PCCP Provides $22M Loan for Acquisition of Busted Condos in Nashville
- Mar 31, 2011
Nashville, Tenn.–PCCP LLC provided a nearly $22 million loan to finance the acquisition of Velocity in the Gulch, a 220-unit Class A luxury rental community that is part of a 263‐unit fractured condo project constructed in 2009 and located in Nashville’s vibrant Gulch submarket. The bank-owned property was purchased by Pollack Partners for $25.3 million, plus reserves and closing costs.
Pollack Partners, an Atlanta-based multifamily developer and operator, plans to lease the 220 vacant units. Velocity in the Gulch was originally designed and constructed as a high-end, mixed-use community consisting of 263 “for sale” condominium units situated in a mid-rise building with approximately 20,900 square feet of ground floor retail. “We are excited to partner with PCCP on this great investment. Their ability to understand a complex deal in a short timeframe made the transaction possible. We look forward to future investments with PCCP,” says Steven Shores, president of Pollack Partners.
The retail component, owned by Nashville-based retail group MarketStreet, and the 43 sold residential units were not included in the acquisition. Holliday Fenoglio Fowler LP handled the asset sale and brokered the financing.
“PCCP sees this as a very strong value-add play for Pollack Partners, an experienced, well-capitalized owner and manager of multifamily communities,” says Jackie Hamilton, senior vice president with PCCP. “This lending opportunity is one PCCP has outlined in its business plan as it seeks to finance distressed properties in recovering markets that are priced significantly lower than replacement cost.”
Hamilton added that the Nashville apartment rental market is currently underserved with a high demand for quality for-rent communities. Velocity in the Gulch will help to meet that demand as units will be available for immediate move-in.
Velocity in the Gulch is in excellent condition. The units feature terrazzo and natural quartz countertops, stainless-steel appliances, and 10-to 15-foot high ceilings with floor-to-ceiling windows. The community’s amenities include an outdoor lounge with cabanas, fitness center, Wi-Fi hotspots in common areas, and a controlled-access parking garage. The unit mix is 27 percent studio, 60 percent one-bedroom, and 13 percent two-bedrooms with an average unit size of 724 square feet.
The property is located in the popular “Gulch” neighborhood of Nashville, situated directly between Downtown and West End. The Gulch is a massive redevelopment area that has become a live/work/play destination for local residents, with a variety of dining and entertainment options.
The Gulch is the first neighborhood in the south to have been awarded LEED For Neighborhood Development (LEED ND) status from the U.S. Green Building Council, one of just thirteen around the world to achieve this honor. Nashville’s apartment market has a 5 percent vacancy rate and average growth rates are projected to exceed four percent per year for the next five years according to significant third-party market sources, with no new deliveries forecast over the near term.
HSI Properties closes financing on Wisconsin development
Wauwatosa, Wis.–HSI Properties has closed the HUD221 (D)(4) financing package for The Enclave, a high-end apartment development in Wauwatosa, Wisconsin. Demolition of the existing mix of industrial buildings on-site is almost complete, making way for the scheduled commencement of construction in the first week of May.
The future 4-story, 152-unit community has a price tag of $25 million, and is owned by an investor group led by HSI. Amenities at The Enclave will include a green roof deck and garden, media room, and fitness center.
Bay Apartment Advisors sells 22-unit California property
Oakland, Calif.–Bay Apartment Advisors has brokered the sale of Fontana Lee East Apartments, a 22-unit property in Oakland, Calif., for $3,075,000 or $139,773 per unit. There was 100 percent occupancy at the time of sale.
Fontana Lee East Apartments was built in 1968 and is in Oakland’s Adam’s Point neighborhood, which has remained a stable rental market through the recession.