Why an investor is going to renovate a St. Petersburg complex to honor the creator of bitcoin
St. Petersburg will soon host a new type of innovative housing project.
Skytian Capital, an investment firm that operates in Tampa, Toronto and New York, bought two apartment complexes in St. Pete for more than $5 million on March 31, according to Skytian Capital founder San Eng. The buildings at 425 2nd St. N. and 424 2nd St. N. will be redeveloped into Satoshi Hideout, a 41-unit housing community designed to provide flexible rental options. The project is named after Satoshi Nakamoto, the anonymous creator of blockchain and bitcoin.
There is a growing need for flexible and affordable housing that caters to people with unconventional work schedules, such as artists, medical professionals and tech entrepreneurs, Eng said in an interview with the Tampa Bay Weather. He saw a need to fill a growing void in Tampa Bay.
“It’s just very busy, like an upcoming Austin or Shanghai at the time,” Eng said of the growth happening in the area.
In this conversation, Eng explained why he didn’t focus on high-end apartments and why he wanted to honor the creator of Bitcoin. This interview has been edited for length and clarity.
Why did you want to build this project in Saint Petersburg?
After many years of research in North America and abroad to find out where we want to invest again, we fell in love with Florida and more specifically Tampa and St. Pete. In past projects, we looked more for opportunities to acquire workforce housing and opportunities to improve communities. So we would usually acquire and then try to make it a better place to live. This project is a bit different in that it is downtown. And we found out they were micro units in a bustling area of Tampa Bay. It’s just very lively, like an upcoming Austin or Shanghai at the time. It’s creative and technical, there’s just a fantastic energy with the youngsters and we felt there was a lack of cheap but cool and comfortable accommodation. We therefore thought that this product was a perfect place that would meet a strong demand: units that are therefore small, very high-tech, with a strong personality, branded, modular, furnished – but not necessarily five-star costs.
So is it a hotel, an apartment or rather an Airbnb?
There is a term called medium term accommodation, definitely not a hotel, which tends to have high staff. And it’s not necessarily a bed and breakfast. It’s sort of in the middle. We will be using technologies that would help automate a lot of things, like automated check-ins, all payments will be automated. It will be furnished like a hotel but the majority of rooms will have full kitchens and bathrooms. It can be very appealing to a nurse who has a three month contract or just imagine a team of founders who are starting a business here in Tampa, and might stay here two or three months but don’t want to stay in a hotel and want to be close downtown.
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It’s a very interesting emerging mix because even in Airbnb more bookings are now longer term, as opposed to just two or three tourist days. And that’s obviously driven by working from home, (and) accelerated by COVID, but it’s a trend that was emerging before COVID.
Tampa’s housing market is exploding, but some fear there is a growing risk of a cooling or correction. How do you navigate there?
That’s the billion dollar question, isn’t it? We are very conservative. We don’t really acquire assets that don’t have cash, so stabilized assets. Normally 90-95% is occupied and often (they) can be overlooked by owners and there are opportunities to really improve it, but not necessarily to empty it to 100%. When the leases expire, we can change the kitchen, upgrade with a washer and dryer, or add amenities like dog parks or change the yard. So we’re improving it, but we’re not doing development work. We may make less money than if we worked on the base, but we’re ok with that.
What will happen to the people living in the apartments now?
Some of their leases are about to expire. Many are monthly. As they leave, let’s upgrade. And obviously those who want to stay we will welcome them. It’s a high-turnover market, but it’s like any city.
How much would the price be compared to the apartments currently there?
We haven’t finalized pricing yet and are still finalizing the design. But I can tell you that if you walk around downtown St. Pete, there is quite a large supply and new supply of luxury condos. And there are many expensive hotels. I can tell you that we are not at this price level. So we will be more affordable just because the assets are a bit older. We don’t want to be another luxury builder.
We’re not going to be a one-star hotel, but what we’re seeing is a niche where there are so many creatives here or healthcare workers who are environmentally conscious, tech-savvy travelers who want something of different. So it’s a very nice niche. We are proud to be the first in Tampa with this concept. This is the perfect place to test something like this.
Why did you decide to call it Satoshi Hideout?
Bitcoin was created in the aftermath of the Lehman financial crisis as a kind of anti-Wall Street, anti-establishment because the belief was that centralized powers screwed up little guys. So the whole idea of decentralization and using technology is to really democratize money, as well as society. So this whole ethos, believe it or not, is what hosts a very tight-knit and passionate community. This philosophy attempts to capture this spirit of democracy, sharing for all and innovation.
The blockchain is massive and only getting bigger, so we wanted to honor the creator of the blockchain because he or she or they, we don’t know if Satoshi is a person or a group of people or if he is is a man, a woman, Black, white or Asian. We don’t know, do we? Because no one does. But we know that they created this thing, which is worth billions in Bitcoin and they are hiding somewhere.