In 1995, Michael Alter succeeded his father, William Alter, as president of Chicago-based development firm The Alter Group. A Harvard graduate with a law degree from the University of Chicago, Alter has expanded his father's firm from being a predominantly local player, with $297 million in projects under construction between 1990 and 1995, to a national powerhouse with $600 million in development projects across the nation in 2008.
Michael's success may be in part attributed his father, William Alter, the son of Eastern European immigrants who came to the United States around 1920. As a son of the working-class poor, William had a strong sense of social justice and of giving back to the community, ideals he passed on to his son.
Today, Michael is a founder and member of the board of advisors at City Year Chicago, a non-profit that brings people ages 17 to 23 together for a year of full-time community service and leadership development. In August, Michael acquired a minority ownership interest in liberal magazine The New Republic in a deal led by his former Harvard professor, Martin Peretz, also editor in chief of the publication. NREI recently spoke to Alter about the evolution of his family company and how it is positioned to weather the economic downturn.
NREI: What philosophies or values did you learn from your father?
Alter: A lot of the community engagement really comes from his father and his parents, who were very working-class poor. His dad was an active socialist. My dad was very far from that, but that mindset of social justice and giving back has always been an important value of our family's. From a business point of view, it's been the idea of integrity and straightforwardness with people, the importance of the reputation.
NREI: In 2008, The Alter Group had 4.3 million sq. ft. of office and 5.5 million sq. ft. of industrial space under development. What are your current plans?
Alter: Those are all projects that have been under way and we're completing them. In terms of new projects, there's very little going on. Unfortunately we're not immune to market forces in terms of demand. What we can do is manage through it in a way that is most favorable given the circumstances.
NREI: Has your company strategy changed in the current environment?
Alter: For the last 10 or 15 years, we've taken a fairly conservative approach in an extremely high-risk business. We're also very relationship-oriented and we have some great lender and tenant relationships. Those have given us a great foundation so when things get difficult — and they've never been more difficult than they are now — those things help a lot.
NREI: Will federal health care reform drive demand for medical office?
Alter: We're pretty bullish on the health care sector. I think there are going to be some decent opportunities both because of the natural growth in health care and demand in health care.
NREI: What is the biggest challenge for commercial real estate today?
Alter: There are some challenges on the horizon, some of it having to do with problems that were in residential in terms of how capital was raised, credit availability, and so on. But I think the biggest challenge to commercial real estate is the overall economy. If the economy starts to grow again — and I think it's going to soon — then things will start to improve.