Primurbia

I have always been a big fan of Joel Kotkin's writing. His book "The City, A Global History" should be on every developer's bookshelf and is one of those works that should be re-read every couple of years. It would sober up many a person chasing the next hot real estate trend. A couple of weeks ago he published an interesting piece documenting some of the research he has been doing on urban movement patterns. In a column titled "Suburban Idyll" he points out that the boomer generation that is, if you subscribe to the popular wisdom, picking up and moving into the city is in fact staying put: "Eighty percent of all moves by suburbanites over 50 were . . . well . . . to another suburban home, almost eight times the number that bought in the inner city."

What the heck is a developer - a trade that Kotkin chides openly in much of his work - bringing this to your attention? It is because of the investment you are making. There is a lot of press about the "rebirth" of downtowns. Developers have honed in on this "trend," and are preparing to deliver a lot of units in a relatively short time span. While I have no doubt that, in time, these units will be absorbed, much of the initial purchase activity is being done by investors hoping to turn a quick profit. When you read about communities that sell out in 48-hours and the like, the bulk of those contracts are not to end users. They are to investors. Nothing wrong with this at all, it is a free market. But, I think, it inflates the demand numbers and leads developers to conclude that they can build forever. Call me a skeptic, but I do believe that the real estate "cycle" still exists. For most people, a home purchase is the single largest purchase they will make. It is crucial to understand the macro-economic picture behind the location of their purchase.
Enter "Primurbia." M2H Group has focused on this area with our "for-sale" product. Primurbia is the first ring of suburbs outside of the downtown core. It is, for us here in Nashville, Midtown. Primurbia has all the support services in place: restaurants, shops, services. It has established neighborhoods...many with distinct characters that will enhance the value of your home. There are still plenty of people alive today that grew up in Midtown and recall 18th Avenue as a delightful neighborhood. Primurbia does not allow the kind of intense development that the urban core allows. The result is a product that is unique and limited in number...ideal characteristics for a potential resale! In short, Primurbia/Midtown Nashville is exactly the kind of place the Joel Kotkin is referring to in his column.
Don't get me wrong...I am a big fan of downtown redevelopment. But I think it is more of a pioneering venture for end users that want to purchase. We are the co-redevelopers of the Stahlman Building downtown, which has been very well received. But Stahlman is a rental option. It allows people to experiment with the option of downtown living without taking the purchase plunge. I look forward to the day when downtown is thriving with a diverse population, but remain convinced that that change is going to happen gradually. And when that day arrives, Midtown will still be a thriving, comfortable neighborhood that will be viewed as extremely desirable.

Views from Midtown

This week's edition of the Nashville Business Journal has a nice write-up about 1101 Eighteenth and Midtown in general. I confess, I am not a good interviewee and inevetably say something I regret...this was one of the few times this did not happen! The comparison to Atlanta's Midtown is appropriate - two stellar Southern cities on the move, why not compare their development experience? As a longtime Nashvillian, I have always bridled at the comparisons to our larger sister to the South, but it is imperative that we learn from their mistakes or repeat their successes.

One of the big differences in development patterns between our two cities is the scale. "Well, duh, they are like a gagillion times bigger than we are!" - I hear you say. And their development projects tend to be larger too. That doesn't mean we have to copy that...and that is the key point I was trying to get across in the article. Like Atlanta, our Midtown has all the amenities that make it a highly walkable, highly liveable community. Unlike Atlanta, we are not doing large scale projects to populate Midtown and that is GOOD! Successful urban redevelopment occurs when the scale of the projects is human and consistent with the surroundings. This is what we have tried to acheive at 807 Eighteenth and at 1101 Eighteenth. We believe that this strategy protects YOUR investment! Consider this: there are more units for sale at Viridian right now (73 at last known count) than we have TOTAL at 1101! What that means is that if and when a buyer gets ready to sell, they are not going to have to compete on price...the exclusivity of 1101 will help all units there maintain and appreciate their values. This is perhaps the crux of my point to the paper. It is exciting that there are mega-projects going on in the Gulch and Downtown...but compared to Midtown, these deals will not hold their value. You cannot re-make a neighborhood just by dumping units on the market - it requires a more holistic approach.

One last thought...we were up walking our building at sunset last night. Here's a shot from a C-3 unit on the north side of 1101 Eighteenth:It's hard to see and appreciate the skyline when you are part of it!