Flank’s Nashville Multifamily Project Set to Rise With $188M Financing Package

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Flank has secured $187.5 million in financing for its new luxury multifamily property in Nashville, Tenn., Commercial Observer can first report. 

The capital stack, which includes a construction loan from iStar plus a mezzanine loan from Lionheart Strategic Management, was negotiated by Walker & Dunlop’s Keith Kurland, Aaron Appel, Jonathan Schwartz, Adam Schwartz, Mo Beler, Michael Diaz, Michael Ianno and Ian Hawk.

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Located at 1111 Church Street in Nashville’s Gulch neighborhood, the new structure will replace the vacant, 73-year-old Valley Arts Guitar building, once occupied by the Gibson Guitar Corp.- owned brand. According to the Nashville Post, Flank paid roughly $21 million for the 1.1-acre site in 2019. 

When completed, the 380-unit asset will be the first true-luxury multifamily property in Nashville. 

Building amenities are set to include an outdoor courtyard, outdoor pool, an art studio, a fitness center and a rooftop terrace. The property will also include retail space and 501-stall parking facility to provide additional income streams. 

Construction is expected to be completed in the third quarter of 2023. 

New York-headquartered Flank is no stranger to the Nashville market — and the Gulch neighborhood in particular — with more than three acres currently under development in the area. “We’re very bullish on Nashville,” Ken Copeland, a partner and chief investment officer of Flank, told CO. “”While many of our peers in New York have been focused on South Florida, we’ve been focused on Nashville.” 

Describing Nashville’s draw, Copeland said: “It’s one of the few secondary cities in the country with a growing corporate presence, combined with an entertainment and lifestyle aspect. That unique mix exists in very few places.” 

Flank is also teaming up with Marriott to develop a 16-story luxury Edition hotel at 1100 Grundy Street, just north of the Gulch; and, in June of last year, the firm announced its acquisition of the Hutton Hotel as part of a new three-way venture with BentallGreenOak and Geolo Capital. Additionally, it’s in the process of purchasing a development site just across from the 1111 Church Avenue site.

The recent financing represents Flank’s second transaction with Lionheart and its first with iStar. 

“This neighborhood-defining project is the culmination of Flank’s data-driven research, intimate understanding of the market, and tenacity to bring a true luxury product to Nashville,” Kurland, co-head of New York capital markets for W&D, said. “Despite the near-term challenges presented by COVID, we were able to leverage our creativity and deep capital markets relationships to make Flank’s vision a reality.” 

“Flank is an excellent and experienced sponsor introducing a high-quality multifamily property in the heart of Nashville – an attractive market where we’ve seen strong population growth as people have increasingly migrated towards cities exhibiting lower cost of living and higher quality of life,” Tim Doherty, head of investments for iStar, told CO. “We’re excited to see this project come to fruition over the next couple of years.”

“We’re excited to get it done,” Copeland said. “It’s nice to be able to report some positive news, given the year we’ve all had, and we’re looking forward to moving ahead with the project.”

Officials at Lionheart weren’t immediately available for comment.