The passing of a bank, even a Southern behemoth, doesn't usually garner a lot of attention in Middle Tennessee.
But the Dec. 31 acquisition of Wachovia by Wells Fargo is still worth noting, even if the impact is going to be felt far more in Wachovia's Charlotte, N.C., headquarters than in Nashville.
Wachovia's departure from the real estate scene will leave a hole that none other is likely to fill soon.
For good or ill, no institution bankrolled more major projects during the recent real estate boom than Wachovia. Building on its 2004 acquisition of SouthTrust Bank, Wachovia had the deep pockets and longtime relationships needed to finance the eight- and nine-figure projects that are reshaping Nashville's skyline.
Wachovia's lending portfolio features many of the biggest deals of the past four years.
The bank was a leading lender in downtown's first major condominium project, the Viridian, and in East Nashville's only major condominium project, 5th & Main.
It provided financing for the Pinnacle at Symphony Place, the skyscraper now rising at the southern edge of Nashville's skyline. Wachovia also backed hotels, including the Hutton that will open this month on West End Avenue.
And Wachovia was a backer of those reach-for-the-stars projects that defined the boom. Developers Tony Giarratana and Alex Palmer each borrowed millions of dollars from Wachovia for Signature Tower and West End Summit, both of which were projected to cost more than $300 million.
Lax standards hurt bankLax lending standards were a major factor in Wachovia's demise, and it's tempting to read that fact into the bank's track record in Middle Tennessee.
The Viridian, 5th & Main, the Pinnacle — these were among the riskiest projects to get financed in Nashville in recent years, each of them relying on a developer's belief that it could stride into a new section of town with an innovative building.
However, the book is still being written on Wachovia's Nashville portfolio.
Signature Tower may be back on the drawing board and West End Summit is stalled out, leaving a large pit on West End Avenue that is unlikely to be filled until office leasing takes off again. But neither has defaulted. Viridian, meanwhile, paid off; and other projects like 5th & Main and Pinnacle could still work out.
A spokeswoman for Wells Fargo was unable to say last week whether it will take a different approach to lending in Nashville. Sour economy and all, she noted that Wells Fargo remains one of the leading real estate lenders in the country.
But given how much more tightfisted bankers have become, it's unlikely Wells Fargo will be as quick with the cash as its predecessor was.
It would be an overstatement to say Wachovia was responsible for Nashville's real estate boom. But the bank's passing certainly signals the end of an era.
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