The Story of 517 W Main St by Neutral - CEO Letters | Neutral

In today's letter, I’d like to take you behind the scenes of creating one of our newest projects: 517 W Main St by Neutral in Madison. We’ll dive into our design approach, trade-offs we had to consider, and the progress to date.

517 W. Main St. is Neutral’s latest project in Madison, bringing 33 residential units and a ground-floor café to the heart of the city. It marks our entry into middle housing and showcases our unique approach: balancing standardized, repeatable building methods with craftsmanship and site-specific design. Here's its story.

Middle Housing

From our work on Bakers Place and Neutral.Edison, we identified two key opportunities:

First, we can deliver new multifamily low-rise homes from purchase to finish in under the time it takes us to entitle large-scale developments.

Second, instead of creating bespoke projects from scratch, we can design repeatable building templates and implement feedback loops to learn from one project to the next.

Flexible standardization

In collaboration with our design and engineering consultants, we set out to develop a streamlined approach for the design and construction of low-rise housing. It required us to balance standardization of common building dimensions for cost efficiency with structural integrity, supply chain optimization, and high quality of the environment for the residents living.

Article content — Typical floor layout of 517 W Main St conforming to 12'x12' plan grid.

We established a 12’ x 12’ base plan grid that optimizes both design flexibility and construction efficiency:

Creates comfortable layouts for various apartment types.
Supports diverse building shapes.
Enables structurally efficient spans for prefabricated cold-form steel walls.
Aligns with common cross-laminated timber (CLT) panel dimensions.
Simplifies construction, reducing complexity on-site.

This pattern is taking shape at the 517 W Main St. construction site.

Our standardized layout approach has proven invaluable at key moments in this project.

First, after designing a 15-unit building, we acquired an adjacent site. Thanks to our flexible approach, we could expand to 33 units, redesign, and resubmit for permitting in just two months.

Most recently, when our first CLT shipment from Europe was delayed due to a ship fire, we stayed on track by using the second shipment and swapping the first-level deck with the third - as the plates are practically identical. Minimizing costly setbacks.

The plaza and the tree

One of the common critiques of design standardization is that it often overlooks local context. With 517 W Main St we went to great lengths to prove that it's possible to create an efficient building system and integrate with the neighborhood.

The massing of this project was shaped to preserve a mature street tree. If we built to the maximum allowed by zoning, we’d have to cut it down. Instead, we recessed the building and created a green open plaza for residents and neighbors.

For an even livelier experience for the community in the middle of a residential block, we received accessory use approval from the city for a café on the ground floor.

Tradition and craftsmanship

We aimed to balance the efficiency of engineered and prefabricated components—like mass timber decks and prefabricated steel walls—with the character of craftsmanship. We achieved this was by working with local Wisconsin masons to incorporate a true brick facade, ensuring the building reflects both innovation and tradition. And on the interior, working with our in-house woodworking team on detailed finishes.

Design control

For the first time, Neutral’s in-house design team led as the architect record for this project. This allows us to balance cost optimization, user experience, and sustainability targets, while learning and continuously improving with each new project.

It also gives us unparalleled design control. Typically, contractors deal with drawings with a lot of interpretation, increasing the risk of misalignment. To prevent this, our team produced highly detailed elevation drawings for every single wall in the building, complete with tagged visuals to communicate design intent. Even corner and shadow gap details were meticulously rendered for precision in execution.

Wellness and sustainability

All of Neutral’s communities, regardless of size, focus on resident health and well-being. We achieve this by using natural materials, adding reverse osmosis filters in every unit for extra-clean water, advanced air filtration, and oversized triple-glazed windows to maximize natural light while maintaining insulation.

We also source high-efficiency, sustainable appliances. For 517 W Main St., we’ve partnered with Kohler’s Waste Lab—an innovation team that transforms manufacturing by-products into high-quality plumbing products. This will be the first project to feature their sustainable sinks.

Project delivery

From the start, our design team collaborated closely with our finance team and suppliers to ensure that our sustainability and quality goals remained financially viable. We successfully reduced hard costs by over 20% though value engineering without compromising design integrity.

We also introduced an innovative delivery method, partnering with super-subs (Terra, C.D.Smith, Dave Jones), instead of a single general contractor. Neutral’s in-house construction management and woodworking teams are overseeing the finishes.

Capitalizing the project

The 517 W Main St project is capitalized in a balanced way with a senior construction loan from First Business Bank, as well as equity and promissory notes from private accredited investors:

Equity with projected 17%+ returns over a 3-year target hold period.
Promissory notes with 10%-12% simple interest, paid quarterly over 2 years (double the return of bonds with minimally more risk).
With tax credits and deduction from investing in sustainable assets.

Over 40% of the capital raised so far comes from repeat Neutral investors. There’s something special about projects of this size: they are beautiful, create much-needed housing, and grow fast in front of your eyes.

Neutral Invest online free data room for accredited investor

We still have equity and debt allocations available. To learn more, you can reply to this email, explore our investor portal, or schedule a call or site tour with Storm Murphy, our Director of Private Capital.

Opening soon

Our mass timber shipment has arrived last week, and in just over one month, the building will top out. We will welcome residents this August—just two years after purchasing the original site.

While the construction team pushes towards building completion, we are actively preparing operations with our partners at Hines Living and the hosts of the café, Copa Vida.

I can’t wait to invite you for a coffee on the bench in front of this wonderful building!

Nate Helbach

Co-founder and CEO, Neutral

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