Gulch Union (Endeavor Demonbreun): 3 towers (20 story/329,000 s.f. office, twin 28 story residential buildings)

[markhollin]

Some new renderings included in NBJ's coverage of The Pullman at Gulch Union switching to condos:

https://www.bizjournals.com/nashville/news/2023/09/26/pullman-gulch-union-condominium-high-rise.html
 

[markhollin]

Looking SW from 12th Ave. South, 1/2 block north of Demonbreun St:

Looking NW from intersection of 12th Ave. South and Demonbreun St:

Looking NE from Demonbreun St., 1/2 block east of 13th Ave. South:

See it peeking out from above the Gulch Union Office Tower (1222 Demonbreun).  Looking east from intersection of 16th Ave. and Broadway:

[Rick Dalton]

Glad to see the condo market expand. Selfishly a little disappointed because I wanted to rent here and I don't think I condo in a city without transit is a great investment

[Sean blackdog]

Today this evening. 

[markhollin]

The Pullman at Gulch Union update.

Looking SW from Broadway Viaduct where it crosses over CSX tracks:

Looking south from McGavock St. at 12th Ave. South:

Looking west from intersection of Demonbreun and 10th Ave. South:

[markhollin]

The Pullman at Gulch Union (28 stories, 310 condos, ground level retail, internal garage) update: glass installation up to 20th floor.

Looking south from McGavock St., just west of 12th Ave. South:

Looking NW from 11th Ave. South at Laurel St:

[markhollin]

CityNowNext with an update on The Pullman at Gulch Union, including one new rendering:

https://citynownext.com/2023/10/18/pullman-gulch-union-progress-on-the-new-condo-tower-in-downtown-nashville/#more-36750
 

[markhollin]

The Pullman (28 stories, 310 condos, ground level retail, internal garage) update: glass installation up to 20th floor.

Looking SW from 12th AVe. South, 1/2 block north of Demonbreun:

Looking NW from intersection of 12th Ave. South and Demonbreun:

Looking NE from Music Circle South at Music Circle North:

[markhollin]

The Pullman at Gulch Union (28 stories, 310 condos, ground level retail, internal garage) update: glass installation up to 21 floor; screening insatll beginning on parking pedestal along Demonbreun St.

Looking south from McGavock St., just west of 12th Ave. South:

Looking north from intersection of Demonbreun and 12th Ave. South:

Looking NE from Demonbreun, 1/2 block east of 13th Ave. South:

[Sean blackdog]

Today this evening. 

[markhollin]

The Pullman at Gulch Union (28 stories, 310 condos, ground level retail, internal garage) update: glass up to 23rd floor.

Looking NW from intersection of Demonbreun and 12th Ave. South:

[markhollin]

The Pullman at Gulch Union (28 stories, 310 condos, ground level retail, internal garage) update: glass up to 26th floor.

Looking NE from Demonbreun St., 1/2 block east of 13th Ave. South:

Looking south from McGavock St., 1/2 block east of 13th Ave. South:

Looking west from Demonbreun St. and 10th Ave. South:

[chris holman]

Small rendering of Gulch Union Phase 3 in the background of the top pic . To the right of The Pullman at Gulch Union on the bottom.

[nashville born]

Anyone willing to speculate on the odds of phase III happening?

[Bos2Nash]

Maybe Q3 of 2025?

[MorganRehnberg]

I spoke with one of their agents as a prospective buyer a few weeks ago. Asked this specific question since it pertains to the view from many units. He seemed confident that it would move forward following phase 2, but certainly wasn’t specific about timing. 

[markhollin]

The Pullman at Gulch Union (28 stories, 310 condos, ground level retail, internal garage) update: glass installation up to 26th floor; scree work for pedestal continues to crawl eastward along Demonbreun.

Looking SW from 12th Ave. South, 1/2 block north of Demonbreun:

Looking NW from intersection of 12th Ave. South and Demonbreun:

Looking NE from Demonbreun, 1/2 block east of 13th Ave. South:

[Luvemtall]

20 hours ago, nashville born said:

Anyone willing to speculate on the odds of phase III happening?

I think the odds would depend upon how quickly they fill the first tower, if the demand is there and there’s enthusiasm for more than definitely it would probably be great odds. As of now I would have to say 50/50 to stay neutral.

[smeagolsfree]

21 hours ago, Bos2Nash said:

Maybe Q3 of 2025?

I think that timeline is reasonable. We are probably looking at a 2-year slowdown IMO. Vacancy rates in the core are approaching 17% and are around 10% elsewhere with a lot of units still under construction. It will take some time for the market to absorb those units. Renters are going to get a gift for a couple of years as rents will drop at some point. these properties will at some point have to drop their rents instead of offering incentives. When one blinks, they all will. I also think some of these large buildings may go all STR further hurting the single home STR market and bring the prices down further for STR's. Some folks will lose their shirt if they have not already. That will affect the hotel market as well.

[Rick Dalton]

Phase 3 design looks good with the arches and materials. I imagine they want to keep it under wraps until they sell the units that will be blocked. 

[Bos2Nash]

5 hours ago, smeagolsfree said:

I think that timeline is reasonable. We are probably looking at a 2-year slowdown IMO. Vacancy rates in the core are approaching 17% and are around 10% elsewhere with a lot of units still under construction. It will take some time for the market to absorb those units. Renters are going to get a gift for a couple of years as rents will drop at some point. these properties will at some point have to drop their rents instead of offering incentives. When one blinks, they all will. I also think some of these large buildings may go all STR further hurting the single home STR market and bring the prices down further for STR's. Some folks will lose their shirt if they have not already. That will affect the hotel market as well.

At the ULI Emerging Trends breakfast it was interesting to hear that we may see some temporary rent INCREASES to absorb the financial concerns with many of the multi-family buildings coming up for refinancing. While Nashville has seen a surge in supply, that means there was also a surge in low-interest financing so my assumption is to account for higher rates, complexes may need to show revenues that can cover the higher rates? Not sure the real impact of the higher rates on cap rates for developers/land owners, but at least in my mind that is the logical/rational thought process

[chc3]

This rent phenomenon has also hit Whidbey Island, where I own three doors, a single-family on a golf course and a duplex right in Langley. I had to drop the monthly rent on one of the duplex units almost 10% since more rentals have come on the market. Still a great cap rate, but indicative of a trend. And the island is FAR from being overbuilt.

[thenorthchannel]

On 11/28/2023 at 8:52 AM, smeagolsfree said:

 I also think some of these large buildings may go all STR further hurting the single home STR market and bring the prices down further for STR's. Some folks will lose their shirt if they have not already. That will affect the hotel market as well.

Harlowe is now offering home sharing as an amenity. Greystar still being selective with which properties to offer it. It is reasonable to expect that to grow. Lifestyle Communities also about to rollout a home sharing program. 

[smeagolsfree]

On 11/28/2023 at 2:17 PM, Bos2Nash said:

At the ULI Emerging Trends breakfast it was interesting to hear that we may see some temporary rent INCREASES to absorb the financial concerns with many of the multi-family buildings coming up for refinancing. While Nashville has seen a surge in supply, that means there was also a surge in low-interest financing so my assumption is to account for higher rates, complexes may need to show revenues that can cover the higher rates? Not sure the real impact of the higher rates on cap rates for developers/land owners, but at least in my mind that is the logical/rational thought process

How will that work when you have vacancy rates in the double digits unless the apartment owners end up in collusion with one another which is illegal. That is call price fixing. With more and more units coming online, again I say someone is going to blink. If there are some temporary INCREASES, they will end up losing tenants. If I knew you were going up on my rates and everyone else was staying the same or going down, my rear end is out the door. There is no brand loyalty in this town or anywhere else.

[Armacing]

5 hours ago, smeagolsfree said:

How will that work when you have vacancy rates in the double digits

I think the high interest rates are working to put a floor under rental prices because there are certain people who could have afforded a home a couple years ago who are now firmly locked into the rental market.   The continued high price of houses even in the face of higher interest rates represents yet another obstacle to home ownership... thus, rents remain higher. 

Also, there were a lot of residential properties purchased by investors during the last run-up in prices.  They really have no choice but to remain firm on their rental prices, otherwise they will have to write-down the value of those assets.  That is also putting a floor under home prices, and by extension, rental prices (by locking border-line buyers out of the ownership market).  As an example, if Mom & Pop with two rental units get desperate, they may lower the rent on one to fill the unit.  But then a few months later they see ABC Corporate ownership renter hasn't changed any of their prices, so Mom & Pop don't come down on the second unit when it comes up for renewal because they see the market is mostly unchanged.  Meanwhile, ABC Corporate is not motivated to change pricing by Mom & Pop's move of desperation because their market share is immaterial.

At this point, I think the only thing that would meaningfully lower home (and rental) prices would be drastic changes in zoning laws and building codes that would allow for more density.  Maybe also the construction of tiny homes and non-traditional construction styles.