First they were doctors. Now, they're leading metro Detroit development.

Credit: Nic Antaya/Crain’s Detroit Business
Dr. Mahmoud Al-Hadidi poses for a portrait outside of the Renaissance Center Tower 600 in Detroit that he purchased in March.

For two years, Dr. Mahmoud Al-Hadidi went to war with COVID-19.

As a pulmonologist, internal medicine and sleep medicine specialist with almost three decades of experience, he was uniquely positioned to confront the virus as it began a rampage that has killed more than 7 million people around the world and sickened almost 800 million — including Al-Hadidi’s colleagues and friends.

He was left exhausted and frustrated, and today, the Oakland County resident doesn’t know when or whether he’ll return to medicine, his passion since he was just a little boy growing up in Jordan. And for his financial future, that’s OK: He was making more money in commercial real estate than he was in medicine, anyway.

These days, Al-Hadidi has a different kind of fight on his hands: overhauling one of the Renaissance Center office towers in downtown Detroit, including potentially adding a residential component to the upper floors with uncommonly large condominiums. Al-Hadidi bought the 600 Tower — one of the shorter buildings to the east of the landmark RenCen —for $9.2 million at auction this spring.

He first forayed into commercial real estate in 1995, just a few years after starting in medicine, seeing it as a sound investment opportunity compared to, say, the stock market.

“As I got busier, much busier, in my medical practice, I also grew in real estate until the market crashed in 2008,” Al-Hadidi said earlier this month, sitting on the 21st floor of what likely is a trophy asset in his portfolio. “And at that time, I decided to scale up because I was successful. A few properties were making more than what I was making in medicine for much less effort. My passion is in medicine, sure, but this is not bad at putting bread on the table.”

He’s not alone, not by a long shot.

Of course, doctors and other high earners in the medical field are regular investors in commercial real estate — but more commonly on a fairly passive basis as limited partners in various deals around town. After all, it can be a good investment strategy with minimal effort other than writing a check and, if all goes well, collecting a portion of the profit.

But Al-Hadidi, who came to the U.S. when he was 17, is among at least a half-dozen doctors and other high-level medical professionals, like pharmacists and physical therapists, who are getting into large-scale commercial real estate development in the city and its suburbs.

For some, they came into it through the family business. For others, it was purely by happenstance.

Yet many of the developers with a medical background find distinct parallels in the profession: planning, preparation — and patience.

Credit: Nic Antaya/Crain’s Detroit Business
Dr. Mahmoud Al-Hadidi poses for a portrait June 10 in the Renaissance Center Tower 600 in downtown Detroit that he purchased in March.

Taking a gamble

Al-Hadidi’s RenCen tower purchase sets itself apart from his other investments in Michigan and across the country in several ways.

“This is different than any other property we bought,” Al-Hadidi said.

“We never bought a property that has a negative cash flow. Never, and I will never do that again. This, in particular, was an emotional thing … It’s a speculation. First time I’ve done something based on speculation, and I don’t recommend speculation when you invest, but this time I made an exception to take a shot, take a gamble.”

In the end, the plan to bring perhaps 20 units with 3,000-4,000 square feet each, on floors 13 and above in the 21-story tower, would cost an estimated $100-$150 per square foot, or more than $10 million, although a project budget was not disclosed.

Estimates to convert Renaissance Center towers into residential space have varied greatly from that per-square-foot cost in recent months. Jared Fleisher, a top lieutenant for Dan Gilbert who is vice president of government affairs for the billionaire’s Rocket Companies Inc., said at the Mackinac Policy Conference last month that turning the taller 39-story Renaissance Center office towers into residential space would cost $500 million each, or something closer to $850 per square foot.

The bottom floors would remain office space, and the residential units would have dedicated elevators, Al-Hadidi said.

Credit: CoStar Group Inc.
The 600 Tower of the Renaissance Center (foreground) in downtown Detroit is 21 stories tall and 334,000 square feet.

Nobody said it was easy

Al-Hadidi is just getting started on his RenCen project, but others have been attempting to pull off their ambitious mixed-use proposals for years.

For example, Dr. Hesham Gayar, a Grand Blanc surgeon, for a decade has owned the downtown Birmingham building where the beloved Hunter House hamburger joint has slung sliders, fries and onion rings for close to three quarters of a century.

Gayar, who declined comment and an interview for this story, has long sought to tear down the building — a throwback to a long-ago Birmingham before its decades-old glow-up into a swank downtown with luxury retail, residential and office space — and replace it with a five-story development that would have had Hunter House as a tenant.

But Gayar and Hunter House tangled in Oakland County Circuit Court for years. Earlier this year, the Birmingham Planning Board approved a one-year final site plan extension for Gayar and his Select Commercial Assets Hospitality LLC to complete construction documents after completing what a Planning Board document described as “final legal agreements” with Hunter House.

Gayar isn’t the only doctor having fits with his project.

Credit: Kirk Pinho/Crain’s Detroit Business
The Hunter House hamburger restaurant in Birmingham.

FIts and starts and fits

Mohammad Qazi, the president of Southfield-based Ciena Healthcare, who is also a licensed physical therapist, has been trying for more than six years to get his proposal called The Mid out of the ground in Detroit, to no avail.

There were signs of life late last year for The Mid, envisioned for the vacant 3.8-acre site he owns on Woodward Avenue north of Mack Avenue near Detroit’s Whole Foods grocery store and the Detroit Medical Center campus.

In the fall, the city received plans for part of the project, which most recently was a 15-story, 216-room hotel believed to be a Thompson, which is part of the Chicago-based Hyatt Hotels Corp. portfolio of hotel flags.

A source familiar with the matter said there have been struggles filling an equity gap in the project, causing delays. The source also said, however, that the development team is optimistic it will be able to do that through “creative financing solutions.”

The proposal from spring 2019 originally included a pair of high-rises as the focal points of the development that would include both for-sale and for-rent residential, hotel, retail, parking, green space and other uses.

Credit: Kirk Pinho/Crain’s Detroit Business
Legislation passed by the Michigan Legislature would give developers three more years to qualify for tax credits for The Mid development in Detroit.

But since then, little has happened. Years have passed since the original 2019 construction start time frame. The site remains empty, with a fence surrounding it and, until recently, a decorative scrim making promises for a development that has long remained dormant.

Even beyond the lack of construction, trouble has started brewing for Qazi and his ownership group recently.

Contractors have started filing liens for unpaid bills at the site, including Ann Arbor-based East Edge Excavating LLC, which says the legal property owner, 3750 Woodward Avenue LLC, owes it about $157,000; Albert M. Higley Co. LLC, the Cleveland-based general contractor with an active Detroit office, says it is owed $1.9 million on a nearly $24 million contract; and Chicago-based Reflection Window Co. LLC says it is owed a little more than $1 million on a $6.75 million contract.

The source familiar with the matter described a “very constructive dialogue” between Higley and The Mid’s development team about resolving the lien, which was also described as “a normal course of business” and “not a sign of deteriorating relationships.”

Credit: Nic Antaya/Crain’s Detroit Business
Mike Shehadi of Dearborn poses for a portrait on June 10 at the AMS Regent Court Development site in Dearborn.

Thinking outside the box

Mike Shehadi’s real estate career — which started during a years-long break from college — started in his very early 20s with a Dearborn townhouse he bought on Schaeffer between Ford and Warren roads.

And with the money he was saving from jobs as a cashier at a gas station and a dishwasher at a restaurant, he bought another. And another. And another.

After selling what became about a half-dozen of the townhouses to a fellow investor at a price he couldn’t refuse, he used that money to fund his pharmacy school studies at Wayne State University.

“But real estate was always in the back of my mind, that I want to do real estate,” said Shehadi, who is CEO of Farmington Hills-based PharmaScript.

And he’s done just that. Most recently, he bought a 37-acre parcel from the Marianhill Mission Society at Telegraph and Ann Arbor Trail to convert it into a non-profit Islamic cemetery.

Credit: Ghafari Associates
Renderings of Mike Shehadi’s Dearborn development on the former Regent Court site.

But perhaps his largest venture to date is the construction ongoing at the former Regent Court office building site in Dearborn, where Shehadi razed the 660,000-square-foot former Ford Motor Co. tower and is under construction on the first phase of what he says is a $150 million-plus mixed-use project.

Among its components: 134 residential units, 250,000 square feet of retail, and separately, six four-story mixed-use buildings with a combination of uses that include office, retail, commercial and residential space. There are also talks, he said, with the city on building a 150,000-square-foot indoor sports dome for sports like soccer and tennis on 16 acres behind the Regent Court site.

Shehadi said on the whole, the majority of his income stems from his real estate investments, although that can fluctuate on a year-to-year basis.

For him, both lines of work require keen mathematical skills — and also the ability to think outside the box.

“It makes you think differently,” Shehadi said. “So, if I say you know one plus one equals two, is that the only answer? One plus one can equal two, but what else? When you get an education, you realize there’s more than one answer, like the square foot of four equals two.”

Carryover skills

Oak Park native Dr. Margaret Poscher never foresaw getting into real estate development. Her interest in the field was, for a time, limited to enjoying Architectural Digest.

That has changed dramatically.

Decades after starting her career as a Wayne State University-educated physician on the frontlines of the HIV/AIDs epidemic in San Francisco in the 1980s and 1990s, that’s where she finds herself, with the state’s largest mass-timber construction project in the pipeline.

Dubbed Southtown, a revised vision for the $120 million effort — plus another $30 million for a microgrid — includes 329 residential apartments plus retail and other uses. Previously, it had 221 units.

It involves razing primarily single-family housing and older, low-slung apartment buildings Poscher has accumulated over the years in the neighborhood east of the University of Michigan Golf Course and just south of UM’s athletic fields and facilities on State Street.

Credit: 4M LLC
Margaret Poscher

Poscher said there is some overlap between the skills needed to be successful in medicine as well as real estate, which she got into starting in 2003 when a friend of hers in San Francisco asked her to work and consult on projects he had been involved in. In doing that, she gained experience in things like project management, financing and getting projects through various public commissions and boards.

Among the attributes needed in both fields, she said: critical thinking, attention to detail and organizational skills.

So after working on those projects for about five years, she returned to medicine with a practice focusing on internal medicine and geriatrics from 2009 to 2020.

During that time, Poscher met her wife, an Ann Arbor native and University of Michigan graduate. They began purchasing properties here and there, and eventually their portfolio got to the size where they couldn’t manage it from the other side of the country. So the pair returned to Southeast Michigan from San Francisco in 2020 and have been in Ann Arbor since, with Poscher’s biggest project to date on the horizon.

“I think that wanting to do for others, to some degree,” Poscher said. “You kind of need to be like that to be a good doctor, a good health care provider, and I think there is some aspect of that in real estate and certainly in the hospitality industry.”

Parallel fields

Commercial real estate is in Dr. Ammar Alkhafaji’s blood.

After all, his father, Shakir, started the Alkhafaji family’s Farmington Hills-based development company, The W Investors Group Inc., and built its 1 million-square-foot-plus portfolio of properties with another 500,000 square feet in the pipeline. Shakir came to the U.S. from Iraq in the mid-1970s, and his son was named principal of The W Investors Group in 2018 while still only in his mid-20s — and still in medical school.

Ammar Alkhafaji.

That shouldn’t be a surprise. He’s been with his father on job sites since he was about 10 years old, Alkhafaji has previously told Crain’s. Ammar, who is growing his internal medicine practice in Livonia, Garden City and Waterford Township, said he balances both his careers by devoting about half his week to medicine and the other half to real estate. “I love the change in environment,” said the younger Alkhafaji, who added that the majority of his income currently comes from real estate. “The switch really does keep things fresh and keeps me motivated in each job.”

With as many projects as W Investors Group has in the pipeline, it’s a balancing act.

Among them: Teal Island, an under-construction 120-unit apartment development at the corner of Hospital and Pontiac Lake roads in Waterford Township. There’s a 276-unit development proposed in Schwartz Creek near a proposed microchip plant in Mundy Township. There are three Sheetz gas station proposals, including one in Farmington Hills at Grand River Avenue and Middlebelt Road. He’s working on a large expansion of an 86-unit townhome project in Midland, adding another 150 units across two phases. There’s a self-storage and retail proposal in Okemos. There are medical office buildings he’s filling up.

Credit: ELA Architects
Renderings of the Teal Island multifamily development at Pontiac Lake and Hospital roads in Waterford Township.