Freddie O’Connell remembers when Nashville’s Lower Broadway wasn’t a strip of country music bars frequented by bachelorette parties and tourists for its Instagram-worthy backdrops. The city council member for District 19, who represents the city’s burgeoning downtown, remembers decades ago, when there was a seedy Times Square feel, when adult bookstores lined what’s now honky-tonk highway. He’s seen various attempts to revitalize the neighborhood, from the now-demolished 1987 convention center, which he labeled “a failed approach at urban design” that ignored the streetscape, to the transformative Bridgestone Arena and the revitalization of the city’s downtown due to tourism and rising real estate prices.
But a new development set to open this fall, Fifth + Broadway, named for the key downtown intersection around which it’s centered, will crystalize how busy developers have been in downtown Nashville.
Measuring 6.2 acres and costing an estimated $450 million, it’ll be the largest mixed-use project in the state of Tennessee, and a “huge development on multiple levels,” according to William Williams, managing editor of the Nashville Post. Fifth + Broadway is a capstone to Music City’s meteoric, decade-long rise as a real estate hotbed. The project will have 200,000 square feet of retail and entertainment space, as well as offices, a 386-unit apartment tower, a food hall, and the new National Museum of African American Music.
Blending entertainment, commercial and residential—at a scope and scale that promotes walkability, commerce, and culture—it’s the kind of development that’s been the template of large-scale infill projects across the U.S., especially in booming cities such as Austin, Denver and Charlotte. But when it’s completed early this fall, in the midst of an increasingly dire surge in coronavirus cases, will this kind of dense city development seem like the work of a different era? In an economy and urban landscape reacting to an ongoing pandemic, will these so-called “transformative” city-within-a-city projects still have a place?
“The honest truth is, at this moment, nobody really knows,” says Adam Ducker, senior managing director at RCLCO, a real estate consultancy. “Few people have woken up and changed their world view. They’re inclined to look at Covid’s impact in a way that supports their presuppositions. We believe the broader lifestyle and behavioral trends will be fundamentally unchanged. It would require years to shift people’s needs.”
The Covid-19 crisis has already altered what was expected to be a grand celebration of Fifth + Broadway’s completion. According to Brookfield Properties, the developer, the restaurant and food hall portions of the project won’t open their doors until March 2021. It wasn’t a “healthy or helpful thing to open them now,” said Dene Oliver, chief vision officer at Brookfield. The lead tenant of the new office space, investment management and research firm AllianceBernstein, which is moving from New York to Nashville, won’t have staff work out of Fifth + Broadway until the first half of 2021.
Nationwide, according to Ed McMahon, a senior fellow at the Urban Land Institute, projects are either near completion and rushing to finish, or waiting to break ground to properly gauge the extent of the economic downturn. Developers are “holding their powder” if possible, he said.
“Fifth + Broadway would definitely be a massive success without the virus,” says Williams. “The short-term impact can’t be denied, but long-term, you will still see this type of development downtown.”
The development signifies how the city has “grown up,” says Williams, especially in the last decade, as downtown and neighborhoods like The Gulch have attracted luxury condos and big-name real estate developers (another in-process project, Nashville Yards, will be home to an Amazon operations center).
Oliver has worked on Fifth + Broadway for the last seven years, back when he was formerly CEO of OliverMcMillan, the developer that started the project. He was attracted to the potential of the site—“it’s not often you have 6.5 available acres at a prime intersection of a city like Nashville”—and began planning for a development that would fill in some of the gaps missing in the city’s core, including retail, office, residential, and more entertainment and dining options, including Assembly Food Hall and the National African American Music Museum. An L-shaped alleyway runs between the different buildings, meant to thread together the project and streetscape and provide more frontage for stores and restaurants.
Downtown Nashville, like so many other cities, has become more of a residential destination in the last decade; O’Connell, the city council member, says that in 2010, just 5,000 people lived downtown, and now it’s above 12,000. While he says there’s some worry that such a sizable new project may dilute the character of the honky tonks, it seems inevitable that there will simply be more and more people living and working in the neighborhood.
Oliver doesn’t see the Covid crisis as anything more than a temporary, albeit serious, setback for the project’s ultimate success. Major events happen, and even such a “behemoth” project will survive and adapt, he said. The general contractor, Skanska, never had to pause construction since it began in 2017, and due to the desire to open everything simultaneously, the complexity and size of Fifth + Broadway made it hard to stop. (“When you’re constructing an aircraft carrier, you don’t stop,” says Oliver). Apartments are leasing now, and state-of-the-art safety measures are being incorporated. Despite some delays in opening different businesses and offices, the project will be complete in time this fall. And Oliver says nobody has pulled out of a lease, with 90% of the food hall space claimed by restaurants and chefs, including local favorites like Hattie B’s and Slim & Husky’s.
Long-term, Oliver sees developers of similar projects focusing on what can be described as “healthy buildings,” those with better circulation, fewer chemicals and artificial materials, more access to outdoor space and natural light. McMahon of the Urban Land Institute agrees. The design of such projects, and public space, will be altered by the pandemic, but “the fundamentals aren’t shifting, just the specifics,” he said. That means a larger focus on healthy buildings, as well as multi-use projects that address imbalances in the residential market, specifically the lack of affordable housing and family-oriented projects.
Other analysts see much smaller tweaks coming to the real estate market. Lesley Deutch, a managing principal at John Burns Real Estate Consulting, doesn’t see a massive rethink of real estate. She believes that big growth, and similar infill projects, will continue in boom towns such as Charlotte, Raleigh, Denver, and Austin.
“It’ll be a difficult year next year, no doubt, but we won’t be at 50% capacity in stores and restaurants forever,” she says.
Like so many aspects of the post-Covid economy, real estate will see an acceleration of existing trends, she says. The markets that are growing will continue to benefit. Ducker at RCLCO says there will also be consolidation in the development world, with fewer and fewer players with the size and bankroll, like Brookfield or Related, that are able to do projects on the scale of Fifth + Broadway.
“Since the talk of cities making a comeback, there have been few regions that have seen a truly meteoric transformation,” he says. “Nashville has done in 10 years what many cities can only do in 30. The question is, where are the next Nashvilles and Austins?”