Four Seasons Hotel and Residences, 40 stories, 542', $400 million

[Binbin98]

When will they announce the specific five star hotel brand in this tower? Have they gotten one yet? I have some sources telling me a bit of info on what brand it probably will be but again it’s not for certain. Rumor has it in the travel industry at least that it will be four seasons, but again it is not for certain.

[DDIG]

11 hours ago, MLBrumby said:

The original design showed towers at both south (where this one remains) and north (an apartment tower) ends. I wouldn't expect that to happen unless downtown goes through another housing boom within a few years after this is completed. There's no telling why SAP went to a single tower (funding, better bottom line profitability, revised market conditions, spite, etc.)

Looking at the renderings, it appears another tower could rise above the parking lot that is now not being purchased. So that remains a possibility, but not a high probability. 

 

Atleast part of the reasoning from what I recall is the core product of this development is high-end luxury condos and I think they got to thinking that you have a better luxury condo product without an apartment tower blocking one side of the building.  And they probably looked at all the apartments coming on line and weren't as bullish on building it. So cut the apartments if you are nervous about the market there and as an added bonus your condo project benefits from it.

[nashvylle]

7 hours ago, Binbin98 said:

When will they announce the specific five star hotel brand in this tower? Have they gotten one yet? I have some sources telling me a bit of info on what brand it probably will be but again it’s not for certain. Rumor has it in the travel industry at least that it will be four seasons, but again it is not for certain.

I have also heard Four Seasons. 

[markhollin]

Couple items from NBJ article today:

- The total cost to develop the 40-story tower is nearing $400 million, up from a prior estimate of $325 million, said senior Congress Group executive Joe Farrell III. Though financing for construction isn't yet in place, Farrell said he's hoping to finalize some construction agreements in the next few weeks.

-Construction is now expected to start in January, several months later than previously planned. The tower will take 34 months to create, meaning that it wouldn't open until the end of 2021.

-The developers are preparing to open an outpost in SoBro's 222 office building, where they will work to drum up pre-sales for the condo units. 

-Farrell said he had no updates on the negotiations with the five-star hotel, the identity of which he has declined to identify. "It's going to take a few more months. Nothing's been formally signed yet. There are not formal operating documents," Farrell said. "Hopefully, in the next 60 to 90 days, it'll sort itself out."

More behind the paywall here:

https://www.bizjournals.com/nashville/news/2018/06/06/price-tag-swells-as-40-story-tower-plans-advance.html?ana=twt
 

[smeagolsfree]

The lot that will be vacant is bigger than the lot where the Diner on 3rd is, so something could be built in the sliver, but will he get his asking price????

[Ingram]

$400 million?

Imagine the cost if they decided to build the second tower.

[MLBrumby]

7 hours ago, DDIG said:

 

Atleast part of the reasoning from what I recall is the core product of this development is high-end luxury condos and I think they got to thinking that you have a better luxury condo product without an apartment tower blocking one side of the building.  And they probably looked at all the apartments coming on line and weren't as bullish on building it. So cut the apartments if you are nervous about the market there and as an added bonus your condo project benefits from it.

Sounds about right... but I'm astonished by the huge jump in project cost, especially without the second tower.  If market conditions were to change for apartments, there appears to be space to build another tower. So buyers of the condos should get some protection for sight lines if that's the case. I agree that it's not likely. The owner of the parking lot may find a use for it that could give a nice return (whatever it is, I have absolutely no idea). Does anyone know if that person/entity has owned it for a long time; or was it someone who wanted to flip the property. Just guessing, the behavior seems like someone who has held it for a long time. 

[wmaddbb2018]

But, but the Fed tells me every year that inflation is “only 2%”....

If you look up dishonest in the dictionary their should be a picture of every federal reserve chairman since 1911.

[urbanplanet17]

9 hours ago, MLBrumby said:

Sounds about right... but I'm astonished by the huge jump in project cost, especially without the second tower.  If market conditions were to change for apartments, there appears to be space to build another tower. So buyers of the condos should get some protection for sight lines if that's the case. I agree that it's not likely. The owner of the parking lot may find a use for it that could give a nice return (whatever it is, I have absolutely no idea). Does anyone know if that person/entity has owned it for a long time; or was it someone who wanted to flip the property. Just guessing, the behavior seems like someone who has held it for a long time. 

Not to get political, but Trump and the FED is to blame for a lot of it.

The tariffs on aluminum/steel have significantly increased the cost of building material, the hard line on illegal immigration has further restricted the pool of cheap workers (thus significantly increasing labor costs) and borrowing costs are starting to skyrockets due to the FED's intention to normalize interest rates after several years of keeping them near zero.

Most of this was unexpected and unaccounted for when developers established a budget and timeline for their projects. I wouldn't be surprised if that's the main hold up behind a lot of projects that previously seemed promising.

 

[wmaddbb2018]

5 hours ago, urbanplanet17 said:

Not to get political, but Trump and the FED is to blame for a lot of it.

The tariffs on aluminum/steel have significantly increased the cost of building material, the hard line on illegal immigration has further restricted the pool of cheap workers (thus significantly increasing labor costs) and borrowing costs are starting to skyrockets due to the FED's intention to normalize interest rates after several years of keeping them near zero.

Most of this was unexpected and unaccounted for when developers established a budget and timeline for their projects. I wouldn't be surprised if that's the main hold up behind a lot of projects that previously seemed promising.

 

 

Edited June 7, 2018 by wreynol4

[BnaBreaker]

7 hours ago, urbanplanet17 said:

Not to get political, but Trump and the FED is to blame for a lot of it.

The tariffs on aluminum/steel have significantly increased the cost of building material, the hard line on illegal immigration has further restricted the pool of cheap workers (thus significantly increasing labor costs) and borrowing costs are starting to skyrockets due to the FED's intention to normalize interest rates after several years of keeping them near zero.

Most of this was unexpected and unaccounted for when developers established a budget and timeline for their projects. I wouldn't be surprised if that's the main hold up behind a lot of projects that previously seemed promising.

 

You're not getting political, you're just explaining reality, and thank you for it.

[titanhog]

[thenorthchannel]

Anyone want to take a stab at the prices of condos, hotel nights?   

 

Some back of the napkin math with round numbers:

• 142 condos w/ an ASP of $1MM = $142MM. 
• 232 hotel rooms at $500/night X 365 days =  $42MM
• According to Quora margins for hotels run 6-14%... or $2.5-$5.9MM/year in this model. 

 

For reference:

•  Omni (built in 2013) was $250MM w/ 800 rooms
• When JW Marriott was first announced (2014) as a hotel/condo mix, it was $300MM for 250 condos and 450 rooms.  

The numbers here for SAP, even if you doubled the condo and hotel prices, wouldn't get me excited.    I cant decide if I want to call this project the top of the market .... or a bluff to get that small property owner back to the negotiating table.   Someone smarter than me want to tell me what I am missing?

 

[wmaddbb2018]

I would agree, something seems off here. Unless there are some magnificent sales at top of building that bring some big cash (5+ million) I don’t know how you recoupe enough up front to make this work, with current construction costs. 

[nashvylle]

1 hour ago, thenorthchannel said:

Anyone want to take a stab at the prices of condos, hotel nights?   

 

Some back of the napkin math with round numbers:

• 142 condos w/ an ASP of $1MM = $142MM. 
• 232 hotel rooms at $500/night X 365 days =  $42MM
• According to Quora margins for hotels run 6-14%... or $2.5-$5.9MM/year in this model. 

 

For reference:

•  Omni (built in 2013) was $250MM w/ 800 rooms
• When JW Marriott was first announced (2014) as a hotel/condo mix, it was $300MM for 250 condos and 450 rooms.  

The numbers here for SAP, even if you doubled the condo and hotel prices, wouldn't get me excited.    I cant decide if I want to call this project the top of the market .... or a bluff to get that small property owner back to the negotiating table.   Someone smarter than me want to tell me what I am missing?

 

you need to add in a vacancy on the hotel. probably 35%

[Hey_Hey]

IIRC wasn't 505 built for around $150 million?  I know the finishes on the hotel portion may be pricier, but that seems to be a significant price difference.  Inflation doesn't account for that, nor does a rise in material or labor costs. 

[TNinVB]

Over on Skyscrapercity, someone said “word on the street is this could start before 2019”.  Anyone else heard this?

[LA_TN]

3 hours ago, TNinVB said:

Over on Skyscrapercity, someone said “word on the street is this could start before 2019”.  Anyone else heard this?

While possible, this is not expected to start until next year

[smeagolsfree]

Construction from what I am hearing is slated for first quarter of next year. I think we have to wait and see though. They are pulling various permits for water sewer availability which is the first step.

[Dale]

Again on SSC, KVB Circle will not start until it secures another tenant. So, this could beat it out of the ground.

[smeagolsfree]

1 hour ago, Dale said:

Again on SSC, KVB Circle will not start until it secures another tenant. So, this could beat it out of the ground.

Agree 100 % as the first tenant has a really great lease deal from what I have hears, so they will have to get another tenant and soon or they could lose the first because with all of the office projects happening someone will steel them and Mainland will be back to square one. I would love to see this one built, but Mainland has not had much experience with a project of this nature.

[RonCamp]

I am hearing Q1 2019 start. It will almost certainly be a Four Seasons. 

[Guest]

I was told yesterday that a unannounced hotel will be made public very soon that will blow Nashville's mind. This is from the head of one of the most active construction companies in downtown Nashville. He would not tell me more,  but I immediately thought of the rumors of the Four Seasons for this locations....hope it is true as it will fill a void in the top end offerings.

[e-dub]

Sounds promising!

[Pdt2f]

5 hours ago, RonCamp said:

I am hearing Q1 2019 start. It will almost certainly be a Four Seasons. 

I’m assuming you don’t mean Q1 of FY 2019? (Not a financial whiz but aren’t we in that Q right now?). Although I’d be happy to the point of dancing if it started in the next month.