A developer from Houston expects to break ground this summer on an apartment high-rise in the Gulch, using Prescient to make the project financially feasible.
Guefen Development Co., teaming with Nashville investors Travis Kelty and Joe Porter, is finalizing plans for Haven at the Gulch. The 11-story apartment building will contain 299 units, located along the downtown interstate loop. Drivers going north on I-65 will head straight at the building before the highway splits entering downtown.
In an exclusive interview, Guefen partner David Kulkarni said the group has all the funding lined up to build the development. The equity includes Guefen, as well as Kelty and Porter, who lead the partnership that owns the angular 1.8-acre property at 641 Division St. Another investor is Durham, N.C.-based Prescient Co. Inc. — which will be involved in construction and also runs a fund that buys minority stakes in certain developments. Kulkarni said a lender has committed to fund the remaining 70 percent of costs. He declined to name the bank, other than saying it’s a “multibillion-dollar lender.”
This will be Guefen’s debut Nashville project, one of just a few times it has reached beyond its Texas home. The company became involved with Kelty’s group around mid-2017, before the jobs announcements of the last year by AllianceBernstein (NYSE: AB), Amazon.com Inc. (Nasdaq: AMZN) and accounting giant EY — totaling more than 6,600 jobs for downtown and Midtown. Haven at the Gulch is scheduled to open in early 2021, when those companies will still be filling many of those jobs.
“When we first started looking at it, the market was strong, but there was oversupply,” Kulkarni said. “With the new jobs coming, it’ll be hard to supply enough units to meet the demand over the next few years. We think our timing is really really good for this project.”
He added: “We’ve followed the Austin market quite a bit, since we’re in Texas. It really seemed like Nashville was on the same trajectory, with the same drivers.”
Kulkarni said the building’s design complies with existing zoning, so no variances are needed. He expects to apply this month for the first permit needed to build the project.
Prescient’s role in the project is another example of creative approaches some developers are taking to blunt the impact of the labor shortage in construction and the permitting backlog at Metro.
Initially, Kulkarni said he planned to build a building half as tall, with a wood frame. A building that height, on this atypically-shaped property, couldn’t contain enough apartments to justify costs and make sufficient profit, Kulkarni said.
“Then we looked at concrete, but the costs were too high. In our opinion, concrete wasn’t financially feasible,” he said.
Guefen’s architect, BSB Design, made the connection with Prescient. The company makes steel frames and panels elsewhere that workers will snap together on-site to create the shell of the building. Stucco will be applied to the building’s exterior.
The approach allows for a taller building (wood buildings are only allowed to be built so high) while saving 10 percent to 20 percent in costs compared to concrete. That’s partly because it’s faster than waiting days for each ﬂoor of concrete to harden, Kulkarni said.
“It’s kind of like Legos. It’s assembled with nuts and bolts. You’re not doing welding on-site,” he said. “It’s very low-waste.”
Prescient has built 36 buildings to-date. The company has projects underway or finished in 16 states.
MW Builders, of Kansas and Texas, is building Haven at the Gulch. The property neighbors the former home of Myers Flooring, and it’s located at one end of the Division Street bridge Metro opened in 2017, connecting the Gulch and SoBro across the train tracks that split the two areas of downtown.
There are about 2,000 apartments and condos in the Gulch today, with hundreds of units in the pipeline.
By Adam Sichko
Senior Reporter, Nashville Business Journal