John Picerne was raised on the real estate business in the third-generation Picerne Real Estate Group. But the further he went in the family business, the less comfortable he became with the boom-and-bust cycles of residential housing. Craving a more stable slice of the market, Picerne ventured into military housing, particularly building apartments on Army bases, and broke off the independent Picerne Military Housing in 2005.
Now Picerne Military has 20,000 units under management at bases across the country and employs 863 people, up 60 percent from the start of the recession, including 80 at the company headquarters in East Greenwich. This year Picerne was honored at the White House for a company foundation that helps the families of veterans and was a finalist for the Ernst & Young Entrepreneur of the Year award.
PBN: How is building housing for the military fundamentally different from building apartments for civilians?
PICERNE: Military housing differs in several ways. It provides housing to military members and their families exclusively and the work we do is entirely on military installations. The way it works is we receive a ground lease for 50 years, we purchase all the buildings from the military, raise debt against the projected rental income, and then reconstruct and redevelop new housing for active-duty members. In our portfolio, which has [more than] 20,000 homes, we have developed about 50 percent new homes and 50 percent renovations. The renovations are really anywhere from minor on relatively new homes to major renovations, which would be all the way down to bare studs and framing, where we are basically starting over again. We also have an extensive number of historic homes in our portfolio.
PBN: What drew you to military housing initially from Picerne Real Estate Group’s specialty in traditional apartments?