Golub & Company: Global high-rise development, Chicago style

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By Midwest Real Estate News Staff

San Francisco’s trendy SOMA district and Warsaw, Poland, might seem worlds apart, but not for one of Chicago’s oldes family-run commercial real estate companies, Golub & Company.

“Deals have taken us to a variety of places across the U.S. and in Europe; it’s not about geography, it’s about opportunity,” says Michael Newman, chief executive officer and part of the second generation of family leadership at Golub.

2014 may be the most geographically diversified year for Golub & Company since Eugene (Gene) Golub founded the firm more than half a century ago. Decades of consistent management have built a strong relationship network of capital partners, architects, contractors and other partners that seek out the firm when a deal feels right—sometimes in those unlikely places, from Warsaw to Chicago to Aspen, San Francisco and anywhere else opportunities might arise.

Navigating family leadership

“The bottom line is that for 54 years this has been a family business that’s opportunistic and entrepreneurial, and it’s going to be around a long time,” Gene said.

Golub & Company has survived and thrived through a half-dozen market cycles that wiped out or transformed most development firms of its vintage. The firm has completed deals totaling in excess of $7 billion, and is rapidly adding to that total with a wave of new developments across the country.

The firm’s owners, all family members, have navigated the commercial real estate market through its ups and downs, following a basic formula that hasn’t changed much since Gene founded the firm more than 50 years ago:

  • Act when the market’s right;
  • Look for deals where you can add value;
  • Work with the best partners and long-term employees; and
  • Do what you say you’re going to do.

This philosophy has led to a long list of professional recognitions for Gene, who recently has been celebrated in Europe as well as in the United States for his contributions to the industry and the built environment. Most recently, he received a lifetime achievement award from EuroBuild, which noted that the firm was the first developer to commit to Eastern Europe after the fall of the Berlin Wall. Gene has also received lifetime achievement awards from the Central & Eastern European Real Estate Quality Awards and from the Chicago Chapter of the Urban Land Institute.

At 83, Gene remains engaged, yet the business has been run primarily by the next generation for two decades, a management team including son-in-law Michael Newman, son Lee Golub and daughter Paula Harris. All three have been with the company for a quarter-century or more.

Other non-family members who round out the leadership roster are long-term company and industry veterans including Michael Goldman, head of acquisitions and financing; John Ferguson, head of office and retail leasing; Bruce Armstrong, head of development; and Tom Gatti, who heads the firm’s financial and administrative functions.

Golub & Company has now become a third-generation family business, Harris notes, as her daughter Samantha Patinkin has joined the company. And there are other family members in the wings. Some of the third generation have already completed internships at the firm and are working elsewhere, gaining valuable experience in the business world outside the family business.

The consistency and longevity of its leadership team has helped Golub & Company achieve a high level of credibility with financial sources and operating partners. “We’ve done deals or worked with just about every major lender out there,” Gene observed. “If someone were to ask me for references, I’d say, ‘just talk to anybody in the business.’”

At least one family member is involved in every major deal, which on the one hand limits the firm’s size but on the other ensures quality control and sponsorship upon which partners can rely.

“We’ve always been able to do big deals, but it’s not about being big—it’s about doing the right deals,” Newman said. “We define the ‘right deal’ as one that is profitable for our investors, is high quality in its asset class, and where we can offer excellence in professional operations and management.”

Taking Chicago connections global

An example of the management team’s creativity in finding those ‘right deals’ is the firm’s presence in Central and Eastern Europe development during the last three decades. Golub & Company was the first Western developer to build in Poland after the fall of the Berlin Wall, and the success of that first building led to additional opportunities, the latest of which is PRIME Corporate Center in Warsaw at the center of Warsaw’s CBD.

Golub & Company’s Polish affiliate, Golub-Gethouse, recently pre-signed Raiffeisen Polbank to a lease for 90 percent of the building’s office space–19,500 square meters (approximately 195,000 square feet)—plus the entire first-floor retail space. The deal was dubbed “Transaction of the Year,” by Polish media and ranked among the largest deals year-to-date anywhere in Europe. The building was designed by Chicago firms Epstein and Solomon Cordwell Buenz (SCB), and is expected to be completed in early 2016.

Those Chicago-bred relationships travel well for Golub & Company. Another SCB-Golub collaboration is under construction in San Francisco. The City on the Bay may be a market with high prices and high taxes, but it’s also known for high rewards for those companies that get development right. When the San Francisco Redevelopment Agency selected a developer for the Transbay Block 6 development parcel in the city’s SOMA (South of Market Street) district, Golub & Company might not have seemed like the obvious choice. But given the complexity of the deal – a 32-story luxury apartment complex and a required adjacent affordable housing tower – it made sense.

“It was a relationship that brought us there,” said Michael Newman.   “SCB called us and said, ‘we think Golub can make a difference there.’ It was appealing to us because it was zoned, so there was no entitlement risk, and urban high-rise multifamily is right in our wheelhouse. We gravitate toward development opportunities where our experience can add real value to the deal.”

Golub and SCB built a diversified team peppered with both San Francisco and Chicago connections with decades of experience working together. Bentall Kennedy joined the group as a capital partner to bring the complex deal to fruition. Ground was broken in December 2013 with much fanfare from the mayor of San Francisco. It was a classic Golub deal, leveraging the firm’s deep relationships, credibility and entrepreneurial flair to seize a moment of opportunity—regardless of geography.

Creativity: A family affair

The projects in Warsaw and San Francisco share a common denominator: creative, opportunistic plays that present strong investment potential for Golub’s many institutional capital partners.

“We are often brought in by capital partners who need operating partners with local knowledge, and are willing and able to have ‘skin in the game,’” Lee Golub observes. “One thing our partners appreciate is that we treat all deals like we’re the owners, even when we work on a fee basis. Because of this, many of our capital partner relationships go back decades, and typically lead to multiple collaborations.”

The firm’s projects typically have a good story behind them – sometimes literally. Gene Golub is a published author of spy novel Protokol, a story set in Poland during the cold war, with interlacing connections to the areas surrounding the firm’s Warsaw developments.

More often, the creativity is in the deal-making and identifying opportunities. One current project, a development of 14 ultra-luxury townhomes with price tags $9 million and above in Aspen, Colo., began with a land purchase at the height of the financial crisis—an opportunity now coming to fruition. In another deal outside traditional major markets, a mixed-use development in Scottsdale, Ariz., was launched when the site was identified during an unrelated business trip, and the management team was then able to garner zoning approval that no other developers had previously been able to achieve. The result: the tallest residential building in downtown Scottsdale.

Other deals still in predevelopment phases are expected to be ready for ground-breaking later this year or in 2015, including several Chicago developments and investments. While Chicago is currently the focus of the firm’s Midwest developments, the company has owned and managed properties throughout the region, including in St. Louis, Indianapolis, Minneapolis and other markets.

When the rubber hits the road

The expertise and relationships that the Golub management team brings to the table pay off particularly when deals get complex. With Goldman Sachs, the firm bought the John Hancock Building in Chicago at the peak of the market in 2007. The financial crisis quickly changed the economics of the deal, and the building itself brought its own complexities, including the operation of one of Chicago’s most popular Observatories.

Yet despite the challenges, over the next five years, Golub & Company, acting as property manager and leasing agent, substantially leased and repositioned the Hancock. Golub principals note that the partnership was successful.

“Since the Hancock deal, we have done two more deals with Goldman Sachs, including the acquisition of 311 W. Monroe in Chicago,” Lee Golub observed.

“Our relationship partners look for value creation, innovation and creativity, and those values come naturally to us because it’s how we’ve always done things – it’s what my father taught us,” Paula Harris said.

Although her father has turned over the reins, his presence looms large, Harris said.

“He’s still extremely creative, able to come up with solutions, and he challenges us to think through every angle, on every deal.”

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Ford Land: Providing modern office space for small businesses in Michigan

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by Dan Rafter

Need modern, furnished executive office space? Ford Land, the real estate arm of Ford Motor Company, is now offering this space for lease in its hometown of Dearborn, Mich.

Fard Land hosted a ribbon-cutting ceremony for the new Executive Offices at Fairlane Plaza Aug. 21. Dearborn’s mayor, John O’Reilly, and Ford Land chairman and chief executive officer Donna Inch, along with members of the Dearborn Area Chamber of Commerce, attended to welcome the first three tenants to the office space.

Those three tenants are Dale A. Bender PLLC, Premier One Group and CARMA Consulting.

The new office space is certainly modern. The Executive Offices at Fairlane Plaza boast 21 private offices in a suite with a large lobby, conference rooms, kitchen and free Wi-Fi.

Rob Cory, director of commercial properties at Ford Land, said the time was right to offer this space.

“We’ve seen an increased demand for small move-in-ready office space,” Cory said. “We are pleased to be the first landlord to make this class of space available in the Dearborn area.”

Each office comes with a wood desk, chair, bookcase or file cabinet and a large window view.

Building amenities in the office complex, located at 290 Town Center Drive in Dearborn, include a full-service cafe, salon, courtyard, parking garage, security and on-site property management.

The executive offices are just the latest service that the company offers to small businesses. Ford Land already offers suites ranging from 200 square feet to 3,000 square feet in several of its multi-tenant buildings.

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It’s been nine years coming, but Bielenberg Gardens project becoming a reality

bielenberg gardens

by Dan Rafter

The site first popped onto United Properties’ radar in 2005. And why not? As Keith Ulstad, senior vice president with United Properties, says, the plot of land is located in a strategic location in the Minneapolis suburb of Woodbury, Minn.

It sits in the southern half of Woodbury, a desirable market for retailers. An attractive demographic lives here. And the site has long been one of the few parcels of land zoned for retail use in this part of Woodbury.

But 2005, of course, was a very different world than the one in which commercial real estate developers are operating today. Before United Properties could finalize plans for a retail development here, the economy fell into recession.

That scuttled any major retail project. Until now.

In late June, United Properties broke ground on the Bielenberg Gardens retail project on this key site at Radio Drive and Bailey Road. The project will include a 65,000-square-foot Jerry’s Foods grocery store as an anchor and 6,200-square-foot high-end liquor store operated by Jerry’s Enterprises.

Bielenberg Gardens will also feature a 12,300-square-foot multi-tenant retail building and 10 retail outlots.

The project is an important one for Woodbury. It serves as the retail component of a city-led master-planned development that will one day include apartments, townhouses and other amenities. The site will connect to the Bielenberg Sports Complex by a tunnel leading under Radio Drive.

Ulstad says the time is now right for the project. It’s true, he says, that Woodbury already boasts plenty of retail. But most of that retail is not located in the southern portion of the community.

“If you peel back the layers of the onion a bit, you’ll see that most of the retail is located along Woodbury’s I-94 corridor,” Ulstad said. “And in high measure, that retail is lifestyle goods, shoppers goods, as opposed to necessary goods. What people didn’t like was driving from the southern part of Woodbury to the northern part to buy gas and groceries or to do their banking or get their prescriptions.”

Bielenberg Gardens solves this problem, providing those residents who live in the southern portion of the community easier access to these necessary consumer goods.

“We made it clear early on that we are not competing with the lifestyle retail in the area,” Ulstad said. “We are not selling ball gowns or flat-screen TVs. This is a shopping center geared to the everyday needs of the citizens of south Woodbury.”

The grocery store and strip center are now under construction. Ulstad said that the goal is to get the grocery store environment-proofed by early to mid-December. United Properties is planning an opening of the store in March or April of next year.

“The stars have aligned for us after nine years,” Ulstad said. “To get going is a great feeling. If you go up there now, you see the walls actually going up. It’s sometimes hard to believe, but we are now underway.”

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Auction.com’s Rick Sharga: How strong is the U.S. housing market?

by Dan Rafter

Few factors influence the state of commercial real estate quite like the ups or downs of the country’s residential housing market. So what do real estate experts think about the recent performance of housing?

This new video by Auction.com’s Rick Sharga, the company’s executive vice president, offers plenty of insights. Commercial real estate pros owe it to themselves to watch. After all, when the housing market is strong, so is the commercial real estate industry.

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Opus bringing new life to 147-year-old former campus infirmary

shattuckby Dan Rafter

The Opus Group has decades of experience renovating and expanding collegiate facilities. The company has also tackled its share of renovations at historic buildings.

That’s good news for the school leaders at Shattuck-St. Mary’s, an Episcopal boarding and day school in Faribault, Minn. The Opus Group is now in the middle of construction on its latest institutional project, turning the 18,500-square-foot Phelps Infirmary building into an on-campus inn with meeting and conference space.

Once complete, the newly renamed Inn at Shattuck-St. Mary’s will serve as the diocesan retreat and meeting center for the Episcopal Church in the state of Minneosta.

Tim Callahan, senior project manager at Opus Design Build, said that his company’s experience with institutional projects — the company has handled recent renovation projects at the University of St. Thomas in Minneapolis and Luther College in Decorah, Iowa, among others — made Opus the obvious choice for the Shattuck job.

“We have a long history of this kind of work,” Callahan said. “On a lot of college campuses, we’ve done remodels of fairly old buildings. We’ve done a lot of residential work similar to the hotel/inn concept that we are doing for Shattuck.”

The infirmary building is an old one, 147 years old. Remodeling such an old building is never an easy task.

“There are always surprises when you work on a building of this age,” Callahan said. “But so far, we’ve not run into any major roadblocks. Certainly, digging into and remodeling the space has been a unique experience. It’s been fun to bring the building back to life and give it a new use for the school. It’s interesting to see how people built spaces like this in that time, and how things have changed.”

Opus began the renovation and expansion project in July, and Callahan says that construction should wrap in October.

The project includes a complete remodel of the 147-year-old infirmary building and will add 10,200 square feet of new space to the two-story facility. The first floor of the building will feature a large meeting room with adjustable partitions, a catering kitchen and a bar and lounge area that can be used for meetings and events.

The second floor will provide 12 guest suites.

Nick Stoneman, president of Shattuck-St. Mary’s school, says that the renovation project is long overdue.

“Renewing our oldest building on campus and giving it new life brings great pride and joy to our school community,” he said.

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Dakota Insight Land & Investments: Making an impact in the Bakken

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by Dan Rafter

Plenty of commercial real estate companies have flocked to the Bakken Shale region of North Dakota. And why not? The region is producing a steady stream of both oil and opportunity. Someone has to build all the shopping centers, hotels, apartment buildings and grocery stores needed by the suddenly booming towns of the Bakken area, places like Watford City, Williston and New Town.

But few CRE pros recognized the opportunities here as quickly as did Joseph Kachuroi with Watford City, N.D.’s Dakota Insight Land & Investments.

Dakota Insight Land & Investments has been the master developer and general contractor for more than 4,300 residential units and more than 3 million square feet of mixed-use commercial projects in the Bakken region. The company has more than $1.3 billion invested in vertical development in North Dakota.

And now Dakota Insight Land & Investments is busy developing and marketing a pair of new mixed-use projects in the Bakken area.

This isn’t surprising; Kachuroi says he still sees plenty of opportunity in this oil-rich region.

“We know this region well,” Kachuroi said. “I’m not saying that we were experts in North Dakota from the time we built our very first project here. But we have taken the time to learn how the process works in North Dakota. We’ve had a big head start on many of our competitors, a head start of more than two years. And we are committed to bringing this part of the state the services it needs.”

The boom times in the Bakken region of North Dakota can be attributed to the oil reserves here, reserves that rival those of Saudi Arabia.

The challenge, though, is that the towns of this slice of North Dakota lacked the amenities needed by their suddenly booming populations. Simply put, there aren’t enough hotels, apartment buildings, single-family homes, gas stations or medical facilities here.

That has provided opportunities for commercial developers and brokerages. Some companies, such as Dakota Insight Land & Investments, have made the most of this, and are reshaping the face of the Bakken region.

New projects

Dakota Insight Land & Investments is currently marketing the NorthStar Center, a 535-acre master-planned mixed-use community in Williston. The goal here is to create a walkable, pedestrian-friendly community to meet the needs of Williston’s growing population.

hunters runThe project is no small one. It calls for 1,274 multi-family units, more than 1,500 units of single-family housing, an autoplex auto center, office park and retail. Plans include a central community, a heavy commercial park and some sort of medical use.

“We broke ground on this project two weeks ago, and we are working diligently to have foundations, if not vertical, in place with some of our apartments by the end of this year,” Kachuroi said.

Demand from potential tenants has already been strong. Kachuroi said that a Chevy dealership has already committed to filling the autoplex portion of the project.

Dakota Insight is working with Watford City-based Titanium Builders & Development on this project. Titanium, led by founder Jason Vedadi and serving as the master builder on the NorthStar project, has completed commercial projects in five states. Kachuroi also serves as the vice president of development and acquisition for Titanium.

Dakota Insight is also currently marketing Hunter’s Run, a 350-acre mixed-use master-planned community in Watford City. This project will bring 190 townhomes, 166 twin homes, 468 apartments and a 7.6-acre park to the community. Other features include commercial opportunities for medical office, retail, restaurants and a possible hotel.

Titanium Builders & Development will again act as the project’s master builder and developer.

Construction on this project is well underway. Kachuroi says that he expects 700 residential units to be available for leasing before the year ends. People are already living in some of the completed residential units, he said.

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Making an impact: Buckingham Companies to bring hotel, retail and apartments to Vanderbilt University neighborhood

by Dan Rafter

Indianapolis developer Buckingham Companies is set to make a major impact on the Vanderbilt University campus area in Nashville.

The company will soon begin construction of a 600,000-square-foot mixed-use development that will bring 350 apartments, a 180-room hotel and 35,000 square feet of retail space to a two-acre site adjacent to the campus.

Buckingham Company officials have a simple goal for the project: They want it to further the transformation of Nashville’s Midtown neighborhood into a walkable district of residences and retailers.

“The project’s design has evolved and is intended to be reflective of and responsive to the creative and passionate feel of the Midtown area,” said Scott Travis, vice president of development at Buckingham Companies, in a written statement. “It will be situated at the heart of a neighborhood that is intellectual, diverse and energetic. Our goal is to build upon those characteristics.”

Kimpton Hotel & Restaurants will operate the full-service hotel at the development, which currently has the temporary name of Buckingham Midtown. Mike Depatie, president and chief executive officer of Kimpton, said that the company has long been searching for an opportunity to operate in Nashville.

“The Buckingham Midtown property is the perfect partnership,” Depatie said in a statement. “This development is in a position to enhance an already vibrant neighborhood.”

The residential units will include studio and one-, two- and three-bedroom floor plans. The apartment development will feature a pool terrace and concierge services.

Buckingham Companies also plans to boost the 21st Avenue South and Broadway intersection of Midtown with enhanced sidewalks, lighting and traffic improvements.

Buckingham Midtown’s different components will open in phases, with the completion of the entire project scheduled for early 2017.

The development will be built by Buckingham Construction Corporation in collaboration with Nashville-based Crain Construction Co. The architect is Torti Gallas and Partners from Washington, D.C. The engineering contractor is Littlejohn Engineering Associates of Nashville.

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