On deck for Sansone Group in 2020: A bullish push to a $1B pipeline
February 13, 2020

ORIGINALLY POSTED BY THE ST. LOUIS BUSINESS JOURNAL AT

https://www.bizjournals.com/st…

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By Steph Kukuljan – Reporter, St. Louis Business Journal

Clayton-based Sansone Group has made its ambitions known over the past few years.

And in 2020, the company’s goals are even higher.

Once primarily known as the go-to retail brokerage firm in the St. Louis region, the real estate company is diversifying — in big ways across platforms and markets. Up next for Sansone Group are industrial deals in the ballpark of $1 billion and 10 million square feet. Its multifamily segment, of which Sansone Group manages some 8,000 units, has grown 128% in three years, company officials told the Business Journal.

Jeff Greenwalt, who the company hired last year as its national director for industrial development and is based in Indianapolis, said they’re bullish on the opportunities ahead, thanks in large part to e-commerce.

“Amazon certainly has changed everything about e-commerce. All companies, from midsize to large, are looking at one-day, two-day delivery and how they distribute,” said Greenwalt, who developed 12 million to 15 million square feet prior to joining Sansone Group. “We’re seeing a lot of runway left with e-commerce.”

In St. Louis, the industrial market had positive net absorption, or leasing, of 191,163 square feet in the fourth quarter of 2019. That was the 24th consecutive quarter of positive absorption for the region, according to the latest research from CBRE.

The company is targeting industrial development in Indianapolis; Salt Lake City; San Antonio; New Jersey; South Florida; and Savannah, Georgia. In particular, Principal Nick Sansone said Salt Lake City can still serve the California market without paying high California taxes, and San Antonio is one of the first railroad stops from Mexico.

“Our goal is to meet what the market demand is. Our first project Salt Lake was a multitenant building for smaller tenants. In New Jersey, it’s totally different,” Sansone said. “We’re not trying to make a new market but fill a need.”

In addition to targeting the acquisition of existing industrial property, Sansone Group is focusing on ground-up development, some of which is build-to-suit and others with joint venture partnerships. The company will look to hold on to some properties, while exiting early on others; all of which is dependent on the market, Sansone said.

Meanwhile, its multifamily segment has grown from managing 3,500 market rate and affordable housing units three years ago to 8,000 today. By the end of 2020, Sansone Group wants to manage 10,000 units in St. Louis, Kansas City and Springfield, Missouri, said Principal Tim Sansone.

The company estimates it invests $3 million to $5 million annually in capital improvements to its apartment communities.

“Your success with an apartment project is directly related to the reinvestment in operations of it,” Tim Sansone said. “The moment you try to cut corners, you hurt yourself, the property and the tenants.”

Looking solely at the St. Louis market reveals the demand, he said. About 160,000 units are located in the greater metro area with a 2019 year-end monthly average rent of $950, a nearly 4% year-over-year boost. Affordable housing will always have demand, whereas luxury builds can be run a fine line of being overbuilt, he added.

“People have really embraced the concept of renting, and I don’t think home ownership is looked upon like it was 20 years ago. The younger generations are not all enamored with buying a home,” he said.

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