Spotlight On: Gray Shell, Division President, TRI Pointe Homes

Spotlight On: Gray Shell, Division President, TRI Pointe Homes

By: Felipe Rivas

2 min read January 2020 — Creative product design and an increase in density are part of achieving a higher relative affordability for housing developer TRI Pointe Homes, according to Division President Gray Shell. The company also takes pride in achieving good, lasting business relationships with partners and providers to keep prices fair in an increasingly tight market, he said in an interview with Invest: Charlotte. 

How have you been able to secure land in the tight North Carolina market?

 

It really starts with people, with hiring the right land acquisition team to identify and underwrite the deals. Company strategy follows. TRI Pointe is a $3 billion public company. We build in seven states, but really, real estate is a local business. We have this concept called the best of big and small, meaning, we are a big, public company, we have access to the public debt markets, we have nearly a billion in liquidity to invest, but we really see the land strategy, the product design, the consumer segmentation as a local business. We have the flexibility to be creative and current with our product design and to be design-forward. That really resonates well with land sellers, developers and municipalities when we talk about our creativity on the product side. That is probably the largest single factor in our success in addition to people. Then, there is the process. You have to have the right process of identifying, underwriting and contracting land.

 

How is creativity applied to property development?

 

We start with a property, for example something near Uptown Charlotte. Here, it is about small acreage and a lot of density, and we want to create good relative affordability. So, we know what the property is, but we need to design the site plan and the product to maximize the use of that land.

 

We go through a product design process in which we identify the consumer. For example, are they millennials and if so, are they married or single, what is the household income? We’ll go through a three- day design process considering the customer’s wants and needs and, from scratch, draw a series of plans. By the end of those three days, we’ll have a good set of working drawings, with exterior elevations and renderings so we really understand the product. Most national builders would do that in nine months; we do it in a week.

 

What has been the impact of the millennial generation on the local market?

 

They do represent the single largest consumer group from a home buying perspective. But even if some people see millennials as one large group, there are really four or five different subsets, related to age, stage of life and income. The one thing all of them do want is relative affordability. It depends on whether they want an in-town, four-story product or a more suburban, traditional, residential two-story product, but you really have to decide what subsegment of that generation you are targeting.

 

The sort of amenities that we add to these developments has changed dramatically over the last five to 10 years. A lot of residential projects that were built 10 years ago had a big swimming pool, a large clubhouse, a golf course, but that has really transitioned and I can tell you, the No. 1 amenity today is walkability. Whether a community has a trail system, walkability to retail, entertainment and restaurants, that is the No. 1 amenity. When we get to suburban communities, there is still that want and need for younger families to have a swimming pool, but the scale is usually smaller.

 

How are you navigating the increase in construction costs in the area as you develop these communities?

 

It really starts with relationships. We partner with trade partners on the product design, on the value engineering, and they want to grow their business with ours. With that relationship, you might not get the best price, but you get a fair price and you get more advance notice of cost increases because you are partnering on it. It is also a tight labor market, the labor pool is short, but when you build a business relationship where they’d rather work for you, that is how you get the labor, and again, a fair price.

 

What other challenges for developers are arising in the Charlotte market?

 

Land availability has always been an issue. There is also the complexity regarding zoning, entitlements, and permit fees that continue to escalate so the cost of development becomes more expensive and affects affordability from a consumer standpoint. Those are the biggest problems. Every municipality is a little bit different and we have a dozen in the Charlotte market, so you have to really understand the municipality and partner with it to get the best result.

 

How can developers and local governments help to cover the affordable housing gap in the market?

 

I think that it requires flexibility from a product design standpoint, and creating good relative affordability. You get there by creating smaller, denser products, but it pushes yields up too. Some municipalities don’t like density, but I think getting more creative with density is the best approach over the next three to five years.

 

To learn more about our interviewee, visit: https://www.tripointehomes.com/

 

We’re making our mark on the industry by offering a strong benefits programs and great opportunities to build careers, a total rewards program to attract and retain the best talent: the unusual combination of offering both industry-leading 401(k) matches and a pension plan to most teammates; industry-leading time off programs to ensure maximum flexibility in planning life events; and financial wellness programs.

 

There is also a place for those interested in computer science and engineering. We are creating an Innovation and Technology Center in Charlotte that will be dedicated to the ongoing enrichment of client experiences. The Innovation and Technology Center will focus on optimizing technology to serve our clients at every interaction, whether it takes place in a branch, over the phone or through a digital channel. The Technology and Innovation Center will also focus on equipping teammates with solutions to deliver personal touch and care to clients. We see this combination of technology and personalization as vital to ensuring clients’ trust and confidence in the security, simplicity and convenience of our services.

 

To learn more about our interviewee, visit :https://www.truist.com/

Our Picks: Top 5 Miami Neighborhoods to Live, Work and Play

By Yolanda Rivas

2 min read AUGUST 2019 — With warm weather, a diverse population and a strategic location, Miami is a magnet for new residents. From luxury condos to mixed-use developments and single-family homes, the city’s residential sector remains strong. These are five thriving neighborhoods to live, work and play.

Wynnwood

The popular art district is a must for many visitors. What once was an area with shuttered factories and warehouses is now recognized as a premier destination for arts, culture and innovation. Wynwood is home to over 400 businesses, including art galleries, antique shops, artisanal food and beverage restaurants and innovative companies. The neighborhood’s street art and hundreds of murals and graffiti are a main driver to the area. The 2018-19 Wynwood Market Report states both multifamily and office inventory in the Wynwood Business Improvement District market are poised to double over the next three years, as projects that are under construction are delivered.

Brickell

Known as the financial district of Miami, Brickell has much more to offer than just business and office space. With many trendy bars and restaurants, hotels, condominiums and business opportunities, Brickell is among the fastest-developing areas in Miami. The opening of the $1.05-billion shopping and mixed-use Brickell City Centre in 2016 has been a catalyst for growth. The walkability in Brickell and access to the metromover are also some of the benefits for families and businesses in the area. 

“Brickell offers the ultimate live, work and play lifestyle. Apart from its walkability and nightlife, it also serves as a central point between the best Miami has to offer. It’s minutes from Coconut Grove, Key Biscayne, Wynwood and Miami Beach,” Diego Valencia, founder of WeRentBrickell.com, told Invest:.

 

Coconut Grove

Located south of Downtown Miami, Coconut Grove is a pedestrian- and bike-friendly neighborhood that is perfect for an escape from the city’s noise. It has been the sailing capital of Miami and it is known for its lush green landscape, bohemian setting and the beautiful Biscayne Bay waters. The renovation of the iconic, open-air mall CocoWalk is expected to attract national and international brands to the area. “The entire retail and office landscape of Coconut Grove is being redeveloped, and there are a significant number of baby boomers who are living in large homes and are reaching a stage in life where relocation makes sense. This creates opportunities for new buyers and developers,” Jay Phillip Parker, CEO of Douglas Elliman Real Estate, said in an interview with Invest:.

 

Edgewater

Located north of Downtown, next to Wynwood Arts District and south of the Design District, this neighborhood has great potential as a live, work, play community. Residential and office towers in the area have great views to Biscayne Bay and a strategic location near some main highways, major neighborhoods and arts and culture offerings. Property prices are usually lower than those in Miami Beach or Downtown and construction activity is on the rise.

 

Doral

Doral is one of the fastest-growing cities in Miami-Dade. The city’s population has grown 77% in the last eight years and is ranked No. 2 in Forbes Magazine’s America’s Top 25 Towns To Live Well, which cites the city’s cultural amenities, pro-business environment, and highly educated workforce. 

“Doral is one of the best locations to live, work and play. It has the parks, restaurants and amenities, and it’s located between the major highways and near the airport. A lot of major companies are headquartered in Doral, and many of the industrial players are located in the city as well. The government is very approachable and they understand business needs,” Rich Guertin, regional vice president of PS Business Parks, told Invest:.

 

 

To learn more about our interviewees, visit:

WeRentBrickell.com: http://www.werentbrickell.com/ 

Douglas Elliman Real Estate: https://www.elliman.com/florida 

PS Business Parks: https://www.psbusinessparks.com/ 

Spotlight on: Gary Jonas, President & Principal, The HOW Group

Writer: Yolanda Rivas

2 min read AUGUST 2019 — Philadelphia’s real estate market has been growing steadily over the last few years. Many international and national investors are targeting the sector, where rents are affordable, when compared to surrounding markets, and there are numerous low-risk investment opportunities. This week’s “Spotlight On,” with Gary Jonas, president and principal of the The HOW Group, illustrates the landscape for the city’s real estate industry, including the most in-demand services, top neighborhoods and the trends in the sector.

What HOW Group business lines are seeing the most growth in Philadelphia today? 

The two divisions that are seeing the most growth are construction and real estate. We attribute that to the hole in the market between companies working for themselves and building a small number of units and companies building hundreds of units. There is a spot in the middle where people need contractors to build 50 to 100 units. It is hard to find companies to fill that space because of the labor shortage. It is also hard to find companies that are capitalized enough to work in that space. Because we are able to fill that gap, we have seen significant growth in our construction division over the last year. There is a huge need for that type of work.

Our real estate company does a lot of new construction sales, which speaks to the Philadelphia market. We expect this division to double its business this year. We made a big investment three to five years ago to launch this division, and now we are seeing significant growth. Between those two companies, we are going to do north of $100 million this year.   

 

What areas of Philadelphia are most in demand in residential real estate?

There is a huge growth opportunity in neighborhoods where you can provide housing that is in the $300,000 to $400,000 range. That is an underserved market and there is a lot of development starting to happen in that price range. For example, Mantua is a neighborhood right on the edge of Schuylkill Yards, education centers and the development going on in the area, and it is a great place for these types of projects. University City has a 17% to 20% homeownership rate, but it’s the second-biggest job hub and there is a need for affordable housing in the area. The edges of University City are primed for significant growth. There is a neighborhood next to Grays Ferry, known as the forgotten bottom, which is another great area for development because of its location and access to major highways. We also expect to see growth in south Philly. 

 

What are some trends in Philly’s real estate sector?

We are seeing people who want to do co-living spaces. We are seeing a lot more buildings that provide a product similar to Airbnb. We are also starting to see more micro units because affordability is starting to become an issue. As construction and land costs continue to rise, we are seeing unit size starting to decrease and become a popular option. Because of the inadequate labor pool, we are also starting to see more manufacturing stock like modular and prefab units being placed.

We are always looking to create advancements within the construction division. We are working with manufactured housing developers to figure out ways to use technology to build in a more efficient and cost-effective way. We are working with foundation companies that use proprietary systems and build foundation walls that are more energy efficient and cost-effective than concrete. We are doing these things to differentiate our products.

 

How does The How Group impact the community?

Our charity division, HOW Charities, supports underserved families with homeownership and financial literacy. We want to get people to financial freedom and this year, we are donating two houses. We are working with the Building Industry Association of Philadelphia (BIA) to figure out ways to duplicate this effort on a broader scale. Along with the BIA, we are looking at solutions with the private sector toward affordable housing and job placement within the industry. There is a lot of momentum because of how great the sector and the city are performing.

 

To learn more about our interviewee, visit:

The HOW Group: https://howgroup.com/ 

Spotlight On: Brett Forman, President & CEO, Trez Forman Capital

By Max Crampton-Thomas

 

2 min read July 2019 — The demand for residential and commercial real estate development in Palm Beach County is at a high, and developers are jumping at the opportunity to capitalize. This spike in demand has not only been beneficial to developers but also to those who are helping fund this development. Invest: Palm Beach recently sat down with Brett Forman, President and CEO of Florida-based, commercial bridge lender Trez Forman Capital. He discussed how Palm Beach County is uniquely positioned for real estate development, and how his company is benefiting from the boom in the market.

Where are you seeing the highest demand for your services? 

We experience the highest demand from developers of condominiums or multifamily rental apartments. There are a variety of financial firms pursuing these type of deals, but we offer something slightly different. We’re competing with banks every day, and we’re competing with more traditional mezzanine players and preferred equity investors. As a result, we have to be creative and offer a unique one-stop shop, including higher proceeds than the banks and non-recourse options. 

How is Palm Beach County a unique market for real estate development? 

Palm Beach County is home to some of the most expensive residential real estate in the world. On the opposite end of the spectrum, it’s also home to some of the poorest areas. So when you talk about Palm Beach real estate, you’re talking about a very diverse asset mix.

Trez Forman is more or less asset-agnostic; we lend against residential real estate, whether it’s apartment communities for rent, single-family houses for rent or condominiums for sale. We don’t necessarily construct homes, but we finance the lot on which developers do the horizontal development. 

What differentiates Trez Forman Capital from a traditional bank? 

It’s very easy to understand what differentiates us from the banks, since the banks are highly regulated. They have to do things according to what the regulatory agencies prescribe, and their leverage is usually much lower and typically requires recourse. What we’re offering is a much higher loan-to-cost solution. Trez Forman basically can take what the bank and the preferred equity investor offers and combine it to provide our clients with a one-stop solution that has surety of execution. We like to under-promise and over-deliver. We can fund a deal in 30 to 45 days, unlike a bank that may not be able to lend in that timeframe.

 

To learn more about our interviewee, visit its website:

https://www.trezforman.com/