At the beginning of 2008, just a few months after the U.S. housing market began to collapse, Mandel Group Inc. president Barry Mandel told his firm’s 140 employees that a difficult year lay ahead. The economy and the residential real estate industry were taking a major downturn.
Mandel Group, one of the most prominent multi-family residential real estate development firms in Milwaukee, had to prepare for the challenges ahead. Mandel was honest with his employees about those challenges and how the company planned to handle them.
“I told the people in my company at the beginning of the year that it was projected that we could lose over $1 million in operations in 2008,” Mandel said. “And I explained to them very carefully what our strategy would be in order to break even if we could. And I also told them that I would be willing to lose money in operations rather than move forward on a project that we felt was ill-advised during this economic slowdown.”
To gain additional income during the downturn, Mandel Group sought business in non-traditional sources by providing real estate development services for other entities. Mandel Group was hired to complete The Point on River (formerly known as First Place on the River) condominium development in Walker’s Point and was also selected to develop a new residence hall on North Avenue for the University of Wisconsin-Milwaukee.
“We were able to break even for last year, and it was really sort of a miraculous year in that regard,” Mandel said.
In many companies, employees are kept in the dark about the company’s condition until dramatic steps, such as layoffs, are taken. However, Mandel believes in keeping his staff informed about how the company is doing.
“I do believe you need to tell them very, very directly what the financial viability of the company is,” he said.
Mandel has been a residential real estate development leader in Milwaukee for years. He founded the company in 1991. Previously, he was a partner for the Milwaukee division of Trammel Crow Residential.
Mandel’s firm was one of the first in the area to build condominiums in downtown Milwaukee, a market that boomed for about 10 years until the recession took hold.
In guiding his organization, Mandel is a strong believer in servant leadership principles.
“I would describe (my leadership style) as being a servant philosophy that I set my company up so that I can serve (the employees) for them to do the best that they can,” he said. “I never view them as employees. I view people as working with me. I treat every person (in the company) as if they were my colleague. I treat them as if I work for them and try to provide the resources and the work environment that will help them reach their full potential at whatever they may be doing.”
Mandel Group sets a mission, goals and core values for the company, and Mandel provides his employees the freedom to do their jobs within the framework for the mission, goals, the core values, and their budget. Employees get more satisfaction out of their jobs when given that freedom and are better able to solve problems that arise, he said.
“What we try to do is set certain parameters,” Mandel said. “I tend to provide a bit more freedom than most presidents of companies may allow (employees) in getting from one point to another. But as long as (the employees) rely on the mission and purpose of the company and go back to the core values of the company, they tend to make the right decisions.”
Mandel Group’s core values are: customer service, integrity, quality, people and reputation.
“The parameters that we try to keep most disciplined about are risk management parameters,” Mandel said. “Most people think developers make money by taking risk. But I would contend that developers make money by managing risk.”
Looking ahead, Mandel Group has a pipeline of $350 million for new developments on land the company owns. The company recently broke ground on the Corcoran Lofts apartment development in Milwaukee’s Historic Third Ward and continues work on the North End project along the Milwaukee River on the north side of downtown.
However, the company will be cautious in moving more projects out of the pipeline as long as the U.S. economy remains in recession.
“Developers want to develop more than anything, that’s what we do,” Mandel said. “But we are going to continue to be prudent about moving forward in an economy that is as uncertain as it is.”
The company will probably focus on apartment development for the next two to three years and likely will not build any condominiums for the next three to four years, Mandel said.
Mandel Group Inc.
Industry: Multi-family residential real estate development
Location: 301 E. Erie St., Milwaukee
Number of employees: 140