Nashville continues to draw hotel projects: What's coming and why?

Nashville, Tenn. Music City. Hotel breeding ground? After honky tonk music and the "Music City Miracle," Nashville might next be known for the continuing way it is attracting hotel development.

Let's take a look at why.

Earlier this week, we alluded to hotel consultant Chuck Pinkowski's Q&A with The Tennessean, wherein he talked about why Nashville's hotel market is so strong. In it, he said that many demand generators are driving the market, including it being the state capitol, with a strong health care industry and university.


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"Those are factors that typically create lodging demand and they're not as vulnerable to economic downturns as other markets," Pinkowski said. "When you look at the top 25 markets that STR tracks, Nashville is at the top in terms of percentage growth of revenue-per-available-room this year over last year.

This has led to a bevy of projects in the pipeline.

The newest one announced is a 180-room Kimpton hotel, which will anchor a $100-million mixed-use Midtown project (a rendering pictured) being developed by Indianapolis-based Buckingham Cos. Full completion of the project is expected to be finished in early 2017.

"They're a national brand with extensive experience in high-end boutique hotels and they bring a high level of creativity to the table," Scott Travis, VP of development at Buckingham, said of Kimpton.

Meanwhile, just yesterday, Commune Hotels & Resorts announced it was bringing its Thompson brand to Nashville. The 224-room hotel will be developed by MarketStreet Enterprises, the Master Developer of Music City's The Gulch neighborhood, along with AJ Capital Partners and The Berger Company.

Those behind it rave about the city. "Nashville has emerged as one of the most attractive markets in the country, and the location and timing of this particular project allows for a truly first rate hotel in this incredible city," said Brandon Berger, principal, The Berger Company

"Nashville is a booming city by various economic standards, including employment, construction and the influx of young professionals, but it's the culture and atmosphere developing in The Gulch that led us all to believe that Thompson Hotels was the right fit for the neighborhood," said Niki Leondakis, CEO, Commune Hotels & Resorts.

Other lifestyle/boutique brands want in, too, including favorite 21c Museum Hotel, construction of which will begin soon, after the operator completed its purchase of the site.

The 21c Museum Hotel planned in Nashville is one of several boutique hotels in the works in the city. Others include a hotel planned at the former bank building at 401 Union St. and another targeted for property on Printers Alley and Fourth Avenue North.

Could Ace Hotel come calling, too, and join the fray? We'll see.

The big brands are also going in full bore. Like Starwood's Le Méridien brand.

So, when should worries of oversupply set in? "When new additions to the market result in occupancies slipping to the point where it begins to affect average rates, that's a period of concern," noted Pinkowski.

Right now: It's all good.


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