Miami Developer Tony Cho Has A Grand Vision To Build Sustainably And Deliver Huge Returns
Tony Cho has been at the forefront of development in the Miami neighborhoods of Wynwood, where his Metro 1 is a leading commercial broker, and Little Haiti, where he is developing the campuslike Magic City Innovation District with partners including Cirque du Soleil founder Guy Laliberte. While other developers tend to build whatever delivers the best financial return on a particular site, Cho said, his team takes a more holistic approach.
“We want to do what's best for the environment, what's best for the community, what's best for our investors and for the project,” said Cho, who grew up on an ashram and owns a spiritual retreat called ChoZen on the Florida coast.
To that end, he has developed a Future of Cities platform — part think tank, part real estate development firm and part venture ecosystem. Announced earlier this year, it aims to take good ideas and great technology, add funding and put the ideas into practice through what he calls "regenerative placemaking." Cho says he thinks he can pull this off and still get whopping returns for investors.
Cho isn't thinking small. He intends to scale environmental, social and governance best practices around the world and has hired staff and set up advisory boards to pursue the goal.
“It's just about bringing together public and private interests and making it work for all of humanity,” Cho said. “That's really what the goal is.”
The think tank arm of Future of Cities serves as a research hub and holds “thought leadership" events about everything from food forests to materials science to rewilding initiatives. So far, his team has collaborated with the Chopra Foundation of author Deepak Chopra, the Global CoCreation Lab and the Buckminster Fuller Institute. One day, it could potentially be spun off as its own foundation or nonprofit.
The Future of Cities real estate development arm raises capital and identifies and executes projects. Cho has already seeded an opportunity zone fund. One site in Florida has already been purchased, and Cho’s team is exploring possibilities for sustainable or regenerative projects there. Over the next few years, a focus will be on high-growth secondary and tertiary markets in Sun Belt states like Florida, Georgia, Texas, the Carolinas and Tennessee.
Each project is set up with its own special-purpose vehicle, but Cho is also talking to large institutions about programmatic joint venture financing. He is seeking investors who can put in $250K or more.
“Our return threshold is higher than many standard funds would be, so we're forecasting low-to-mid-20s IRR on our projects,” Cho said. “We won't do them if we can’t get a very high yield, and I think we’ll do much better than that. My track record has been north of 40% IRR over the last 10 years.”
As for the venture capital arm of his platform, it could invest in smart city technology, proptech, health tech and clean technologies.
“We’ve made our first venture investment in a mobility company, which we'll be announcing hopefully here in the next couple of weeks,” said Cho, who is seeking to raise about $25M in a funding round.
“That's the thesis: Invest in the companies that we feel are aligned with our values, that are disrupting the space in the built environment and solving problems. It's a whole ecosystem that works together,” Cho said.
As for concrete steps to pull off his grand vision, Cho said public-private partnerships could better incentivize sustainable development — everything from affordable housing to urban permaculture — so that developers of such projects make more profit than those who create sprawl or build luxury.
There needs to be more regulation, too, Cho said.
“You shouldn't be able to just develop something if it's going to damage the environment or damage society or create more gentrification," he said.
In Miami, home prices are so out of reach that “I can't even find housing for my executives who make six figures,” he said.
A champion of sustainable development, Cho said he gets involved politically, but only to the extent that he reaches out to politicians and educates them, rather than campaigning or making political donations.
Developing sustainably will achieve higher returns for investors because it is more future-proof and supported by the community, Cho said. For example, Cho said, when developers were transforming Wynwood from an industrial warehouse district to a trendy arts destination in the early 2000s, he was vocal about advocating for small independent businesses and helped prevent a Walmart from opening in nearby Midtown.
“Small businesses are the lifeblood of the community,” Cho said. “That's the secret sauce. That's why Wynwood is worth five times more than other places, because you have [independent restaurants rather than] a strip mall that had a Starbucks and Dunkin' Donuts.”
Cho said he thinks he could impact a billion people with his plan.
"We have the solutions," he said.
CORRECTION, JUNE 23, 11:15 A.M. ET: A previous version of this story referred to the Massachusetts Institute of Technology Global CoCreation Lab. MIT isn't a partner with the Global CoCreation Lab on this project. The story has been updated.