Like many developers, Chris Deveso suffered through the recession last decade. But he also learned a valuable lesson about the value of timing and good customer service.
Business is good these days for Chris Deveso.
The commercial real estate broker, developer and custom homebuilder is preparing a multiunit condominium project on Siesta Key, in Sarasota, where he hopes to break ground next year.
He's recently been retained by AW Property Co., a Palm Beach-based investment firm, to scout out medical office buildings as acquisitions throughout Florida.
And he continues to seek out deals for a slate of high-wealth individuals with whom he's done remodeling and building for two decades, scoping out potential deals.
“It's not work to me,” he says. “I really love what I do.”
But Deveso also carries with him the haunting memory of an eight-figure development gone south, and proverbial scars from forces beyond his control that scuttled a mixed-use project conceived nearly a decade ago in Venice.
In many ways, he personifies the hundreds — or perhaps thousands — of commercial real estate developers, brokers, investors and others who bet big during the exuberance of the past decade and got burned.
But while Deveso's experience may epitomize the pitfalls that often came with the mid- to late-2000s euphoria, his story also is one of recovery and resilience, of second chances and cautious optimism that has come as the Gulf Coast market has rebounded over the past five years.
Hot tar and screen doors
Deveso, 50, grew up in Buffalo, N.Y., and began painting houses and doing construction jobs out of high school because he didn't want to go to college — until an uncle persuaded him to enroll at the University of Buffalo.
In 1990, Deveso packed up a pickup truck and drove to Sarasota with $500, to rehab a house in preparation for a family move from upstate New York.
They never made it. But Deveso stayed on and worked roofing jobs, mopping hot tar in the summer heat for $5 an hour in cash. On days off, he began doing odd jobs for condo complexes. A $2,000 gig to replace screen doors prompted him to earn his contractor's license.
One job led to another, with increasing complexity. Before long he was doing full-scale remodeling work.
“It seems trite, but I always tried to go above and beyond,” he says.
Six years after moving to Southwest Florida, Deveso was elected president of the Sarasota Homebuilders Association's Remodelers Council, and he began branching out by buying a piece of land on which to construct a spec custom home.
It was then that he met Tom McGinley, a former banking executive who had retired to Sarasota and wanted extensive work done at his home. Deveso installed an elevator and revamped the entire residence.
When McGinley moved, Deveso and his tools went to work there, too.
Eventually, the pair became business partners, forming the TC Group LLC to develop custom spec homes.
“We had the same philosophy that you always had to take care of the customer,” McGinley says. “And what impressed me about Chris was he always did what I asked and he always gave me honest answers.”
In 2006, Deveso decided to shift into commercial real estate, after growing nervousness over the upscale residential market. To him, things were getting too frothy.
He and McGinley bought a 10.5-acre tract in Venice, annexed it into the city, had the property rezoned, obtained entitlements and designed it as a condo project.
The Galleria on Venice Avenue, as the project would be known, would be a 105,000-square-foot mix of office, retail and restaurant uses.
In April 2006, Synovus Bank lent TC Group's Ventura Commerce Park LLC $10.5 million to develop the 1500 E. Venice Ave. project, according to documents, and Deveso started building.
Two years later, Ventura Commerce had half the units sold and a certificate of occupancy for a portion of the project.
'Out of our hands'
The same week its CO came through, though, Lehman Bros. collapsed. Scared buyers backed out. Deveso began offering the equivalent of free rent and other perks to try to entice new tenants or buyers.
But with a recession in full swing, no one seemed to want to take a chance on an unfinished project in a tertiary market.
Synovus, meanwhile, sold the Galleria project's debt to Tandy Loanco LLC, even though Ventura Commerce had whittled the loan amount to $7.7 million.
After Deveso was unable to pay Galleria's property taxes for 2010 when they were due, Tandy Loanco exercised an option and accelerated the payments, according to a foreclosure lawsuit filed in Sarasota County Circuit Court in January 2012. In all, $7.4 million in recourse debt was due — immediately.
Tandy Loanco also tacked on default interest of 25%, beginning in October 2011.
As the debt mounted, the four-building Galleria's value plummeted. Shortly after Tandy filed its lawsuit, the loan's collateral — the project — fell to around $3 million.
“It just got out of our hands,” Deveso says. “It was scary. Very scary.”
Still, Deveso kept plugging, managing the project, executing leases with restaurant Le Petit Jardin and others, and searching for a white knight to bail out Ventura Commerce.
He never found one.
Tandy Loanco completed its foreclosure in May 2015, records show.
By then, the Gulf Coast commercial real estate markets were rebounding. Deveso began poking around for brokerage opportunities.
“My feeling was it was only a failure if I didn't learn something from it,” he says.
Drawn to the green-skinned 1250 Medical Plaza, he tried to get time with the building's owner to discuss a potential sale. He couldn't get in the door. For the next year, Deveso called. And called.
Intrigued by the match between Florida's older-skewing demographics and medical office buildings, Deveso began driving around the state looking at property and educating himself on the nuances of medical-related space.
When 1250 Medical Plaza owner Ben Price finally agreed to see him, he told Deveso he could try to sell the four-story building — but without a formal listing agreement. He wouldn't let Deveso market the property through traditional avenues like Loopnet, a commercial real estate marketing website, either.
Part of the problem was the building was considered a “broken condo” — some of the spaces were owned by individual tenants, some by Price. It'll never sell, he told Deveso.
Undaunted, Deveso worked to boost occupancy from about 70% to 95%, and to unify ownership to make a sale more palatable.
Eventually, Deveso met AW Property Co. partner Brian Waxman, who was in the market to acquire high-end medical office buildings. In May, AW Property bought the 48,200-square-foot building for $16.1 million, according to Sarasota County property records.
Waxman was so impressed with Deveso's tenacity that in the wake of the 1250 S. Tamiami Trail purchase, he asked him to look for additional Southwest Florida medical-related properties for the Palm Beach Gardens investment firm to buy.
A few weeks later, following a series of meetings in AW Property's offices, Waxman told Deveso to expand his search throughout Florida.
“He knows the business really well and he's willing to roll his sleeves up,” Waxman says of Deveso. “I know about his background, too, and I think that having to deal with adversity is the true test of someone. Chris has proven himself having gone through success and failure.”
For his part, Deveso emerged from the economic recession scathed, but not broken.
“I learned nothing's a sure thing,” he says. “I used to think I was in control of my own destiny, but I realize now you can't control macro-economics. And my experience has also reinforced my notion that if you treat people right they'll usually give you another opportunity.
“There will always be another opportunity if you're willing to work hard and go after it.”