Notes from Road - Apartments and Retail in Nashville

Research evidence excerpt

Notes from Road - Apartments and Retail in Nashville

o be a transition period, assuming a 2027 recovery.

• Expanding MAA's Sunbelt focus to Midwestern growth markets. With MAA already

in most of the larger Sunbelt markets, looking to other regions with similar low-cost,

pro-growth economies makes sense. Many of its original tertiary Sunbelt locations have

become suburban infill as the Southern metros have grown, subsuming the former

second and third rings. MAA has been actively considering Columbus, OH for the past

several years, but has yet to find a property that makes sense; though brokers continue

to show MAA product. The allure of Columbus is the 15th biggest in the country, which

has also showed up previously on CSR's radar, who was also screening for new growth

markets. We think Omaha (FRT recently entered, just 3-hour drive from Kansas City,

where MAA already owns) would also be a good consideration as it would improve the

regional efficiency. Maybe MAA would buy CSR's presence.

• Platform efficiency is a common theme, driving asset allocation decisions. Both

CPT and MAA mentioned the importance of scale to justify a presence, which is leading

CPT to expand in Nashville. By contrast, markets like Las Vegas have proven tough for

MAA to grow, which could lead them to exit. We continue to think Virginia is the market to

watch, given the progressive shift that could bring increased regulations to apartments.

• Retail attractiveness of Nashville reflects economic and tourist strength. While

SPG was mum with the productivity of Green Hills, we would assume it's over $1,000/

sf based on the tenant line-up and crowds on a generic Wednesday. SPG's new

development, originally planned as an outlet, will now be full price; though, keeping

a similar footprint.