Chicago-based Golub & Company has added Alex Newman as financial analyst to support the asset management group.
Newman’s responsibilities will include investment and market analysis related to portfolio management, acquisitions and finance.
He comes to Golub from CNA Insurance, where he performed financial analysis functions for domestic and overseas operations. Prior to joining CNA, Newman served as senior auditor for Ernst & Young, working mainly with real estate sector clients such as REITs and asset management companies.
Newman graduated Summa Cum Laude from Washington University’s Olin Business School in 2008, and received a Master of Science degree in Accounting from the University of Virginia McIntire School of Commerce in 2009. He is a Certified Public Accountant.
Link: Alex Newman Joins Golub As Financial Analyst
When Michael Newman and Eugene Golub began their first commercial real estate deal in Poland, one of the first things they learned was that there was no Polish word that directly translated to “developer.”
“The office market there was occupied by state owned companies in state owned buildings. No first class or modern office space really existed,” Newman recalled of their first trip to the city in 1989. But that was about to quickly change, and GOLUB was the first U.S. developer to begin building in the Polish capital city of Warsaw, breaking ground on its first building there in 1991. Today, their Polish arm is Golub-GetHouse (GGH).
The fall of the Berlin Wall in November 1989 charted a course for the gradual opening of Eastern Europe and enhanced economic opening for domestic and foreign companies alike. Berlin also played a role in Golub’s journey to Warsaw. While working on another project with a Berlin-based company in 1989, Poland was pitched to them as a potential opportunity.
“At first, we were hesitate to go behind what was then the Iron Curtain,” Newman recalled. “But hesitation gave way when we realized it was a historic opportunity.”
Read on for more insight from our conversation with Michael Newman:
What were the early challenges as you began working in Warsaw?
Newman: What we had to explain was that they were more used to “contractors” – the norm was state-owned buildings owned by state-owned companies. There wasn’t really a concept of privately owned land and buildings. There was some funny nuance to explaining that a developer wasn’t a builder, but that the developer puts all the pieces of the private transaction together. For our first project, our development team acted as the general contractor and hired subs directly, which is not what we would do in the U.S. And we don’t do that there anymore, but at the time we just couldn’t find the kind of expertise needed to oversee a Class A building.
Who were the tenants that were looking for commercial office space?
Newman: We built Western style space for Western companies either already currently in Warsaw in ad-hoc space, or those considering opening an office in Central or Eastern Europe. These were service firms like law firms accounting firms and banks and service firms, which were following the manufacturing firms that were already there.
What was the funding structure?
Newman: There was no private capital, no institutional equity pension funds, really no one was financing or investing there at the time. The International Finance Corp., sister company of World Bank, became our lender for that first project, and they invested equity.
What changes have you seen in funding availability?
Newman: So many projects of ours were the “first of” their kind over there. For our most recent project, we put a fund together with two of the largest Polish pension funds to invest in our deals. In the states and the U.K., opportunity funds are common. But Polish pension funds have traditionally invested in the public market. So our $50 million real estate fund was something new for them, and we hope it grows into expanded mutual opportunity.
What is your latest project in Warsaw?
Newman: Golub-GetHouse is developing the 23-story PRIME Corporate Center building on Grzybowska Street in the Warsaw CBD. It’s currently under construction and is nearly 100 percent pre-leased to Raiffeisen Polbank, which is unique. The building was originally zoned for residential, but we felt given the location and market we worked toward the required approvals and redesigned the building plans for conversion into an office project.
What other European cities have you done business in over the last several decades?
Newman: Early on we did a little bit of work in Budapest, a development in Prague and Brastilana as well. We completed a project in St. Petersburg, Russia, that I would consider one of the most significant accomplishments we’ve had. It was a very complicated deal, the first of its kind there. We partnered with the city and renovated a 250-year-old structure into office space, which became The Atrium at Nevski. It was crazy how complicated it was. But we got it done, leased it, and ended up selling it.
What are a few of your current U.S. projects?
Newman: We broke ground last fall on three major high rises in Chicago that are still under construction; in San Francisco we are halfway through a high rise residential rental project and pursuing other opportunities. We also have a high end condo project underway in South Florida, as well as in Aspen, Colorado.
How would you summarize your approach to business, both at home and abroad?
Newman: We pride ourselves on being open minded and creative. We want to stay nimble and flexible, and be opportunistic.
Link: Investing Behind The Iron Curtain
Golub & Company, a Chicago-based investor and developer, believes it is important for real estate companies to find ways to stand out in competitive urban markets. “Before the project even breaks ground, we like to establish what really distinguishes our project,” said Michael Newman, principal. “We want the project to appeal to consumers on an emotional level as opposed to just being a good building for a good price in a good location.”
Golub pays close attention to demand in its target areas, using an up-front marketing strategy as a way to lease buildings quickly, add long-term value and position each project as its own brand.
“There are a lot of people who are thinking along the same lines and looking to build urban high-rises,” Newman added. “One of the big questions is whether building supply will outpace demand. It hasn’t yet, but that’s always something that we keep our eyes on.”
As many consumers are renters by choice, Golub seeks projects that are relatable to encourage them to continue renting. The company broke ground at the end of last year on an apartment development in Chicago’s South Loop neighborhood, an area known for its creative, tech-savvy vibe as a number of universities are located there. The project at 1001 South State Street was named 1001 to reference binary code, in support of that tech-savvy atmosphere. Additionally, open, collaborative meeting spaces and maker’s labs with 3D printers are being added to serve the area’s need for creative space.
The company has another apartment development project in the works in Chicago’s historic Streeterville neighborhood that it has named “Moment.” Newman explained that the area’s focus on a healthy and balanced lifestyle will be reflected in the building’s amenities. “We have a marketing team that we send out to the areas we’re in to talk to as many people as they can about what consumers are looking for and where the market is going,” he said. “It’s an ongoing process, even after we’ve broken ground and begin leasing.”
Golub focuses primarily on office and residential properties and is seeking to do more condominium development going forward as millennials show greater interest in ownership. “We have residential developments in the works in San Francisco, Arizona, Colorado, Southern Florida and Chicago,” Newman said. “We feel really good about the markets that we’re in, and we’re always looking for more opportunities.”
Link: Golub Seeks To Stand Out In Urban High-Rise Development Boom