AF: Even as our network began to grow, we felt like we had an established Detroit advantage—because we had been through several cycles in Southeast Michigan, and we'd learned how to operate efficiently—including what kind of creative solutions could get the job done in different economic circumstances. It's funny, our experience navigating a couple of recessionary cycles in this region that other markets hadn't really had to deal with created a situation where we became accustomed to taking a lot of calls looking for us to help solve problems. Today we've come full circle, and Detroit's renaissance has led to a material shift. Now everyone is calling asking for us to help identify and maximize opportunities in and around Detroit.

GS: What was your early vision for the company? Has that changed at all—and, if so, how?

AF: We really wanted to lean in to our expertise and our established niches: which included complicated restructuring and complex redevelopment of opportunistic deals. At its core, Farbman has always been a value operator and investor. For my brother and me, taking that foundational philosophy and operational mandate and making it more institutional was our primary goal. The first year under our leadership, we bought a couple of historic office buildings and redeveloped them. We acquired approximately 1 million square feet in 2001, and we've tried to maintain that pace over the last 17-18 years. At the moment, we are more of a net seller, because of the state of the market, but we continue to be proactive about looking for opportunities­—both within our portfolio and across our client base.

GS: Speaking of opportunities, you have made a concerted effort to expand your horizons over the last 10-20 years. What prompted that, and what has your strategy been for expanding throughout Michigan and the Midwest?

AF: As an investor and an operator in commercial real estate, once you reach a certain size, it gets harder to beat the market, because (to some extent, anyway), you start to become the market. For us, that magic number is around four million square feet in Detroit. If you go much larger than that, you risk crossing that threshold. It naturally encourages you to explore new opportunities in other markets. We've had some success in places like Cleveland, Columbus and Milwaukee, looking for similar sets of circumstances where we can leverage our experience with a similar market, capital source, or tenant base. Every market is different and has its own unique characteristics and nuances, but markets in the Midwest do begin to look familiar over time—they share some similar DNA and underlying market dynamics.

GS: Does being from Detroit help when working in different Midwest markets?

AF: It does, without question. But I don't think that's limited to just Detroit. The real estate business is very much a relationship business—people want to shake hands and do deals. So, having roots in any Midwest market is a very important asset. If you're deeply rooted in a community, that tends to make you more trustworthy, bolsters your reputation, and ultimately makes the world smaller.

GS: How do you view the overall state of those Midwest markets, right now?

AF: The urban focus definitely continues. It's been an exciting few years for many Midwest cities, and millennials and empty nesters continue to lead a reinvigorated and revitalized downtown/civic renaissance. Whether its individuals or businesses, everyone is looking to become more connected and collaborative, and the density, connectivity, and live/work/play dynamism of a vibrant downtown environment checks all of those boxes. That activity is starting to expand out into the urban-suburban transition areas, as well. Successful operators recognize that this is the source of Midwest markets' fundamental strength, and, as always, are finding ways to be where people want to be.

GS: What about supply/demand concerns? Is there an imbalance—and, if so, how much of a problem does that pose for companies like Farbman?

AF: There's clearly been some over-exuberance, particularly in urban hotels and multifamily. Hotel brands have been pushing owners and operators to spend more on hotel renovations, which has created a higher number of new or newly renovated hotel properties than some anticipated. The next few years should tell us a lot more about just how significant that oversupply issue will be—but it definitely bears watching going forward.

GS: What makes Farbman different than other real estate firms?

AF: I think the biggest thing is that, despite the fact that we're a mid-sized company, we still run it like a family business. We still try to meet all of our tenants. We take a lot of pride in that personal side of the business. This is a local business at its core, and we make a point to have executive leadership as the “face” of the business actually living in the markets where we operate.

GS: How has the company evolved since the beginning?

AF: Our sophistication and ability to execute larger deals. Some of that is experience, but we've really upped our game from a systems and operating standpoint. When you start doing $100 million deals, it changes the players and the expectations—and your sophistication has to evolve accordingly. And it's no small thing that our access to capital is really second-to-none in the Midwest.

GS: What's next for the company?

AF: We definitely believe that real estate supplies a product to a demand that already exists—hopefully in supply-constrained markets. We are constantly evolving and reshuffling our deck to enhance our ability to take advantage of areas where we believe there is either a lack of supply or an opportunity to provide supply at a cost that matches demand. Our clear focus going forward will primarily be urban, capital-driven opportunities: markets where there is some sort of equilibrium between supply and demand—and that equilibrium is pushing yields. Another emphasis for us will be to continue trying to find places where our capital is appreciated. Today, when there is so much full capital out there to make transactions happen, it's all the more important for us to be keenly focused on places where we can get an appropriate yield or risk-return for our investment.