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When the principals in Property Markets Group say they live by low overhead, it's not just the hyperbole of four ambitious developers who buy distressed real estate and turn it around.
About 20 of their employees are squeezed into 1,400 square feet in the narrow second-floor office they rent on East 42nd Street. Instead of desks, Ziel Feldman and Kevin Maloney, two of the partners who oversee the firm's $200 million in assets, make their phone calls from the $39 folding tables they moved in with four years ago. In the elevator, where the landlord has yet to add the firm's name to the directory, someone has printed it in ballpoint ink.
While the poor-man's decor is partly the result of six- and seven-day work weeks, it also is a reminder to the firm's investors that PMG knows how to keep a lid on costs. The company scoops up troubled properties at low prices, many of them rental apartments in Manhattan, and refurbishes them in order to raise the rents. It is in the process of doing that at the Belnord, the landmarked Upper West Side building that is the group's highest-profile investment since starting in 1991.
In those five years, PM G has gone from being a complete unknown in the real-estate industry to a boutique that can easily raise millions from...