A $55 million purchase, scheduled to happen Friday, is calling new attention to the rapid expansion a real estate investor from Knoxville is pursuing in Greater Nashville.
LHP Capital’s purchase of Trevecca Towers, a property which contains 580 apartments and is located on the campus of Trevecca Nazarene University, is part of LHP’s quest to double its local portfolio in five years. LHP uses federal tax credits to rehabilitate and develop affordable and low-income housing, and CEO Carey Parker said she sees a "crisis" in Nashville.
"There is a lot of demand and little supply," Parker said.
LHP is opening an office in the tower at 511 Union St.
"You think, ‘low-income housing — why should the business community care?’ It’s a very hot topic with the chamber: How to keep the workforce remotely close to where they need to work?" said Bob Martineau, newly hired to oversee LHP’s rental properties and their staff.
"There are so many service workers, whether it’s hospital janitors, or restaurants, and the entertainment industry. If they have to live out in Murfreesboro to be able to afford an apartment, that makes it a bigger challenge for businesses to find staff. And the downtown business community does not want companies to move out," said Martineau, who previously was commissioner of the state’s Department of Environment and Conservation.
Bob Martineau, newly hired executive at LHP Capital and formerly the commissioner of the state Department of Environment and Conservation.
With Trevecca Towers in the fold, LHP Capital will own nine properties in Middle Tennessee, totaling 1,800 units from Nashville to Smyrna. Walker & Dunlop (NYSE: WD) financed the purchase, according to public records.
The apartments at Trevecca Towers will remain focused on attracting seniors and people with disabilities, Parker said. More broadly, the deal signifies LHP’s intent to pursue other deals for affordable housing, for everyone from younger people entering the workforce to the elderly.
"I’d love to own as much as possible. We think the sky’s the limit for us," Parker said. "I’d love to see us double [our portfolio] in five years."
Parker said her company also is open to doing new development, in addition to buying and renovating existing properties. It will take two years, and a $25 million investment, to overhaul the Trevecca Towers units, she said.
Apartment rents and home prices in Nashville have skyrocketed during the region’s booming growth, which often has meant that people who could once afford to live in their neighborhood are now priced out — and having to move farther from their job in order to find more attainable housing prices. It is one of the dynamics that is worsening the region’s traffic and contributing to the growing agitation many feel with the speed and scale of the region’s growth. Metro tried to entice developers to pitch in, but no units were ever developed under laws that the state government nullified earlier this year.
LHP is joining a slowly growing group of developers who are turning at least some of their attention to affordable or workforce housing. Nashville’s Elmington Capital Partners and E3 Construction Services LLC are among the companies with projects underway. Developer Tony Giarratana and serial entrepreneur Mike Shmerling opened a 50-unit apartment complex in Midtown offering below-market-rate rent.
"We can make money and provide affordable housing," Parker said.
Part of the Trevecca Towers property that LHP Capital was scheduled to purchase on July 20, 2018.
"We can make money and provide affordable housing," CEO says.