Nathan Helbach Founded in 2020, Madison-based development firm Neutral is based on a paper its 25-year-old founder Nate Helbach wrote while studying finance through Harvard Extension School. His thesis: by using mass timber and other low-carbon construction materials, developers can significantly reduce the environmental harm created throughout the construction process and
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Nathan Helbach[/caption]
Founded in 2020, Madison-based development firm Neutral is based on a paper its 25-year-old founder Nate Helbach wrote while studying finance through Harvard Extension School. His thesis: by using mass timber and other low-carbon construction materials, developers can significantly reduce the environmental harm created throughout the construction process and maintenance of residential buildings.
“This big problem that we have is carbon and the non-sustainability of the built environment,” Helbach said. “Right now, most buildings are taking natural resources from earth and they’re not putting any of that back into the planet.”
To measure the effectiveness of this approach, Helbach says the firm uses life cycle analysis to measure the embodied carbon impact of its buildings and energy modeling tools to forecast their operational impact.
“Ultimately, the deals still have to pencil out and be sound investments with good metrics,” Helbach said. “It’s always this dichotomy between how far can we push on the sustainability side with maintaining the mandate from our investors and making financial returns.”
In pursuing that vision, Helbach has looked outside conventional thinking for development practices and building materials, especially when it comes to using mass timber as well as financing models. For instance, Neutral partnered with Milwaukee-based real estate technology startup e-States for one of its projects, where, through the blockchain-based platform, anybody can go through a streamlined online screening process and purchase shares to invest in the project.
Prior to starting Neutral, Helbach worked on the development and investor relations teams for T. Wall Enterprises, a Middleton-based developer with more than 1,600 multifamily units in operation. Helbach said the experience helped him gain a holistic understanding of the development process.
Saying he always envisioned himself owning his own business, Helbach described starting Neutral as an “inflection point” in his career when he “had an opportunity.”
“I had a good relationship with two German investors, and I pitched my thesis to them on Neutral, and both of them were really excited about it,” Helbach said. “They had seen in the early and mid-2000s this wave of big sustainability initiatives and government regulations that had come into Europe. What they saw was the first movers in the market were the ones who were really successful.”
“They said, ‘We see an opportunity for investment,’ and they backed me and that was the impetus for why I was able to start Neutral.”
Since then, Neutral has proposed five projects, including the one at the Marcus Center parking structure site. The firm is currently wrapping up construction on its first project, a 206-unit mass timber apartment building, known as Bakers Place, in downtown Madison and has since proposed a second Madison project, with 30 units, that the firm is working on financing.
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Daniel Glaessl[/caption]
Neutral’s website shows a staff of 15, including Daniel Glaessl, partner and chief product officer at Neutral. He leads all of the firm’s development activities and has worked for several architectural firms during his career, including San Francisco-based Gensler, London-based Foster + Partners and London-based Gumuchdjian Architects.
In Milwaukee, Neutral has finished test piles and is eyeing a late 2024 or early 2025 construction start for The Edison, a 32-story, 383-unit apartment building on the Milwaukee River, just west of the Marcus Center parking structure site. Also a mass timber development, The Edison would become the tallest mass timber building in the world, overtaking Ascent, also in downtown Milwaukee and developed by New Land Enterprises.
The Edison was first pitched in 2021 as a much shorter building, but the project grew to the building planned today. The Barry Co. worked with Neutral to purchase the site for The Edison at 1005 N. Edison St.
“They worked through a lot of different issues, and at the end of the day they came through with a great plan,” said Jim Barry, president of The Barry Co., calling the Neutral team “creative.”
“The proposal for the site across the street would be very ambitious, but they’ve come through before and I have a lot of respect for their ability to get things done,” Barry said.
Neutral has also proposed a project in Fayetteville, Arkansas, and plans to expand in the northwestern Arkansas region in the next three to five years, according to Helbach.
“Our methodology from the start has been to build quality, sustainable buildings in markets that have good absorption, low vacancy and great rent growth,” Helbach said of the firm’s decision to build specifically in Madison, Milwaukee and Fayetteville – all cities that fit these criteria.
Although the early 2020s haven’t been kind to real estate developers, Helbach said the firm has managed to forge ahead.
“Ultimately, if we look at the 10-to-15-year timeline, real estate continues to trend up 7% to 9% return on investment per year,” Helbach said. “We really don’t subscribe to the macro factors nor forecast, we really look at how do we make good investments with good criteria and invest for the long term.”