Even while apartment sales broker Ian Anderson was closing deals in Nashville, Tennessee, for JLL, he would hear good things about what rival firm Cushman & Wakefield was doing in the surging market and across the Sun Belt.
Last month, Anderson, who had spent the previous five years handling apartment transactions across Tennessee, decided to see for himself. He moved over to Cushman & Wakefield's Nashville office, where he's now a director who works on apartment investment sales in the city and across the eastern portion of Tennessee, as part of the firm's Sun Belt multifamily sales group.
Cushman & Wakefield's track record of multifamily transactions in the region attracted him to the Chicago-based firm, Anderson said.
In 2021, Cushman & Wakefield's Sunbelt Multifamily Advisory Group closed 429 deals with an aggregate value of $13.8 billion that involved the trading of nearly 85,000 units. The sales volume and transaction number ranked No. 1 in the Sun Belt region, Cushman & Wakefield said, based on deals reported to CoStar Group.
While headwinds have started to gain strength, mostly caused by increasing interest rates, Anderson said he still sees ample runway ahead for multifamily sales in Nashville.
"With the amount of development activity in the market, many properties will deliver over the next several quarters which should bolster transactions," Anderson said in an email. "Continued interest from a growing list of investors is as strong as ever."
From April through June, multifamily sales in the Nashville area hit a quarterly record. Anderson played a role in one of Nashville's largest apartment sales of the second quarter: While at JLL, he was part of the team that represented Westplan Investors in its $77.64 million sale of Accent Edgewood, which has been renamed Braxton Music City.
However, the Federal Reserve's moves to raise interest rates by 75 basis points twice in the past two months have increased its benchmark rate to 2.25% to 2.5%. That is expected to affect sales of commercial properties across the country and globe, and Anderson is monitoring the central bank's actions.
"The greatest challenge we are seeing right now resides in the debt markets," he said. "The recent increase in rates will affect the price point at which investors are willing to transact."
A Nashville native, Anderson said commercial real estate had intrigued him, so it was a natural career choice.
"It allows me to work with clients from all over," he said. "I get to share my perspective on this great city and learn the fundamentals of investing."
While global institutional investors are starting to take note of the Nashville market, it still has work to do before claiming top-tier status, Anderson said.
"With the amount of attention and publicity Nashville has gained over the past decade, we are still far from being a gateway city," he said. "I see that as a positive. I’m optimistic about the long runway Nashville holds."