Empire Realty Investments Creates Value with Aggressive Strategies, Total Access: Flexible Approach Accounts for Wave of Deal Closings in '07

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Who says it's a slow market? Not Michael Pearlstein. As president of Philadelphia-based Empire Realty Investments, Inc., Pearlstein says 2007 has been an exceptional year for the growth of his real estate investment company.

Typically, we are buying deals that already have high vacancies or are performing far below the market - these are the deals where we can add value and create long-term growth because we're buying the investments based on the as-is numbers, not the proforma. It's always been our business goal to buy low and keep our assets long term in good, stable markets.

    "We've closed eight deals in the last six months," says Pearlstein. "I think the caliber of these deals and of the properties, themselves, speaks to our strengths and flexible strategies and to the solid relationships that we've built with developers, owners and financial institutions over the years."

Empire's overall transactions have totaled approximately $200 million in recent months, and the company is closing in on its goal of reaching $1 billion in real estate holdings. The mix includes multi-family, mall, office and retail properties that cover territory from the Philadelphia area to the Midwest and to Washington and Oregon states.

Empire's growth is a testament to Pearlstein's tenacity, says Kevin McClernon, a senior vice president with CB Richard Ellis. McClernon represented one of the nation's largest shopping center owners in the sale of the Schuylkill Mall, a 900,000 square foot property on 150 acres in Pottsville, Pa. "The deal was very complicated, and Mike was very aggressive in his pursuit of the property. He showed great perseverance in ferreting out what he needed to do to make it a profitable project for both sides, and he's proving that out now as the owner," says McClernon.

Joseph Verdejo, senior director for Cushman & Wakefield's Capital Markets Group, was also witness to Pearlstein's persistence. Verdejo sold a 100-unit apartment complex in Lansdale, Pa., to Empire on behalf of Home Properties, Inc., the country's fifth largest apartment REIT. "From the time that Mike committed to the property through the closing, the debt market had changed significantly. In spite of that, Mike performed," says Verdejo.

Pearlstein says it should come as no surprise that Empire can close on new opportunities even in challenging markets. "In fact, we see a great opportunity across the country to capitalize on deals that are now being affected by the challenged markets," he says. "Typically, we are buying deals that already have high vacancies or are performing far below the market - these are the deals where we can add value and create long-term growth because we're buying the investments based on the as-is numbers, not the proforma. It's always been our business goal to buy low and keep our assets long term in good, stable markets."

The Empire Advantage

Pearlstein said his business formula and track record give Empire an advantage, especially in challenging markets, and it's getting the company recognized and sought out by institutional-sized owners, including several of the top 10 real estate developers in the country. "We're moving the company to the next level. Owners and brokers know that we're credit-worthy, and they know that when we go under contract, we close the deal," he said.

Ask brokers what the Empire advantage is and they'll tell you that, in part, it's the total access they have to Pearlstein. "If Mike's interested in a property, you'll know it," says R. Eric Mattson, Jr., a vice president with GMH Capital Partners. "He's the decision-maker, and he's available 24/7. A lot of larger companies have big teams that come in with a standard checklist, but Mike is very hands-on and figures out the best approach for the deal. He even shadowed the physical engineer on the tour of the property he bought through me." That property was a 100-unit apartment building in Newark, Del., that Mattson sold for Fairfield Residential, one of the top 10 multifamily management companies in the country.

About Empire Realty Investments

Empire Realty dates to 1960 when Pearlstein's father, Robert, first began acquiring and managing properties. Michael created the current business model in 1987 and said that being a family-run company is what allows him a very hands-on approach to the business. "We stabilize properties for long-term growth because we give them our personal attention and have the flexibility to be aggressive, make quick decisions and really negotiate with tenants we have confidence in. Larger institutional lenders can't do that," Pearlstein says. "We also understand that what worked today will not necessarily work tomorrow. We anticipate and respond to the changes in the market and become creative and hands-on to make the deals successful."

In addition to managing much of its own portfolio, Empire's relationships with major property management players like Fameco Real Estate also ensure that Pearlstein's plans for asset redevelopment and management are handled efficiently, professionally and cost effectively.

Empire Realty Investments, Inc., has acquired and managed approximately 2,500 units, 3 million square feet and 500 acres of retail, office, multi-family and residential properties throughout the metropolitan Philadelphia area and in 15 states across the country.

For more information about Empire Realty Investments, Inc., visit http://www.empirerealtyinvestment.com or call 215-232-5400.

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Christine Reimert
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