EJF Capital LLC, an alternative asset management firm, has formed a joint venture with Chartwell Residential to invest $80 million in a two-phase, 750-unit multifamily development in a Nashville, Tennessee opportunity zone.
The first phase, which includes approximately 375 multifamily units in a five-story structure with an above-grade parking garage, is slated to be under construction in early 2022 with delivery in early 2024.
The second building will break ground thereafter and will contain approximately 375 multifamily units. The site is adjacent to Amulet Lake, a 40-acre lake north of downtown Nashville.
The 13.6-acre project will be located on the former Watkins College campus, which EJF claims is one of the last “viable” sites in the 850-acre Metrocenter submarket. Metrocenter became Nashville’s first master-planned mixed-use business community and recently transitioned to a residential neighborhood with the growth of the urban residential market.
There is more than 17 million square feet of office space within a 10-minute drive of the submarket, including the future Amazon and Oracle urban campuses, with 2.5 million square feet under construction and another 3.5 million square feet proposed. Other employers include Postmates, Cigna, and Aegis Sciences Corp.
“Our project will offer the influx of Nashville residents an affordable price point as they seek to take advantage of the amenities of urban life in a robust city,” said Asheel Shah, EJF senior managing director and head of real estate development.
The opportunity zone initiative, part of the Tax Cuts and Jobs Act of 2017, allows investors to realize a number of tax benefits including capital gains deferral, tax liability reduction and income tax exemptions, if they make long term investment in lower income census tracts known as “opportunity zones.” There are more than 8,700 qualified opportunity zones across the U.S.
EJF Capital LLC recently launched its second opportunity zone fund, EJF OpZone Fund II LP, to invest primarily on multifamily and industrial development opportunities in disadvantaged areas. EJF’s inaugural fund closed in January 2021 after raising approximately $280 million.
As of March 31, 2021, EJF manages approximately $6 billion across a group of alternative asset strategies.