Gables Magazine / Winter 2004
By Larry Luxner
Renzi Development Inc. operates out of an unassuming little office just off S.W. 27th Avenue in Coconut Grove, on the ground floor of a modest apartment complex. Every few minutes, a tenant stops by to drop off a rent check or ask a question.
It's certainly not the headquarters you'd expect from Miami-Dade County's seventh-largest real-estate developer.
"Anybody else would be on the top of a building in a penthouse with leather couches. We're not into that," said Pasquale Renzi, the company's 41-year-old director.
The company employs only six people including Pasquale's 38-year-old brother, Renzo, president of the firm.
"This is a closely held corporation between my brother and I," said Pasquale. "There are no investors, no partners. It's just the two of us. We have a small staff compared to industry standards, because we sub a lot of things out. We do our work very efficiently."
Last year, company sales came to $20 million, down from $38 million in 2002. But Pasquale said 2004 revenues will reach $50-60 million, rising to $80 million by 2006, when a number of the company's megaprojects will start producing serious revenue.
These include two residential condominium projects under construction: the 30-story Sail on Brickell and the 10-story Emerald Plaza on Coral Way. Luxury residential projects in the works include the 200-unit Blue on Coral Way; the 60-apartment Ocean Sound on Collins Avenue; 100 Alhambra, with 120 units, and The Beacon, which will have 250 apartments.
The sons of Italian parents who emigrated to Venezuela many years ago, Pasquale and Renzo left their native Barquisimeto in 1979 to continue their educations. Pasquale attended Miami's Florida International University and in 1984 earned a bachelor's degree in industrial engineering. Renzo graduated from Miami's St. Thomas University in 1986 with a B.A. in economics.
Pasquale says the combination of these two specialties has proven to be a key ingredient to the success of their company, which is known for both affordable housing as well as luxury residential units.
"My brother is more into the economics and finance of the business. I'm more in the day-to-day operations," he said.
"We started this business in 1988 by building two luxury homes in the Pinecrest area. That led to more projects, mainly in the Coconut Grove area, where we developed over 100 townhomes. That led us to build Grove One, a five-story building consisting of rentals. Then we went on to do some more buildings in the Brickell area."
In August 1992, after Hurricane Andrew ravaged much of South Florida, the Renzi brothers were hired by friends and neighbors to rebuild their storm-damaged homes. As a result, more than a dozen luxury houses were rebuilt or repaired in the space of a year. That began Renzi Development's thrust into the South Florida real-estate market.
In December 1995, Renzi Development completed a five-story building consisting of 20 rentals in Coconut Grove. Two years later, a second rental building with 30 units went on the market. In August 1998, the company finished its third rental apartment building, also located in Coconut Grove.
Brickell Terrace, the firm's fourth rental project, is a luxury apartment complex at 1918 Brickell Ave., not far from the brothers' 15-story condominium, Coral Plaza, located at Coral Way and 35th Avenue.
"Courvosier Realty does our sales. Our construction crew is subbed out, so we have no direct construction employees. We buy the properties with our own money. Without banks, we'd be dead, so we get acquisition loans," he said. "It normally takes about three years to see return on our invesment, and sales happen right away."
The brothers' first foray into the lucrative commercial real-estate market was a seven-story office building located at 2200 South Dixie Highway in Miami. The Renzi Building, designed by architect Ramón Callado, consists of 46,000 square feet of office space on four floors, above three stories of covered parking.
Much of Renzi Development's efforts have been centered on Coral Way, a major thoroughfare known for its shady canopy of graceful banyan trees stretching from Brickell Avenue to Douglas Road. The area is now the focus of a multimillion-dollar facelift that will, says Renzi, convert Coral Way into a fashionable corridor and attract new businesses and upscale retail shops.
"Our vision is to be ahead of everybody else," he said. "We were the first ones to do a building in Coral Way, which had been neglected for 20 years. Two years ago, there was nothing there. Now, all of a sudden, the area is sold out."
That's because people continue to stream into the area, particularly from Latin America. Pasquale said that for example, many Colombians buy commercial space in order to establish restaurants, hair salons and other retail shops. Some 80% of his buyers are Latinos, of which 60% are of Cuban origin.
Interestingly, said the Venezuelan-born executive, "the Venezuelans are not my prime customer base, because in general, [wealthy] Venezuelans are not used to living in apartments. Our market is basically Miamians avoiding traffic. People who live in Kendall have to drive an hour to work. They find that they save an hour each way by living in the Coral Way area. Traffic is extremely bad, but that's what's bringing us business."
The Coral Way area is also considerably cheaper than Coral Gables. Renzi says the average single-family home in the Gables now costs $350,000, while in the Coral Way area, a one-bedroom apartment goes for $150,000 to $200,000, and a two-bedroom apartment between $200,000 and $280,000.
"So far, the market is holding up, due to low interest rates and the influx of people — not only foreign investors, but a lot of local, young professionals who are acquiring these units," he said.
"Compared to the rest of the United States, we are fairly priced, especially when you look at the luxury market. A luxury apartment in Chicago, Philadelphia, Los Angeles, Atlanta or Seattle would cost at least $1,200-1,300 per square foot. In Miami, that is considered extremely expensive. The priciest one here is Millenium Tower, where apartments start at $900 per square foot."
Renzi Development's most ambitious project so far is a 55-story residential tower that will rise in front of the 72-story Four Seasons at Brickell. The company purchased an existing 36-slip marina and will turn it into a 90-slip marina.
Few details are available on the $60 million project, other than that "we're still working on the name" and that "the Osceola Indians are donating a 40-foot bronze statue, which will be a focal point of the building, to be located between the 50th and 55th floors."
Not everything always goes according to plan, says Pasquale, noting that "the most troublesome part of all this is obtaining a building permit. It takes me, between acquisition and actual groundbreaking on a project,18 months to two years on average," he said. "There's a lot of bureaucracy. Sometimes it's necessary, sometimes not. Other than that, it's fantastic. There's a great market here."