The Home Stretch

We are almost finished! Our general contractor is trying to wrap up the 6th floor and turn in over to our buyers and we should finish that process in the next two weeks. Can I be candid here and vent a little? The process of getting codes approvals in Nashville has become onerous. Our wonderful design team works EXTREMELY hard to design and spec a building that meets or exceeds the International Building Code...those plans are scoured over by the Codes Department before permits are issued. Inspections occur every step of the way. And then, when you request your final inspection, the Inspector of the Day decides he/she wants something added. Our GC is over a barrel, there is no choice but to comply or we don't receive the Use and Occupancy Permits. The costs of making changes like this are typically not in the budget, so the Developer/Owner has to inject more money into the project at a time when prices have already been set...there is a fairness issue here that goes unnoticed. The end effect of all this is that over time, developers will start to build in larger and larger contingency budgets and be able to deliver less and less to the end user reducing the quality of the project in anticipation of a rogue inspector. OK...I feel better now!

Back at 1101, the landscaping has been installed in the front and back and our lobby area should be getting the tile in sometime in the first two weeks of December. There will be some "nits and nats" to finish up over the next few weeks, but by and large we are done. Here's a sneak peak of the view from the 6th floor at night:

OK, I cheated a little bit - that's actually from the "party deck" in Unit 611. But folks, if you are on the north side of the building. From the third floor up, you will have unobstructed views of our ever-improving skyline. Further, M2H Group, our developer, has pledged to NOT build a tower on the neighboring land. We have heard some sad stories from buyers at nearby communities that thought they would have skyline views in perpetuity only to learn that hotel developers can pay a lot of money for land and need to max out their sites by going vertical. What once was a pristine skyline view will soon be a wall. Sad...but if you choose to live at 1101, that will not happen! Our first level of townhomes facing north will be partially obstructed by the construction of Treble Flats next door, but in exchange, a beautifully landscaped bio-retention area will be built that will give it a European courtyard feel.

Urban living is going to create conditions like this, but developers need to be responsible to their residents and do what they can to provide for long term value...but as my 9th Grade Latin teacher admonished: "caveat emptor!" This is a doctrine that should be a "no brainer" for buyers, but in the heady rush of new construction and excitement/marketing hype, some folks may have checked their judgements at the door. Not so with the good folks at 1101 where quality, value and long-term appreciation are the hallmarks of good development and construction.

Walkable

There is no small degree of consternation in the market right now concerning the health of real estate both nationally and locally. Chas Sisk's column in the Tennessean yesterday morning sparked a row of accusation and response on the site's article response page. But this shouldn't be the point of discussion or concern. The fundamentals of our economy both locally and nationally are still pretty solid, especially here in Nashville where we are experiencing solid job growth and a terrific lifestyle.

Is there some overbuilding right now? Probably so, but nothing that won't get absorbed in a few years. The capital markets have already responded by making the availability of dollars for "iffy" developments much harder to get. Similarly, the buyers have become better educated and much more sensitive to the underlying strengths or weaknesses of the development they are considering. Allelujah! Here are some simple "Do's and Dont's:"

• You should not purchase a unit in a development where you are one of hundreds of the same floor plan. Good luck re-selling against every one else!
• You should not purchase a unit because of slick marketing, great websites or good salesmanship.
• Do not purchase a unit because of sleek amenities that you will never use but will be paying through the nose for in HOA fees! Remember, a membership at the YMCA is a whole lot cheaper and the facilities are better!
• You should stick to the fundamentals:
• Is this unit priced fairly versus everything else on the market?
• Is this a location that I am going to be comfortable in over the long term?
• How is the neighborhood evolving?
• What are the barriers to entry so that my unit doesn't get overwhelmed by a dozen other projects?
• Is this a walkable neighborhood - are the amenities I seek...restaurants, services, employment nearby? The developers of 1101 Eighteenth preach the gospel that in urban living "the city is the amenity." See the picture below? That's the bridge over 21st Avenue that leads to the heart of Vanderbilt and the Medical Center...1 block away from 1101!
• Can I afford this unit without stretching myself?
• What are the HOA fees - am I trading my current rental situation for the same rent (HOA fees) AND a mortgage?

From looking at the wonderful buyers at 1101 Eighteenth, it is obvious they have taken these things to heart and chosen wisely. With only 56 units in total and Hillsboro Village nearby - Vanderbilt and Peabody practically across the street...great architecture and construction, 1101 will hold its value better than most.

There was a condominium development proposed near I-440 that was withdrawn just prior to the start of construction. They advertised themselves as being "near Hillsboro Village," but if you ever tried to hike that distance on a pleasant afternoon in late July in Nashville, you would learn that being "near" something doesn't get it! 1101 gets it and is. Take a look at this aerial photo to get your bearings! (That's Vanderbilt Medical on the left, Scaritt on the right and USN directly behind that good looking white-roofed 1101.)

The Move-ins Have Begun!

Our little community is starting to take shape as real people close on their new homes and move in. The first three floors are complete except for some minor cosmetic work. The landscaping will be installed in the front and back within the next couple of weeks. Solomon Builders has told us that they expect to be completed by Thanksgiving. Take a look at what some creative interior design can do...these are from our model unit on the second floor:

I am particularly excited about the large number of windows that flood light into these units. Our architect, Gilbert McLaughlin, has done a superlative job of creating outdoor spaces for our residents to give a wonderful open feel that is uncommon for an urban setting.
The feedback we have been receiving from our brokers at Latitude Realty is that buyers are very impressed with the quality of the construction and the thoughtfulness of the floor plans. One of the things we have always prided ourselves on is that our floor plans make sense! Floor plan design drives the design of our buildings not the other way around. The end result is a highly efficient and functional unit. Come on down and check it out!

Just about ready...

We have crossed the first major threshold and have our temporary use and occupancy permit! Last week our architect and brokerage team along with the builder walked all the townhome units on the first two floors to "punch" them and make sure they were ready to be introduced to their buyers. The developer will walk them today to make sure nothing is overlooked. We should be able to allow move-ins by next week!
The third floor (flats) will be walked next week by the inspection team to prepare them for closing in two weeks. The fourth floor will follow shortly after that and then the fifth. Construction is planning on being completed with the site by the second week of November. There will be some lingering issues that have to be dealt with as our neighbor, Treble Flats, gets built.
Treble Flats, the sixteen unit development will be built on the lot that is between 1101 and Scaritt Center. It is anticipated that it will break ground in late October and be finished no later than twelve months from that date. "T Flats" has agreed to expand and better landscape the bio-swale that runs between the two properties. However, that landscape installation may not occur before next spring. The balance of 1101's landscaping will be installed when the weather stays cool for a little bit! The Urban Forester has asked us not to install until that time for fear everything would just die.
There has been a lot of turmoil in the financial markets of late...check out the developer's perspective in this post. The bottom line is that real estate that is reasonably sized and in an excellent location will do just fine.
As we approach the finish line, we need to thank all the hard working individuals at Solomon Builders and all their sub-contractors. They have worked very hard under difficult circumstances to deliver a high-quality product.

Getting there from here...

If you have driven by 1101 Eighteenth anytime during the last eight weeks, you would have seen the non-stop buzz of activity. Our general contractor, Solomon Builders, is doing everything they can to complete this project on time. This, despite the slow downs caused by some codes issues that had to be resolved before we could proceed. Kudos to those guys sweating through this heat wave to deliver what will obviously be a gorgeous building!


Within the next week, our development team will walk what we are calling the "model unit," to ensure that the interior quality is up to snuff. Once our contractor has that approved, that standard will be applied throughout the building. The next milestone for us will be receiving a temporary use and occupancy (U & O) permit on floors 2&3 (the town home units). In order to get that, we have to pass ALL the life and safety inspections for the whole building. We are hoping to achieve that goal by mid-August. If that occurs, we hope to be able to start closing on those units by the first week of September.

The plan then is to get the 4th floor's U & O about the same time as we start closing on the first two floors. That would mean that 4th floor will be ready to move in around mid-September. The fifth floor would follow at the end of September with the sixth floor coming in mid to late October. The bad news in all of this is that we are closing the first units later than originally anticipated, the good news is that the contractor will be out of the building sooner.

Once residents have begun moving in, the back elevator will be only used for construction. We will also use the lower level of the parking garage for construction for a little bit.

Some of you have asked about the adjoining property, 1033 Eighteenth avenue. We are in full design for that property now and it will consist of sixteen flats. Here's a preliminary elevation so you know what we are looking at:


We are working hard to ensure that the views from 1101 are not obstructed...financially, it would have been nice to develop the site more intensely, but it would not have been right to block those incredible views from 1101!

The development is being called "Treble Flats," and we plan to start construction before the end of the year. As it is a much smaller project, we are planning on being done before the end of next year. This is also a little different than 1101 or 807 Eighteenth, in that there will be no pre-sales with "developer discounts" and the like. We are confident enough in the neighborhood that this deal will succeed without having to cater to investors.

We continue to believe that Midtown is the true "neighborhood" option for urban living and are thrilled that so many of you have elected to live at 1101!

Cute!

I guess I am in to one line headlines today - just got this from our marketing folks and I love it:

Striking!

Watching a beautiful building emerge is like watching a butterfly morph. I rode my bicycle around Midtown over the weekend and stopped at the corner of Edgehill and 18th to look back this lovely structure. There was a couple walking their dog coming towards me and as they neared they turned to see what I was staring at. "Striking!" the woman said. I couldn't agree more.

Solomon Builders is working hard to get our first floor of units ready by late July. Unfortunately that may slip a week or two. As so often happens in this business, the field inspectors of a municipality don't agree with the plans approvers. This is exactly what just happened with some of our townhome designs and we had to go through an appeals process to get relief. The issue is the type of construction used on the stairs internal to the units. The inspectors felt a steel system was necessary (our exit stairs are steel) but codes had already approved a wood structure with proper sprinkling. On appeal, the wood system we had designed and built was approved as more than surpassing code safety requirements. But, we had to hold up dry walling for a few days while the decision was rendered. As the picture becomes clearer, we promise to keep you informed!

Primurbia

I have always been a big fan of Joel Kotkin's writing. His book "The City, A Global History" should be on every developer's bookshelf and is one of those works that should be re-read every couple of years. It would sober up many a person chasing the next hot real estate trend. A couple of weeks ago he published an interesting piece documenting some of the research he has been doing on urban movement patterns. In a column titled "Suburban Idyll" he points out that the boomer generation that is, if you subscribe to the popular wisdom, picking up and moving into the city is in fact staying put: "Eighty percent of all moves by suburbanites over 50 were . . . well . . . to another suburban home, almost eight times the number that bought in the inner city."

What the heck is a developer - a trade that Kotkin chides openly in much of his work - bringing this to your attention? It is because of the investment you are making. There is a lot of press about the "rebirth" of downtowns. Developers have honed in on this "trend," and are preparing to deliver a lot of units in a relatively short time span. While I have no doubt that, in time, these units will be absorbed, much of the initial purchase activity is being done by investors hoping to turn a quick profit. When you read about communities that sell out in 48-hours and the like, the bulk of those contracts are not to end users. They are to investors. Nothing wrong with this at all, it is a free market. But, I think, it inflates the demand numbers and leads developers to conclude that they can build forever. Call me a skeptic, but I do believe that the real estate "cycle" still exists. For most people, a home purchase is the single largest purchase they will make. It is crucial to understand the macro-economic picture behind the location of their purchase.
Enter "Primurbia." M2H Group has focused on this area with our "for-sale" product. Primurbia is the first ring of suburbs outside of the downtown core. It is, for us here in Nashville, Midtown. Primurbia has all the support services in place: restaurants, shops, services. It has established neighborhoods...many with distinct characters that will enhance the value of your home. There are still plenty of people alive today that grew up in Midtown and recall 18th Avenue as a delightful neighborhood. Primurbia does not allow the kind of intense development that the urban core allows. The result is a product that is unique and limited in number...ideal characteristics for a potential resale! In short, Primurbia/Midtown Nashville is exactly the kind of place the Joel Kotkin is referring to in his column.
Don't get me wrong...I am a big fan of downtown redevelopment. But I think it is more of a pioneering venture for end users that want to purchase. We are the co-redevelopers of the Stahlman Building downtown, which has been very well received. But Stahlman is a rental option. It allows people to experiment with the option of downtown living without taking the purchase plunge. I look forward to the day when downtown is thriving with a diverse population, but remain convinced that that change is going to happen gradually. And when that day arrives, Midtown will still be a thriving, comfortable neighborhood that will be viewed as extremely desirable.

Views from Midtown

This week's edition of the Nashville Business Journal has a nice write-up about 1101 Eighteenth and Midtown in general. I confess, I am not a good interviewee and inevetably say something I regret...this was one of the few times this did not happen! The comparison to Atlanta's Midtown is appropriate - two stellar Southern cities on the move, why not compare their development experience? As a longtime Nashvillian, I have always bridled at the comparisons to our larger sister to the South, but it is imperative that we learn from their mistakes or repeat their successes.

One of the big differences in development patterns between our two cities is the scale. "Well, duh, they are like a gagillion times bigger than we are!" - I hear you say. And their development projects tend to be larger too. That doesn't mean we have to copy that...and that is the key point I was trying to get across in the article. Like Atlanta, our Midtown has all the amenities that make it a highly walkable, highly liveable community. Unlike Atlanta, we are not doing large scale projects to populate Midtown and that is GOOD! Successful urban redevelopment occurs when the scale of the projects is human and consistent with the surroundings. This is what we have tried to acheive at 807 Eighteenth and at 1101 Eighteenth. We believe that this strategy protects YOUR investment! Consider this: there are more units for sale at Viridian right now (73 at last known count) than we have TOTAL at 1101! What that means is that if and when a buyer gets ready to sell, they are not going to have to compete on price...the exclusivity of 1101 will help all units there maintain and appreciate their values. This is perhaps the crux of my point to the paper. It is exciting that there are mega-projects going on in the Gulch and Downtown...but compared to Midtown, these deals will not hold their value. You cannot re-make a neighborhood just by dumping units on the market - it requires a more holistic approach.

One last thought...we were up walking our building at sunset last night. Here's a shot from a C-3 unit on the north side of 1101 Eighteenth:It's hard to see and appreciate the skyline when you are part of it!

Topping Out

We have reached the point of "topping out" at 1101! The roof is being poured and with that milestone achieved, one of the biggest risks in construction is behind us. 1101 is built with what is known as post tensioned concrete slabs...why, you may ask, is that important? Well, for the future homeowner at 1101, they should consider this from the Post Tensioning Institute:

Post-Tensioned reinforcing has been used for many decades in bridges, elevated slabs (parking garages and residential or commercial buildings), residential foundations, walls, and columns. The use of post-tensioned reinforcing can result in thinner concrete sections, longer spans between supports, stiffer walls to resist lateral loads, and stiffer foundations to resist the effects of shrinking and swelling soils. The additional advantage of putting the concrete into compression can be used to construct slabs and walls that have fewer visible cracks that can allow the passage of moisture and termites.

In other words, this is good! It is, however, a tricky and sometimes time consuming process. Structural engineers are intimately involved in the process working side by side with the builder. Numerous samples of the concrete and its compression strength are taken through the course of the buildng to ensure the highest quality.

In a future post we will discuss the significance of the roof at 1101 - yes, it does a lot more than just keep the rain off our heads! But for now, let's raise a glass to Solomon Builders and congratulate them on the great work in achieving this milestone!

With topping out achieved, the interior work begins in earnest. You will see the windows starting to be installed on the lower level as the steel studs and drywall march up through each floor. Masonry and stucco work will begin on the exterior as the interior buzzes with the activity of plumbers, electricians, dry-wallers and all the trades needed to convert this concrete "skeleton" into an impressive luxury condominium community. The split-faced block is already going in on the ground levels and it is a beautiful product with a lot of depth and grain. In the end, 1101 will be a sturdy, handsome addition to the neighborhood...one that anybody would be proud to call "home."

M2H Group Garners National Attention

The Urban Land Institute has just published a new book recognizing best practices in condominium development. The book is titled "Developing Condominiums: Successful Strategies," and is available at the ULI Bookstore. Here's the press release announcing the award:

Urban Land Institute Names 807 Eighteenth
Among Nation’s Best Condominium Developments

Developer brings the lessons learned to new project at 1101 Eighteenth

NASHVILLE, Tenn. Feb. 16, 2007 – It was the first condominium project in Nashville’s Midtown in 20 years and also the first for developer M2H Group. Now, the story of 807 Eighteenth is a case study as one of the nation’s most successful condominium developments, according to the prestigious Urban Land Institute. The Nashville condominium is one of only ten projects featured in the ULI’s recently released book, Developing Condominiums: Successful Strategies. (Urban Land Institute, © 2006)

“Convinced of the urban neighborhood’s historic significance and high quality location – sandwiched between Music Row and Vanderbilt University – the pioneering firm [M2H Group] successfully broke Midtown’s residential development drought with this new urbanist infill project that subsequently sold out while still in construction,” wrote ULI author Alexa Bach.

Not content to rest on their national laurels, the M2H Group will soon top out a new, larger luxury condominium project just down the street at 1101 Eighteenth.

“This is not something we solicited or applied for. They found us, which I suppose is quite an honor, considering the number of projects they looked at to select a handful as examples of success,” said Marty Heflin, founder of M2H Group. “We were still under construction when the first evaluation team visited the site. After construction was complete, the author came and spent two days in Nashville. We showed her around the site and the neighborhood to explain why we picked 18th Avenue.”

Developing Condominiums: Successful Strategies features ten developments around the country ULI believes embodies the best practices for developing condominiums. 807 Eighteen in Midtown and The Bakery in New Orleans are the only two developments in the book from the South.

“[M2H Group] focuses on community needs, pledging to pursue ‘organic development’ that is sensitive to the site and its neighborhood,” writes the author. “In lieu of a ‘cookie cutter’ approach to development that seeks to force a product that was produced elsewhere onto a site, M2H is committed to allowing the site and the neighborhood to steer the design.”

“When we looked at 18th Avenue, we felt that this was once a vibrant residential neighborhood and should be again,” Heflin said. “With responsible development, we can bring it back. 807 was the first step.”

Heflin said he and his partner, Bob Springer, learned a lot of lessons during the construction of 807 Eighteenth that are being put to use at 1101 Eighteenth.

“We’re trying to build on our success and bring the same quality work to 1101 Eighteenth,” Heflin said.

Heflin said he is already getting calls from developers around the country that have seen the book and want advice about developing projects. He’s also gotten some very positive feedback from Midtown residents who have seen the impact of having new people move into neighborhood.

“I got a call from a friend of mine who has a studio on 18th,” Heflin said. “He said it was great to see people walking their dogs or jogging along the sidewalks. He said it was beginning to feel like a neighborhood again.”

Construction is going well at 1101 Eighteenth, which has sold more than two-thirds of the available units. Heflin said they should top out the 6-story structure by the end of February.

The Urban Land Institute is a nonprofit education and research institute that is supported by its members. Its mission is to provide responsible leadership in the use of land in order to enhance the total environment.

1101 Eighteenth is a 56-unit condominium development designed by award-winning architectural firm Gilbert McLaughlin Architects. The project features one-, two-, and three-bedroom floor plans with town homes, city flats and sky lofts available. The units feature balconies, decks and terraces, as well as a variety of luxury upgrades. For more information contact Scott Troxell with Keller Williams Realty at 615.425.3600 ext. 3612 or online at 1101eighteenth.com.

Aerial Acrobatics

1101 Eighteenth from the air! Here are some shots that came in this morning courtesy of the good folks at Aerial Innovations. The fifth floor is poured and the structural supports for the sixth are going in. After that...all that's left is the roof. Our general contractor is starting to "dry in" the lower floors and that process will roll upstairs right behind the concrete.

Check out the sizes of the porches on those townhomes of the first floor of the south side...they are enormous!

Progress, progress, progress

Despite the frigid conditions of the last few weeks, our team at Solomon is continuing to make great strides. Here are a couple of views from the fourth floor:















I apologize for the resolution, but take a look at the Tennessee State Capitol peering between the Midtown Plaza building and the downtown state office tower. I have a new camera on the way that will take better photos.

Midtown continues to excite me as I watch it return to a residential neighborhood. I am glad that 1101 Eighteenth is such a central part in this re-birth!