With shifting demographics driving buyers to the urban core, the building community's interest in redevelopment has ignited a recent firestorm of alternative projects. And as traditional residential companies continue to search for ways to make the infill business model work, niche players such as Chicago-based SilverStone Communities are expanding on their success.
The company, which specializes in the acquisition and construction of higher density condominium communities close to transportation, freeways, schools, shopping, entertainment, and recreational venues, was previously active only in California. SilverStone was launched from scratch with funds from San Rafael-based institutional investor firm Hearthstone in 2003. Together, the San Diego division and Northern California division posted revenues of more than $100 million and closed 319 units in 2005.
In addition to being Hearthstone's president and COO, Tom Bruin now carries the title of CEO for SilverStone Communities. He began putting the company's expansion plans into place at the end of 2005—hiring partners to head up new divisions in Denver, Chicago, and, as of Feb. 14, 2006, Boca Raton, Fla. “[SilverStone] is built on the same model we have with any other builder—where we provide the money for competent people and they run everything,” Hearthstone CEO Jim Pugash explains of the unique arrangement. “The only difference here is that we picked very talented senior people and put up all the overhead capital to get them started.”
The importance of hiring local experts is one of the key factors to their success in infill, says Bruin, who appointed Steve Anrod, formerly of Grace Associates, to head up the new Midwest region. Anrod brings infill and condo conversion experience from St. Louis and Chicago to his new position. “We know the landscape of both markets well, and Chicago is highly competitive,” says Bruin. “That's why, based out of Chicago, our focus right now is on two opportunities in St. Louis.”
In Denver, Jeff Wikstrom, formerly a managing partner at Trammel Crow, will head up SilverStone operations. And Michael Ging, formerly the senior vice president and regional director for the multifamily developer Gables Residential, will manage the Boca Raton projects. According to the business plan for 2006, Bruin expects the five operations to generate another 350 closings and revenues of $130 million.
But don't think Bruin is stopping there. He doesn't rule out the possibility of adding a sixth market later this year, confirming that he is exploring the Middle Atlantic region, the Washington, D.C./Northern Virginia market, Atlanta, and Texas. “We plan to build this company to be a $1 billion revenue generator in the next three to five years,” he predicts.
Learn more about markets featured in this article: Chicago, IL.