Bisnow's Escape Retreat Fosters 400-Unit Development Deal

In November 2022, ELK Development founder and CEO Evan Kasper and Managing Director Steve Caton attended Escape, Bisnow’s executive retreat for the CRE industry’s most prominent veterans, with the intention of meeting new people. Two days later, they left with the foundation for a new major joint venture.

The two spoke with PCD Development Founding and Managing Member Jonathan Stein and felt they had formed a strong connection. Approximately five months later, both companies went on to form their joint venture, 522 Fifth Venture LLC. The partnership will support their project, 522 Rep. John Lewis Way, formerly known as 522 5th, a 19-story, 400-unit development in Nashville’s SoBro district. 

This is exactly the kind of deal Escape is designed for. The two-day, invite-only retreat, held at the 1 Hotel South Beach, enables attendees to engage in networking with their peers and discuss deals face-to-face while basking in the warm weather.

Kasper said he had initially met Stein at Bisnow’s 2021 Escape retreat. However, they had only engaged in brief conversations. At the 2022 retreat, Caton and Stein were placed in the same tribe session — a small group of hand-selected CRE professionals to exchange industry perspectives and personal stories. There, they discovered they had an easy rapport and wanted to stay in touch after the retreat. 

“Making a connection with someone at Escape is very easy because it’s a small group, and you keep running into the same people,” Kasper said. “If you hit it off with someone, you have plenty of opportunities to build that relationship.”

When Kasper and Caton were seeking a joint venture partner for 522 Rep. John Lewis Way in 2022, they thought that PCD and Stein would fit the bill, given the company’s experience working on large-scale developments.

Kasper said that ELK had originally designed the building in 2021 with a predominance of micro-unit apartments in line with its standard business plan. Given the hyper-acceleration of interest rates and the rising construction costs associated with building micro-units, ELK decided it made sense to investigate converting the project into a more conventional luxury apartment building. With that goal in mind, the company set out to find an experienced multifamily developer to join the venture and lead the redesign efforts.

Stein said that ELK and PCD joined forces in April 2023 and have been actively working on the redesign, reducing the unit count from 645 units that were mostly micro-units to a conventional mix of 400 apartment units.

He said the redesign has been driving large savings in a multitude of areas, not only for furniture, fixtures and equipment for 245 fewer units, but also reduced costs for the mechanical engineering and plumbing and HVAC systems. It also reduced underground parking by a third. 

“This will be something that institutional investors can sink their teeth into when the financial markets thaw,” Stein said. “Nashville is a primary market and this is one of the best development sites in that market."

Stein said that the redesign of the project and the attendant cost savings will drive outsized returns that should generate significant investor interest when their plans and costs studies finish later this year. Construction is slated to begin in mid-2024.

Caton said that when both companies met in Nashville to discuss the project, the experiences they shared at Escape made the process feel more seamless and relaxed.

“Unlike having a cold connection, and instead of our conversation being all about business, we shared stories from Escape and had a nice dinner that already felt comfortable,” Caton said. “Having that shared background helped to further the relationship and get down to brass tacks when it was needed. Our approach to business was very complimentary.”

Kasper credited the success of the joint venture to the companies being on the same page about their approach to work, including how to reach and carry out important decisions and how to resolve a conflict, if one arises. He stressed the importance of keeping the overall vision at the forefront and choosing partners that share the same vision for success.

“A JV partnership is so personal because you’re in the trenches together, you need to problem-solve and deal with adversity together,” Kasper said. “It’s really important that you and your partners see eye to eye on principles, keep a cool head and keep the broader success in mind.”

Stein agreed that success in CRE is about having meaningful, lasting relationships in the industry, and finding the right partners involves having alignment on values, perspectives and interest, as well as mutual trust and rapport. He called PCD's partnership with ELK Development “a natural fit.”

One way that Stein said he was able to establish relationships was to participate in the tribe sessions at Escape. He said that the most meaningful part of the retreat was meeting new contacts and having the opportunity to build upon existing relationships in a more casual setting year after year.

“Escape is a very interesting format in that you get the normal networking opportunities, although on a much more extended basis and with a much smaller group over a longer period of time that stretches over several days,” Stein said. “I’ve been going for approximately five years, and it’s always been a great experience.”

In addition to tribe sessions, the Escape agenda also offers speed deal-making, which places owners across from capital providers for a three-minute conversation about a prospective deal, and activities such as ice baths, breathwork and mind nourishment discussions. 

Kasper said that this environment allows for CRE professionals to dive deep into forming these relationships.

“Escape is a deal-making conference with key decision-makers, and because the intention is clear from the start, each attendee is open to conversation,” Kasper said. “I like to tell people that it’s the only conference I go to. The reason I liked it from the start is because you can ask people to have a conversation and everyone says ‘yes.’”

Bisnow’s 2023 Ascent Retreat will be held Nov 6-8 and the 2023 Escape retreat will be held from Nov. 8-10, both at the 1 Hotel South Beach. Click here to apply for Ascent and here to apply for Escape.

Bisnow news staff was not involved in the production of this content.

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