Business Monday

Q&A with Ronald Krongold: In business, timing and diversity are everything

Ronald Krongold, managing partner of Gold Krown Holdings, LLC.
Ronald Krongold, managing partner of Gold Krown Holdings, LLC. Miami Herald staff

Ronald Krongold doesn’t believe in sticking to one business.

The West Virginia-born lawyer graduated from the University of Miami law school in 1969 and started working for developers on real-estate deals. By the late 1970s, he and a former client were building tract homes of their own in Kendall Lakes.

In the 1980s, Krongold founded his own private investment firm, Gold Krown, which focused on real estate but also ventured into other businesses. The most successful was Magic Box, a local network integration company that Krongold and his partners sold in the 1990s.

Gold Krown also invested in the Corner Shot, a weapon developed by an Israeli army officer and designed for hostage and terrorist situations that shoots around corners.

Moving into politics, Krongold helped managed his friend Jeb Bush’s successful campaign for governor in 1998.

In 2001, Krongold became the development partner for Jungle Island, relocating Miami’s longtime tourist attraction Parrot Jungle to Watson Island, where it opened in 2003 and was renamed in 2007.

And during the recession, Gold Krown (whose investors included Bush) bought 559 unsold units at the Midtown Miami project for $110 million. The group has since sold all but 50.

Today, Bush’s son Jeb Bush Jr. works as a managing partner at Gold Krown, when he’s not raising money for his father’s all-but-declared presidential campaign.

Krongold answered the following questions by email.

Q: What is the core of your business today and how/why do you keep it diversified?

A: Real estate has been the core of my business for more than 40 years and always will be. But as an entrepreneur, thanks to always having a strong entrepreneurial spirit from a young age, I remain curious to explore various industries. As a result, I have grown my business successfully while keeping life interesting.

Beyond my passion for real estate, I have maintained a diversified portfolio in Gold Krown by investing in technology. I am always interested in other areas, but opportunities have presented to take the leap in thriving areas such as technology, where you can change the way in which business is done.

We partnered with a young fellow by the name of Israel Fintz in Magic Box, which was ranked by LAN Magazine as one of the country’s top 100 network integrators. Timing was everything; we entered the computer tech market at the ideal moment and within a few years were among the largest computer integrators in the southeast. While pursuing going public with Magic Box, we were approached by the largest integrator in the country and offered a deal to sell the company. It was an offer that we could not refuse.

Q: What forces in the market led you to believe Midtown Miami would be a good investment? How has the purchase played out?

A: As a Miami resident for the last 50 years, I have experienced Miami’s real-estate market at its best and its worst. Even during some of the worst economic times our country has suffered, Miami has always been the last city to be affected and the first to recover. The city’s diversified economy presents a number of different revenue streams to rely on (i.e. hospitality, real estate, banking). It is definitely my home for smart investments and successful business.

Midtown Miami Residences was acquired during a distressed time; however, I knew that the Miami market would overcome the world’s economic challenges. Due to Midtown’s prime location in a neighborhood emerging with popular restaurants and the then-proposed Design District redevelopment, I immediately saw the project as a ripe opportunity to penetrate this market. The significant interest from foreign investors wanting to quickly cash in was also a key factor in the great potential when purchasing a large residential project such as this.

As we anticipate selling all of Midtown Miami’s condo units we purchased by year’s end, the project has been one of Gold Krown’s most successful to date. We have sold a good quality product at a relative value to buyers, still at a lower price compared to most pre-construction projects east of I-95 and in the urban core of Miami.

Q: What are your plans for the old FBI headquarters in North Miami Beach, which you developed in the 1980s and which the FBI recently vacated for a new property in Miramar?

A: As a truly one-of-a-kind property encompassing 148,000 square feet and over 700 parking spaces, the former FBI headquarters is one of the most secure structures in all of Miami-Dade County. As a result, we have received numerous inquiries from institutions and businesses that want a secure environment, such as schools and manufacturers that need office space and a secure surrounding. I do not foresee having any issues renting the property, especially due to its accessible location within minutes of I-95, the Turnpike, Palmetto and 163rd Street, leading to the beach.

Q: How has your partnership with the Bush family helped your business? Will you support Jeb Bush if he runs for president?

A: Jeb Bush is a talented businessman. While he is known best as the former governor of Florida and a member of a family that has served our nation for years, one hidden secret is that he is very knowledgeable in the business world. With regard to supporting him for president, should he choose to run, the answer is unequivocally yes. I know him well, and he is a man of great character and intellect who would re-energize our country.

Q: With a great deal of inventory scheduled to come online in the next 12 months, the market for luxury condos appears to be slowing down. How will this affect real estate in Miami and where should careful investors look to put their money?

A: With the new construction frenzy taking place, South Florida will experience a large wave of inventory coming online in the few years, making it more challenging to find buyers to fulfill the oversupply. Many buyers will be overly cautious about their approach to real estate as rental rates drop and short-term appreciation of their units becomes more questionable. This will be a growing concern in urban areas with already high density, such as downtown and Brickell. It will be much more difficult for developers to sell units, which will result in a price decline, thus leading to a market correction. As Miami always recovers, the oversupply will eventually be absorbed for the market to normalize.

As for the long term, Miami is and always will be a smart place to invest in real estate. All aspects of the city are growing, from our cultural and art events, to major entertainment and shopping destinations. Miami will continue to be international and attract a plethora of worldwide buyers looking to invest in a real-estate market that still remains affordable compared to major global cities around the world.

Q: How has Miami changed in the years since you’ve known it, and what has driven the changes?

A: As a 50-year resident of Miami, the city has transformed overnight from a local town to an international destination. We continue to be amazed and thrilled by the increase in diverse cultures that are driving positive changes to this spectacular place. Miami’s cultural scene, for example, has ignited the city to attract an even wider audience. From international art fairs like Art Basel Miami Beach and Art Miami, to the new Pérez Art Museum Miami and Science Museum, our burgeoning scene now brings worldwide attention. Miami has something to offer for everyone, yet this is only the beginning.

Ronald Krongold

Job title: Managing partner of Gold Krown.

Time in current post: Managing partner since 1980.

Previous positions: Lawyer and longtime entrepreneur.

Education: University of Miami, with degrees in accounting and law.

Personal: Married to Glenda and has four daughters; lives in Miami Beach. Was born in Clarkesburg, West Virginia, and moved to Miami in the late 1950s.

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