Stuart Meyers has been bucking market trends since he launched real estate development firm Cornerstone Group with Jorge Lopez in 1993. Instead of erecting high-rise luxury waterfront condominiums like his competitors, Meyers and his partner got their feet wet building affordable suburban apartment complexes.

But as land values and construction costs ballooned, and demand for condos grew, the lure of big money nudged Meyers to take the Coral Gables-based company in a different direction. Several years ago, Meyers and Lopez dove head first into building condos for sale, instead of apartments for rent. The pair tried to stay true to Cornerstone's roots by building more affordable dwellings than the competition, some in areas long overlooked by other developers.

"Our strategy since the inception of the company has always been to strive for the lower price points. That's carried through to our condominium division," says Meyers, Cornerstone's chairman and CEO.

Meyers and Lopez founded Cornerstone more than a decade ago after departing from developer The Related Group of Florida. As of yearend 2004, Cornerstone had built 17,000 multifamily housing units, and the 400-employee company is now the nation's No. 8 largest multifamily developer, according to Builder Magazine. Revenues followed, with the company booking $240 million for 2003. Meyers and his team expect revenues to grow to approximately $1 billion by 2006, as the company focuses heavily in pro-development cities such as Hollywood, Hallandale, Riviera Beach and Boynton Beach. A look at the company's strategy can provide a window into South Florida's mid-cost development future.

Parsing the expertise

Facing the challenge in the months and years ahead will depend heavily on new company divisions Cornerstone has launched. In areas where Cornerstone lacked experience, Meyers and Lopez have hired veterans from other companies to head up new divisions. The partners have also promoted executives from within. For instance, last July, they appointed 25-year industry veteran John Barr to head up the townhome division. Eric Weiner, formerly the director of the asset and risk management department at Cornerstone Group, was installed as president of the company's new Cornerstone Realty Services division last November.

The idea is to take advantage of South Florida's soaring multi-family sales market. Consider the statistics: During the first nine months of 2004 alone, real estate brokerage firm Cushman & Wake-field reported an annual 46 percent spike in the number of multifamily closings. The average per-unit price for a South Florida multifamily property is up 25.5 percent. And the multifamily transactional volume during the first nine months of 2004 totaled a whopping $2.9 billion, up $1 billion from 2003.

While the landscape is more profitable, the challenges have become more daunting. Land to develop is in short supply, and what is available is expensive--as are construction costs. Some municipalities in Miami-Dade, Broward and Palm Beach counties have also tried to put the brakes on real estate development, and the risks of rising interest rates or over-building are keeping some developers awake at night.

Meyers, however, is signaling plans to forge ahead and develop approximately 3,500 units during the next 12 months.

And why should Meyers take such a risk? Gary Saul, a partner at law firm Greenberg Traurig's Miami office, says the current market has proven to be a good risk. "I'm watching building after building close successfully," Saul says. "Good developers know how to adequately manage the challenges and risks."

Is there a bona fide land shortage in South Florida? That depends on whom you ask.

Gil Dezer, the Sunny Isles condo developer and business partner of Donald Trump, says there definitely is a shortage of land along the coast. "There's nothing left," Dezer says. "The market is here. Buyers are buying all day long, and if you build it they come. We set up sales offices before we start construction and buildings are selling out in record time. Who are we to fight the market?"

Indeed, the competition among developers for coastal property is so fierce, Cornerstone instead has turned to an urban in-fill strategy to keep momentum and stay out of the fray.

Richard Lamondin, president of Cornerstone's condo division, points to Hollywood Station as a prime example. The $170 million, mixed-use multiphase development will span four city blocks across eight acres of land on the corner of Hollywood Boulevard and South Dixie Highway, in Hollywood. The project will include 600 condominiums and 15,000 square feet of ground floor retail in an urban setting. Construction will start in the spring, with units starting from at just more than $200,000.

"We are going into areas that, up until now, people thought were blighted," Lamondin says. "There is still a lot of land available. It does take foresight and patience to find it. It took us two-and-a-half years to put the property deal together for Hollywood Station."