Waiting on Fifth and Main

The upscale condo development in East Nashville was a noble idea; however, Fifth and Main is now struggling to survive in a tough economic environment. In fact, since it is now in receivership, they are no longer even showing the units or taking offers. This may be an opportunity to take an advantage of a distressed property in the near future.

The developer, The Home Company (a subsidiary of Affordable Housing Resources), is a non-profit that specializes revitalization projects. In return for offering up a portion of their condos to lower income buyers ($38,000 and under), the organization received a $6 million in tax-increment financing from the city. Then the credit crisis hit and potential buyers suddenly had a more difficult time getting a loan. While Fifth and Main were initially able to sign up a hundred buyers, none have actually been closed.

I recently went to East Nashville to check out the six-story commercial and residential project. What I found was a modern building that cuts an impressive figure in its neighborhood just north of historic Edgefield. While I had trouble getting the elevator to work, I did find a helpful sales person who gave me a tour and informed me that the sales people were pulling out after that day. I may well have been last person to see the interior of the Nashville condos.

The first thing I noticed was how eerily empty the building was. Inside the units, I found incredible views of LP Field, the river and downtown. My vertigo actually kicked in just by walking into bedrooms with angular wall windows that hover over the busy street below. The units have many of the same upgrades of their counterpart condo developments across the river, such as stained concrete floors, stainless steel appliances and granite countertops.

The biggest difference is that Fifth and Main was offering their units at about a $100 less per square foot than the new midtown and downtown luxury condos. For example, a 750-square-foot unit sells for $149,900 (*affordable housing units), and larger units are priced at $191 a square foot to $265 a square foot. With the recent setbacks, I was encouraged to write offers at an additional 15% to 20% discount. Association fees also have been held to 20 cents to 22 cents a square foot compared to 30 cents or so per square foot that their competition demands. By comparison, Fifth and Main does not have a fitness center and a swimming pool which the most of the more expensive condos do offer.

I have signed up to receive updates on Fifth and Main when Wachovia decides what they are going to do with this development they now own. Long term, this Nashville condominium and retail complex will be an anchor for an entire neighborhood. Proximity to downtown and the over-all quality construction should ensure that this will be an attractive place to live. At the right price, this could also be an excellent investment. Stay tuned for more information or contact me at 615-545-8611 or at jefffulmer@comcast.net