Spotlight On: Matt Sullivan, Chief Operating Officer, The Michaels Organization
May 2025 — Matt Sullivan, Chief Operating Officer of real estate firm The Michaels Organization, spoke with Invest: about the importance of developing affordable housing in South Jersey and other markets. “As leaders in affordable and attainable housing, we work closely with local officials to navigate the complexities of development, finance, and long-term management and compliance of these projects.”
Reflecting on the past year, what have been the most significant milestones or achievements for The Michaels Organization?
The last two years have been plagued by indicators that have performed poorly. We’ve seen high interest rates and high capitalization rates, leading many lenders and equity partners to limit their investment in new speculative real estate projects. We’ve had construction material price increases post-COVID that haven’t slowed down. We’ve had labor shortages. Increased job opportunities at higher wages have led to limited labor pools and rising payroll costs. And we’ve seen rising insurance premiums as catastrophic losses across the United States have led to insurance premiums increasing about 140% over the last five years.
The commercial real estate landscape has been extremely challenging over the last two years, but we have continued to grow our portfolio in a reasonable and responsible manner. Our portfolio spans every market niche, including affordable, student, market, and attainable housing as well as military housing. We develop 10 to 15 affordable housing properties per year, many of which are right here in South Jersey, while expanding our reach in other markets like Atlanta and Las Vegas. We’ve been a private-sector partner to the Department of Defense for more than two decades, serving military personnel and their families on 12 installations across the country. We are proud of our investment in military housing.
How is the company redefining affordable construction in Camden?
Camden is our home. We relocated to Camden five years ago, and we are committed to investing in the city and in South Jersey. We are a large organization, with 80,000 units across 39 states and the Virgin Islands, but we stay committed to doing good here in New Jersey. We are developing five groundbreaking, 100% affordable housing projects in some of New Jersey’s most affluent and sought-after communities, including Saddle River, Englewood Cliffs, Cherry Hill, Voorhees, and Woolwich. Each project is uniquely designed in collaboration with local stakeholders, ensuring thoughtful integration into the community while addressing critical housing needs. The Englewood Cliffs and Saddle River developments mark the first-ever affordable housing for families in those municipalities, an unprecedented step toward expanding housing attainability in high-opportunity areas. There are many cities outside of Camden that don’t have affordable housing-specific projects. As leaders in affordable housing, we work closely with local officials to navigate the complexities of development, finance, and long-term management and compliance of these projects. We help municipalities meet their affordable housing obligations.
What are the challenges and opportunities in developing affordable housing in New Jersey, and how is The Michaels Organization addressing them?
We want to help businesses, municipalities, hospitals, and the military provide safe, quality, and affordable housing for their employees, constituents, and service members. Providing housing that is affordable and attainable is more of a challenge due to rising costs in our industry. As those costs continue to increase, deals are more challenging to close, and capital returns to investors get squeezed. We have found that when we can capitalize on one or more of our three main pillars of attainable housing, we can have a successful project. The first is free or discounted land, the second is tax abatement, and the third is infrastructure savings. If we have one or more of those pillars, it allows us to pursue an opportunity and deliver properties with below-market rents. Rents across the United States have ballooned since COVID. The last five years have seen remarkable rent growth, which is good for an investor, but bad for a consumer looking for a high-quality, affordable place to live.
How do you perceive the trends in the New Jersey real estate market, particularly in the multifamily housing sector?
I was looking at a heat map showing where Americans are moving. There has been a lot of moving from the Northeast to the South, particularly to Florida and Texas. At the same time, New Jersey has seen a slight increase in population relative to the other Northeast and mid-Atlantic states. It’s confirmation that New Jersey is a great place to live and raise a family. There is continued demand here. Job growth continues to be strong, which means we have an ever-pressing need to deliver on our promise to provide affordable housing to residents of New Jersey, but affordable housing continues to be somewhat unobtainable in Camden and its surrounding counties, which is why our aforementioned work in some of the most affluent Jersey neighborhoods is so important.
How will the company bring its expertise to active adult housing to improve communities in New Jersey?
We currently have several active adult projects in development to help build our experience in this space. We hope to do the same in New Jersey and bring quality active adult developments in the same way we’ve developed affordable housing throughout the country.
We plan to leverage our 50+ years of expertise to enhance New Jersey’s active adult housing market. As demonstrated by our Oliver Station project in Camden—a partnership with Virtua Health through NJ’s Hospital Partnership Subsidy Program—we can combine our development and management capabilities with strategic partnerships to create housing that serves adults 55 and older. Our strong financial resources, experience managing over 80,000 units, and relationships with specialized architectural firms position us to develop communities that are both accessible and thoughtfully designed for this demographic.
Our approach to active adult communities focuses on two key objectives: enhancing community engagement and promoting holistic wellness. We emphasize creating maintenance-free living environments with strategic locations near healthcare facilities, retail, and transportation hubs. By incorporating diverse social activities and comprehensive wellness programs that address physical, mental, and emotional health, we aim to develop communities where New Jersey’s seniors can thrive in environments that support an active, fulfilling lifestyle while maintaining connections to essential services.
How does The Michaels Organization engage with local communities in New Jersey to ensure that development projects meet the needs of residents?
We engage early and often with local communities, local stakeholders, and the municipality itself to hear what their needs are so we can design a property that meets those needs. We also utilize the support of our strategic collaborative partners, both also based in Camden. For example, in many cases, we bring in the nonprofit Better Tomorrows to provide comprehensive social services for our residents, such as after-school programs and work training. Urban Practice provides in-house architectural services for all of our affordable housing projects and some of our military projects.
Throughout the development process, we’re committed to gathering input from existing and prospective residents. From conception to completion, we are focused on open dialogue to ensure our housing solutions fit into the fabric of the existing community. With this in mind, we are keen on creating opportunities for our residents, whether it’s through new supportive services or even job opportunities for residents and local businesses.
Have recent changes in state or local regulations impacted your development projects? If so, how are you adapting to these changes?
There have been challenges in Low Income Housing Tax Credit projects, particularly with the tax credit program. We see many projects that have a source-and-use imbalance, which means our cost to develop these projects tends to exceed the amount of money we have available, creating a gap that we have to fill with capital. We will often work with municipalities and the New Jersey Housing and Mortgage Finance Agency to help plug that gap and bring soft funds to the project to ensure we can deliver these affordable housing communities to New Jerseyans.
What initiatives or projects are you excited to push forward?
In addition to our investments in nearby Cherry Hill, Voorhees, and Woolwich, we just closed on Ablett Village here in our hometown of Camden, which will bring 78 energy-efficient townhomes in a large redevelopment of Camden’s oldest public housing community. We look to deliver that community to Camden residents in late 2026. We also have a $3.7 billion student, market, and attainable pipeline, the most notable of which is a 1,400-unit project with a Fortune 100 company to provide their employees and the local community an affordable place to live close to where they work and play. Lastly, our $1.7 billion military housing pipeline continues to grow, including a first-of-its-kind barracks privatization at Fort Irwin, California, that should break ground in the first half of 2025.
Looking ahead, what are the top priorities and goals for The Michaels Organization in the next two to three years?
There has been turmoil in the equities markets that has sent investors fleeing equities to the bond markets for safety of cash flows. In just two days, we saw a 30 basis point drop in the 10-year Treasury rate. It’s impossible to predict if these trends will continue over the next year. The decline in interest rates will help many developers and borrowers finance deals that were previously unfinanceable. Continued rising costs in insurance premiums, materials, and labor will present challenges. It will force more companies and developers to buy more American-made products, especially in the face of new tariffs. This will come at a cost to Americans, but will overall be a benefit for the economy.
Michaels will continue to grow in a responsible manner. We have focused a large part of our product procurement on American-made products and buying locally in the communities we serve. Our total development pipeline is more than $5 billion. We have partners and stakeholders who want to continue to invest with us. We have strong strategic relationships with banks to continue to lend money to our projects to help build our vision throughout the communities we serve. We are in our 53rd year of operation. In the last five to 10 years, we’ve seen remarkable growth, making Michaels a powerhouse in housing solutions. Over the last four years, we have acquired nearly 30,000 units across our three disciplines in 13 different states. I think, given everything we have going on right now, the next five to 10 years will be our best yet.
For more information, visit:
