The Altman Cos. has built apartments in Florida since the 1970s, through multiple real estate cycles.
But in the last five years the long-time developer, led by founder, chairman and co-CEO Joel Altman, has undergone dramatic changes. In November 2018, Ft. Lauderdale, Florida-based real estate investor BBX Capital bought a 50% stake in the company and Seth Wise became co-CEO. Since the acquisition, Wise says he has increased staff and added property management to Altman's development and general contracting platform.
Wise expects that 2022 will be a strong development year for Altman. Florida has seen record-high absorption in rent years, partially fueled by migration into the state during the pandemic. For new move-ins, rents rose 22.1% in the state from October 2020 to 2021.
But Altman is also eyeing expansion. The company opened an office in Atlanta and has plans for projects in that market.
Here, Multifamily Dive talks with Wise about the rental situation in Florida, supply chain challenges and adding property management to its platform.
The following has been edited for brevity and clarity.
CONSTRUCTION DIVE: Do you feel like this run in Florida will last for a while? While you may not hit the rental growth levels seen in 2021, is there more on the horizon?
SETH WISE: I think it would be malpractice to assume that we will get 20% rent growth year after year. And we don't need that to be successful. Florida generally is still relatively affordable compared to many other places around the
country. So, with population growth and new companies announcing their moves to Florida every day, we think that rental housing will continue to be a viable place to focus on. With interest rates inevitably moving up, housing affordability is going to become even more constrained than it already is. And that will push people into rental housing.
What could hinder your growth?
We've got construction headwinds and supply chain headwinds. All those things can create challenges for that execution. But we've got pipelines in place to support pretty significant growth next year.
How do you manage these issues?
One of the ways that we do that is just the way that the business is structured, to begin with. We have multiple prototype products that we replicate over and over again – both because the market accepts them well and because it allows us to know our costs extremely well. We don't have to wait to get the bids in to know what our costs are going to be. We have great data on what we've spent in prior jobs. It gives us the ability to be better at predicting what the new jobs are going to cost.
The fly in the ointment is the unknown of inflation. We have what we call a value engineering list of items that we can always take advantage of that brings the cost down while preserving the integrity of the product. It gives us better visibility and more comfort in committing to new starts.
What prompted you to add property management to your development platform?
We think that it is something that gives us a competitive advantage. We can use it to control our destiny, not only as developers but as general contractors and as property managers.
You can outsource property management. Lots of people do. We are really focused on the resident experience. We have what we call our "why" at Altman, which is enhancing people's lives by delivering an exceptional living experience.
We think it's pretty important to manage our own properties so that we can ensure that is not just a tagline and that we're actually doing that. We think that creates value that keeps people staying in the properties longer and paying more rent.
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