Finding Opportunity

Paul Leviner
President of PAL Realty

Leaning forward in his chair, Paul Leviner smiles, clearly enjoying the story he is telling. "I grew up in Lake Charles and never went to college - couldn't afford to. So I took the first entry level job I could get, selling paper for Lanier. I was working hard but not making much. It galled me to see that the real money was being made by the guys selling office machines to the leads I was giving them! And they weren't working nearly as hard as I was! So I talked myself into a job selling machines and learned about copiers."

The owner of the successful Northpark Shopping Center, Paul has an easygoing, causal air about him. But, when he tells how he developed his business philosophy, he shows an intensity that makes it easy to understand how he has become so successful, without a college education.

"I have always believed in seizing opportunities. For whatever reason, I have always been able to see opportunities by looking at things a little differently than others. What some people call 'thinking outside the box.' In the early 1980s, I saw that the downturn in the economy was creating a flood of returned machines at the same time that companies became more interested in leasing instead of buying. I knew I could sell those returned machines to dealers and worked a deal to take back hundreds of them for pennies on the dollar. I saw another opportunity and did the same thing again in the 1990s buying copiers from the government when it was shutting down military bases, and later again, buying copiers from Xerox that they took back when they sold new ones. I could turn over six to seven hundred copiers a month."

"I made it work, and made a lot of money, because I never got into a deal unless I had several exit strategies. I don't take risks, and in every deal I make sure of two things: the deal has to be a win-win for both parties, and I make sure I get my costs back almost immediately."

Not ready to think about retiring, Paul got into real estate in the early 1990s by accident. "We were financially comfortable, but not ready to retire. My wife Angela had graduated from law school and couldn't find office space in which to set up her practice, so I started to look at available real estate." In 1991, he came across an RTC foreclosure sale and acquired the building, and an office for his wife's practice, for pennies on the dollar. Over the next few years Paul filled the building with tenants and saw his investment appreciate dramatically. That building is now Leviner Plaza, located on the Eastex Freeway in Humble, Texas.

Then, on a whim in 2000, Paul attended an auction sale that included a package of two office buildings and a tract of land. At the last minute, the terms of the sale were changed, requiring bids on all three assets as a package. None of the other bidders wanted to bid for the package. Seizing the opportunity, Paul put in the winning bid and, a few minutes later, had sold one of the buildings to another bidder for what he had paid for the entire package, netting him one building and the tract of land free and clear.

"You have to know the values and be willing to walk away from the deal," Paul explains. "I never accept it when people say, 'This is the way it's done.' I am always looking for a different way to do the financing, or structure the ownership, or to exit the deal. I always try to understand what the other guy needs, because I know that the deal has to work for everyone involved. But I make sure it works a little better for me."

Paul didn't have much faith in banks. "I have a history of being turned down by banks," he notes. He met Johnny Brooks, now a senior vice president with Sterling, while looking for funding to do more real estate acquisitions. Johnny got back to Paul with a line of credit in 24 hours.

"Up until then, I had never had a banker respond so quickly and so positively," Paul said. "I believe you bet on people, and Johnny saw that I was a good bet. I found that developing a relationship with a banker gave me the freedom to make larger deals and to take advantage of unique situations. Six months later we closed on a property."

Paul is always looking for opportunities, and about five years ago he came across the Northpark Shopping Center. The center was built in the 1980s in Kingwood - a planned community northeast of Houston - and had never been successful. In fact, it was in bankruptcy and about to go into foreclosure. But the area was growing and Paul saw the potential for success. He and Brooks put together a financing package and Paul took over the center in 2003.

Finishing his story, Paul Leviner stands and looks out at the center through the window of the new office building he has built in one corner of Northpark. "People told me I couldn't make this center work because I knew nothing about retail. But we structured the deal to give me time to figure it out. I drew in tenants by creating unique leasing packages and give them a voice in developing ideas to promote the center."

Today Northpark has had a facelift, is almost fully leased and, despite not having the typical 'anchor' store, is decidedly profitable. Paul has added two restaurants, including the most successful Los Cucos in the chain. Not bad for someone who knew nothing about retail.

Thinking outside the box, seizing opportunities, and being able to craft win-win deals all are keys to Paul Leviner's success.

When asked 'what's next?' Paul responds to the question with enthusiasm, "I'm not done yet," he proclaims. And he's probably not done changing the rules. If Paul Leviner were to write his business biography, it might well be titled, "Let's do this a little differently."