The Tennessean
By CHAS SISK • Staff Writer • April 14, 2008

With coups such as the region's first Trader Joe's and Whole Foods supermarkets, as well as luxury retailers such as Louis Vuitton, Burberry and Tiffany's, Green Hills appears to be rapidly pulling away from other wealthy neighborhoods as Middle Tennessee's most upscale shopping district.

Despite its reputation for mile-long traffic backups, limited access and heavy crowds, the Hillsboro Pike corridor is riding a wave of interest from retailers that cater to upper-class customers.

Their investments in Green Hills have driven a surge of construction in the neighborhood that includes the recently opened Hill Center, the expansion of The Mall at Green Hills and new plans to turn an aging shopping center owned by Brookside Properties into an upscale retail and office complex.

Green Hills, with its proximity to the mansions of Belle Meade, the downtown's high-rise offices and private Vanderbilt University, might seem like the natural choice for most top-shelf retailers. But as recently as the late 1990s, suburban competitors in commercial real estate such as Brentwood and Cool Springs were quickly closing in on Green Hills or surpassing it, winning leases with national chains that previously might have gravitated toward Hillsboro Pike.

Now, momentum has shifted back to Green Hills, fueling a renewed retail growth spurt there despite a sluggish U.S. economy that has caused some chic chains to curb expansion plans elsewhere.

"What it comes down to is more people are spending more money in that area," said Tom Frye, managing director of the Nashville office of CB Richard Ellis, a commercial real estate broker. "That's something that's keeping that area going."

Tiffany's in, Payless out
A century after its creation as one of Nashville's first suburban refuges, Green Hills and its commercial core are being redeveloped as a concentrated city neighborhood where Middle Tennessee's elite can shop, dine and be entertained.

At the district's center is
The Mall at Green Hills. Seven years ago, that shopping center was purchased by Davis Street Land Co., an Evanston, Ill.-based firm that specializes in upscale retail.

Davis Street has transformed the Green Hills mall from a nondescript suburban mall to a high-end retailer that can draw stores that once would have overlooked Nashville, real estate and retail experts said.

Gone are suburban shopping mall staples such as Champs Sports and Payless ShoeSource. In their place are Tiffany's jewelers, Louis Vuitton and Lacoste. Later this year, Burberry and Juicy Couture will open their first stores in Tennessee.

The presence of such stores has made The Mall at Green Hills a more popular destination for wealthy shoppers, even those who live outside Middle Tennessee, boosting annual sales to an estimated $650 per square foot. That's the best sales performance in the state, retail analysts say.

Other developers have capitalized on Green Hills' rising popularity. Last year, local developers H.G. Hill Realty opened the Hill Center, and Rochford Realty and Construction opened the Bedford Commons shopping center within blocks of the mall.

This summer, the Nashville real estate firm Brookside Properties hopes to unveil plans for an upscale shopping center across the street.

Such a concentration of upscale shops will tend to make the area even more attractive to future luxury retailers, said Will Albaugh, managing director of BSM Consulting, a firm that advises companies on store locations.

"They target the same type of people," Albaugh said. "It sends a signal when they go in, because you only find these stores in areas of high wealth."

Shoppers come from afar
Mandy Miller, a human resources manager from Paducah, Ky., illustrates the point. Resting on a bench in a black top, slacks and matching sandals while her sister-in-law, a niece and a friend shopped, Miller said she has traveled to Nashville on shopping trips for the past 15 or 20 years, but only in the past five years has she started visiting Green Hills.

"We like Louis Vuitton, Coach, Abercrombie," Miller said. "I also love going to Whole Foods (which opened a store in Hill Center last year). That's a great store."

Luxury retailers in Green Hills also draw from a large and well-heeled local customer base, Albaugh said.

Household incomes in the area around the Green Hills mall actually lag slightly behind those in Cool Springs. But Green Hills has more people, and its residents tend to be slightly older. That means they tend to have more disposable income, less mortgage debt and fewer children at home.

"A family in Franklin may be making $200,000 a year, but they may be paying for their kids to go to private school or college and a $4,000-a-month mortgage," Albaugh said. "They can't afford to buy a $10,000 necklace at Tiffany's."

Overall, Green Hills residents spend nearly twice as much annually on retail goods as people who live in Cool Springs, according to a recent retail study by BSM Consulting.

Expansions cascade
The Mall at Green Hills built a new wing three years ago, and later this year it plans to add two floors to its parking garage. Other developers and real estate experts believe the mall is close to signing an upscale department store, such as a Nordstrom, to anchor yet another wing of the mall.

Davis Street officials have sidestepped such questions, saying no such announcement is imminent. But the mall has acquired three nearby lots, deals that could prepare the way for an expansion.

The Hill Center and Bedford Commons are nearly full, and their arrival has produced a cascade of available retail space. Last month, Trader Joe's, a California grocery store chain, announced it would take over a building vacated when Whole Foods opened its new store in the Hill Center.

But even as more stores open, whole categories of retailers and restaurants are yet to find a home in Green Hills. The area does not have a high-end steakhouse, for instance, nor does it have an upscale sporting goods store.

"You still see a lot of people who think they've got to go to Atlanta to do any shopping," said Nelson Andrews, Brookside's chairman.

Cool Springs responds
Shoppers don't have to go all the way to Atlanta to find such stores, however.

Steakhouses, sporting goods stores and the like abound in the suburbs, where retailers are enticed by cheap land, plentiful parking and easier access to land.

On the city's wealthy fringes, developers have started to incorporate some of the same techniques that have made Green Hills popular again.

In the McEwen development, for instance, Southern Land Co. is building a neighborhood on the south end of Cool Springs that will combine offices and shops with 1,000 residential units. Whole Foods has already signed a deal to anchor McEwen's town center when it opens in the fall of 2009.

"Green Hills is a great area that attracts a lot of national and regional tenants," said Paul Neuroth, Southern Land's senior vice president of leasing. "We have not had a cohesive project like that where retailers can go to."

Developments such as McEwen, in newer, more densely developed areas of Cool Springs, could emerge as strong competitors to Green Hills, Albaugh said.

"No retailer wants to be out-positioned by the competition," he said. "And it's well known that south Cool Springs is where the momentum is."