Michael Procopio, CEO, The Procopio Companies
Building Multifamily When Others Pause
Subscribe now on any of these platforms so you don't miss a single episode.
Apple Podcasts
Blubrry
Android
YouTube
TuneIn
Stitcher
Google
Spotify
Amazon Music
RSS
Guest: Michael Procopio, CEO, The Procopio Companies
A Developer’s Market When Capital Is Skittish
Michael Procopio runs a fourth-generation, vertically integrated multifamily development company headquartered north of Boston, active across the Northeast, Carolinas, Texas, and Florida.
Typical projects: 150-400+ units; 10-12 active at a time; roughly $300 million of total capital deployed annually across debt and equity. Integration matters: Procopio sources and entitles, often self-performs GC work, and recently rebuilt an in-house, hospitality-driven property management arm, the operational levers that make development pencil while others stall.
Control vs. Capital: The Private Equity Trade
Institutional equity is abundant, until it isn’t. Procopio’s first institutional investor was Carlyle, a baptism by fire that taught him the reporting cadence and governance reality of big-fund partnerships. His blunt summary: “You’re in charge until they decide you’re not in charge.”
Why still do it? Because 95/5 JVs can produce exceptional equity multiples for the GP, leveraging a small GP co-invest into a meaningfully larger share of backend proceeds. The trade-offs: larger minimum check sizes that don’t fit every deal; heavy soft-cost overhead (third-party ‘experts’ on everything from mail rooms to fitness rooms); audited financials; and legal spend that can hit mid-six figures just for loan closings.
Waterfalls tend to be standard, IRR-tiered (e.g., pref to 10%, hurdles at 14–18%+), which can be challenging in today’s underwriting.
Family offices sit between institutions and individuals.
The sophisticated ones write $10–$25 million discretionary checks and look similar to institutions in docs and decisioning yet think longer-term, are highly tax-sensitive, and are often open to Opportunity Zone investments (OZ), tax-exempt bonds, and depreciation-heavy strategies that institutions, being tax-agnostic, don’t value. The downside: many have small, generalist teams; sponsors must educate.
Individual accredited investors can be powerful in aggregate. Procopio syndicated $52 million on a Boston-area 300-unit deal when New York institutions wouldn’t move but any single group can run dry. The firm keeps all three lanes open (institutional, family office, high-net-worth) to match capital to the right plan and to preserve sponsor control where it matters.
Why Institutions Are “Active” Yet Not Acting
On paper, institutions say they’re open for business especially in Boston multifamily, a top-ranked market. In practice, many are “very skittish.” Some multi-strategy funds are consumed by asset-management fires in lab/office; liquidity management at open-ended vehicles with heavy redemptions also tightens the pipeline.
And career risk runs through development: no one gets fired for buying a stabilized asset below replacement cost though someone might for backing a ground-up deal in a tertiary submarket. The result is a bias to safety and to headlines, even when near-term data obscure medium-term demand.
Micro > Macro: Where to Build When Spreads Look Ugly
Procopio’s stance isn’t “risk-on”; it’s cycle-aware.
He’ll start today where near-term pain is temporary but permits are finite e.g., a Florida submarket with double-digit negative rent growth now, double-digit vacancy in new product, and the fastest population growth in the U.S. three years running. The bet: shovel now, deliver in 24-30 months into normalized supply and healthy absorption, with almost no new permits in the pipeline.
Conversely, he’s cautious in oversupplied nodes (e.g., pockets around Raleigh) until absorption tightens. This is a “micro beats macro” approach: traffic counts, on-the-ground migration, and neighborhood shifts trump TV-studio narratives about entire states.
Policy Reality Check: Tariffs, Immigration, and the Real Cost Line
Hot-button policies matter but not always the way headlines imply.
In the Northeast, higher immigration enforcement hasn’t meaningfully disrupted his job sites; a single apprehension with a criminal warrant is the largest incident to date.
Tariffs? Run the math: materials are around 20% of project cost; a fraction of that is tariff-exposed; and the average tariff rate on that subset may only be mid-single-digits. Net, he pegs the total project impact at “somewhere between 1 and 2%,” a real headwind but not a deal killer provided you resist opportunistic price-hikes from vendors citing “tariffs” as a blanket excuse.
The truly consequential policy locus is local: rent control mechanics, inclusionary zoning ratios, stretch codes, Passive House mandates, embodied-carbon rules – each can break feasibility. In coastal blue states, cumulative policy friction often redirects development (and tax base) to friendlier regimes. The industry’s task is constructive advocacy, showing municipal leaders why “feel-good” set-asides at uneconomic levels simply stall housing.
The Northeast BTR Arbitrage Institutions Miss
Procopio’s most contrarian push is bringing large-scale build-to-rent (BTR) single-family to the Northeast. The comp set up here isn’t new apartments; it’s $1.5–$1.8 million for-sale homes. A $15,000/month ownership carry can be swapped for a $5,000/month rental creating a massive rent-versus-buy spread that institutions accustomed to Sunbelt math may be slow to recognize.
The catch is land and zoning: assembling 75-300+ BTR pads inside 50-minute commutes and educating towns that tightly spaced single-family rentals are “affordable by design,” sticky, and family-friendly.
Done right, BTR frees up boomer-held for-sale stock, captures migrating households, and compounds quietly for long holds.
OZs as a Hedging Tool: Underused and Misunderstood
Opportunity Zones remain one of Procopio’s favorite structures. Family offices sometimes hesitate, but he argues OZs are simpler than DSTs/1031s, allow lifestyle flexibility with realized gains (pay tuition, buy a car, invest the rest), and can deliver full capital return mid-hold via refinance while the project throws off cash. For sponsors balancing control, tax efficiency, and duration, OZs belong in the toolkit especially amid wide bid-ask spreads on land.
What to Watch into 2026
- The 10-Year and credit spreads.Not because the 10-year is magic, but because once BBB bonds yield 8–9 percent while development deals underwrite to the mid-teens, money splits fast. As that gap closes, capital migrates to lower risk yield.
- Workforce participation and boomer retirement behavior.More renters among downsizing boomers and a two-home rental lifestyle (Northeast and Florida) shifts demand.
- New York policy outcomes.Expect higher vacancy of controlled units as owners sit out uneconomic regulations and continued capital/personnel migration to South Florida. If that thesis compounds, Miami-West Palm cements its status as the country’s financial co-capital.
Takeaways for Sponsors and HNW LPs
- Own the levers.Entitlements, GC, and high-touch operations can restore feasibility where third-party dependency kills margin.
- Match capital to plan.Keep three lanes (institutional, family office, syndicated HNW) open so duration and control match the real business plan, especially in secondary/tertiary markets.
- Underwrite policy locally.The 1-2% tariff math pales next to a single uneconomic inclusionary ratio or rent cap clause. Model municipal friction first.
- Consider BTR in high-cost metros.The rent-buy spread is your friend; teach it to both capital and city hall.
- Use OZs intelligently.They are flexible, cash-flow friendly, and can de-risk holds while maintaining upside.
***
If you’ve ever wondered how some developers are still breaking ground while everyone else waits for “clarity,” this episode is worth your time.
Michael Procopio walks through exactly how he’s keeping 10–12 projects moving by controlling construction, management, and capital under one roof.
We talk about where institutions have gone quiet, how family offices are filling the gap, and why the Northeast’s build-to-rent math actually outperforms the Sunbelt.
It’s a rare, unvarnished look at how a seasoned operator is navigating high rates, skittish investors, and local politics and still making the numbers work.
If you want a practical view from someone building through the noise, you’ll want to hear this one.
Related to this episode:
