FOR DECADES, SOUTH FLORIDA REStdential real estate developers have followed the "bigger is better" strategy. Large-scale country clubs, urban "gentrification" projects and luxury waterfront condominiums seem to get all the attention. But Stuart Meyers and Jorge Lopez have taken a quieter route to the top. Their Coral Gables company, The Cornerstone Group, has focused primarily on low-profile suburban apartment complexes, only recently entering the more glitzy condominium market.

"There's a lot less risk in what we do, compared to other developers," says Meyers, co-founder, chairman and CEO. "We look at the level of risk we want to assume and how we can assure the success of each project."

Since founding Cornerstone in 1993, Meyers and Lopez have seen their company become the largest multifamily rental builder in South Florida and 14th largest in the nation, according to a 2001 survey by Builder magazine. To date, Cornerstone has built 8,500 units, and has another 2,000 under construction, plus 2,500 more in the planning and permitting stages.

"Stuart and Jorge have penetrated a Jot of different sectors in the housing business in just a short time," says Jay Massirman, a Miami-based senior vice president of commercial real estate brokerage CB Richard Ellis. "They have successfully diversified into the luxury apartment sector and now into condos, as well as having a vertically integrated organization."

Their 300-employee company had about $150 million in revenue in 2001, almost unchanged from 2000. Meyers forecasts a jump to $190 million in 2002. Cornerstone expects to start about 3,160 new units this year, up from 2,900 in 2001, with a dozen apartment projects underway in Jacksonville, Tampa, Daytona Beach, and other Florida communities.

Cornerstone has come a long way since Meyers and Lopez left The Related Group, the high-profile Gables development firm headed by Jorge Perez, to strike out on their own. Initially, Cornerstone focused on building subsidized apartments that offered tax credits to builders and below-market rents to tenants. (Perez built Related with a similar strategy - before he started putting up luxury condos.) As part of the Hurricane Andrew rebuilding process, Cornerstone developed a number of subsidized projects in the Homestead area. The company also rehabilitated the historic 80-unit Olympia Building in downtown Miami.

In the mid-1990s, Meyers and Lopez added market-rate rentals to the mix, financing many projects with their own corporate funds. These were typically low-rise, garden apartment complexes of 75 to 350 units in suburban settings, with land and building costs lower than in downtown or waterfront locations. Cornerstone now has 1,030 such rental units under construction, at projects including San Marino at Laguna Lakes in West Palm Beach and Villa Del Sol in Boynton Beach.

"Our goal was to start with affordable rentals, and become a statewide developer in all the major metro areas of Florida," says Lopez, who is co-founder, president and COO. "We accomplished that." Out-of-state expansion to Atlanta or Dallas is a possible next step.

While many South Florida developers have come to grief from oversized egos and undersized bank accounts, Meyers and Lopez have taken a conservative approach. By focusing on the mundane but solid apartment market, they've attracting blue-chip investors like Bank of America, First Union and Lend Lease Real Estate. In South Florida and other parts of the state, "rents have held up well, and apartments continue to attract private and institutional investors," says Massirman. "There's not a lot of zoned land available in South Florida for new apartment construction."

Now Meyers and Lopez are ready for the next step in their company's evolution: La Perla, a 42-story oceanfront condo in Sunny Isles Beach. Under the direction of former Coscan executive Richard Lamondin, now president of Cornerstone Premier Communities LLC, La Perla will have 332 units. Unlike luxury condos being built on Miami Beach, however--where prices quickly crest $1 million--their condos start in the $300,000s. Philip J. Spiegelman, president of International Sales Group, which is marketing the property, says more than 260 residences have been pre-sold. Construction is scheduled for this year.

Bouyed by the response, Cornerstone is already considering a condo project in Fort Lauderdale. "We think the market for condos in Florida is as strong now as it's ever been," Meyers says, "and this can become a major area of business for us."

COPYRIGHT 2002 Americas Publishing Group
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