Chabad Youngster Builds Empire

Michelle Jarboe McFee – Cleveland.com

Chaim Schochet is like many other 25-year-olds.

Married less than two years. The father of twin boys. A potential first-time homebuyer, weighing his native Miami Beach, Fla., against the low cost of living in the Midwest.

But Chaim Schochet is unlike any other 25-year-old in Cleveland.
He’s one of downtown’s largest landlords, an investment executive responsible for roughly 2.8 million square feet of office space owned by U.S. investors and the principals of a Ukranian business conglomerate.
In downtown Cleveland, he might be the most important guy you’ve never heard of.

Now Schochet (pronounced Show-het) has reluctantly agreed to step into the spotlight, participating in his first in-depth interviews since becoming the most aggressive buyer of buildings in the center city.

Since 2008, when Optima Ventures bought the chisel-shaped One Cleveland Center tower on East Ninth Street, Schochet has been its man on the ground.
Now Optima, a private company based in Miami, owns four office buildings here and a stake in a hotel — making the company a bigger player in the downtown office market than Cleveland-based real estate giant Forest City Enterprises Inc., according to data from local brokerage firms and regulatory filings.

Business associates describe Schochet as a hands-on operator, focused on understanding Cleveland and forging connections with key players in the city. In person, he’s shy. And restless, as if he’d rather be doing business than discussing it.

It’s not hard to see why some people interpret his reticence as aloofness, his strong opinions and sarcasm as cockiness.

But Schochet is engaging, particularly when talking about his dual goals in Cleveland: Making money for investors betting on the upside of a Midwestern city, and contributing to the betterment of a downtown that more high-profile buyers have passed by.

“When you own one asset, you really are not contributing anything to the city,” Schochet said, explaining Optima’s investment philosophy. “You’re just collecting rent.

“The way we like to operate is we like to get ourselves knee deep — if not, I mean, the way we are in Cleveland is almost neck deep — in the market,” he added, “so we can understand where the market’s heading and how we can help improve the market and make changes in the market.”

A family connection helped to get consideration

Born and raised in Miami Beach, Schochet didn’t follow a traditional road to the real estate business.

“I’ve always had a thing for architecture,” he said, “which is how I got into what I’m doing. I always was fascinated when they put up big buildings, little buildings, monumental buildings. And then, I guess, from that it evolved into wanting to work with them. Real estate was probably the best entrance for me, without having to spend lots of time in architectural school.

“I do some sketches and some drawings of my own,” he said, laughing, “but I doubt any of them would pass code approvals.”

Optima Ventures is one of downtown Cleveland’s largest property owners, with more than 2.8 million square feet of office space and a stake in the former Crowne Plaza Cleveland City Centre hotel, which is being redeveloped as a Westin.

Instead of studying buildings, Schochet attended the Rabbinical College of America, in Miami, New York and Toronto. A member of an Orthodox Jewish movement called Chabad — and very private about his religion — he graduated with a degree in Judaic studies in 2006.

The sixth of eight children born to Obie and Sheva Schochet, he recalls a busy, loud household. His siblings, now ages 20 to 36, are among his closest friends. They gather several times a year, from locations as far-flung as Istanbul, where one of his four sisters does humanitarian work.

After college, Scochet headed to Singapore and spent a year traveling and volunteering in Asia. Then he returned to Florida and joined Optima Ventures, a real estate investment business owned by the leaders of Optima International of Miami and the principals of the Privat Group, one of Ukraine’s largest business and banking groups.

“A family connection helped to get me initial consideration,” Schochet said, referring to Mordechai “Motti” Korf, his brother-in-law and a co-founder of Optima International. Corporate records show that Korf and businessman Uri Laber formed Optima International in 1994.

“But I’m on my own here, and I — and I alone — am accountable to our investors for my decisions and my work,” Schochet added.

In eastern Europe, those investors have ties to distribution, mining, manufacturing and the energy business, including refineries and oil and gas production companies. They’ve owned and sold a telecommunications business, a cement factory, office buildings and hotels.

In the United States, they’ve focused on steel and raw materials. Through various companies, Optima International controls businesses including Warren Steel Holdings, a casting mill northwest of Youngstown; Felman Productions Inc., a West Virginia plant that produces additives to purify steel; and manufacturing facilities spread from New York to Texas.

In 2007, the investors launched Optima Ventures to diversify into U.S. commercial real estate, though the group recently put money into a daily-deal website called 1SaleADay. Schochet, who is not a principal, was circumspect about discussing how the company is structured or who the major investors are.

A document provided by Optima to some downtown Cleveland office tenants in 2010 said that the founders of Optima International owned 33.3 percent of the real estate operation. The principals of Privat Group owned the rest.
But they’re not the ones in Cleveland, eyeing acquisitions, searching for tenants and learning the landscape.

That’s Schochet, who has gained a reputation as an aggressive, quick-thinking deal-maker, at his best in face-to-face conversations and informal settings.

“He loves to get out into the market, walk through other buildings, meet people,” said Brian Hurtuk, a first vice president with the CBRE real estate brokerage in Cleveland. “You wouldn’t necessarily see Chaim at a huge real estate event, but if you talk to him and you rattle off names of other owners in town, other developers, key attorneys, he’s pretty much made the rounds.”

Optima now owns more than 5 million square feet of real estate in the United States. Schochet spends much of each week traveling or camped out at the Cleveland Marriott Downtown at Key Center, between trips home to Miami Beach to see his wife, Rachel, who “takes care of my two babies.”
When he gets a break from managing buildings, he’s thinking about house prices and what’s best for his sons, Eliyahu and Yehuda.

“It’s deciding where you want to move, how you want to move, what you want to build, new construction, existing,” he said. “With a wife it’s a whole new picture.”

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