraged to email me if they have helpful information.)

In addition, there are no fewer than 25 multi-spaced urban infill buildings of two to seven floors (both commercial and residential) in the aforementioned five areas plus in Belle Meade, East Nashville, Germantown, Green Hills, Hillsboro Village, North Capitol Mall, Waverly-Belmont and West End Park.

In short, Nashville is undergoing a building boom that many second-tier U.S. cities would salivate to experience.

But like the casualties in the wake of the Don Imus fiasco, not every announced project materializes.

One example is Park 30, a seven-story retail/residential building John Hays’ Graymont Group had planned to develop near Centennial Park.

Hays says a saturated local condominium market forced him to rethink his plan for the site, located on 30th Avenue North near Poston Avenue. He will now develop a three-story, 34,000-square-foot building with space to be sold as retail/commercial space.

“We were about three-fourths through with plans when numerous condo developments or plans for them hit the market,” Hays says.

Hays says the exterior of the now-planned building, for which he currently has no name, will offer a “historic replica” feel, with a nod to 1920s architecture. Local architect Preston Quirk is handling the design, with Middle Tennessee Bank & Trust to provide financing.

The scrapping of Park 30 is, frankly, a disappointment. For its design, Hays had enlisted Nashville’s Gilbert McLaughlin Architects PLC, a progressive company known for contemporary work. Had it been built, the sleek Park 30 would have contributed nicely to the “mini-skyline” in the general area.

Hays says work should begin on the substitute project within six months and require a roughly one-year timetable.

Public art for WEP

Speaking of The Graymont Group, Hays says the company in the next 30 days will install a roughly 7-foot-tall abstract sculpture in front of its Graymont Park condo buildings at 3186 Parthenon Ave. in West End Park.

Nashville-based artist David Rahm designed the outdoor sculpture.

And on an embarrassing note…

The April 9 Creating Places — which focused on Atlanta-based developer Barry Real Estate Companies and its proposed tower to be anchored by Bass, Berry & Sims — was a mess that could rival that of the Don Imus fiasco.

In fact, many posters on the Nashville forum of urbanplanet.org ripped me for the missteps. Understandably so. Oddly, with all the attention, I almost felt like a local celebrity.

First, I misspelled the last name of local architect — and true City Paper supporter — Gary Everton. My apologies, Gary.

Second, I failed to include in the list of those high-profile and nationally known architecture companies that have designed Nashville high-rises the venerable Skidmore, Owings and Merrill LLP. The Chicago-based SOM — which is designing New York City’s Freedom Tower, by the way — was the architect for the handsome William R. Snodgrass Tennessee Tower.

Lastly, I unwittingly suggested that non-Nashvillians should not be allowed a voice regarding the design and function of the proposed Barry tower. I acknowledge that to take such a stance would be unfair, if not ridiculous.

What I meant to write, very simply, is that there are some out-of-town urbanplanet.org Nashville forum posters who sometimes criticize the design and function of proposed buildings while failing to acknowledge two points: 1. The architects of these projects are, to an extent, limited in what they can design by the developers’ budgets and desires; and 2. These buildings, imperfect though they may be, often generate a sense of community excitement and bring numerous ancillary positives to the city.

Yes, we should demand that developers and architects deliver the best buildings possible. But we must be realistic. And we must respectfully ask the out-of-towners to understand that those of us who live here and are working diligently to make Nashville a more cosmopolitan and enjoyable place sometimes find their approach tiresome and unproductive.