Allen Arender, Chief Development Officer, Holladay Properties

In an interview with Invest:, Allen Arender, Chief Development Officer of Holladay Properties, discussed the company’s recent progress and market dynamics in Nashville. “The theme of our new projects in 2024 was that they all opened successfully and filled up,” he said, highlighting strong regional demand. Arender also shared insights on industrial and apartment market trends, challenges in commercial real estate, and future development plans.

What have been some of the main highlights and key milestones for Holladay Properties in the last 12 months?

We have had a good year of progress on new projects. We delivered several new projects in 2024 in Nashville, the biggest of which was the near completion of the first phase of the Factory redevelopment. We also delivered some apartments in the Donelson Plaza redevelopment and got those opened. I think the theme of our new projects that we opened in 2024 was that they all opened successfully and filled up. That was in a year marked by uncertainty toward the end of 2024. 

Even so, the strong demand we saw is a testament to the strength of the region, and the projects performed well. We also completed the sale of an industrial project in 2024, which turned out to be a highly successful transaction. Since then, we’ve continued expanding our pipeline with additional industrial projects. We have apartment developments in the planning stage, a hotel at The Factory at Franklin that is in the planning stage, and another phase of industrial development at our airport site. Altogether, it’s a robust pipeline of activity that was in motion throughout 2024 and is set to kick off in 2025.

What services and industries are driving growth, demand, and profitability for Holladay Properties in Nashville?

Nashville has seen strong performance in the apartment market, with a significant number of units delivered and solid absorption to match. Due to conditions in the financial markets, new construction has been relatively limited. However, as the market continues to adjust and more of the existing supply is absorbed, we expect apartment development to pick back up.

The industrial market remains very strong, especially for the type of space that supports the service industry, where vacancy rates are still quite low. Demand for that kind of industrial space continues to be solid. Perhaps most notably, we’re starting to see transactions happening again. After roughly two years of limited sales activity, we anticipate an uptick in transactions in 2025. Hopefully, we’ve reached the low point and are now beginning to see momentum return.

To what extent is Holladay Properties benefiting from the economic growth and increase in population that is taking place in Nashville?

There’s a compelling demand story in Nashville. Not only is there strong demand from tenants for available space, but there’s also significant interest from investors looking to establish a real estate presence in the city. That influx of capital has remained consistently strong. When investors evaluate where to place their real estate dollars, Nashville is consistently at the top of the list. I expect that trend to continue, fueling ongoing activity and reinforcing the market’s resilience.

From a commercial real estate perspective, what makes Nashville an ideal market for Holladay Properties to operate in?

The core fundamentals of the market remain intact, even during what may be considered a slower period. Historically, Nashville tends to experience shorter downturns — we’re typically slower to decline and among the first to rebound. That trend continues, largely driven by strong job growth. The region still offers a high quality of life, along with a favorable tax environment for both businesses and individuals. I believe these advantages will continue to position Nashville — and Tennessee more broadly, but especially Nashville — as a market that consistently stands out.

Given Holladay Properties’ expansive operations, are you looking to expand into new markets or to consolidate existing operations?

Holladay Properties has development activity in eight cities across 25 locations and serves much of the country. Throughout our operations, we’re seeing strong opportunities, particularly in our Midwest markets. While the past five to six years have seen heightened focus on the Sun Belt, we’re now witnessing renewed momentum and increased activity in the Midwest. These markets have historically been economically supply-constrained, with minimal new development during that period. However, they’ve experienced steady, consistent growth, not the rapid expansion seen in places like Nashville, but reliable progress. Now, with demand starting to outpace available supply, we’re seeing a real shortage emerge in some areas, which we believe presents strong opportunities moving forward.

What are the primary challenges facing the commercial real estate industry in Nashville, and how is Holladay Properties working to address these?

The primary challenges are capital markets and lending. The current interest rate environment has required a recalibration for nearly everyone. Additionally, construction costs remain high, and there is added uncertainty due to trade-related factors and tariff impositions. These conditions make it difficult to underwrite and initiate new construction projects. It remains challenging to get new developments started under these conditions.

What changes in the regulatory or legal landscape could potentially affect the work that you do for your clients in Nashville?

We monitor regulatory changes, particularly at the local level. Currently, there is an initiative at the city level to allow design modifications for apartment buildings, such as permitting a single egress staircase instead of two. This could improve building efficiency and reduce costs. On the other hand, new energy code requirements, such as those related to HVAC systems, can add complexity. The regulatory environment is constantly evolving, and developers must adapt. Overall, the city has made progress in streamlining project approvals compared to three or four years ago, when the volume of applications was overwhelming.

What is your overview of the commercial real estate industry in Nashville and Middle Tennessee? 

Transit development will be a key trend to watch over the next few years. The recent referendum approved funding for transit improvements, and how these plans are implemented will significantly influence future development activity. The specifics of the transit program and where improvements are made will shape investment patterns for the next decade. Additionally, developments on the east bank of the Cumberland River will be important to monitor over the next three to five years, as they will drive significant real estate activity.

What upcoming projects for Holladay Properties are you particularly excited about? 

The next phase of The Factory is a major focus, and this will be the fourth phase of airport logistics, encompassing approximately 200,000 square feet, with construction set to begin this year. Additionally, we are dedicating considerable effort to planning the next phase of development in Germantown, near the baseball stadium, on land we have owned for some time. These projects will occupy much of our attention in the near term. However, we are also evaluating new opportunities, particularly in the outer ring of Nashville and Davidson County. These include mixed-use developments, with some industrial projects under consideration as well. The future of development in the city is leaning toward mixed-use concepts, and identifying suitable sites for these projects remains a key priority for us.