Despite the fact that Dean Schwanke -- vice president of Urban Land Institute (ULI) -- illustrated national recovery for commercial real estate with a tortoise, he also indicated that current market trends are in place for Nashville to make a huge profit in 2013.
During the ULI’s annual Emerging Trends conference held at the Frist Center for the Visual Arts, Schwanke said the organization’s yearly survey indicates that secondary markets (including Nashville) are likely to see gains in the New Year.
He then goes on to explain how investors are currently searching for various ways to generate profits, and how their search has led them into secondary markets. Foreign investors – especially those from Canada – are major underlying factors for the positive trends seen in Nashville today.
Moreover, the Music City ranks 18th amongst the 51 biggest markets in ULI’s outlook rankings for 2013. Industry experts say its comparatively high position is attributed to the city’s various economic drivers -- such as healthcare -- which has been unaffected from the recession.
"Insuring more people is a positive for health systems," says Ryan Dole of Health Care REIT. "The question is whether it increases demand for office space."
However, even if the influx of developments underway and in the pipeline has rendered positive improvements within the local market, a sudden surge in construction within a short span of time may bring forth potential dangers associated with excessive commercial inventory.
Nevertheless, this year went pretty well for the hospitality industry, as significant industrial factors such as vacancy, supply, demand, and revenue per room, has reached record-high levels. In addition, Jan Freitag of Smith Travel Research says these indicators of strong growth may very well continue throughout 2013.
Freitag points out that Nashville’s hotel industry reached its last peak level during 2007 and 2008. The financial crisis which followed caused profitability to spiral downwards for the next two years. However, the industry has managed to make a substantial comeback – successfully exceeding 2007 levels -- a little more than a year and a half later.
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