Nearly 100 rental units at Germantown’s Werthan Lofts will begin to convert to condominiums in early 2014, marking the first time in years that a large-scale block of for-purchase residential product has hit the Nashville market.
Mark Deutschmann, president of Werthan Lofts developer Core Development Services, said mid-January Werthan 5 Lofts LLC will buy 98 units at the North Nashville complex from the current ownership group, which includes some members of the buyership entity. Deutschmann, who is involved in both groups, said the agreed upon purchase price is $13.5 million.
“We will essentially invest in the new partnership,” Deutschmann said. “Some of the money invested in the current partnership will be invested in the new partnership."
First Farmers & Merchants Bank and Avenue Bank will team to provide the loan for the acquisition, he said.
Deutschmann said that after the transaction, Village Real Estate Services (of which Deutschmann is founder) will begin to sell units starting with the top (fourth) floor. Existing renters will be given an opportunity to purchase.
“We’re allowing for up to four years for the transition but my sense is that, given the current market, the [move from a fully rented to a fully owner-occupied building] will occur much quicker,” he said. “I expect a lot of the folks who live there now will want to buy their units.”
Since Nashville's last wave of large-scale condo buildings were completed in the late 2000s, the city's urban core has seen the construction of only smallish (typically 10 units or fewer) for-purchase residential buildings. Similarly, there have been no high-profile apartment buildings located within the core converted to condos.
Deutschmann said pricing for the first 33 units to go on sale is expected to be between $179,000 and $329,000, for an average of about $250 per square foot.
“What we’re offering is a price point that is quite attainable in Nashville's urban condominium market,” he said. “We feel this is a good time to bring these out to market. There is a scarcity of for-sale product at this time.”
The 98 units are part of Phase 5 of the historic former industrial building. Started in 2019-10, Phase 5 was the only of the five phases of Werthan Lofts that opened as rental residential space.
Relatedly, Core Development is planning to undertake a mixed-use development in the fast-changing Wedgewood-Houston district of South Nashville.
Deutschmann said the boutique development company has contracts on eight acres located at the northwest corner of the intersection of Martin Street and Merritt Avenue. The site currently is home to A.B. Collier Wrecking Services and Kirby Welding Co.
“We hosted a charrette at the South Nashville Action Partners meeting last month and had folks from the neighborhood, business owners, artists, the Metro Planning Department, nonprofits, and some of the craftspeople in attendance to share input,” Deutschmann said.
Core has enlisted Nashville-based companies Hawkins Partners and Smith Gee Studio for conceptual planning and neighborhood consultation.
“Kim Hawkins and Hunter Gee organized the meeting, and we came out with the beginnings of a plan that will include mixed-income housing, studios, retail and artisanal/maker space,” Deutschmann said. “We will continue meeting with neighbors and the Metro Council representative, Sandra Moore, and plan to submit for an SP (specific plan) in early February.”
Core is developing the 79-cottage Gale Park (which is sold out), and The Chesterfield, with 43 cottages. Both should be completed by March 2014. In addition, the company has started the 40-home cottage development Richland Station, located in Sylvan Park at 54th and Charlotte avenues, and will begin to market the homes soon.