The local real estate industry is expected to slowly begin to rebound starting in 2021 — though the post-COVID-19 bounceback might not be clearly noticeable until the following calendar year.
Still, a cautiously hopeful tone seems evident.
This seemingly is the general mindset of a handful of local commercial, industrial and residential real estate experts who gathered virtually Wednesday morning via a webinar panel arranged by Colliers International | Nashville. The firm hosted a discussion of its mid-year 2020 Commercial Real Estate Vitality Index via webinar for the first time. T
he Colliers Index, launched in January 2019, uses key economic indicators to track the health of Middle Tennessee’s commercial real estate sector from 2001 to the present. Those indicators include job growth, population growth, building permit activity, rental rate variances, net absorption of space, vacancies, consumer sentiment, and other factors.
Bert Mathews, Colliers' president, said Nashville “is not immune to what is going on in the world.” However, he said that in the long term, the city will remain strong for investors despite the current “lack of clarity” in the investment market.
As to real estate investment numbers, Nashville saw about $4.82 billion worth of investment in all product types in 2019. To date in 2020, the number is about $1.8 billion.
On a positive note, Mathews said the collective value of new permits issued to date in 2020 and related to commercial projects ($212.24 million for 184 permits) is up 88 percent compared to the number from this same time in 2019 ($112.45 million for 82 permits).
Still, Mathews conceded some challenging times loom.
“Retail is getting hurt,” he said, while adding there remains a “tremendous amount of opportunity” within the sector.
On the retail theme, Geren Moor, CFO with Brentwood-based GBT Realty, said, “My crystal ball for retail is still very cloudy but we will adapt, survive and thrive.”
Moor (pictured) said he anticipates future bricks-and-mortar retail spaces to offer smaller footprints than has been the case to date. As such, he expects lower rents.
“Restaurant and grocery tenants will pay less [rent],” he said, while adding, “Buying patterns will change significantly with online purchases."
The panel also included Whitfield Hamilton, a partner at Panattoni Development Co.; Shirley Zeitlin, chairman of Zeitlin Sotheby's International Realty; and Colliers International President and CEO Gil Borok. Janet Miller, Colliers Nashville CEO and market leader, served as host.