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Nashville’s real estate bubble…

When it comes to cities that are impacted by the real estate bubble, Nashville doesn’t usually make the list. But a quick skim of the proxy filed yesterday by American Healthways (AMHC) shows that the cost of Nashville real estate may be increasing much more rapidly than believed.

In the proxy, the company notes that the son-in-law of one of its longtime directors is a partner in a company that owns AMHC’s headquarters building. In fiscal 2005, American Healthways paid that partnership $1.6 million in rent. Now here’s the interesting part: in 2004, American Healthways only paid $818K in rent. Granted, they increased their space from 99,000 square feet to 126,000 square feet, according to a quick skim of the Ks. But that doesn’t quite explain why the rent has doubled even though they only added about 27% percent more space. The longtime director, William C. O’Neil Jr., sits on both the audit committee, where he’s listed as an independent director (gotta love those rules on independence), and, perhaps even better, on the corporate governance committee.

Several other “related transactions” also caught my eye, including the hefty raise given to Chairman Thomas Ciggaran’s son, Christopher, who has a new job and got a 55% raise in September. There was also the first-time listing of executive vice president Robert Stone’s son on the company payroll. Finally, there’s the fact that the company’s new chief information officer is married to the company’s CFO.