Florida multifamily development executive Kurt Kehoe isn’t running scared.
Scared, that is, of an apartment sector bubble that could wreck ambitious plans his firm, Cleveland-based NRP Group, has for Florida, specifically the state’s west coast. The firm recently opened one project, Allure at the Gateway, a 274-unit, $48 million apartment community in Pinellas Park. That development marked NRP Group’s 10th Florida project since entering the state in 2010. Two more, one in downtown Bradenton and one in downtown St. Petersburg, are scheduled to open in the coming months. The firm has other projects in the works in Lee and Pasco counties, and another in Manatee County, near IMG Academy.
“We don’t believe we are in a bubble or an unrealistic growth phase of multifamily development,” says Kehoe, vice president of development for NRP Group, and head of the firm’s Florida division. “We acknowledge that right now multifamily is hot and everyone and their brother is trying to figure out how to do it. But we only do stuff we believe in. We don’t take undue risks. And we don’t live in fear.”
NRP Group, of course, also isn’t the only multifamily developer that remains bullish on Florida, even as the possibility of a slowdown percolates. But Kehoe believes his firm can rise above the competitors through a strategy of community-specific amenities; control over projects by being developer, owner, builder and manager; and sticking to a hyper-focused strategy of only the best sites. “There are developers who will build on any location,” he says, “but NRP will only build on the best of the best sites.”
One example of the firm’s strategy in action, he says, is the 302-unit Aria at Bradenton, across the street from Manatee Memorial Hospital on Manatee Avenue West — gateway to the city’s revitalized downtown. In 2018 NRP Group, through subsidiaries, paid $7.2 million for the nine-acre property, which formerly housed the Bradenton Herald newspaper and had sat empty since 2013. One key to keep rents down and put more money in amenities, says Kehoe, was to go with surface-level parking and max out buildings at four stories. “Rents wouldn’t support a parking garage,” he says.
NRP Group has grown into its Florida strategy and position, says Kehoe, with an eye on two metrics: job growth and household creation. Again citing Aria at Bradenton, he says the company wouldn’t have considered Bradenton as recent as 2016. But job growth in the area, even in St. Petersburg, a 30-minute drive away, swayed the company.
The focus at 1701 Central, a 243-unit project in downtown St. Pete, scheduled to be competed in the first quarter of 2020, is also on new jobs. With a price point of about $1,700 a month, some 20% lower than some of its other projects, NRP targets the highly-coveted younger renter demographic. “I call them the craft brew and flip-flop set,” quips Kehoe, “rather than the wine and cheese crowd.”
While NRP group has projects statewide, including Jupiter and Fort Lauderdale, Kehoe, based in Orlando, says the west coast of the state is its current focus. The firm has about 45 employees statewide, and management and constriction offices in Tampa and St. Petersburg, respectively. Potential spots for future NRP projects include Venice, Port Charlotte, Punta Gorda and Naples. Says Kehoe: “Those are all communities starting to get our attention.”