Breathing new life into Baltimore’s historic real estate
Eugene Poverni is the managing partner and CEO of Poverni Sheikh Group, a real estate development company based in Baltimore. Unlike many firms, PSG is vertically integrated and fully manages every stage of its projects, from brokerage and advisory to construction to property management. The company specializes in the sustainable, adaptive reuse and rehabilitation of historic and distressed structures such as The Vault, a landmark 40,000 square-foot bank building that PSG recently converted into a mixed-use retail and residential space.
OFFIT KURMAN: Have you had any mentors?
EUGENE POVERNI: Every couple years, we have different people that step in and out of our lives. My partner, when I was in middle school and high school, was a mentor of mine. He was a few years older. We were in the online distribution business. I learned a lot from him on cash management and inventory management. My skill set was always going out and trying to find the opportunity, and I needed that second half to try to seize it. I appreciate him really educating me a on it and learning that subset.
Through college, through law school, once I started practicing, my former law partner was a big mentor for me who really taught me a lot of practicing law and servicing clients—which, even though we’re in the real estate business, today is super applicable because we service our equity partners, we service our lenders, we service our tenants, but how do we service them the way they expect and the way that they’re happy with us? How do we deliver on our promises?
Today, I have some additional mentors, other individuals who have been in this business 20, 30 years who we can go to and sometimes partner with, and ask, “How do we do this?” Or: “How do we do that?” What do you think about this?” Without some of those crutches—some are just organic and happenstance—I don’t know if we’d be able to make good decisions on an ongoing basis, so we’re very thankful for them.
Q. Where do you see the company in a few years?
A. We see our company growing. Our goal is not necessarily to grow a headcount but to continue to do good, strong risk-adjusted projects; continue to provide good construction services, good lending services. Last year we put about $50 million in development to our pipeline. Just to give you sense, the previous three years, we put $30 million into our development pipeline. If we can keep that momentum going, do good projects, grow, and keep good people that are with us today, we think the next 5 to 10 years are only going to show growth and profitability. We expect the company to grow, from an asset that’s under management, from a development project completed perspective, from our lending business, from our construction business—we expect to continue to do more good work, continue to retain top talent, and be able to grow our bottom line on an annual basis.
Q. What do you do when you’re not working?
A. When I’m not working my wife currently takes up a lot of my free time, which is a good thing because we’re expecting a child. We try to spend time together—go out in nature, go for a hike, go for a walk, talk about life, think about life. When time permits, hit a couple golf balls, you know, play a little chess with my dad. Go travel when we can, see the world, try to pick up the perspective from other places. The whole world, for better or for worse, doesn’t exactly look like the skyline view on the 23rd floor in downtown Baltimore, so just try to keep some of those things in perspective.
Q. What would you change about Baltimore if you could?
A. The same structural issues that you’ve had in this city for a while, which are not easy to tackle overnight: transportation, income inequality and gaps—when you put those things together, it’s just tough. There is continued population stagnation, the school system, which makes it challenging for you or for I to raise our families locally without having to send our kids to private schools or go to the few public schools in the city that are truly doing well. I think those structural issues continue, and we’re certainly both confident and highly optimistic that with the new mayor should be able to at least start addressing those. I think that if the city were to start looking at those and put out a plan that was concise—look, we can only try things, and if they don’t work, try something different, but put out a concise plan that everyone could buy into and make some sense, out of town capital, non-local developers could potentially buy into the idea that the city really is moving in the right direction, and let’s continue our investment.
Look, there has been great momentum in the city, you can look out and you see cranes all over the place, so it’s about keeping that momentum, and getting the country to look at Baltimore as not The Wire but really where the opportunity is. And it’s here. We’ve seen it in the last five years, both from our capital sources, both from the projects we’re doing: we see other people looking at Baltimore in different ways, and we just hope that the current administration continues that momentum. I’m confident they will.
We recently purchased a piece of dirt in Canton, 0.6 acres for approximately $2 million, which is by far the most we’ve ever paid per acre, but we’re excited about it because it’s the right place and it will be a great project. We’re looking for more of those well located parcels as well as big empty warehouses.
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