DBRIEF

SCHOSTAK BROTHERS & CO.

BUSINESSES: Real estate, digital enterprises, and restaurants

PRINCIPALS: Bobby, David, Mark, and Jeff Schostak

HEADQUARTERS: Livonia

EMPLOYEES: 7,000

REVENUE: NA what your instincts tell you,’ ” Mark says. “There are some issues where we all have to come together, and we use each other as sounding boards. But at the end of the day, it usually ends up with, ‘Whatever you think.’ ”

The brothers’ way of running things is based, in part, on their upbringing, as well as what they learned from their father and grandfather. Louis began to gradually retire from the company he founded in the mid-1950s, and his son, Jerome, took over a greater leadership role. “Our dad, for 15 years or so prior to my grandfather leaving, was really running the business, with his father being semi-retired,” Bobby says. “Dad had a vision to take the company into the development business, which is different from the brokerage business, and to a third area of opportunity in leasing.”

After Louis passed away in 1970, his three grandsons began to move into entrylevel roles.

Very entry-level.

“Our job was sharpening pencils and stuffing envelopes, and from there we began to learn the business,” Bobby recalls. “In high school, when we had driver’s licenses, we were all messengers or delivering packages.”

But the greatest teacher of commerce for the brothers wasn’t part of the business world at all. It was being crew members on their father’s sailboat. Jerome was an avid sailor, and that gave the boys some intense lessons in teamwork before some of them had even become teenagers.

“No matter how big the boat is, there’s not a lot of room for a lot of people when you’re operating the sails,” Bobby says. “We learned together how to win races, lose, get frustrated, and get angry. And fight back.”

The three brothers had little choice but to learn under the pressure of a sailboat race. And anyone who didn’t want to cooperate would quickly find there was nowhere to escape.

“For the three of us in particular, it defines how we collectively come together and how we view success,” Bobby says. “To be challenged by the elements in these long, overnight races in multiple parts of the country, and the whole experience with others out there fighting for the same things we were, was inspiring and challenging at the same time.”

Past Is Present

proposition. “ ‘You folks own the land,’ ” Mark recalls a Burger King official saying. “ ‘Why don’t you become the franchisee?’ ” woman, to get a loan over 50 years ago,” Mark says. “The bank wanted her husband to co-sign the loan, and he wouldn’t do it.”

Today, their success in running a large, multifaceted company comes from lessons learned working together as a team. The same discipline extends to the company’s culture, which not only serves to attract good people, but to keep them on board over the long term.

“One reason for our success is all the people we’ve associated ourselves with over the years — our teammates,” David says. “And the real tell-tale sign is the length of tenure of the people working for us. We have people who have worked for us 30 and 40 years. It’s a family atmosphere.”

The company has 50 employees on the real estate side; 6,500 workers among the restaurants — Applebee’s, Del Taco, MOD Pizza, Olga’s Kitchen, and Wendy’s; and several dozen more among the portfolio companies on the venture capital side.

One might not expect a real estate development company to get into running restaurants — and the Schostaks didn’t expect to go in that direction, either. But success often means being willing and ready to say yes when an opportunity presents itself.

In 1981, the family developed a shopping center in Alpena. It was anchored by Kmart and JCPenney, along with room on the outskirts of the parking lot for a gas station, a bank, or a fast-food restaurant — “outlots,” in real estate parlance. At the time, Burger King Corp. was particularly keen on putting a franchised restaurant there.

But with interest rates at more than 17 percent at the time, the restaurant chain couldn’t find a franchisee. So they came to the Schostaks with an interesting

Running restaurants had never been part of the family’s portfolio, but the Schostaks were never ones to pass on an idea because it was new to them. “My dad felt it was important that we added more legs to the table,” Mark recalls. “He had three boys who were going to be in the family business — separate but equal tracks — so my dad was creating another track.”

This particular course proved to be a fast one. By 1992, the Schostaks were running a dozen Burger King locations; in 2015 they sold the entire operation.

But today, while running five different restaurant brands, they say they’re still learning.

“The business changes all the time,” Mark explains. “The last few years, through the pandemic, the business has switched pretty dramatically. That change, for us, was understanding how important culture was and how important it is to have the right systems to train and develop people, and to reward achievement and reward the doers.”

While it may be harder to create a family atmosphere among 169 restaurants than it is in a professional office setting, the Schostaks were determined to find a way by mastering the simple things: making sure people had the schedules they wanted, every facet of the operation was clean and well-managed, and there were opportunities to grow.

The restaurant group took a major step forward in 2015 when it bought Olga’s Kitchen out of bankruptcy. The acquisition came 11 years after the brothers had contracted with the company to build a series of Greek American restaurants in the area.

Mark says he and his family took a keen interest in the story of founder Olga Loizon, and what she had gone through to build the company. “She started the business herself and it was difficult for her, or any

Eventually, he says, a bank agreed to lend Loizon the money to start the company at a small stand in the former Continental Market in downtown Birmingham (just north of the Daxton Hotel).

Loizon was no longer the owner of the company when it faced bankruptcy in 2015, with more than $4.5 million being owed to creditors. But after the Schostak acquisition, Loizon returned to play a public relations role until her death in 2019 at 92 years old.

In her honor, the Schostaks set up the Olga Loizon Foundation to provide grants to female entrepreneurs. Members of Loizon’s family serve on the foundation’s board.

The restaurant venture is relatively new by Schostak standards — 40 years old — but Schostak Brothers & Co. has long been synonymous with malls and shopping centers. While there remains a great deal of opportunity in that space, the marketplace is constantly in flux due to shifting shopping habits, especially with online sales.

The Schostaks sold their last mall in 2005, but they’re far from finished with commercial real estate. The focus now is on the acquisition of well-located shopping centers. To that end, the company recently acquired more than $300 million worth of real estate parcels in 17 states, with high priority going to centers adjacent to Walmart stores.

The traditional mall may be fading in the rear-view mirror, but new opportunities are presenting themselves in places such as logistics operations, urgent care centers, fitness facilities, and salons.

“Historically, we were shopping center people,” David says. “We had a big shopping center presence. What people would call the death of the shopping center, and the death of malls, has clearly had an impact