Tackles Tough Projects The expansion into other market segments helps Cornerstone continue to operate and grow in a region that is running out of land. In the past, Cornerstone would find a property, make a deal with the owner to buy the land, and wait to see if zoning was approved and the subsidy was awarded, explains Meyers.
These days, owners aren’t willing to wait and see if the financing is going to go through. They want to make the best and the fastest deal. Now, Cornerstone needs to commit to the property before having everything secured up–however, the company does its research beforehand and is relatively certain that the deal will get done.
“We are aggressively buying property well out in front of the actual date of construction and the date of bond and financing closing,” says Meyers. “We try to do our homework in advance. We want to know all the issues and what’s going to transpire.”
But even after the homework is done, surprises happen. In Palm Beach County, Fla., the company was about to start an affordable housing development when it found itself in opposition to local government leaders. “We met with the leaders and addressed their concerns head on and basically won the day,” says Meyers.
The company was able to show that there was no difference between its community, Portofino Apartments, and market-rate projects, explains Lenny Wolfe, president of Cornerstone Group Development LLC. “We assured them that the rents were comparable, if not higher than anything in the area, and that the project would help revitalize the corridor.
The company specializes in going to tougher areas and turning them around, explains Mara Mades, executive vice president of Cornerstone Group Development. “We’ll take trailer parks that were left to decay and turn them into quality housing.” When looking for a site, the company makes sure the property has good visibility–a lot of drive-by traffic–and that it’s close to jobs, day care, and retail, says Mades.
Cornerstone often goes out and does the legwork, says de Villiers. “The company finds and identifies undervalued properties with an upside potential. It is Cornerstone’s primary focus.”
When looking for a new location, Cornerstone carefully examines the local market. It looks for a property that will lend itself to 250 to 300 units. “Larger properties are much more economical to manage,” says Meyers. “And, that’s the real key to success, how it’s managed after it’s built.”
The company offers a package of amenities at all of its properties. For instance, at its affordable communities it provides a full sports package for children. In addition, it holds educational programs on homeownership and credit. There is a clubhouse at each property, which offers a pool and usually a Jacuzzi and, in some cases, tennis courts, volleyball courts, and barbecue areas.
The extra touches that Cornerstone puts into its projects makes it very easy for investors and banks to want to work with the company. In addition, the company’s reputation for building quality product on time helps the company continue its reach in the Florida market.
But, “besides being really good developers, they are excellent entrepreneurs,” says Massirman. “They bring that spirit and touch to every development. That is what will ensure their future success.”