Essentially, TSREI will work closely with The Bozzuto Group to identify projects which fits within its program. TSREI is interested in development and repositioning opportunities in high-barrier-to-entry markets with a significant premium to spot market purchases. Deal sizes have been targeted at $20 million to $100 million.
“Having the money available for real estate transactions gives you an edge,” says Mostyn. “This gives you an advantage when dealing with land sellers and other people who control product.” Having the money readily available gives the company a leg up over other companies that don’t have the money and it puts The Bozzuto Group on a level playing field with real estate investment trusts (REIT) who have access to money, he says.
Having a committed, knowledgeable money source alleviates some of the risks associated with development, says Bozzuto. “One of the benefits that (TSREI) brings us is they give us a commitment before we start spending all this money,” he says. In addition to development deals, the company also plans to do repositioning deals.
The plan is to purchase well-located B-grade properties that will be repositioned to class A. The Bozzuto Group has been able to set up deals like the TSREI agreement because Bozzuto and the rest of his team work very hard to preserve established relationships, says Paulson. “Bozzuto is very diplomatic in dealing with the people. He knows what he can give and what’s important to the deal.”
Community Involvement The company also built its reputation by being active in the community. “Bozzuto is not just a leader in business but in the community as well,” says Ron Creamer, a private investor who has done several deals with the company. “It’s terrific to be able to tie together the business and civic relationships that you establish … not to mention that it’s good for business.”
Among Bozzuto’s activities, he’s actively involved with the Millennial Housing Commission, the National Multi Housing Council, the National Association of Home Builders, the Maryland National Capital Building Industry Association, Maryland Science Center and Hobart College.
“Bozzuto thinks beyond himself and the impact on his own business when it comes to industry issues,” says Susan Matlick, executive vice president at the Maryland National Capital Building Industry Association. “He’s a superb representative of the industry and an outstanding businessman.”
Living and working in the Maryland area gave the partners at The Bozzuto Group an advantage over its competitors, says Mostyn. Not only did they know the people with whom they were conducting business, but also more often than not, they were friends.
“Every one of us has been involved in community affairs,” says Bozzuto. “We have been involved in building affordable housing as well as high-end housing. So, when we go to community meetings, we don’t go as complete strangers; we go as people who have a good reputation who have built complexes in this market for more than 30 years.
“At one point, I used to tease Slidell about having an affair with the planning director in Gaithersburg, Md., because he used to spend every Wednesday night at planning meetings,” he says. “We have worked hard to cultivate a reputation in this community as people who do what they say they’re going to do, as people who are members of the community and as people who give back to the community.”
The Bozzuto Group’s reputation and dedication to quality has not only brought it repeat business but it has also brought the company new business. Creamer did two years of due diligence before deciding on a company in which to invest. “Their reputation was impeccable,” says Creamer. “Everyone from the bankers to the lawyers said they were really high quality people.
I saw the work that they did. They are not just good at what they do, they are very flexible as well. If the market changes, they can change quickly with the market.”
Says Bozzuto, “I don’t think there’s a single partner who we’ve had who would hesitate to give us a good reference.”