Seeking counterintuitive deals, startup development firm chose Tampa over Miami

It was almost two years ago when Jay Roberts, a real estate investment banker who’d worked for major international financial institutions, decided to go out on his own and start a commercial real estate development firm.

Roberts, born in South Korea and adopted by American parents, graduated with an MBA from New York University Stern School of Business. He has long had a passion for real estate. 

According to his official bio, he eventually went to Bank of America Merrill Lynch in New York, where he worked on real estate mergers and acquisitions, IPOs and capital markets transactions. Before BofA, he worked at Training The Street, a economic education company, teaching analysts at Goldman Sachs and Credit Suisse financial modeling and Excel best practices.

All that knowledge and insight led Roberts, 37, to open his firm, the Prosper Group, in Tampa rather than Miami, where he was living at the time, because he saw more opportunity to make an impact.

“I’ve always been an independent thinker, and it’s very crowded and very competitive in Miami,” he says. The firm opened January 2021 and Roberts moved to Tampa full time a year later. Not only is Miami hyper-competitive, but Tampa, Roberts says, is in the “early innings of our rocket ship growth and I wanted to be a part of that from on the ground floor.”

“Tampa, historically, was not a capital city. The developers here were not raising outside capital,” Roberts says. “I was able to identify an opportunity in the market where I can bring my investment banking, relationships and experience and private equity experience to Tampa and put development and investments together. I see Tampa having a longer runway.”

Roberts says there are several deals, including a hotel in the city and multifamily units, Prosper will make public in the coming months. One deal the company has already announced is a $17 million townhouse development on 3.1 acres at 8419 and 8425 N. Hubert Ave., off of Waters Avenue and near North Dale Mabry Highway. The three-story three-bedroom and two-bath homes will be 2,143 square feet and will include decks. Prices will start at $575,000.

The Business Observer recently sat down with Roberts to talk about the company, Tampa and the industry's economic outlook.

Prosper is approaching two years in business. How has real estate changed in those last couple of years? And what has surprised you most?

I started Prosper coming out of COVID. That was a big consideration at the beginning of 2021, and I think the market was still figuring out a balance of where people wanted to invest in, build and develop. I would say that one of the biggest changes and shifts over the last two years has been the migration to Florida and to states like Texas, people leaving California, people leaving Chicago, and New York and moving to Florida. That has been a big change and a big shift. I think a lot of real estate investors and developers are capitalizing on that and we’re seeing that we need to build a lot more housing, both single-family as well as apartment. 

You had a you had a pretty successful career before you started Prosper. What lessons have you learned in this first couple of years about yourself and about running the business?

What I would say is be diligent in the deals you’re doing, don’t overcommit yourself, don’t take risks that you don’t need to take and stay lean. Keeping costs and overhead down has been my focus and my priority, so really, I keep an eye on the bottom line of every project I do, as well as the organization’s. The other thing I would add is, investing in long-term relationships with really high-quality, high integrity people. And then I think the third thing I would say that accelerated Prosper’s growth is giving more and aligning everyone’s interest. Oftentimes in real estate investing everyone is negotiating for themselves and trying to take as much of the pie as they can. I like to reward people who add value to the process more than is traditionally or historically the norm. And I found that you really get a lot of people aligned and working for your cause, then you include them and pay them more.

Is there one particular deal or project you’ve worked on that stands out, that you’re really more proud of than others?

We have a lot of big projects and big developments that are under contract and we’ll be closing on at the end of this year. I have a hotel development that we’re announcing later this year. I’m partnering with a group out of Miami. I would say that this is a deal I’m excited about for a number of reasons. One, my thesis and strategy for moving to Tampa from New York and Miami and really learning the market and becoming a market expert is paying off. One of my partners is Lineaire Group out of Miami, and that’s a relationship I’ve cultivated over two years. They came here (and) said, ‘You know, Jay, we know you, we like you, we want to do business with you, we trust you. And you are the market expert in Tampa.’ And so that gives me confidence in, and satisfaction, that the plan and process is playing out. The other thing is that Tampa needs more supply of hotel rooms. So, building a hospitality concept is something I’m proud and excited about, building a 178-key hotel.

You’ve just begun construction on a townhouse project in Carrollwood. What other residential multifamily projects have you got in the works?

We have nearly 1,000 multifamily units we’ll be building over the next year, starting in 2023, around the central business district or downtown Tampa, partnering with other developers, institutional developers.

Are you worried about a slowdown in the residential market and how it’s going to affect multifamily and rents?

I’m a big believer in Tampa’s growth, story and future. The way that I look at investments and deals is, I understand what’s going on in the macro, broader picture, with interest rates and inflation. But long term, Tampa, in my mind, is the best bet that you can make, with our population growth and investment, and with local government encouraging development, combined with affordability. (Recession worries and higher interest rates are) something to be mindful of, and to manage around, but I’m not too concerned. If anything, it’s kind of thinned out the market during this period.

There are worries that with the rapid growth and number of units coming online, school districts will need to be rezoned, roads will get too congested and there is a lack of public transportation. How do you see things on the infrastructure side?

I think we need to continue investing in our infrastructure, certainly in our schools and our students. Some of the millage rate taxes that have been on the ballot, I wouldn’t mind, personally. These increases help invest in infrastructure and the community that we all benefit from. The traffic, at least today in 2022, is not like Miami or New York or L.A. It’ll happen over time as more and more people move here.

What are you most optimistic about moving forward?

I’m most optimistic about Tampa’s future as a tier-one city. I want to thank Jeff Vinik and Bill Gates and their people over there at Strategic Property Partners for having the vision, and the courage, to invest in the downtown area, in Water Street. We are, as a whole, kind of drafting and benefiting from that because it’s going to attract more investment into the community, more development. We’re going to attract more companies, more businesses, more high paying jobs. So I’m excited about Tampa’s growth prospects, and just being here, and being a part of the community here, and getting to know more people and working on more projects.