The Cornerstone Group was founded as a builder of affordable rental homes throughout Florida. As the company transitions into for-sale homes, it remains true to its roots by focusing on moderate prices.

During a successful run as a builder of affordable housing throughout Florida since its inception in 1993, The Cornerstone Group had the pleasure of making profits while creating opportunities for segments of the population to enjoy quality rental housing with amenities they might not be able to afford otherwise.

But the company has realized that homeownership is another aspect most of the population wants to experience, as well. With the trend toward homeownership skyrocketing, Mara Mades, executive vice president/partner at Cornerstone, says the company realized it had to diversify into that market.

“As interest rates declined, the market was looking for homeownership,” she says. “At the same time, it no longer made sense to build affordable housing because of the rapidly rising land and construction costs. We couldn't economically make it work, but we could make homeownership work.”

In spring 2004, Cornerstone decided the best use of its resources would be in for-sale homes, so it started redesigning projects that would have been delivered as rental apartments instead as condominiums and/or townhomes. Today, the company is delivering 1,500 units annually for ownership.

Cornerstone has not completely abandoned its roots in affordable housing, however. The company still owns 15,000 units in Florida after selling 1,000 market-rate rentals to condo converters.

Even as Cornerstone markets to potential homebuyers after years of appealing to renters, Mades says the company's principles remain intact. “We have a unique viewpoint after having worked so long with the affordable housing market where we're making sure families can enjoy housing at a reasonable cost,” Mades says. “We're not trying to be something to everybody, and we're not trying to only pursue the higher-end market. We take a little less profit and know we're serving the population that might not otherwise afford homeownership.” The Cornerstone Group is made up of eight divisions to offer vertically integrated services in the Florida market.

Cornerstone Group Development handles affordable and market-rate rental communities and Cornerstone Premier Communities develops luxury condminium communities, including high-rise and waterfront properties. Cornerstone Townhome Division was established in 2004, and the division re- sponds to urban infill opportunities. Cornerstone Group Condo Conversion focuses on acquiring existing properties nationwide and converting them to for-sale condos.

Cornerstone Residential Management is responsible for servicing all Cornerstone communities, as well as providing management services for third-party property owners, and Cornerstone Realty Services serves as a brokerage firm.

Alliance Construction is Cornerstone's own state-licensed construction firm with general contracting and construction management services. The company also has its own cable, alarms and Internet provider, Mainstream Communications, to better serve its customers once they have moved into their homes.

All together, Cornerstone has 450 employees in its management divisions and 200 in construction. Its headquarters is in Coral Gables, Fla., and it has offices in Bonita Springs, Tampa, Orlando and Boca Raton, Fla.

Keeping Costs Down
Cornerstone is currently working with a manufacturer to move into the panel construction market for some of its projects. Panel construction, similar to tilt up, is used to save time and money for the company, according to Mades. Mades also says that the all-concrete walls offer more stability against hurricane conditions, as well as cutting down on noise between residences and energy bills during the hot Florida summers.

“We decided that the time and the investment would offer a benefit to the residents,” Mades says. “When you've got concrete, insurance is a lot cheaper, and we also believe our residents' utility bills will reflect the better efficiencies provided by the panels”.

For construction purposes, the manufactured walls cut down on time and site clutter. Mades says the walls are built to specification, assembled in the factory and delivered to the site ready for installation. “The project goes much quicker if you have everything on site and less subs on site,” she adds.

“Anything that can reduce the time between commencement and completion is a huge benefit, especially in today's subcontractor and material constrained market. Another benefit is that the ceilings are typically higher than 'customary' construction, which give the unit a much bigger fee.”

Changing Attitudes
Not long ago, according to Mades, a number of large investors bought many of the condos in Florida to either sell right away or rent out to individuals. These investors wanted to make a quick exit because they wanted to turn their profits and move onto the next deal, Mades says. But as they left the market, Cornerstone remained as the industry returned to normalcy.

“It is nice to get back to a more normal market, where we're marketing location, quality of the product and a good value for the product we are delivering,” she adds.

Cornerstone is set for the future, she notes. The company has bought enough land to build 9,600 units over the next three years, with 8,000 of those as town homes and 1,600 condo conversion or high-rise projects. “We'll stay focused on delivering those, buying new land and keeping the pipe- line growing,” Mades says.