FEATURE ARTICLE, MAY 2009

Velmeir Finds The Right Formula
The right niche coupled with a good philosophy are key for The Velmeir Companies.
Stephanie Mayhew

Michigan-based Velmeir is a preferred developer of CVS/pharmacy stores.

Often finding the right niche coupled with the right philosophy can become the formula for success in good times and in bad. The Velmeir Companies, a full-service commercial retail development company, has done just that. While business is harder to come by and more difficult to do than in recent years, Velmeir has held its own by focusing on smaller developments and offering first-rate customer service. As a developer for top brands such as CVS pharmacy, Chase, Aldi, The Home Depot, Fifth Third Bank, McDonald’s, Staples and many others, the company’s philosophy is simple, yet solid.

“The philosophy is do the deal and the money will come, not the other way around,” explains Steven Silk, president and CEO of The Velmeir Companies. “We service each account 110 percent.”

The predecessor to what Velmeir is today was originally founded in 1968 as a residential real estate company, with Silk working with his father. As the downturn in the 1980s took hold, Silk decided it was time to strike out in a different direction and turned his attention toward the retail sector. He began working with what was then called Arbor Drugs in Michigan. Ultimately, the retailer was bought by CVS/pharmacy and Velmeir’s long relationship as a preferred developer began.

Today, Velmeir, which was founded in 1995, is headquartered in West Bloomfield, Michigan, with satellite offices in Minnesota, Florida and Washington, D.C. The company’s development division continues to grow at a rapid pace servicing clients across several regions.

As a full-service company, the firm offers a variety of services including market research, acquisitions, development and construction. Through its market research team, Velmeir can provide area demographics to pinpoint just the right market and site for a retailer.

“Our employees have been trained to spot the holes, the fill-ins and where the need is in any market,” says Stephen Bock, vice president of operations for Velmeir. “If there is a need, then there is a deal to be had.”

Velmeir can also help retailers acquire sites through its in-house brokerage affiliate, Eagle Commercial Services. This network provides experienced site selection, real estate assemblages, and a legal staff that finds the best site and negotiates the best price.

Once the right site is identified, the company manages the entire development process from entitlement (due diligence, site plan approval, permitting and re-zoning) to handling political issues with local townships. The Velmeir team works closely with neighborhood officials, municipalities, city officials and residents to resolve potential problems in advance.

Currently, The Velmeir Companies has approximately 20 to 25 deals going on with various retailers. According to Dale Stol, the vice president of finance for Velmeir, the company’s busiest market is the Washington, D.C., area and parts of Maryland. And despite the downturn, clients are asking Velmeir to look for sites and figure out a way to do deals in all of the other markets it services.

“They still want to be ‘Main on Main’ in a good corner, but in these economic times they are looking for land costs to come down and are just looking for better deals in their markets,” Stol explains. “If the site is right and the price is right, they will do the deal.”

Silk adds, “During these tough economic times, it is all about working together with our clients to ensure that their projects are a success.”

As the company continues to work in its core markets, Silk, Stol and Bock see more growth and expansion for Velmeir as they look to future years. The firm is looking to do anywhere from five to eight deals for two retailers in the Florida market by 2010 or 2011. And the firm has its eye on some work with retailers north of the border in Canada.

“We have a good reputation in the industry, and we are trustworthy, so we have had a few retailers call on us in the last year or so, and we are looking to possibly expand to Canada on behalf of a couple of retailers,” Silk says.

While the volume of deals has been slower than in the past, the executives feel it is realistic for today’s real estate industry. Silk notes that it is not just about finding the right deals for their clients, it is also about helping them navigate the changing market and acclimating the clients to the current changes in demand.

“These are extremely difficult times for a lot of people and many retailers have pulled back,” he says. “However, there are those that are still interested in different markets and still have growth plans, so as part of servicing the client, we are here to help them find that niche in the markets they are interested in.”

One program the firm is rolling out to help its clients capitalize on the changing market is focused on utilizing second-generation space left in the wake of some recent retailer bankruptcies. Since Velmeir works so closely with its clients, it knows about their needs and wants, so it can help retailers figure out if they could fit in that sort of second-generation space in that particular market, or any space in their key markets for that matter.

“Velmeir has a tremendous talent in helping retailers manage their growth. If they identify a market that they want to break into, we do the market research, we do the footwork and the investigation, we do the site identification, and we will work across those 15 states to assist that potential client,” Bock explains. “We get many inquiries from people who are looking to break into new markets, and that is when you have to talk about managed growth, what they want to do and how many stores they want. And those are the kind of things we want to address because being service oriented, we want to assist on the identification, the growth, their goals and actually deliver the keys.”

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