Pollack Partners has acquired Velocity in the Gulch, a Class-A luxury rental community in Nashville’s vibrant Gulch submarket, for $25.3 million, plus reserves and closing costs. The Atlanta-based multifamily developer and operator purchased the 220-unit, bank-owned property as part of a 263‐unit fractured condo project constructed in 2009.
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 sq. ft. of ground floor retail. Pollack Partners plans to lease the 220 vacant units.
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, LLC , a real estate private equity firm with offices in Los Angeles, Sacramento, San Francisco and New York, provided a $22 million senior loan to finance the acquisition of Velocity in the Gulch.
“We are excited to partner with PCCP on this great investment,” said Steven Shores, president of Pollack Partners. “Their ability to understand a complex deal in a short timeframe made the transaction possible."
Jackie Hamilton, senior vice president with PCCP, says the acquisition is a strong value-add play for Pollack Partners, an experienced and well-capitalized owner and manager of multifamily communities. “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.”
With only a 5% vacancy rate, the Nashville apartment rental market is currently underserved with a high demand for quality for-rent communities, says Hamilton. Velocity in the Gulch is expected to help meet that demand as units will be available for immediate move-in.
The units at Velocity in the Gulch 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% studio, 60% one-bedroom, and 13% two-bedrooms with an average unit size of 724 sq. ft.
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 of choice 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.