Real estate developer Property Markets Group, which has made its mark mostly by building luxury properties, has started an affordable housing division — with its sights set on the Tampa Bay area.
Property Markets Group is headquartered in New York and Miami, and has developed thousands of units in Florida, often with a specialty toward high-end. Highlighted projects on its website include phrases like “exclusive architectural icon,” “boutique residential high-rise” and “ultra-luxury,” describing properties in some of Miami’s most expensive neighborhoods. It’s also a developer of an upcoming Manhattan residential tower in an area dubbed “Billionaires’ Row,” which will reportedly be the world’s thinnest skyscraper.
But this new, more affordable tack could allow the company to help fill a much-needed gap in Florida.
The new division was first announced last year and now it’s researching areas where it would like to start building new housing or buy existing properties. Tampa Bay in particular is the place the company is targeting to get started in Florida, Coakley said, because of a shortage of lower-cost apartments here.
“We see a tremendous imbalance with regards of supply and demand with affordable housing in that market,” he said.
The economic effects of the coronavirus, Coakley added, are not likely to help that trend.
“With COVID happening, because of the terrible impact on employment and the loss of jobs, there’s going to be people who are currently market-rate renters who are going to need to rely on support and access of an affordable housing program,” he said.
The company is interested in the entire Tampa Bay metro area but Coakley gave West River, Ybor City and Robles Park in Tampa as examples of places where it’s looking. Some potential projects have been held up by the pandemic, but it’s possible Property Markets Group could start working to restore an existing apartment building by the fourth quarter. New construction might still be a year away, but the goal would be to develop “a pipeline of projects that we can be delivering quality affordable housing units to the market each year over the long run,” Coakley said.
Rent of these apartments would start around $400 and range up to $900 range for some larger units with two bedrooms and two bathrooms, the company said, and at least some of the apartments will be limited to tenants in certain income brackets.
Because affordable housing projects rely in part on government funding, the pandemic’s shrinking of state and local budgets could have a significant effect. In the state budget signed by Gov. Ron DeSantis on Monday, he vetoed $225 million in affordable housing funds that would have been distributed to local governments to help offset plummeting sales tax revenue.
But Coakley said the company will remain steady in its mission, which is personal to him.
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“My father grew up in public housing. We wouldn’t be where we are without him having had that experience with a single mother and five siblings growing up in the Boston projects,” he said. “I have a personal appreciation for the value of it and need of it.”
Adding to this optimistic outlook is the fact that the company didn’t expect to see immediate profits from these projects anyway, simply because of the nature of the affordable housing business. Unlike the quick returns of a high-end building, affordable housing “is a game of singles and doubles, not home runs,” Coakley said, in which successful businesses commit to developing multiple properties over several years.
“You have to look at it 15, 25 years-plus on the horizon,” he said. “Things will tighten up over the next year or two and you might have to wait longer to get projects done but affordable housing is an essential need, so I have to think ... people are going to put their heads together to enable affordable housing to get built.”