- February 22, 2019
Mathieu Rosinsky is a study in luxury versus gritty contrasts when it comes to his commercial real estate portfolio in Sarasota.
On one side, his West Palm Beach–based firm, Belmont Associates, is one of the largest landlords on tony St. Armands Circle. Purchase prices are at an all-time high on the Circle — with some recent deals going for over $1,700 per square foot. Monthly lease rates, following that valuation, are some of the highest of any shopping destination in the region, $150 or $200 per square foot for some stores. Belmont has 10 properties on St. Armands with 17 tenants, and has held property there since the 1990s. The list includes the firm’s most recent purchase: it paid $3.1 million, or $1,631 per square foot, for 361 St. Armands Circle, which houses boutique gift shop Garden Argosy. The purchase, an off-market 1031-exchange, closed Jan. 7. “It’s an A plus plus property,” Rosinsky says.
Then there’s Belmont’s push into multifamily. Over the past three years, Rosinsky has purchased a pair of Class C apartment communities in Sarasota, spending a combined $8.3 million on 96 units. He’s since spent some $1.3 million to renovate and rehab the facilities — ridding them of what he says were drug dealers and other troublemakers. Not exactly the ritzy vibe of snazzy clothing stores and pricey eateries of St. Armands, where tenants include Lilly Pulitzer, Tommy Bahama and the Met Fashion House Day Spa & Salon.
Yet, like on St. Armands, Rosinsky’s multifamily investment — a conscious effort to diversify Belmont’s portfolio to guard against a downturn, even before the pandemic — is paying off handsomely: Belmont paid $5.25 million for a 64-unit complex on Hillview Street in Sarasota, across from Sarasota Memorial Hospital, in August 2017. The firm then bought a 32-unit complex on Beneva Road, Beneva Flats, in April 2018, for $3.08 million. The value of both properties, he estimates, has increased from about $92,000 a unit when he bought the complexes to where the units are now “probably worth north of $200,000 a door.”
“Those two properties are sensational,” Rosinsky adds. “And my timing was really good. I hit the cycle at a good time.”
Belmont, in total, has 11 multifamily properties with 284 units — the non-Sarasota ones are on Florida’s east coast. The business dates back to 1908, when Rosinsky’s great-grandfather, Aaron Rosinsky, founded The Belmont Paper Box Co. on Belmont Street in Greenpoint, Brooklyn. Aaron Rosinsky made paper boxes, delivered by horse and wagon. The third generation, Harold Rosinsky, began investing in commercial real estate, mostly on Florida’s east coast in the mid-1970s. He expanded to St. Armands Circle in the mid-1990s.
Mathieu Rosinsky, 40, took over the business from Harold Rosinsky in 2003. In a recent interview with the Business Observer, Rosinsky talked about the multifamily market, challenges and the company’s strategy in Sarasota. Edited excerpts:
What’s the state of the Sarasota apartment market?
I just keep raising rents on renewals and on new leases, and people just keep coming in. If there’s a vacancy, it gets filled right away. The market is really really strong. Florida in general but Sarasota specifically, the rents, the competition I see around my properties, the rents are just going up so much. I’m following the same thing, and all of us are full. It’s going to level off at some point but the Sarasota market is such a good market. It’s safe, it’s clean — and I don’t feel like you have the crime there compared to other areas.
'I just keep raising rents on renewals and on new leases, and people just keep coming in. If there’s a vacancy, it gets filled right away.’ Mathieu Rosinsky
How do you go about making properties safer?
Every multifamily property I buy has a drug dealer and there’s crime. We go in and take a look the tenants, and who is not making things safe. We’ll also put in a lot more lights; if you have bright spotlights then it makes it harder for drug dealers or homeless people to be there. If our management company ever sees a drug dealer, we don’t renew the leases. And if we have to, we call the police.
I always think, ‘if I live there, what would I want to see?’ It can take years and there’s heavy lifting (to clean up the properties) but…there’s satisfaction that doesn’t come financially from seeing a community that now seems pretty safe for a family and is inviting, versus one that seems pretty uninviting and dangerous and unsafe.
What is your strategy to keep the two complexes in Sarasota full?
When I purchased Hillview it was in horrible, horrible shape. It was dirty. The owner had an attitude I’ve seen a lot of landlords have, which is to not put a dollar into the property, not maintain it and let it completely go. We’ll go in and spend money, like do pest control (in each unit.) I take more of a pride of ownership, where I go in there and try to figure out who the quality tenants are. Because even if they can’t pay top dollar, if you have someone who pays on time and doesn’t cause problems, then it’s worth keeping them. Conversely, if you have someone who pays a ton but they cause problems, you definitely don’t want them.
Are you looking to buy more multifamily complexes in Sarasota?
I am. I’ve made a lot of offers — they just haven’t worked out. Like anything else, you have to try a lot. It’s challenging in terms of price, but off market deals are the best way to buy. I try to maintain relationships with other owners and let other brokers know I’m searching.
What’s nice is I don’t have partners. And I’ve been able to have success by being creative, in terms of purchasing. A lot of times I’ve found maybe a seller would still like an income but doesn’t want the hassles of keeping the property. So they will act as a lender or I will put a down payment and they will get consistent income. Usually they will look at my net worth and feel comfortable they will get paid. Whenever you have partner, especially when it’s a larger fund, you have disagreements and sometimes don’t see things the same way. That’s been a big issue.
How have you handled financing without partners?
Financing has worked out pretty well because I’ve done a lot through Fannie (Mae) and Freddie (Mac.) The two loans (for the Sarasota complexes) were specifically with Freddie. The terms are really good and as long as they see you know what you’re doing and you have a track record, they make it easy. They are really the go-to lender because other banks won’t beat them on terms and they provide non-recourse debt that’s really sensational.
What’s the biggest challenge you face now in multifamily?
I want to get quality people in the community as tenants. I want people who don’t cause problems and are good to their neighbors and pay on time and have the ability to stay employed. Sometimes you have a few people who cause a lot of problems for others in the community. You do what you can to vet tenants but it can be challenging because if you make the requirements too stringent, it’s not quite feasible for that demographic.
You could sign a lease with a drug dealer, and they could pay, they could put a deposit down and they can have what looks to be a job that’s normal. But when they come into the community and the crowd and noise they bring in, all the problems, that’s the biggest challenge.