Q&A: Joel Altman, founder of Altman Companies, Gives His Take on Real Estate and the Economy

Joel Altman, CEO and founder of Boca Raton, Fla.-based Altman Companies, has carried his company from a small business to one of the country’s leading luxury condominium and apartment developers and managers. Despite Altman Companies’ beginnings during a rough economic state in the U.S. in the late-1960s, the firm has worked through the economic difficulties and is currently celebrating its 40th year anniversary. MHN Reporter Rachel Block talks to Altman about the current economic situation and his success in similar times.MHN: How does it feel to be celebrating your company’s 40 year anniversary after having started out in the midst of an economic recession? Altman: Compared to today, I don’t really look at 1968 as a recession, and the years have just flown by. When I started out, I was 25 years old and had $5,000 in my pocket–my long range was for the next week, the next pay roll. A number of years ago, my thoughts changed; probably in 1992, I started thinking about seeing the company survive me, and for the associates to have an opportunity to take over the company at some point.MHN: What city did you start in? Altman: We started in East Lansing in Michigan. Largo was the first job we did in Florida, and then we opened a regional office in Boca Raton in 1983. In 1987, we moved the home office from East Lansing to Boca Raton and kept the office in Michigan as a regional office.MHN: What was the first big project you worked on? Altman: The first project was an 84-unit housing job, and when I was 25, that was a big job. MHN: Can you explain your first Real Estate Investment Trust (REIT) rescue assignment for North American Investors in Largo, Florida in which you assisted?Altman: In the mid-70s, interest rates went through the sky–loans that originally had 10 to 12 percent interest ended up being 24 percent as rates escalated. Many other jobs had trouble working through. Our lender was doing loans on a number of our jobs in Lake Michigan, and while they had many jobs that failed in Florida, we had to deal with higher interest rates. In exchange for their helping us, we went down to Florida and helped them there by taking over jobs that weren’t completed and such.MHN: What changes for Altman Companies, and in the real estate business in general, have you noticed over the years?Altman: In 1968, there was a team of one, and today we have over 300 associates. From the standpoint of economic cycles, if you just look over that period of time of 40 years, there have been tremendous variations from high interest rates in the mid-70s, to the change in the tax laws in the mid-80s, to the recession of the early-90s. I’ve never seen anything as bad as it is today in terms of credit markets and the problems of for-sale housing and reduced values. This is the worst I’ve ever seen in all my years. MHN: How is this affecting your business?Altman: The rental business is pretty good, as long as we don’t have a tremendous increase in unemployment, and we do have positive growth where there is still job and family formation, so there’s demand for rental housing. If the lenders continue to lend, the business will go on. I don’t think this is a permanent thing; banks need to clean up their portfolios and it will get better. It’s cyclical and we’re just hoping this cycle ends real soon.MHN: How many rental units are you currently working on, and about how long until you expect them to be completed?Altman: Right now we are working on about 2,940 units, with first units being delivered between now and July of 2010. The last job is starting in January of 2009 and is being delivered in July of 2010. MHN: Are there any plans in mind for changes in the future years to come?Altman: We’re going to open a regional office in Texas, and our first job will be in Austin; we already have the site. For our next expansion, we will open an office in the Carolinas and also one in Georgia and southern Virginia.