As reported in Milwaukee Journal Sentinel by Jeff Bentoff, for Phoenix Investors
Q: Tell us about Phoenix Investors.
A: Phoenix Investors is a national commercial real estate firm based in Milwaukee. Our core business is renovating and repositioning underappreciated former single-tenant Class B and Class C industrial facilities throughout the U.S. The properties we redevelop were previously owned by large companies, Real Estate Investment Trusts (REITs), or financial institutions. We work creatively with owners, tenants and public entities to make these distressed properties profitable while also transforming the communities economically.
Q: How long has Phoenix been in business?
A: I started my real estate career in the 1980s, developing hundreds of retail projects in Milwaukee and across the U.S. I started Phoenix in the 1990s, initially focusing on single-tenant investment opportunities. Following the Great Recession, my business partner, David Marks, and I channeled our real estate and development experience into identifying and creating value from the unprecedented real estate opportunities we were seeing in abandoned manufacturing properties.
Q: What is the current scale of Phoenix’s holdings?
A: Our affiliate companies hold interests in over 30 million square feet (SF) of industrial, retail, office, and single-tenant leased properties across 21 states. The most recent National Real Estate Investor survey ranked Phoenix Investors as having the 28th-largest total industrial real estate portfolio in the U.S. and we’re the single largest owner of industrial real estate in Wisconsin.
Q: How has your business performed in the last several years?
A: Our industrial portfolio grew from about 7 million SF in 2015 to more than 30 million SF today. If acquisitions in our pipeline all close this year, we’ll end 2020 at over 40 million SF. We are the fastest growing private owner of legacy industrial real estate in the country.
Q: Tell us about one of your larger projects.
A: We recently completed a $31 million investment at the shuttered and partially demolished former Delphi GM plant in Flint, Michigan which is 502,199 SF. Flint was hard hit by the closing of this and other GM plants. Urban decay and blight were rampant when we acquired it in 2017 and began a massive renovation. Neighboring blighted properties, including homes and a vacant mobile home park, were the staging area for criminal activity on our property and the wider neighborhood. Undertaking a creative partnership with the Genesee County Land Bank Authority (GCLBA), we made a donation of $50,000 which enabled it to win a grant of $500,000 from the Michigan State Housing Development Authority. With these funds, GCLBA demolished blighted buildings in the neighborhood surrounding our site. The impact was a reduction of crime and improved economic activity.
Q: Can you tell us about a project that’s still underway?
A: In Milwaukee, Ald. Ashanti Hamilton (then Common Council President) approached me about redeveloping the abandoned Interstate Forging Industries site in his North Side district. Working with the administration of Milwaukee Mayor Tom Barrett, we spent several years demolishing the 400,000 SF vacant plant and remediating the site, investing $750,000 so far. From when we began the project in 2015, property crime fell by 36%, and more serious crimes dropped by 32% in the surrounding neighborhoods.
Q: Have you found a new user yet?
A: We have, but until everything is signed, I need to hold off on discussing it. But it’ll be a really big deal for the community.
Q: You seem very aware of the impact an abandoned factory has on a neighborhood.
A: A plant closure is devastating to the soul of any community. Generations of family members in these communities have a deep connection to a plant through past or present employment. Also, a plant closure has profound and negative implications for the former company and its brand. Therefore, most corporate sellers care less about the price we pay for their closed plants and much more about what we will do with it and how we will repopulate it with quality companies with job impact. Our projects, with the help of our corporate and public partners, help reverse the fortunes of distressed communities and stoke their economic engines.
Interview, Part II Coming Soon: Phoenix Investors’ philanthropic initiatives and how COVID-19 will affect the industrial real estate market.
Freelance writer Jeff Bentoff is a former Milwaukee Sentinel reporter. He served as an official in the Milwaukee Department of City Development and office of Milwaukee Mayor John O. Norquist.