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VOL. 42 | NO. 17 | Friday, April 27, 2018

Still surprised by downtown condo sales? Check out 505

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When approaching the downtown area, there is plenty of time to rest while sitting idly in the traffic and to develop a strategy for dodging the potholes in the fastest-growing, bestest city in the world. During their idle time, many drivers gaze skyward and notice the shining, glimmering building at 505 Church Street.

The product of years of planning, rejections, retooling and determination, this edifice climbs 45 stories above Nashville and is Nashville’s tallest residential building. The project was born of the vision of Tony Giarratana, the man who re-introduced high-rise living with the advent of the Viridian in 2004 and by the Encore and later the refurbishing of the Bennie Dillion Building and scores of apartment buildings.

Giarratana also recently sold Premier Parking, a company he founded in his spare time while he continued his work decorating of the Nashville skyline.

The project at 505 has achieved outstanding success. Not since the Icon have units sold as quickly, and the dollar volume dwarfs that of the Icon.

And these are different times, to be sure. The Icon, a condominium development located in the Gulch, sold 232 units in less than 30 hours ranging from $149,000 to $850,000 for a penthouse on the 22nd floor.

During the 30-hour feeding frenzy in April 2006 at the Icon sales office, buyers could pay a deposit of $5,000 and reserve a unit, any size, any price. Originally, the tower was to be the condos and the lower levels were designated for apartments, but the staggering success of the presales prompted developers to convert the reaming 212 apartments to condos.

The dawn of the Recession crippled the closings, and on-site agents such as Scott Evans, Ivy Arnold and Carmen Swoopes later recalled that several units were sold – or placed under contract – as many as three times as buyer after buyer drifted by the wayside.

As the Recession roared across the land, money was tight and jobs were evaporating.

Surprisingly, the developers, Bristol Development, held their prices. Sales came, even though financing was limited, with many bringing cash.

Now the building has rewarded those who invested. Condos in the Icon that sold for $149,900 now sell for more than $300,0000. The 844-square-foot units that originally sold for $232,000 now bring as much as $453,000.

The percent increases continue to hold even with the higher-price units. Penthouses that sold in the $800,000s are now changing hands at $1.6 million.

This phenomenon played well into the 1212 building, which began closing sales in 2015 with many of the buyers migrating across The Gulch from the Icon with profits in hand.

The 1212 project offered the newness that these buyers had enjoyed at the Icon with more amenities and opportunities for better views. Even in the days of the Icon, Nashville was plagued by constant references to price per square foot, and that quotient was the center of conversation when establishing the overall value of a property.

The utilization of the space had no bearing, nor did the age of the mechanicals, whether there was a garage or, heaven forbid, a swimming pool. It seems all real estate experts know the “location, location, location” recitation and can boast with considerable glee that they are aware that a swimming pool adds no value to a home.

1212 sent the price-per-square-footers home scratching their collective heads and continues to confound people. Adding to their consternation is the fact that property that sold for more than $800 per square foot has appreciated.

For example, unit 2302 sold in 2015 for $1,616,825 and recently closed for $1,975,000 or $882 per square foot. Unit 1501 recently sold for $1.6 million, or $860 per square foot, some $306,000 more than the seller had paid for it two years ago.

One of the greatest successes was realized with unit 1201, a condo with 884 square feet that sold three years ago for $998,000 and last month for $1.575 million. The 1212 sales force was happy with the pilgrims who left other condos with pockets full of cash and landed in their building.

Across town, Tony Giarratana was absorbing the trend. 505 originally was supposed to be apartments, but with the – dare I say it – glut of apartments on the market in Midtown and others rising from the ground, condos seemed a better option. Additionally, there was the trend developing with condo owners taking their profits and moving up.

Soon, the marketing team known as SimpliCITY was announced as the group that would sell most of 505 as condos. There is little competition for downtown apartments, although the Midtown area is flooded.

Floors 4-6 and 9-15 – 140 units – are occupied by Stay Alfred, a boutique hotel.

“We launched sales February 3rd,” Giarratana says. “In the three months since, 25 percent (48) of the 193 units are already under contract or closed totaling $48.7 million. We are offering studios from the $400,000s, one-bedrooms from the $500,000s and two-bedrooms from the $800,000s.

“On level 45, three of the four penthouse units are under contract or closed as “shells” for between $5 million and $6 million. The 350-unit apartment component on Levels 3 through 29 began leasing last November and is 67 percent leased in only 6 months.”

Realtracs is showing 26 condos, all less than $650,000, under contract at 505. However, several units sold for well more than $1 million.

The most incredible statistic is that only one of the four penthouses is available. These condos listed for $5 million for the shell alone - nothing inside. The owner must then complete construction after dropping $5 million.

Other than the penthouses, the prices are reasonable at $820 per square foot, with a 44th floor, two-bedroom, two-bath, 1,195-square-foot unit going for $930,000. A one-bedroom, one bath condo with 788 per square feet sold for $555,000, a steal by today’s standards.

SimpliCITY is comprised of long-time Giarratana associate Caroline Rigsby and her mother, Yvonne Kelly, both affiliated with Zeitlin Sotheby’s International Realty. They recently added Alex Sloan to their team as the volume is staggering.

Richard Courtney is a licensed real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at richard@richardcourtney.com.