Bristol Development’s first rental residential project won’t be in The Gulch but in Midtown.
The developers’ plans to construct a new apartment building at 17th Avenue North and State Street, the first major rental residential project in that area in a long while.
Plans call for 170-174 units, all one and two bedrooms, said Ashlyn Hines, a Bristol principal. The apartments would rent for $1,000 to $1,600 per month.
Bristol, which for the past several years has focused on developing condominiums in Nashville, bought the property in late October for $1.5 million from medical office developer The Ritzen Group, according to the deed transfer. Property records show it already has taken a loan for $18.8 million through the Bank of Nashville for the construction.
“We’re down to the final details,” Hines said of the project’s design and construction.
Bristol plans on beginning construction early next year and finishing in 2009.
Most of the rental property available in Midtown is in condo buildings and townhouses individuals own as investment properties. The last substantial apartment development came with the Wesley Place Apartments near Vanderbilt University and the Gardens of Hillsboro Village in the late 1990s.
Midtown, however, has been unique relative to other parts of town. There’s always been demand for apartments even as the condo boom was in full swing. Low interest rates, however, leaned developers toward for-sale units instead of rental.
The condo market has shifted along with the interest-rate environment to make apartments more attractive developments. But the biggest challenge for apartment developers still is the availability of land in Midtown sizable enough and at prices that can justify large apartment construction.
“It’s just so expensive over there,” said Kirby Davis, president of First Management Services, an owner of apartments and a property manager. “It’s just been more profitable to sell.”
Bristol picked up pieces of property in its purchase that total about two acres. The property is located near the Baptist Hospital campus where Ritzen had planned to build medical office buildings.
Several years ago, Bristol started to build Bristol on Broadway. Instead, it converted the development to for-sale condos as the market for that product heated up and sold them all.
Because of limited supply, West End/Midtown has been the strongest rental market in the Nashville area with the highest rents in the area at more than $1,100 per month, according to the Greater Nashville Apartment Association. “There’s a lot of demand for rental,” Hines said.
The association tracks apartment units not units individual investors rent so it’s difficult to track the shadow market. Anecdotally, those units have gotten as much as $2 per square foot, above what 20th & Grand gets, about $1.65 per square foot, according to the apartment association’s figures. The average for West End/Downtown is $1.22. By comparison, Bellevue’s rents average 84 cents per square foot.
Bristol has plans for another apartment project in Germantown and one in The Gulch. The Germantown property still has a tenant on it and the lease has to run out. Hines said Pine Street Flats is a year away as Bristol finishes off Icon and Velocity in The Gulch.