Writer: Joshua Andino
2 min read February 2023 — With cranes dotting the iconic Nashville skyline and Middle Tennessee continuing to see billions of dollars worth of investment flowing into development, Nashville’s growth remains evident. For this year’s publication, Invest: spoke to a number of investors, developers and builders to collect their insights and understand the key considerations they are making when looking at what’s next for the region and how they’ve responded to continued demand.
John Vardaman, Nashville Business Unit Leader, DPR Construction
What are you most proud of from your involvement in the region?
For us, it has been to deepen our roots here in Middle Tennessee through three avenues. We continue to hire some great people. Nashville is drawing people from other regions and there have been some great hires that bring a wealth of knowledge both for us and our clients. We are growing our relationships and using the relationship-based approach to doing business in a very positive manner. We are always trying to understand and get to know each other to succeed and do bigger and better things than just a business transaction. Lastly, we are continuing our involvement with the community to be embedded and indispensable to the community. That is a great way to be part of the fabric, ingrain yourself and do some good.
Mark Deutschmann, Founder, The CityLiving Group/Founder & Chair, Emeritus Village/ Founder & CEO, Core Development
How do you engage with the community as a builder?
I consider myself a ‘community builder,’ and continue to dedicate time for various organizations and projects. Our greenway system is now at approximately 100 miles, and we are working to further our urban system, focusing on the CityCentral Greenway, which would be a 23-mile loop when complete, with spurs. We are working on a rail with trail connection from the Farmer’s Market to One City and then on to Centennial Park, where it will connect to the first section of the 440 Greenway.
I’ve also been involved with the reemergence of Fort Negley and the old Greer Stadium site, which has been vacant for a decade. Core Development had developed several projects in Wedgewood Houston, and then sold a prime site to Hines for a big mixed-use Opportunity Zone project and became an investor. The deal terms included putting a significant chunk of funds in the Core Fund, our non-profit that houses in the Community Foundation. We wanted to give something back to the neighborhood. When we learned that the RFP was sitting dormant, because of frozen funds at Metro due to the pandemic, we acted. We gifted money from the Core Fund to release the RFP, with support from the Mayor’s Office, and that park is now in design, as the team worked with the community to shape what will be a world-class 68-acre park system, with greenways and complete street connectivity.
Sean Buck, Senior Vice President & Nashville Market Leader, JE Dunn Construction
What have been some interesting projects at JE Dunn Construction over the last year or so?
It has been an exciting year for us. We have some very large projects that got started including our Neuhoff Mixed-Use project in Germantown and The Broadview at Vanderbilt. We also have some new projects that were just awarded to us recently that we will share more about in the coming months.
In addition to the new projects, we have had some high-profile projects that (completed in 2022). 17th & Grand has finished, which is a Class A office building with our long-time partners at Hall Emery that we delivered through the pandemic. We have a project with Greystar,Hotel Fraye & Fallyn Apartments that we will open this fall. It is a good distribution of work for us with a lot of high caliber, high character clients. I am really proud of this work, including our smaller projects as well. It has been busy in every market sector, but we are excited to be working with such great clients. We are also excited about where the market is even though there is a little turbulence surrounding construction costs and inflation.
Do you see the current construction and planning trends continuing for the foreseeable future?
Vardaman: I think this is the new normal. While there is certain nostalgia to going back to the way things were, budgets are tighter and timelines are getting shorter. People want things to go faster, and while they understand cost increases, at the same time they want certainty and assurance of the decisions they make. Great shifts are happening worldwide, such as the effects of the pandemic and the situation in Ukraine, and it will take years before we see the ultimate impact. We are in the midst of all of them and we will continue to test our ability to manage limited resources.
What projects are in the pipeline for Core Development?
Deutschmann: Core Development, which I founded in 2003, is a boutique development company that has focused on Nashville’s urban neighborhoods. Core is currently developing High View Flats and High View Cottages in East Nashville, and CityBluffs in Northwest Nashville. We have four new projects that should start in 2023, three in Nashville, and one in Chattanooga, a new market that we are exploring. And we have now acquired the old Memorial Hospital building on 9.2 acres in inner Madison, with some great plans in the works. In Chattanooga, we control 11 acres with the possibility of securing more on the Riverwalk, a greenway trail. And you know how I love greenway-oriented development opportunities! Greenways and neighborhood commercial districts allow us to create what we call “One-Mile Radius” neighborhoods, walkable/livable neighborhoods; our aspirational goal.
What are your projections for the next couple of years?
Buck: It is getting harder, there is no doubt about that. With supply chain issues, interest rates, inflationary costs and labor availability issues, there are many factors that are making our business more difficult. However, despite the turbulence we are not seeing projects cancel or delay at this point. That speaks to the resiliency of this market specifically as Nashville continues to perform well and be a place our clients want to invest. In many ways the strength of a market follows population growth, and we are continuing to see that in Nashville. Every market will react to being in a recession or a market correction differently and we believe Nashville is well positioned to perform better than most based upon the momentum and population growth we are experiencing both now and anticipated in the future.
What are the organization’s priorities moving forward?
Vardaman: We are a very tech-focused builder; we are software-driven by using the latest emerging technologies and leveraging them for the betterment of the project and the client. It is not just having technology for the sake of technology, it must add value to your operations, so we will continue to work on that. We will also work on having everyone on the team adopt them so we can benefit the client.
The other thing is about people, and recruiting the most talented individuals and making sure they are tech-savvy. As construction costs go up, our clients are expecting higher quality construction, better-performing buildings, and leveraging more technology both in the construction and in the final product. They want more efficient buildings and, as they become more complex, we must have people that can build them and understand the underlying technology of how these things are made and how they are meant to operate and interact with other systems that exist in the building.
What is your outlook for Core Development and the region over the next two to three years?
Deutschmann: Given Nashville’s economic success, the city is working to address affordable housing issues, which have been exacerbated by recent increases in prices of both for sale and for rent product, with several new pilot programs for developers. Core is exploring these programs for our next project, as we have always worked to create what we call attainable housing. Also, given that Amazon is now finishing up the first tower of their headquarters, and given that they have committed $2 billion to the three markets they’re in for affordable housing, Core is working with them on projects which will put more affordable housing into the market.
We are living and working in exciting, and perhaps challenging times, for our city. I’m honored to be in the mix.
What is your near-term outlook for the construction industry in middle Tennessee?
Buck: Nashville is a bright spot in development, and it will continue to be in the near term. We still need to get some supply-chain staples fixed and I think that will continue to plague our industry for the next 12-18 months. In the near term, we really need to see how the world reacts to inflationary pressures and supply chain before we can determine if or how that could impact us locally. Consistency and stabilization is just not here yet, so it is a challenging time, but we are navigating it.