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Island Dealers
GSR Development LLC is poised to bring its waterfront developments to market after about two years in business. Sales should top $100 million by 2005.
By Sean Roth
Real Estate Editor
Robert Byrne and Steve Noriega readily admit they're addicted. Not to sex, drugs or rock 'n' roll, but to real estate and the art of the deal.
"We are just doing what is in our blood," Noriega says.
Both men moved to Bradenton Beach with the expectation that they were done working. Their retirement didn't last long.
Byrne and Noriega are now the founders and owners of GSR Development LLC, a real estate company that owns some hot waterfront island property. With four condominium developments in the works, along with several single-family speculative homes, GSR Development's principals are looking at 2004 as a pivotal year. They expect to sell more than $100 million in real estate by 2005.
Both men are real estate savvy.
Byrne was a residential contractor on Florida's East Coast who made his money principally by buying rundown apartments and remodeling them. He also redeveloped the River Club, a condominium complex in Bradenton on the Manatee River next to the Sandpile development.
On Anna Maria Island, one of Byrne's first real estate deals involved the Fast Eddies restaurant, near the city pier. He reportedly paid $750,000 for the property, after noticing the location on an afternoon boat ride. "I knocked it down," he says, " and flipped the property for $3 million."
Noriega, a Tampa native, started his professional career as a baseball player for the Pittsburgh Pirates' AAA team. "It was such a hard life," he says. " I was married and never got to see my wife. I was on the road so much." He also didn't like the idea of being washed out of baseball at 30. So he returned to college.
Noriega eventually graduated from the University of South Florida with a degree in mechanical engineering. After working as a mechanical contractor for several years, he started his own business as a general contractor. He built a few high-end speculative homes, and it grew to where he was working fulltime as a developer. In the mid-'90s, he worked six months as a consultant developing Riviera Dunes, a waterfront development on 214 acres east of U.S. 41 and north of the Manatee River in Palmetto. He helped in the cleanup of the Dolomite mine and in establishing a Development of Regional Impact (DRI) for the development.
Noriega and Byrne met in 1998 when they both tried to buy the Capri Hotel on Bradenton Beach. Noriega closed on the property in 1999 and turned the project into a successful condominium development. The men became friends.
Byrne, who was on the Bradenton Beach Board of Adjustment, even helped Noriega through the approval process. However, before the project was completed, Byrne resigned from the board. "He left me alone with those crazy people," says Noriega half-joking. After several parties, the future partners took a trip to the Bahamas together.
"I saw we just jelled so well it was a good fit," says Noriega.
They decided to start GSR Development. Each contributed $200,000 and in March of 2002, GSR Development was born.
GSR stands for Gary, Steven and Robert. Asked what happened to Gary, without giving his last name, Noriega pulls out a copy of a quote the two remaining partners follow.
"On the Plains of Hesitation lie the blackened bones of countless millions who, at the Dawn of Victory lay down to rest, and in resting died," attributed to Graffiti at the Lucy's Tigers Den Bar in Bangkok, Thailand, 1968.
"That is what happened to him," Noriega says. "When it came time to contribute money, Gary disappeared."
But the two men went ahead; and after obtaining bank financing, they put in a bid of $2.5 million on one of the last undeveloped parts of Anna Maria Island - an about four-acre parcel which abuts canals on the Gulf side on South Bay Drive. After some back and forth with the owner and $600,000 more, GSR Development owned its first property.
"It was a tough closing," Noriega says, but the purchase is already reaping benefits. The property was appraised at about $3.1 million in May 2002. Eleven months later the bank appraised the property again using the same appraisal company. The value of the land had jumped to $8.5 million. No actual construction had been done between the appraisals, only some administrative and permitting work. "That breaks down to (about) $250,000 a month," Byrne says. "Not a bad living."
The property, now renamed the Villa Rosa, will consist of about 17 single-family luxury homes. City approval, while sometimes a contentious issue, is done, and underground utilities construction is underway. Total sales volume is slated at $25 million, and vertical construction is scheduled to start in 30 to 40 days.
GSR Development has since expanded. The company is developing a 4,000-square-foot $800,000 spec building in South Tampa.
And in April, the developers bought two lots south of the Villa Rosa. They are developing the property as The Hibiscus, a two-building, four-unit condominium project. It is expected to have sales volume of about $3 million.
In June, GSR Development closed on four waterfront homes on Bradenton Beach (2508, 2510, 2512 and 2516 N. Gulf Drive) for about $7.7 million. Noriega and Byrne demolished the homes and are seeking permit approval to develop a 14-unit upscale condominium called Rosa Del Mar. Construction on the more than $25-million project should begin in late January.
Meanwhile the developer continues to buy single parcels to flip or redevelop.
The firm's most recent deal is a contract to purchase a hotel on Longboat Key. Set to close in May of 2004, The Orchid project will involve multiple condominium units for a total sales price of about $60 million. The project should be under construction by June or July.
"I have another one up my sleeve," Noriega says. "But I can't really talk about it yet."
Anna Maria Island and Longboat Key are key to the company's success.
"This area is so undervalued," Byrne says. "I had a friend on the East Coast ask me, 'Why would I pay $6 million for a home on the water, when the same home here would cost $3.5 million?' "
As for the long-term, Noriega says that in about four years he plans to convert his investments from condominium developments into large apartment complexes. It is a little more conservative, he says, and less stressful, especially with a management staff handling the day-to-day operations.
"Do you know what's going to be on my tombstone?" Byrne says. " 'Oh, honey just one more.' "
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