Brookfield Properties has sold a mixed-use, open-air development in Nashville, Tennessee, for $715 million, the priciest deal ever in the Nashville metro area and one of the biggest real estate deals in the U.S. this year. Northwood Investors acquired the mixed-used asset, Fifth + Broadway, which includes retail, The Place residences, and the 501 Commerce office tower.
Fifth + Broadway came online in 2021 and is considered one of the largest mixed-use developments in Nashville and Tennessee history. The development sits on a 6.2-acre site that replaced the Nashville Convention Center and includes 367,000 square feet of office space and 250,000 square feet of retail and entertainment space, a museum, parking spaces, and residential units. The deal marks the fifth Nashville asset that Northwood, a global real estate investment firm, has acquired. Across the U.S., the company owns 65 office assets, 50 of which are Class A properties.
The deal between Brookfield and Northwood shows how strong the hot Nashville real estate market is, but it’s also a sign of how popular mixed-used developments have become in the wake of the pandemic. Large mixed-use projects are in the works all over the U.S., including the Navy Yard in Philadelphia, a Related Company development in Santa Clara, California, and the $6 billion Lincoln Yards project in Chicago.
Offices within mixed-use projects also tend to have rent premiums. JLL research revealed that office rents in mixed-used developments tend to be nearly 25 percent higher on average than those in the surrounding submarket. The developments are usually a win-win for both cities and investors, so we should expect to see more of these mega projects in the future.