Nashville’s Retail Market is Growing Leaps and Bounds, Both Inside and Out
Set to open in the next couple months, Village 21 at Regions Park in Nashville’s Hillsboro Village will feature 100 residential units atop retail and restaurant space.
Just like the hit show, “Nashville,” Nashville’s retail market has more than one storyline in play and all of them intertwine to create a tapestry that showcases the retail development in our city. You don’t have to look too hard around downtown Nashville to see the redevelopment surge that is bringing retail as part of mixed-use and traditional developments to this market.
Greenfield development in suburban nodes is also capturing the spotlight, albeit a smaller one, as a direct result of the intown growth that is driving up land and construction costs to a level that puts available space out of reach for many retailers. Those that can’t absorb the risk or afford the rent in downtown are looking to Nashville’s most popular suburbs for reasonable storefront alternatives.
Downtown Nashville redevelopment is a hit right now with no end in sight, which is welcomed news for well-capitalized, specialty retailers. Because of the continually rising costs of land and construction, redevelopment and mixed-use projects are the only feasible entry points for retailers in this market.
One of the most significant projects highlighting downtown’s potential is the 6.2-acre redevelopment of the Nashville Convention Center: Fifth + Broadway. A high-quality, mixed-use development, this project alone is expected to infuse downtown with approximately 230,000 square feet of retail.
Similarly, Southwest Value Partners is crafting plans for the overhaul of the former LifeWay Christian Resources campus at the corner of Broadway and 10th Avenue North. To date, Hyatt Regency is set to anchor this 15-acre site that is the largest contiguous parcel available in the city since the turn of the century, and rumors have it that a grocery store and other high-end retailers are targeted.
Even surrounding neighborhoods, such as Hillsboro Village, a historic submarket known for its unique style and one-of-a-kind shops, the historic Belcourt Theatre and the famous Pancake Pantry, are benefitting from the demand for mixed-use, urban-focused development.
Set to open this spring, GBT Realty’s Village 21 at Regions Park combines modern architecture with in-demand amenities that appeal to residents, as well as the student and daytime population, yet still aligns with the neighborhood’s creative culture. In addition to approximately 100 residential units, Village 21’s commercial line-up is almost set with a mix of restaurants from fast-casual to tablecloth dining, along with boutique retailers.
Yet, while high-end, unique specialty stores are in abundance, a significant need remains for traditional retail. Grocery and soft goods — much-needed intown commodities — have yet to crack the city core and fill the void that is growing proportionately with the residential population.
Second Choice Isn’t Bad
The explosive residential growth downtown is keeping suburban population growth somewhat in check, for now, so the next wave of suburban retail has yet to hit hard. Retailers that have opened their doors over the past 10 years have been able to meet the growing demand as a result of suburban growth.
While both Bellevue and Gallatin are primed for a wave of retail growth that hasn’t hit the suburbs since the 1990s, several other markets are proudly taking second place to downtown and popular nodes such as West End, Green Hills and 12 South.
Murfreesboro (the fastest growing city in Tennessee), Hendersonville, Mt. Juliet and Nolensville have benefited from the inflated downtown rents and are welcoming retail expansion and newcomers. While the waves may not be as great, the retail heading to the suburbs includes high-quality names.
Hendersonville will soon be home to a new Kroger prototype at the site of the former Kmart. Further, Franklin and Murfreesboro are both home to Nashville’s first two Sprouts Farmers Market storefronts. Other redevelopment is underway with more expected as a result of suburban growth.
Sprout’s expansion strategy is an ideal example of how retailers are circumventing the prohibitive downtown rents by going out to in. Once Sprouts understood the economics of the preferred Green Hills, West End and intown markets, it headed to the suburbs. GBT Realty’s 58,000-square foot The Shoppes of Northgate in Murfreesboro is now home to a 30,000-square foot Sprouts store. By establishing brand recognition and a loyal following in the suburbs, it makes the move intown to higher rents less risky and success more probable.
We all know retail follows people, and people are moving to Nashville — both in and out. The Music City’s tourism draw, along with our government’s business-friendly environment, only adds to the lure of steady residential growth. No state income tax and quality of life amenities such as superb healthcare, culture and entertainment also have retailers singing from the same Nashville songbook. So whether looking inside or outside of Nashville, you can bet the story of retail will continue to carry a sweet tune.
— By Jeff Pape, Managing Director of Shopping Centers, GBT Realty Corp. This article originally appeared in the February 2017 issue of Southeast Real Estate Business.