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In the aftermath of its late January management buyout of its corporate parent, Kast Construction, the general contractor behind some of the region’s most ambitious new buildings in recent years – including the 41-story One St. Petersburg mixed-use tower – is working to forge a new and independent path.
The buyout came 15 years after The Kolter Group, the developer of The Ritz-Carlton Residences, Vue Sarasota Bay and Westin Hotel and The Mark in Sarasota and One St. Petersburg and the forthcoming Saltaire in St. Petersburg, formed Kast as a subsidiary.
“That gave Kolter more control, over things like distribution and better pricing,” says Mike Neal, Kast’s CEO.
Kast’s first work for Kolter was a $150 million project in Kast’s hometown of West Palm Beach. In its first year of business, it generated revenue of $30 million.
In the years since, Kast has become one of the largest construction concerns in the Southeast U.S., working on behalf of Kolter and others, and the fourth largest general contractor in Florida. Last year its total revenue came to $550 million.
In all, Kast has built more than two dozen Kolter projects containing more than 2,000 residences and 1,600 hotel rooms valued at nearly $1 billion, including the mixed-use The Mark, Vue Sarasota Bay and others.
Kast and Kolter had originally planned to separate in 2008, but last decade’s economic recession stymied and delayed those plans. Neal declined to put a price on what the two companies are describing as an “orderly transition of ownership.”
Even as it was working for Kolter, though, Kast also has expanded its business and geographically, as well, with offices in Tampa and Miami.
Since 2017, Kast has delivered more than $700 million worth of projects, and Neal says the company is able to stand on its own now and into the future.
“Today, the vast majority of our business is outside of Kolter,” Neal says. “We’ve been involved, for instance, with every major, national multifamily rental developer, and we now do senior living, healthcare and manufacturing projects, too.”
And once again, Kast is looking to expand both geographically and by sector.
Though it is licensed to build projects in Georgia and North and South Carolina, Neal says Kast is more focused on growing Florida markets like Orlando, Tampa and Fort Myers.
“We’re really looking to diversify into Orlando, where we’re anticipating our first project there to break ground in the second quarter of this year, and then we have a project set to go forward in Fort Myers also,” Neal says. “It’s pretty easy for us at this stage to leverage our resources and go into new markets in Florida.
“We’ve determined that it’s better to take our existing resources and focus them on Florida, which is a geography we know well,” he adds. “We’re working very hard to capture market share in Orlando.”
Neal says Orlando is the seventh-highest growth area in the U.S., with Tampa Bay not far behind at No. 11 nationally.
Additionally, Kast intends to stray further from its roots in condominium and other multifamily development and hotel construction and delve deeper into healthcare work and higher education projects.
In the Tampa Bay area and Orlando areas, extending into Southwest Florida, much of the growth will be left to Sean Ouellette, who in early March was named Kast’s senior vice president and division manager for the region.
Ouellette, who joined Kast in 2016, had been the company’s vice president of operations prior to the promotion.
By 2025, Ouellette says he expects Kast to have a “significant presence” in both Tampa and Orlando.
“We’ll by then be a much more well-rounded company,” he says. “I think we’ll be established in markets and sectors that we’re currently not in. I think the sky’s the limit. I see the pipeline as being very strong. I don’t think we’ll look like the same company five years from now.”
Neal says he believes Kast is on track to generate revenue of $750 million a year by 2025.
But while Kast has formally separated from Kolter, Neal says the contractor is still lined up to build several of the developer’s planned projects, including the $250 million, 35-story Saltaire condo tower in St. Petersburg and the forthcoming 35-story, 61-unit Elevate 61 in downtown Tampa.
Kast also may be tapped to build Kolter’s planned 18-story Bayso condos in downtown Sarasota.
“The timing is ideal for our exit in ownership,” Kolter CEO Bobby Julien says, in a statement. “Kast has flourished to become one of the country’s largest and most trusted contractors. I’m entirely confident in Kast’s continued growth and dominance of their industry.”
He, too, says Kast will continue to work for the company despite the corporate split.
“We look forward to launching several new projects in Florida this year and Kast will be our contractor.”
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