Earlier this year, Steven Shores was named CEO of Atlanta-based multifamily investment firm Pollack Shores Real Estate Group, which he co-founded in 2006. Fellow co-founder Marc Pollack, who remains in his role as chairman, says the transition was long planned.
Pollack Shores began the formal transition process last year with the promotion of Michael Blair to COO. Blair joined the firm in 2006 and led development efforts for the company. Pollack Shores also promoted Brian Metzler to Blair’s former position of managing director of development. Metzler now leads all development efforts for the company and is assisted by director of development Brian Oates, who focuses on project construction.
In 2017, Pollack Shores completed approximately $1 billion in transactions, having sold $328 million in assets and investing $550 million in acquisitions of existing properties and new, ground-up developments. The company also last year began its expansion into the Southwestern U.S., with acquisitions in Texas cities Austin and Dallas.
Pollack Shores owns $1.6 billion in total assets and manages a balanced portfolio of nearly 26,000 multifamily units.
Multifamily Executive recently corresponded with Shores via e-mail about his new role and his vision for the company:
What was the impetus behind the restructuring?
This leadership transition was a long-planned milestone in our growth strategy. Marc and I began the restructuring last year by promoting from within and delegating elevated responsibilities to our leadership team. Our new roles will enable us to remain nimble and successfully grow and react to today’s investment environment.
What was the driving force behind the Southwestern expansion?
Since founding Pollack Shores in 2006, we've established a strong presence throughout the Southeast. As we evaluated opportunities for growth and expansion, the Southwestern markets, such as Dallas, Austin, Denver, and Phoenix, were a logical next step. Their market conditions closely resemble those in the Southeast, with similar construction methods, product types, job and population growth patterns. We look forward to expanding our presence across the Sun Belt over the next five years.
What will Pollack Shores aim to do in the Southwest this year?
We recently put our stake in the ground in Texas, having acquired two value-add apartment buildings in Uptown Dallas, as well as a luxury apartment community in Austin. We’ve opened an office in Dallas and relocated some senior staff to that market. Our goal is to break into the Denver, Phoenix, and Houston markets by the end of this year. Through our subsidiary Matrix Residential, we'll also continue to expand our property management portfolio to all the major markets in the Southwest.
What new product lines is Pollack Shores working on?
Though it's still in the early stages, we're considering several new product lines: One focused on active-adult lifestyle communities, one on market-based workforce/affordable housing solutions, and another on a hybrid hospitality-rental model inspired by Airbnb rentals we see in some of our communities.
The latter product line would integrate a traditional multifamily building with dedicated units and floors for furnished short-term/overnight units. These units would serve the growing demand for short-term leases. The building itself would feel like a hotel, with resort-level services and experiences for guests and residents. For example, we'd create a buzz in the lobby by featuring a large food and beverage presence that encourages people to come in and mingle, sip coffee, surf the internet, and socialize. We’d also feature a full-service concierge that would coordinate special offerings like bike rentals and dog walkers.
The focus on workforce/affordable housing is a logical extension of our recognition that there's an affordability issue in many of our markets and that we have unique skills to help address the problem in a proactive manner. Many municipalities and governing authorities are taking steps to mandate and legislate policies around the problem. We'd like to get in front of the problem by putting into practice market-based solutions and working proactively with municipalities on helping them solve these issues.
These ventures are still in their infancy, and we look forward to further exploring what unique multifamily models will best resonate with future residents.
What will the company do this year in terms of acquisitions and development?
This year, we'll start at least six new developments, and the majority of those will be suburban infill. Suburban investment opportunities are on the upswing throughout our industry, and [we'd like to] expand on the success we experienced in that sector last year. We've been fortunate in that we recognized this opportunity several years ago and began securing the best sites in our markets, which take a long time to work through the entitlement process.
On the acquisitions side, we'll work with our partners to invest approximately $700 million in value-add, core, and core-plus products throughout the Sun Belt. We're also in the process of raising our own fund to acquire multifamily product opportunistically.
Can you give us an update on Home at the Battery since our coverage of the project last fall?
There’s a lot of positive momentum at Home at the Battery Atlanta. We're averaging 35 to 40 net leases [there] per month, and we’re close to being stabilized. Our rents continue to be about 25% above market, and we attribute that in part to the destination retail and street-level energy that creates value for the entire mixed-use community.
This spring, we're especially excited [about] a wave of new retailers opening at the Battery. If you look back one year ago, we were still in the process of wrapping up construction on the three multifamily communities, and retail leasing was ongoing. On Opening Day this year, the entire development was fully functional and open to the community. The hotel is open, office buildings are occupied, and the shops and restaurants are generating healthy foot traffic. It’s become a year-round destination in metro Atlanta, and Pollack Shores is proud of our partnership with [Major League Baseball's] Braves.
