BEFORE: Glendale Central Center in Glendale, Arizona, prior to Michael A. Pollack Real Estate Investments’ redevelopment work.

According to Michael Pollack, breaking ground on new Arizona developments does not constitute a breakthrough into a new commercial real estate world for his company, Michael A. Pollack Real Estate Investments. The firm, known for its redevelopment work, has been building new projects for some time now.

“We’ve actually done quite a few [new developments] over the last 12 months to 18 months,” says Pollack, founder and president of the Mesa, Arizona-based company. “What’s made us do it is prices — prices of existing product have climbed to a level that we decided to start building again.… I’ve always said when it got to the point that I can build new for what they cost used then we’ll start building again.”

AFTER: Glendale Central Center, a 22,390-square-foot strip center, represents the redevelopment magic of Michael A. Pollack Real Estate Investments.

People in commercial real estate have come to expect this from one of Arizona’s largest privately held shopping center owners and operators. The company dedicated to improving communities is also committed to sound business practices, which means it must adapt to market conditions.

Michael A. Pollack Real Estate Investments is preparing to build a 100,000-square-foot office complex called Pollack Business Park North in Chandler, Arizona. Construction of the new development should begin this month. In addition to Pollack Business Park North, the company will soon break ground on Cooper Plaza, a new retail project in Gilbert, Arizona. The 15,000-square-foot center is due to be completed in the first quarter of 2004.

“It’s a small strip, convenience-oriented center… that we’re doing in an incredible, really affluent, great location,” says Pollack, who — while still in his teens — entered the real estate business in 1973 building single-family homes.

Michael A. Pollack Real Estate Investments recently finished about 40,000 to 50,000 square feet of new projects in its home state including Union Hills Plaza II in Phoenix and Chandler Business Park, which is now home to DW Flooring and West Coast Spas. Union Hills Plaza II features a Checker Auto Parts, the health club Curves For Women and a Quiznos Subs. Pollack’s company expanded Alma School Village Shops and Waterfall Shopping Center, both in Chandler, to accommodate such tenants as Tri-City Insurance, Century 21 Real Estate, Mail Boxes Plus and various Mexican restaurants.

“We’re [still] doing redevelopment though,” says Pollack, who estimates that redevelopment work probably accounts for 80 percent of his company’s active projects. “This year is going to be our biggest year ever. We’re on target to do between 600,000 and 800,000 square feet — a big year for us. Our heavy focus is still on infill locations and it’s still on redevelopment of urban America.”

The company’s most recent redevelopment project is Pollack Main Street Plaza, a 78,000-square-foot retail center in Mesa that was acquired in late June. At the time of purchase, it was about 65 percent vacant but the enterprising Pollack forecasted a 90 to 95 percent occupancy rate by the end of its first month. The 45,000 square feet of anchor space, once filled by a Fry’s Food & Drugs, was leased to Goodwill Industries. To listen to Pollack talk about this latest redevelopment project is to hear the words of a general contractor, real estate agent and owner/operator all wrapped into one.

“There was an ex-Burger King pad right in the front that blocked the visibility of the whole center,” Pollack says. “The very first thing I did was scrape it [to make] a visibility window. That’s one of the biggest problems it had. And we’re getting ready to put a new face on [the center]. We have to make it look like it was built in the year 2003 as opposed to the year 1963 or 1973. Then we have to find the right tenant mix for it. And that’s a job.”

Pollack’s company engages the entire brokerage community to find the tenants best suited for a particular property. Whether sending out fliers to former tenants to inquire about expansion or launching a major advertising campaign, no effort is spared in finding the right tenants for the property.

All told, Michael A. Pollack Real Estate Investments and its affiliates control close to 4 million square feet of property in Arizona, California and Nevada. Late last year, the company assumed management and leasing duties at Mervyn’s Plaza, a 179,000-square-foot open-air shopping center in Chandler that was more than 50 percent vacant at the time. Within 6 months, Pollack’s company had the retail property 100 percent leased. In doing so, the firm split up a 25,000-square-foot box formerly occupied by Marshall’s to accommodate both Coomer’s Craft Mall and C&S Fashions. Specialty shops fill the rest of the center.

The revitalization philosophy and redevelopment focus at the company stems from the vision of the man who started it all. Pollack believes that a healthy bottom line can coexist with the aims of community improvement and efficient land use. Besides that, he enjoys the challenge that comes along with his unique direction.

“Basically, I saw a need,” says Pollack. “I love to build new but my passion is really redeveloping. Anybody will build a new building if you’ve got tenants and the lender will give you the money. Redevelopment is a whole different focus. We’re going to continue to redevelop infill locations within the cities that we operate in and we’re going to continue to strive to make a positive difference in the neighborhoods those centers or properties are located in.”

Pollack, whose son, Daniel, became the fourth generation of the family to work in real estate when he joined the company in 2002, says the Number 1 priority when considering a redevelopment opportunity is price. If the company pays too much for a property at the start, then it can’t afford to redevelop it properly. In addition, the location has got to work, the property must be built right and it must be positioned properly with regard to visibility and parking.

“I don’t necessarily care what the economics of the deal are as far as what the occupancies are,” Pollack says. “Everybody talks about buying it at a cap rate. I usually buy it at no cap rate or negative cap rate because [the centers are] usually empty when I buy them.”

The multifaceted company seems to reflect Pollack’s personality. Not one to shy away from paradoxes, he describes his company as extremely conservative but at the same time extremely aggressive. The firm takes caution in underwriting a property but acts quickly when finding a project that fits the company’s strategic framework.

Whether it’s labeling his company a dichotomy, sealing a deal via fax from his Prevost bus or purchasing properties at no cap rate, Pollack maintains a unique, undaunted style. But underneath it all is substance borne of 30 years of experience in the commercial real estate industry. This permeates the company and, in turn, benefits the customer.

©2003 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.