2/11/21 Nashville Mastermind Group Meeting

Key Take Aways from Nashville February Meeting!

• David Lister with Kraft CPA’s lead off the meeting with a look at the Employee Retention Credit and the significant changes that were made to the credit for 2021.  This credit is intended to encourage employers to pay employees even if they are not working.  Every employer and tax professional should look at this credit for eligibility. He then discussed possible changes to tax law based on an aggregation of what Biden and his team said on the campaign trail along with his first few days in office.
• There has been a lot of activity in Nashville according to Richard Warren with Bradley Arant Boult Cummings, especially with the bombing on Christmas day in downtown Nashville’s historic area. This caused significant damage to several buildings including the AT & T switching station.  The Project at 5^th and Broadway is about to kick off, the old convention center has been demolished and is now being re-built.  NASCAR is looking to bring racing back to Nashville, this may be due the smaller size of the venue here as compared to other cities. 
• ‘Money is cheap,’ according to Stephen Brink with First Southern Mortgage, and there is an abundance of capital and as interest rates continue to compress, lenders especially life insurance companies need longer-term fixed rate loans to match long term liabilities.  Industrial and multi-family are getting the very best pricing at 2.5 to 3.0%, 10-year range and retail and hospitality fixed rates are closer to 3.0 to 3.5%.  Deal flow is very strong right now, lenders seem hungry to get ahead of the curve.
• Vic Alexander with Kraft CPA’s sated that the apartment community is starting to see a higher delinquency and cannot evict and this becoming more and more of an issue.  Hoping some of this round of stimulus package will go to apartment owners.  Columbia and Clarkesville are seeing growth and activity.  Nashville is top 3 or 4 growth cities and expect this trend to continue over the next decade.  Seeing major gifting happening with many of my clients with the uncertainties of what is going to happen with tax rates.
• Lifelong Nashville resident, Paul Blackburn with Marcus & Millichap never thought he would see the real estate prices that he is seeing today, although the prices pale in comparison to places like New York City.  Seeing a lot of out-of-town folks looking to put capital in this area and he believes the 3 prime variables for this are pricing, non-union state and no state income tax.  The lack of mass transit in the area could hold things back in development in the future.  Developers are building more parking than needed for their tenants with hopes of leasing out to adjacent properties.  River North project is moving along and when Top Golf popped up, people took notice, it is the largest and most expensive ground lease ever!
• Casey Estanislao with Hastings Architecture says they were the master planner on River North and are very excited to see it moving forward.  She is optimistic about a pedestrian bridge connecting River North to Germantown.  Connecting east Nashville to Germantown would be a huge benefit and could potentially increase property values.  Their work on the soccer stadium has proved to be a really fun project.  They have been back in the office since June, as a result of their renovation, they prepared and planned for growth and this has allowed everyone to be back in the office, properly distanced.  
• Matthew Berry with The John Buck Company is looking for opportunities in Nashville, he says with the astronomical number of people that have moved and are still moving in, is a huge driver for them.
• W.E. O’Neil Construction Co.’s Steve Culp has been working with an interesting mix of small local businesses, including smaller manufacturing types wanting to relocate to this Nashville area.  2020 was a bit slow but 2021 is looking very strong.
• AJ Jacobs also with W.E. O’Neil Construction Co. based in Chicago is working with legacy companies in Chicago that want to be more active in the Nashville market.
• Steve Jarvis with AKT Peerless says that Racetrac is starting to enter the Nashville market and is planning to put in 30 new gas stations.  Their work has been very steady but he has been seeing an uptick in RV resorts and marinas in addition to multi-family and light industrial.
• Jesper Dalskov with Stantec Architecture says that although Nashville is not immune to what is happening, he believes it will bounce back very quickly.  He says that with rents skyrocketing and the need for affordable units, you may see a resurgence of the 1+ Den unit.  Land costs are driving deals right now.  Work from home will continue in some form and balance and this will have an impact on multi-family, having that extra nook in your unit for a desk will be a huge plus.