After our most recent Building Chicago roundtable event on affordable housing, we decided to sit down with our SVP of Development (and event moderator), Justin Pelej. Having been in the business for quite some time, Justin shared information on his role, as well as his observations on how Covid-19 may impact development in Chicago.
Tell us about your role at Focus as the SVP of Development.
I lead a team of extraordinarily talented real estate professionals who manage the day-to-day responsibilities of the company’s development projects. I also spend a large portion of my time sourcing and qualifying new development opportunities. Lastly, in collaboration with our CEO, I manage all of our relationships with our equity and development partners throughout the lifecycle of a development.
You’ve put together a really diversified team that brings a wealth of expertise. How did you assemble your team and what value does your discipline brings to Focus?
My goal is to hire people who are passionate, teachable, and most importantly, smarter than me. People always laugh when I say this, but intelligence outweighs experience in my world. A mentor of mine once said “you can teach ‘don’t know’ but you can’t teach ‘don’t care.’” This saying has served me well and has produced a high functioning and diverse team at Focus.
What is one of the most memorable projects you’ve overseen at Focus and why?
The most memorable project is our Circa 922 apartment development in Fulton Market. We were aware of the site because we were the court assigned receiver on the property during the Great Recession. The original developer abandoned the site. As a result, we were able to spend time in Fulton Market during its infancy and really begin to understand its potential. While it was risky to be a first adopter, we jumped at the opportunity to buy the property when it became available. The end product was/is a new 104-unit luxury apartment building that was/is connected to an existing 45-unit loft apartment building. This unique combination of old and new architecture, along with limited new supply in the neighborhood, allowed us to lease up the development in less than two months. During the weekends, there were literally people waiting in line to sign leases. The icing on the cake was Google announcing its plans to move to Fulton Market as we were finishing construction. That announcement only solidified what we already knew about Fulton Market and allowed us to sell the stabilized property at a great price. I will always remember Circa 922 because it truly impacted the neighborhood in a positive way while also being a great and very rewarding project for Focus.
Talk to me about the skills needed for a job in the development and CRE industry.
Creative thinking is paramount to a successful career in real estate. No two deals are the same and nothing is formulaic. A person who can creatively avoid or react to obstacles will not only have more fun, but will also be more successful in real estate.
Based on what you’ve been seeing in the Chicagoland area, what trends do you think are heading our way in terms of development? What challenges are we facing?
Covid-19 has made all of us re-evaluate and adjust our business plans. It is my belief that the anxiety created by the Covid-19 pandemic will greatly affect how people experience real estate. I think need based real estate, such as medical, grocery, industrial, storage, and arguably multi-family, will rebound quickly. Unfortunately, I think discretionary retail, restaurants, and hospitality have a long road to recovery. I am also worried that the “for sale” residential market will continue to be stale, if not decline. Overall, I think people are going to be extremely cautious with both their discretionary spending and their fixed living costs until we return to some sort of normalcy.
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