Alp Kirmizioglu joined RangeWater Real Estate in the middle of the pandemic to help launch its own construction team.
Less than two years later, the Atlanta-based firm is now deploying its offshoot, RangeWater Construction, for the first time to construct a set of build-to-rent homes and apartments in Gwinnett County. The new in-house arm will bolster the firm’s goal of doubling its annual development volume within five years, Kirmizioglu said.
“There’s not a single developer of that size that solely relies on third-party general contractors,” said Kirmizioglu, director of construction at the new division. “We’re at that juncture where we need to take a little bit more control of our destiny.”
Rising construction costs
Supply chain issues, rising land prices and soaring construction costs have made it exponentially more expensive to build multi-family housing. The price of PVC piping, for example, has nearly tripled over the past 18 months, Kirmizioglu said.
“Having your own construction company helps, because it allows us to dig a little deeper into the supply chain, figure out what the challenges are and manage that risk for RangeWater,” Kirmizioglu said.
RangeWater did not share details about how much investment went into launching the division, nor its approach to weathering the high costs of development and construction through its expansion. But the launch coincides with years of pent-up demand for nearly all housing types, given metro Atlanta’s strong population growth bolstered by corporate relocations and relative affordability compared with other markets.
From planning to build out
RangeWater averages about a dozen deals a year. It plans to still rely on third-party general contractors in markets relatively new to the firm or when tackling complex projects. But its in-house team will come in handy in familiar areas for the company — like Atlanta or Central Florida — where it often has a high volume of new deals land at once.
The formation of a dedicated construction division will allow the developer and contractor to sit at the same table from planning to build-out, Kirmizioglu said. This helps streamline communication and make sure the interests of both parties are aligned.