- [00:00](ua-cam.com/video/01lS8qDUOWI/v-deo.html) 🏙 Nashville's Multifamily Market Overview - Discussion on the current state of multifamily properties in Nashville. - Impact of ownership by Adam Neumann on the multifamily disaster. - Introduction to demographic data influencing real estate in Nashville. - [01:24](ua-cam.com/video/01lS8qDUOWI/v-deo.html) 💰 Financial Challenges Faced by Multifamily Properties - Analysis of cap rates and property values in Nashville. - Contrast between high absorption rates and declining rent and vacancy rates. - Critique of the decision to opt for floating-rate debt despite economic indicators. - [02:54](ua-cam.com/video/01lS8qDUOWI/v-deo.html) 🌎 Migration Trends and Market Implications - Examination of migration patterns from California to Nashville. - Validation of migration data by platforms like Costar and LinkedIn. - Discussion on the impact of inbound migration on Nashville's housing market. - [06:17](ua-cam.com/video/01lS8qDUOWI/v-deo.html) 💸 Financial Struggles of Multifamily Properties - Analysis of a specific luxury apartment complex, 2010 West End, and its financial woes. - Explanation of the property's mortgage and operating costs. - Critique of relying on floating-rate debt and the challenges it poses. - [09:42](ua-cam.com/video/01lS8qDUOWI/v-deo.html) 📉 Projected Challenges and Market Outlook - Projection of future challenges based on ongoing construction and absorption rates. - Assessment of the potential impact on commercial real estate in Nashville. - Conclusion on the current state of multifamily properties and the need for financial assistance.
That Building next to Loews was protested. It was stated to house Vanderbilt Students on the fencing along the road. I am seeing far more Florida tags than California tags now. The main reason? Insurance. People in Florida can not afford or can even get Insurance in FL. There are also huge Muti family residences in Donelson sitting empty. Rent rates are out of control and Locals will not pay that and are leaving in droves. I too, am leaving the state.. and possibly the country.
Rent is still too damn high, especially for local singles. I live in Franklin and a studio apartment, 678 sq ft, is $1800 by the time you add in all the fees. I am in my forties and I have six friends, also single and in their forties, who have moved back home because they can’t afford rent and everything else. Nashville wages aren’t anything close to the LA wages, so many local people have been forced to find alternatives which means they are leaving the market all together. My parents have several friends who also currently have their adult children living with them. If my parents were closer I’d move back home in a heartbeat. If these complexes would lower the rent they wouldn’t have so many empty units. I don’t care about move in specials. I’ve moved three times since all this nonsense started and what they do is offer a special on certain length leases. So, for example, you only get the special if you lease for 10 months then you get your lease renewal letter at 10 months and your rent jumps $300-$600 a month. It’s ludicrous. I guess they think you won’t hassle with moving but it’s backfiring on them. People are just moving back home.
@@brandoncarpenter9681 Honestly it's great - assuming you get along with your family and have a decent relationship with them. I think we are going to see a huge rise in multi-generational living again due to all of this inflation. There are so many benefits - community, support, additional resources. My parents are now in their 70's and I would love to be able to spend time with them. I didn't appreciate them when I was a teenager, as most don't.
@@EthanFlynn I think many companies experienced record breaking profits during these "unicorn" years of inflation and are now paying the price as things catch up. I was reading in the paper the other day that in 2019 Shell oil made $14 million dollars in profits but for the past 3 years their profits were over $60 million. And many large companies experienced the same. Apartment complexes got caught up in the frenetic energy as things skyrocketed and have been taking advantage of people. I realize many things have increased like insurance, and cost of goods are more expensive, but if you have over 50+ empty units seems like a no-brainer to drop rents
Walking around observations lead me to believe that we have a very segmented rental market in Nashville. The newer semi-luxury market has pulled rents up in existing old complexes in places like Hermitage, Donelson and Bellevue. It's unfortunate that a lot of working people in the service industry who make between 50-70k a year in a lot instances still cant afford to live in a newer, nicer, more importantly safer building.
I’m hearing that some builders are switching to rent townhomes due to buying demand slowing. I think things could start falling further out too. Time will tell.
@@EthanFlynn I could see more of a demand for rental townhomes. They set up better for roommates and single parents. Once again, I can't emphasize enough the growing concern about crime. There is a reason all the new multi-family buildings in your video are fortresses. Courtyards, underground parking, and rooftop pools are more than just cool amenities, they are safety features. Townhouses are walkups with insecure parking lots.
This is very true! The place I lived at was 35 years old. I chose it because it was inexpensive. I lived there for five years and in 22 my rent jumped $600 per month, and in 23 it jumped another $700 per month. But they are raising their rents because there is a brand new, luxury complex across the street charging $2100 for a studio apartment. It's stupid what these old places are charging.
@@AmandaGatesHome I know it's frustrating. It's at all price levels whether renting or owning. A lot of this is the inept COVID response. That cannot be overestimated. Wilco was always going to continue to grow but this accelerated it.
Great info as always, sir! I'd be curious to see what that absorption rate was historically, if that data's available. Was the 3264 or the 8342 closer to normal absorption for the area over the past decade?
I recall 2021 was higher and my gut says some of that was pull forward from 2022. So best guess is 8300 will be more normal. All things being equal but that’s a guess. I would say absorption in this market is highly uncertain.
Essentially return on cost of purchase. So if you got $5K before taxes or any capital investments and you paid $100K for the property. Your cap rate would be 5%.
🎉🎉🎉 Thank you Ethan for always bringing us the truth! I absolutely love the data you put out. I Promise you that it will get worse before it gets any better. I’m still holding on to my plan of saving money and getting ready for some awesome opportunities. Blessings,Carlos ✝️🙏❤️😊🇺🇸
- [00:00](ua-cam.com/video/01lS8qDUOWI/v-deo.html) 🏙 Nashville's Multifamily Market Overview
- Discussion on the current state of multifamily properties in Nashville.
- Impact of ownership by Adam Neumann on the multifamily disaster.
- Introduction to demographic data influencing real estate in Nashville.
- [01:24](ua-cam.com/video/01lS8qDUOWI/v-deo.html) 💰 Financial Challenges Faced by Multifamily Properties
- Analysis of cap rates and property values in Nashville.
- Contrast between high absorption rates and declining rent and vacancy rates.
- Critique of the decision to opt for floating-rate debt despite economic indicators.
- [02:54](ua-cam.com/video/01lS8qDUOWI/v-deo.html) 🌎 Migration Trends and Market Implications
- Examination of migration patterns from California to Nashville.
- Validation of migration data by platforms like Costar and LinkedIn.
- Discussion on the impact of inbound migration on Nashville's housing market.
- [06:17](ua-cam.com/video/01lS8qDUOWI/v-deo.html) 💸 Financial Struggles of Multifamily Properties
- Analysis of a specific luxury apartment complex, 2010 West End, and its financial woes.
- Explanation of the property's mortgage and operating costs.
- Critique of relying on floating-rate debt and the challenges it poses.
- [09:42](ua-cam.com/video/01lS8qDUOWI/v-deo.html) 📉 Projected Challenges and Market Outlook
- Projection of future challenges based on ongoing construction and absorption rates.
- Assessment of the potential impact on commercial real estate in Nashville.
- Conclusion on the current state of multifamily properties and the need for financial assistance.
That Building next to Loews was protested. It was stated to house Vanderbilt Students on the fencing along the road. I am seeing far more Florida tags than California tags now. The main reason? Insurance. People in Florida can not afford or can even get Insurance in FL. There are also huge Muti family residences in Donelson sitting empty. Rent rates are out of control and Locals will not pay that and are leaving in droves. I too, am leaving the state.. and possibly the country.
Can you tell me which ones you see are empty in Donelson?
Rent is still too damn high, especially for local singles. I live in Franklin and a studio apartment, 678 sq ft, is $1800 by the time you add in all the fees. I am in my forties and I have six friends, also single and in their forties, who have moved back home because they can’t afford rent and everything else. Nashville wages aren’t anything close to the LA wages, so many local people have been forced to find alternatives which means they are leaving the market all together. My parents have several friends who also currently have their adult children living with them. If my parents were closer I’d move back home in a heartbeat. If these complexes would lower the rent they wouldn’t have so many empty units. I don’t care about move in specials. I’ve moved three times since all this nonsense started and what they do is offer a special on certain length leases. So, for example, you only get the special if you lease for 10 months then you get your lease renewal letter at 10 months and your rent jumps $300-$600 a month. It’s ludicrous. I guess they think you won’t hassle with moving but it’s backfiring on them. People are just moving back home.
Heart breaking to hear 40 year olds moving back home, blessing that they have family and can be around them
Wow. That’s wild they are still pushing rents like that. Thanks for sharing your story.
@@brandoncarpenter9681 Honestly it's great - assuming you get along with your family and have a decent relationship with them. I think we are going to see a huge rise in multi-generational living again due to all of this inflation. There are so many benefits - community, support, additional resources. My parents are now in their 70's and I would love to be able to spend time with them. I didn't appreciate them when I was a teenager, as most don't.
@@EthanFlynn I think many companies experienced record breaking profits during these "unicorn" years of inflation and are now paying the price as things catch up. I was reading in the paper the other day that in 2019 Shell oil made $14 million dollars in profits but for the past 3 years their profits were over $60 million. And many large companies experienced the same. Apartment complexes got caught up in the frenetic energy as things skyrocketed and have been taking advantage of people. I realize many things have increased like insurance, and cost of goods are more expensive, but if you have over 50+ empty units seems like a no-brainer to drop rents
Of course you are, you live in Franklin.
Walking around observations lead me to believe that we have a very segmented rental market in Nashville. The newer semi-luxury market has pulled rents up in existing old complexes in places like Hermitage, Donelson and Bellevue. It's unfortunate that a lot of working people in the service industry who make between 50-70k a year in a lot instances still cant afford to live in a newer, nicer, more importantly safer building.
I’m hearing that some builders are switching to rent townhomes due to buying demand slowing. I think things could start falling further out too. Time will tell.
@@EthanFlynn I could see more of a demand for rental townhomes. They set up better for roommates and single parents. Once again, I can't emphasize enough the growing concern about crime. There is a reason all the new multi-family buildings in your video are fortresses. Courtyards, underground parking, and rooftop pools are more than just cool amenities, they are safety features. Townhouses are walkups with insecure parking lots.
This is very true! The place I lived at was 35 years old. I chose it because it was inexpensive. I lived there for five years and in 22 my rent jumped $600 per month, and in 23 it jumped another $700 per month. But they are raising their rents because there is a brand new, luxury complex across the street charging $2100 for a studio apartment. It's stupid what these old places are charging.
@@AmandaGatesHome I know it's frustrating. It's at all price levels whether renting or owning. A lot of this is the inept COVID response. That cannot be overestimated. Wilco was always going to continue to grow but this accelerated it.
Great info as always, sir! I'd be curious to see what that absorption rate was historically, if that data's available. Was the 3264 or the 8342 closer to normal absorption for the area over the past decade?
I recall 2021 was higher and my gut says some of that was pull forward from 2022. So best guess is 8300 will be more normal. All things being equal but that’s a guess. I would say absorption in this market is highly uncertain.
Can't wait to see 6 months free. I'll move right in 🤣
😆
We need defaults first then it will probably be lower rents.
What is "cap rate"?
Essentially return on cost of purchase. So if you got $5K before taxes or any capital investments and you paid $100K for the property. Your cap rate would be 5%.
Holly Molly! 😳😳😳
Yeah it’s wild.
🎉🎉🎉 Thank you Ethan for always bringing us the truth! I absolutely love the data you put out. I Promise you that it will get worse before it gets any better. I’m still holding on to my plan of saving money and getting ready for some awesome opportunities. Blessings,Carlos ✝️🙏❤️😊🇺🇸
Thank you Carlos!