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Commercial Real Estate
Business Observer Friday, Aug. 17, 2018 3 months ago

South Real Estate Group focused on Southwest Florida — for now

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Naples company is building a portfolio through tenant relationships and strategically located projects
by: Kevin McQuaid Commercial Real Estate Editor

John Conroy came to a fork in the road and took it.

Though he had come from a Southwest Florida family with a real estate pedigree and had earned an accounting degree from the University of Notre Dame, after college Conroy moved to Nashville to try his hand as a musician and songwriter in the nation’s country music capital.

Four years of singing, writing songs, waiting tables and working part-time as an accountant later, and spurred on by marriage and the birth of his first son, Conroy decided to shift gears again and steep himself in the family business.

Rather than move back to his native Naples, though, Conroy took his nascent family to Scottsdale, Ariz., and got a job with Cole Capital, a Phoenix-based industrial investor and developer with holdings along the Gulf Coast. (In 2016, a Cole Capital affiliate bought Amazon’s 1.02 million-square-foot Ruskin fulfillment center for $103.6 million.)

“I knew that if I didn’t do music I wanted to be in the real estate business,” says Conroy, 31. “But I also knew that I wanted to learn and do my own thing.”

Conroy’s story didn’t end up like one of the country songs he might have written, though.

Following three years of experience at Cole Capital, he picked up and relocated again, to his hometown, in 2015.

Back in Naples, Conroy likely could have slid into Investment Properties Corp. (IPC), Naples’ first full-service commercial real estate brokerage firm, which his grandfather, John Conroy Jr., founded in 1976.

The elder Conroy had come to Naples in 1963 as a general contractor and morphed into commercial real estate, eventually teaching for two decades classes required for brokers to obtain a prestigious Certified Commercial Investment Member designation.  

But just as he had after graduation with the move to Nashville, Conroy took a different and somewhat unexpected path.

Together with his father, J. Thomas Conroy III, a prominent Naples real estate attorney with Conroy, Conroy & Durant P.A., Conroy formed South Real Estate Group, a boutique development firm that has specialized in retail and office projects in Lee and Collier counties.

“I decided I preferred a developer’s role to that of a broker,” he says.

"He’s extremely sharp, and as a developer, he’s a complete package. He’s a numbers guy at heart, with an accounting background, but he also has a very good eye for real estate, he’s got a very solid work ethic and he’s a people person. I really don’t see any weakness in him. The sky’s the limit for John.” — Investment Properties Corp. Agent Rob Carroll, on John Conroy.

The pair’s first venture came in the form of a one-third of an acre parcel of land adjacent to the Courthouse Shadows Shopping Center, in Naples — though Conroy had dabbled in Southwest Florida real estate years earlier.

In 2012, while still living in Tennessee, the Conroys purchased a 1.2-acre tract known as Coconut Crossings that, like the Courthouse Shadows’ parcel, is almost directly tied geographically to a larger, existing shopping center and master -planned community.

On the retail front, Coconut Point contains a raft of successful merchants, including Target, Barnes & Noble, Dillard’s and Pier One Imports, among others.

“I was always looking for properties, and for opportunities, even when I was in Nashville,” Conroy says.

The duo’s third purchase — also along U.S. 41, as was the case with Coconut Crossings — was a three-acre tract that came to be known as Estero Grande, where South Real Estate conceived of a mixed-use development.

The retail portion of the site is being developed into an 8,700-square-foot building anchored by Starbucks, and a 285-unit apartment complex also is in the works.

South Real Estate’s most ambitious project to date began gelling in January, when the Conroys acquired the first piece of a 14-acre site in Estero. The second half of the property was acquired this summer for $4.2 million, property records show.

University Highlands will be developed in phases, Conroy says, with the southern portion of the property just north of the Miromar Outlets featuring retailers like Starbucks, Tide Dry Cleaners and Chase Bank.

South Real Estate plans to complete the 22,000-square-foot-plus retail portion of the project next year.

The balance of the site, which could accommodate a variety of uses including a hotel, restaurants, retail or even medical office, will likely be delivered in 2020, he says.

“John is a shooting star, in my opinion,” says Rob Carroll, an agent at IPC who helped negotiate South Real Estate’s University Highlands acquisitions.

“He’s extremely sharp, and as a developer, he’s a complete package,” Carroll adds. “He’s a numbers guy at heart, with an accounting background, but he also has a very good eye for real estate, he’s got a very solid work ethic and he’s a people person also. I really don’t see any weakness in him. The sky’s the limit for John.”

At this juncture, at least, Conroy’s goals are more modest. He wants to be a preferred developer for retailers like Starbucks who occupy multiple locations throughout Florida.

“We want to try and leverage good relationships with tenants built through projects over time so that they come to us when they have a build-to-suit they want,” he says.

And for now, South Real Estate is content to focus on retail and other projects that don’t stretch the company’s resources too thin.

“We’re looking specifically for smaller, niche development opportunities that some of the bigger players are overlooking, or that don’t make economic sense to some of the larger developers.”

Eventually, however, Conroy acknowledges that South Real Estate may venture outside of Lee and Collier counties.

“I think our business five years from now will be largely tenant driven,” Conroy says. “Hopefully the company will continue to grow as the portfolio has grown over the past few years, and geographically, I could see us expanding.

“But ultimately, what we’d like to do is continue to do preferred development projects for national tenants.”

 

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