New Tennessee Titans Stadium | Impact on CRE

The Metropolitan Nashville Council has granted the Tennessee Titans the last green light to proceed with their intentions of constructing a new, covered stadium on Nashville’s East Bank. In late April 2023, the Metro Nashville Council endorsed the proposal with a 26-12 vote. The Metro Nashville Sports Authority, which holds ownership of the existing and upcoming stadium, had previously agreed to the arrangement on April 4, 2023. This $2.1 billion deal, the largest in Nashville’s history, is set to start construction in 2024, with the hopes of a 2027 opening. Once opened, it has been estimated that the new stadium will generate about $27 million in sales tax revenue as well as $10.3 million in ticket taxes and rental fees.

Read on to see how this historic project will benefit the Nashville commercial real estate market.

Tennessee Titans | Stadium Plan and Experience

With a size of around 1.75 million square feet, this stadium has the capacity to accommodate approximately 62,000 individuals. Although this is a decrease from the current stadium’s 69,000 capacity, the new seats will have better visibility. According to David Manica, the head architect at Minca Architecture, “Every seat has been pulled further forward and slightly steeper. That means the views are closer and better to the game or the concert than they are in the existing building. In fact, the entire upper deck is pulled about 30 feet closer.”

Regarding the number of seats, the NFL has revised its requirements for selecting Super Bowl venues, expanding the criteria beyond seat capacity to encompass the availability of nearby accommodations, venues, and various fan-centric offerings that can cater to the needs of game attendees. The new stadium’s construction will unlock valuable riverfront property, allowing Nashville to repurpose and develop these areas into the very types of spaces that meet the NFL’s updated considerations and contribute to the city’s overall growth and appeal.

The new stadium will also do much more than host local football games. It will now host multiple sporting, entertainment, and civic events year-round. The building is more than competition or fun; there has been a large emphasis on how this will positively impact the surrounding community. The stadium will be constructed using advanced, ecofriendly resources and designed to reduce waste while conserving energy and water. Within its premises, there will be a community center spanning 12,000 square feet, intended for hosting events throughout the year to foster unity in Nashville.

The lease term is set to expire in 30 years, ensuring that the Titans will not move for that entire period. Once the old stadium is removed, the new building is set to return valuable acres of riverfront land to Nashville. In turn, the Titans have developed a transformational riverfront project that will generate millions for Nashville’s highest priorities, with local businesses being at the top of the list.

Impact on the Community

Following the introduction of a newly proposed football stadium agreement, the Tennessee Titans are unveiling a community benefits initiative in collaboration with 16 local and regional organizations. These programs were unveiled at Tennessee State University, a steadfast partner of the Titans.

Comprising diverse initiatives, the ONE Community platform aims to extend its reach to numerous underprivileged neighborhoods within Nashville, emphasizing three core areas:

• Opportunity
• Neighborhoods
• Education

“Ultimately, increasing opportunities for workforce and small business development, nurturing and enhancing our neighborhoods in need, and supporting education at all levels was what the community believed would be most impactful.” – Adolpho Birch, Senior Vice President and Chief Legal Officer for the Tennessee Titans.

In addition to the new agreement between Nashville and the Titans, the team will maintain its long-standing partnership with Tennessee State University by hosting TSU games in the new stadium and collaborating on TSU related projects. As part of the deal, the Titans will also give back 66 acres of land that was previously used as parking lots for the city’s use. Nashville plans to use this land for creating parks, green spaces, affordable housing, a multi-modal boulevard, and local businesses.

How Does This Impact Nashville CRE?

The new stadium and business it is set to bring will have a noticeable impact on the hospitality, multifamily, and retail CRE assets.

Hospitality: The increased number of visitors for games, concerts, and other events will likely drive up demand for hotel accommodations in the area. Hotels situated nearby could experience higher occupancy rates, particularly during major events, leading to potential opportunities for new hospitality developments. According to STR, the entire Nashville MSA has 492 hotels, while the Nashville Central Business District/Downtown has 61 hotels.

Multifamily: The city has noted that it will be utilizing the 66 acres of land to address the affordable housing issue. There has been an ongoing trend throughout the U.S. of turning parking lots into multifamily buildings, which could be a viable option in this case. Additionally, with a stadium capable of accommodating thousands of attendees, there’s a likelihood of increased foot traffic, creating an appealing environment for residential developers. The surge in visitors during game days and events could spur the development of mixed-use, apartment complexes, or condominiums, catering to both short-term rental needs and long-term residents seeking proximity to entertainment venues.

Retail: Retail businesses, especially those specializing in sports merchandise, apparel, and entertainment related offerings, stand to benefit from heightened foot traffic. Entrepreneurs and retailers might be incentivized to establish or expand businesses in the vicinity to cater to the diverse crowd attending various events, thus enhancing the local retail ecosystem.

Takeaways

In essence, the introduction of the new Titans stadium is poised to trigger a chain reaction in the Nashville CRE industry. It has the potential to reshape the landscape by fostering demand for multifamily housing, boosting retail businesses catering to event attendees, and spurring growth in the hospitality sector due to increased tourism and accommodation needs. This multifaceted impact is expected to influence the way developers, investors, and businesses perceive opportunities in the city’s CRE market.