This year the leadership of Milwaukee-based real estate firm Zilber Ltd. has been passed on, in effect, to a third generation.
Joseph Zilber, the company’s founder and chairman has promoted James Borris to president and chief executive officer. John Kersey and Robert Braun were promoted to executive vice president posts.
Those three are succeeding the company’s second generation of leadership, which included Arthur Wigchers, the previous CEO and now vice chairman and senior advisor to the company, said Zilber’s assistant, Mike Mervis. Zilber himself is considered the head of the company’s first generation of leadership, Mervis said.
Borris, Braun and Kersey are taking the day-to-day leadership roles at Zilber Ltd. during an extraordinarily challenging time as the worst global recession since the Great Depression continues and the real estate market has collapsed.
For years the company has built homes in Florida, Arizona, California and Hawaii, which were some of the most hyper-inflated markets.
Despite the steep decline in the residential real estate market in the Sun Belt, Zilber Ltd.’s leaders said the company will remain active there and is seeking to take advantage of the downturn.
“We will be active in those markets,” Borris said. “We are waiting. And of those markets right now have the best opportunities available for positioning for the future as far as land prices and available inventory. We will stay in those markets. Depending on what makes sense to us we could move into another market, but those have been our markets for a long time. We’ve got a lot of relationships in those markets.”
Prior to his promotion, Borris was the president of Zilber Ltd.’s Homes by Towne division. In 2005, when the national housing market was on the verge of a meltdown, the company began taking steps to prepare for the bubble to burst.
During that process, the company cut staff and projects. The executives declined to provide details on the cutbacks. Zilber Ltd. had about 250 employees.
“Jim and the people on the residential side have been way ahead of the curve on the slowing economy,” Braun said. “We were frustrated when we cut back and we saw some of the big publics continuing to build spec inventory and that type of thing.”
“We knew that the good times were not going to continue forever,” Borris said. “I’m not sure we saw the depths and especially the financial meltdown last year, I don’t think anybody expected that. It’s a little bit tougher than we might have envisioned. In the fall of ‘05 we had certain properties that we had options on. For the most part we terminated those options. We’ve downsized this company from a staffing standpoint quite a bit.”
The company has been adjusting to the real estate market collapse and preparing to take advantage of it when the market recovers, Borris said.
“What we have spent the last 3 to 4 years doing is to position our company to be able to take advantage of market conditions, which will change in the future,” he said. “We have properties that are in great locations everywhere. So when market conditions improve we will be in a position to capitalize. We have had to re-position the company a little bit from a cost structure. Financially we have a strong balance sheet and we are well capitalized. We’re in a unique position to be able to capitalize on some of the opportunities that are out there. We are actively looking to acquire land in all of our divisions at very, very favorable prices because land is cheap right now. It’s a buyer’s market and we have the ability to take advantage of that.”
The company’s diversity, both in geography and real estate categories, has helped it during the downturn, Kersey said.
“What gave us the ability in my opinion to withstand the downturn really was the genius of (Joe) Zilber,” he said. “Because what Mr. Zilber did is the way he positioned this company, we did not have all of our eggs in one basket. We had diverse products and we were geographically diverse. While residential was down the investment properties, while not booming, certainly did not take the hit that the residential properties took. Certain markets are able to withstand the problems better than others.”
The Milwaukee area real estate market, the company’s home where it also remains active, was not as inflated as other markets were during the boom and has not fallen as hard as those markets have during the downturn, the Zilber executives say.
“This market has not had the highs nor has it had the lows of some of the other markets we are in, but it’s soft,” Borris said. “We’re still able to sell in this market. We’re still building and selling, mostly single family (residences). Good locations, we’re in Muskego, Cedarburg and Pewaukee. Locations where people want to be. One of the things we’ve done, which has helped us in this market and in other markets, is to redesign our product. And we now are targeting a little bit of a lower priced product than we did before, we think that’s where the market is moving. When it comes back, that’s where it’s going to be.”
For commercial real estate, the company has been active with a number of speculative industrial developments in Kenosha County, which has had significant growth spurred by sprawl from the Chicago area.
“We think (Kenosha) is a terrific growth area,” Kersey said. “It’s attracting businesses from across the border, which we are very proud of participating in. I think it’s one of the great successes of the M7 that goes un-talked about. We think that is really the epicenter of where the growth is and we are well positioned there.”
For the rest of the Milwaukee area, the office market has been soft and the company has been more active in the suburbs, particularly in the industrial market, Kersey said. Significant recent suburban developments for the company include the new American Transmission Co. corporate headquarters in Pewaukee that Zilber Ltd. division Towne Investments is developing in partnership with Interstate Partners LLC.
Borris, Braun and Kersey have all worked with Zilber Ltd. for several years. Borris joined the company in 1986. Braun has been with the company since 1981 and most recently was vice president of finance. He also remains chief financial officer of the company, a position he has held since 1990. Kersey has been with the company since 1979 and was promoted from vice president of Towne Investments.
They are just three of several long-time employees with the company.
“I think (employee longevity) is part of the culture of Zilber Ltd. and Joe Zilber,” Borris said. “This is a great place to work. The company has a philosophy of caring for its employees and its people and I think when you do that it’s vice-versa people care about the company. There are a lot of people that have been here 20, 30, 40 years. It’s caring about each other.”
Zilber has created the culture that makes the company such a great place to work that employees are loyal and want to stay there, Braun said.
“It starts with Joe,” he said. “Joe is the smartest man that I ever met. He’s creative and he’s fun to work with. He cares about his people and he has surrounded himself with a lot of good, creative people. He’s very entrepreneurial. He has been a risk taker and that means we’ve gotten involved in a lot of different types of transactions and businesses. There’s never a dull moment.”
Borris, Braun and Kersey say their top priority is to make sure that Zilber Ltd. continues to do business successfully for years to come.
“What Joe wants is for Zilber Ltd. to be a very viable company well into the future,” Borris said. “That is what our objective is to keep this organization a viable, growing, great place to work and have that to go on for perpetuity. That’s what Joe wants and that’s what the three of us and many others here want to do.”