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ContraVest, Inc. 

Building and Construction, October 6, 2009

Written by Brooke Infusino 

With one look at Lake Mary, Fla.-based ContraVest Construction Cos.’ portfolio, you might forget about the residential real estate slump. Since it was founded in 1986, ContraVest Construction Co. and its parent company – ContraVest Inc. – have completed a combined total of some 22,007 multifamily units nationwide.

As the general contractor for some of the larger residential multifamily apartment communities in greater Florida, the company is licensed to do business in Georgia, North Carolina, South Carolina, Tennessee, Texas and Arizona. It has completed projects in each of those states. It is also licensed in Georgia and is capable of building in Colorado.

The firm’s portfolio is highly diversified, encompassing several different product lines including high-end condominiums and apartment buildings. ContraVest has built multi-family communities for such third-party developers as Colonial Properties, Archstone-Smith Communities, Broadstreet Partners, LeCessee Development, Kaplan Group and Daniel Corp.

In today’s uncertain economic climate, ContraVest is proceeding with only those projects that make the best sense for the needs of the communities in which it builds. Even with the uncertainties of the real estate market, ContraVest intends to maintain an active pipeline well into the future.

Part of what makes ContraVest such a success relates to its vertically integrated business approach. The company develops, constructs and manages apartment communities. It understands how to effectively operate in each one of these areas and how important their relationship is to one another. This business model sets ContraVest apart from most development companies and gives them a distinct advantage in its niche market.

Using this turnkey approach, ContraVest has been able to meet its main goal time and again – to create a solid return on investment for its stakeholders. “Over the last 15 years, we have been able to generate a 27 percent internal rate of return for our investment partners – that’s a very strong return,” CFO and Partner John Schaffer asserts. As the dynamics of the market have changed in the last few years, many people entered the multifamily development line of business as a result of the subprime mortgage lending practices, Executive Vice President Steve Ogier explains.

One of the more unique approaches the company has taken is to purchase land during stagnant market periods. As many homebuilders have exited the industry, the price for land has begun to recede dramatically. “It’s given us more land to choose from and we are being more selective on the site today because we want to make the right pick,” Ogier explains. 

Experience is the Difference
Because it provides construction services to a multi-family developer, ContraVest understands the complexities of delivering multi-family units on time and within budget. “We primarily build for ContraVest, although we also do some work for third-party developers that don’t have in-house construction services,” Senior Vice President of Construction Ephraim Grubbs says. “We are able to take those things that we’ve developed in-house and provide the same systems and expertise for other developers. We like to sustain a certain number of third-party clients and we keep about two to three active.”

ContraVest understands how vital it is for a project’s attractive amenities to be completed, so that on-site marketing can be well underway before the first unit is completed.

For the typical apartment community, that means delivering a marketing package at about eight or nine months from ground break that includes entrance signage, clubhouse, swimming pool and club area. Following that, the first units are then delivered depending on phasing and other considerations.

Subcontractors are a big part of the construction and development process. ContraVest works heavily on the development process, while balancing budget and schedule, and utilizes a large subcontractor base in the areas in which it works.

“Subcontractors are a big part of the team,” says Grubbs. The company takes time to talk to its subcontractors about the expectations for a project, including budget, schedule, quality and administration.

To keep track of each of these measures, each job is assigned a project manger and superintendent who manage the subcontractor’s work and the overall progress of the project. Communication is key component of building a successful project, Grubbs notes.

“I sit down with our subcontractors and figure out what we can do better,” Grubbs continues. “If I can keep the subs’ interest ahead of mine, we both benefit and we don’t take that lightly. We are only as strong as our weakest link, so one of our primary roles in the construction process is to facilitate productivity through our leadership,” Grubbs notes. 

Premier Properties
Quality rental communities have been a successful platform for the firm in today's tumultuous residential construction market. In May 2007, construction began on a $30 million apartment complex in Yulee, Fla. Courtney Isles is one of ContraVest’s many premier rental developments. Designed by Forum Architecture & Interior Design Inc. in Altamonte Springs, Fla., the 240-unit, 23-acre complex had been in planning and permitting for two-and-a-half years.

Apartments are in one-, two- and three-bedroom formats and will range from $850 to $1,300 per month and will average 1,000 square feet. Amenities include a clubhouse with a fitness center, business center, billiards room and a swimming pool. The project opened in February 2008 and wrapped up in August 2008.

The residences include gracious floorplan designs, ceramic tile flooring in the kitchen, bathrooms and foyer, expansive nine-foot and vaulted ceilings and 42-inch custom cabinetry.

Courtney Isles is the multifamily component of The Shoppes at Amelia Concourse, a mixed-use development situated on 168 acres. The company currently has nine projects in its construction portfolio.

Well-Managed 
The property management arm of ContraVest – ContraVest Management Co. – provides management services for multifamily rental properties, which are owned by ContraVest and its joint venture partners and other fee management clients. Since it launched in 1989, the firm's apartment portfolio has grown from 200 units to nearly 3,400, with properties in Florida, North Carolina, South Carolina and Georgia.

The primary objective of ContraVest Management Co. is to maximize the economic value of our clients’ apartment portfolio through excellence in leasing, property administration, rent collection and increasing net operating income.

Using indicators of measurable performance, the company keeps owners apprised of the profitability of their properties. “We’re taking raw land and developing it into an income-producing asset,” Executive Vice President Mark Ogier notes.

ContraVest Management provides services such as on-site training, budgeting, marketing and financial reporting to ensure a successful investment. 

Understanding Trends
ContraVest remains widely recognized for its ability to anticipate trends in the housing market, while weathering tough economic cycles. To coordinate multifamily development with the demands of the local demographics in areas where it builds, ContraVest takes great care in researching the markets in which it does business, Steve Ogier says.

“We have selected areas where there is a demand for apartments buildings because there is a demand for jobs and the population has increased,” he adds.

Conducting research helps the team decide the best site to acquire, where to set rents and what type of multifamily product will best suit the market. The company takes into account the competition, population, the real estate market in the region and other factors that drive people to live in a certain area.