Ben Bonner, Managing Partner, Magnolia Investment Partners

In an interview with Invest:, Ben Bonner, managing partner at Magnolia Investment Partners, said that Nashville’s evolving market dynamics are driving a renewed focus on fundamentals and long-term value in commercial real estate. “For a long time, low interest rates allowed for financially engineered returns—cheap debt made even risky deals look attractive, but the risks are now outweighing the upside for many investors,” Bonner said.

What changes have impacted Magnolia Investment Partners over the past year, and in what ways?

At Magnolia, we made the decision to lean into Nashville’s growth by becoming more competitive as a Fund. With the increased attention and activity from outside investors in our city, the level of competition has risen across the board. As a result, in order to continue to be competitive and better serve our clients, we’ve brought on new partners, moved our management in-house, and become more vertically integrated. Although that can be a buzzword, it really applies here. To continue being a high-quality service provider to our clients and investors, we knew we had to evolve. This elevated competition has pushed us to stretch, grow, and improve. Like any stretch, it comes with a bit of discomfort, but it’s made us better. 

What do you believe makes the city such an ideal location for Magnolia Investment Partners?

Honestly, there’s no other market we’d rather operate in for commercial real estate investment. We’re still in the early innings here. Nashville’s economy is incredibly dynamic, offering sectors like entertainment, healthcare, sports, public relations, tourism, finance — with companies like AllianceBernstein moving here — and tech, with Amazon and Oracle investing heavily. What makes Nashville unique is that it attracts people from all walks of life. It’s not just about economic growth but about how the city serves both residents and visitors. The creative fabric of Nashville constantly evolves. Just when you think the city has reached its peak, that energy pushes things even further. For instance, look at Bridgestone Arena and the surrounding developments like Fifth + Broadway. Just when it seems that the area has maxed out, new innovations are underway. People often say they came here on vacation, and before they left, they were already looking at houses. That kind of pull isn’t common in many cities. 

Which sectors in the Nashville region are presenting the most compelling investment opportunities?

We have a very targeted focus: retail real estate, office buildings, and light industrial properties. All of these asset types are thriving in Nashville. Take shopping centers, for example. It’s incredibly challenging for retailers to find available space. Our Director of Retail Properties, Charles Warner, has been instrumental in sourcing great opportunities and bringing high-quality retailers into the community. In terms of office buildings, while the global office market has been under pressure, Nashville is somewhat of an outlier. We’re seeing a shift where some downtown office buildings are going offline — Phillips Plaza and Fifth Third are converting, and Dolly Parton is installing a hotel in the former Baker Donelson building. So while some office properties are disappearing, the remaining premium spaces are in high demand. We’re bullish on the long-term upside in office real estate, particularly when it’s well-located and top-tier.

What primary trends are shaping the real estate market in Nashville today?

The market was on a strong run for years, fueled by speculation and low interest rates. For a long time, low interest rates allowed for financially engineered returns, and cheap debt made even risky deals look attractive but the risks are now outweighing the upside for many investors. But post-COVID, as interest rates have climbed and capital is more expensive, speculation has cooled, and there’s been a clear shift back to fundamentals. That means prioritizing location, traffic, demographics, and long-term value. And on those metrics, Nashville performs very well. That focus on fundamentals is bringing more investors to town, which naturally increases competition. We often talk internally about investing in real estate where people actually want to be, and Nashville offers plenty of those opportunities, from Franklin to downtown, Murfreesboro to Lebanon. In this environment, you need to invest with certainty and conviction. 

What are some of the main obstacles Magnolia Investment Partners is currently facing, and what solutions are you exploring?

Finding strong, fundamentally sound deals at attractive prices is definitely a challenge. One key to overcoming that is having committed capital — investors who are ready to move and believe in what we’re doing. Thankfully, we’ve solved that. Our team has built a solid reputation, and that has helped us attract strong capital partners who trust us. We first created the Fund to acquire opportunistic properties such as shopping centers, office buildings, and smaller industrial warehouses. These are asset types we know well and have existing relationships with asset categories. With this fund, we’re able to act quickly and buy properties using unleveraged capital. That allows us to offer real solutions to sellers looking to exit, while staying competitive in a competitive market.

Would you say Nashville is currently a buyer’s or seller’s market, and how do you approach each scenario?

It’s a bit of both, depending on the asset type. The market is really bifurcated. Some office buildings, for example, are essentially obsolete — they’ll never be used as offices again and might get torn down or repurposed. But at the same time, there are premium office buildings with record-high rents and waitlists. The difference between what people want and what they don’t has become extremely pronounced. We’re also focused on shopping centers. The demand is centered on premium properties with strong visibility, accessibility, parking, and a curated mix of tenants. Consumers want convenience, quality and affordability. Retailers want spaces that support that experience. But it’s tough to balance — it has to work for both the landlord and the tenant. 

Are there any recent legal or policy changes you’re keeping an eye on that might impact Nashville real estate?

Tariffs can increase costs in both the short and long term, and that uncertainty alone tends to drive prices up. Costs rarely go down in any meaningful way, so we expect development to become more expensive. That changes the risk-reward equation — building new properties might not be worth it compared to buying existing ones, especially in office. This could lead to more competition for existing assets, both in purchasing and leasing. As for interest rates, the cost of capital is just higher now. That makes it more difficult to make deals work. Investors are efficient, and they’ll go where the best risk-adjusted return is. If you can’t offer that, they’ll put their money elsewhere. 

Where do you see the most potential for growth?

Our top priority is always to make the best decisions for our clients and investors. That means investing wisely, protecting against downside risk, and positioning for future upside. It’s a difficult task in a fast-changing market, but we believe our relationships and market trust give us an edge. As for the broader industry, real estate moves slowly — it’s a big ship to turn. However, those who make informed, timely decisions will benefit more than those who wait too long. That said, timing the market perfectly is almost impossible. You need conviction, good data, and trusted partners to make the right calls early, and that’s exactly what we’re focused on.