While housing has become more expensive to build and affordability challenges continue to grow nationwide, PTM Partners and Peacock Capital have launched a new platform, Inception Housing, to tackle both problems at once. The platform is dedicated to producing high-quality workforce housing for middle-income renters earning between 80% and 120% of the area median income without any subsidies through vertical integration, cost control, and supply chain management.
To manage development costs and supply chain flow, Inception Housing’s platform will focus on cold-formed steel buildings, in-house production, assembly of framing, and direct procurement of over 90% of materials. It also will have direct negotiation with suppliers domestically and abroad so that it can bypass traditional distributors and subcontractors, shortening the supply chain, and eliminating layers of mark-up. According to the firms, a standard building is expected to be ready for move-in within six to seven months, a 50% reduction compared with traditional stick-build products. In addition to a faster time to market, the strategic design and methodology is expected to help reduce the overall cost of the development by allowing lower interest reserves and cash flow sooner.
“Inception Housing will do what the assembly line did for cars,” said Michael Tillman, CEO and co-founder of PTM Partners, a Florida-based real estate investment and development firm. “The platform is indicative of us staying true to our organization’s mission of delivering high-quality, accessibly priced housing for the masses. There are many developers out there, but there’s also a lack of builders. This is where we have a strategic advantage for investors and residents. Instead of settling for aging properties, Inception Housing offers residents a chance to live in new-build Class A products with minimal additional costs, quality materials, amenities, and more.”
Inception Housing will target the Southeast, with an initial focus on Florida’s high-growth markets, such as Miami, Orlando, and Tampa. The platform’s first development, the 74-unit Magnolia Flats, is underway in South Orlando, while a second project, the 168-unit Spring Lake, will follow in Winter Haven. It has a pipeline of nearly 1,600 units with a total capitalization of more than $300 million.
“Our entire focus is providing high-quality housing for our residents at an affordable rent,” said Kenneth Polsinelli, managing partner at Peacock Capital, an owner and operator of neighborhood multifamily residential communities. “We believe housing is a service business, not just a real estate business. We inverted the typical development process by starting with the resident first, understanding what they can afford, and we have worked hard to provide the best value to our customers for their hard-earned dollar.”
Polsinelli added the platform takes into account other factors, such as utility expenses and transportation, when addressing affordability.
“By choosing investments close to employment centers and designing highly energy-efficient buildings, our residents benefit from a lower total cost by living at our communities. Fully integrating our platform further helps drive down costs, which can then be passed on to the residents.”
PTM Partners and Peacock Capital have experience in providing multifamily housing in growing markets. Through investing and developing in Opportunity Zones on the East Coast, PTM Partners has been involved in the Edge Collective in downtown St. Petersburg, Florida, a large-scale mixed-use development; Watermark in Washington, D.C., a 452-unit adaptive-reuse project; and the recently leased-up 1900 Biscayne in Miami. Peacock Capital is focused on acquiring, renovating, developing, and operating multifamily communities throughout Central Florida, owning over 2,300 apartments.