Business Management Corporate Profiles
June 1, 2007
By: Eugene Gilligan, Senior Hotel Editor
During the past two decades, plenty of real estate companies have distinguished themselves as dynamic, sophisticated models for business excellence and growth. The executives that CPN interviewed for “Leaders Look Ahead” on page 48 guide five such accomplished firms. Here, senior editor Eugene Gilligan profiles five others.
The Blackstone Group L.P.
Fast Learner
With the number of landscape-altering transactions in which The Blackstone Group L.P. has participated, it is all the more notable that the firm is barely more than 20 years old. It opened an office in 1985 with a staff of four working with a balance sheet of just $400,000.
Blackstone formed its real estate group in 1992 and has been a prolific acquirer of properties ever since. To date, it has invested in 213 transactions totaling 3,200 individual assets worth $103 billion.
Its acquisitions can be described as monumental, its signature being the February 2007 acquisition of Equity Office Properties Trust, which had been the largest publicly traded owner and manager of office properties in the United States, with whole or partial interests totaling 103.1 million square feet in 543 office buildings. But the the $39 billion purchase, the largest leveraged buyout in U.S. history, is just one of the firm’s major real estate acquisitions, which have focused on large, publicly traded office owners.
In 2006, Blackstone and Brookfield Properties Corp. acquired Trizec Properties Inc. and Trizec Canada Inc. for $9 billion. Blackstone also acquired CarrAmerica Realty Corp. for $5.6 billion last year. And the company has also shown a particularly voracious appetite for hotels. In 2005, it acquired Wyndham International Inc. for $3.2 billion and LaQuinta Corp. for $3.4 billion. Last year, it acquired MeriStar Hospitality Corp. for $2.6 billion. And in May, Blackstone announced that the Chinese government’s soon-to-be-established State Investment Co. will purchase $3 billion worth of non-voting units as part of Blackstone’s IPO. That gives the investment company a stable foothold in China’s boiling market. Blackstone is also a member of the private equity consortium that owns CPN’s parent, The Nielsen Co.
Forest City Enterprises Inc.
86 & Still Developing
Owner, developer and manager Forest City Enterprises Inc. has $9 billion worth of assets in the United States, primarily targeting Boston, New York City, Philadelphia, major California markets, Baltimore, Denver, Chicago and Washington, D.C. The company was born when four siblings from the Ratowczer family, which emigrated to the United States from Poland, launched a lumber yard in 1921, growing it into the real estate power we now know. The family later changed its name to Ratner.
Known for complex mixed-use projects in markets with high barriers to entry, Forest City operates three units: By the end of January, its commercial arm owned 91 retail, office and hotel properties; its residential division owned 123 apartment communities totaling more than 38,000 units; and its land development group had 7,700 acres of developable land. At the end of 2006, Forest City had 18 projects, representing $1.7 billion, under construction.
Signature projects from the past 20 years include the 3 million-square-foot redevelopment of a Cleveland railroad station into the 3 million-square-foot Tower City Center retail and office complex. In 1998, Forest City was named master developer of the redevelopment of the 7.5-square-mile former Stapleton Airport site in Denver. And the company is developing the $4 billion Atlantic Yards—a long-term, skyline-altering project—in Downtown Brooklyn, N.Y., with retail, office and residential space, as well as parks and an arena for sports and concerts.
Jones Lang LaSalle Inc.
Global Grower
Real estate money management and services firm Jones Lang LaSalle Inc. has 160 worldwide offices and operates in 450 cities across 50 countries. The company is an industry leader in property and corporate facility management, with a portfolio of 1 billion square feet worldwide.
Jones Lang LaSalle came into being in 1999 via the merger of Jones Lang Wootton and LaSalle Partners Inc. The merger created a firm with significant global coverage, combining LaSalle Partners’ real estate management services stature in North America and Jones Lang Wootton’s strong presence in Europe and Asia-Pacific.
Jones Lang Wootton also had a strong U.S. footprint at the time of the merger, having opened an office in New York City in 1975 and then taking advantage of the increased flow of capital from the United Kingdom and the Middle East. LaSalle Partners had launched a strong growth initiative in the 1990s, acquiring property and development management firm Galbreath Co., the Satulah Group Inc.’s project management business, top-five management services firm COMPASS Management and Leasing Inc. and Lend Lease Real Estate Investments Inc.’s U.S. retail property management business.
In July 1997, Jones Lang LaSalle completed an IPO of the company’s common stock and is now considered one of the nation’s most prominent real estate services firms, with 7,200 employees.
The Opus Group
Versatile Leader
Since its 1953 beginnings as a general contractor in Minnesota, the Opus Group has developed 2,375 projects, and it now has 34 million square feet in the pipeline. The $2.1 billion firm, with 28 offices in the United States and Canada, develops office, industrial, retail, government and institutional properties and has a green building arm.
Signature projects from the past 20 years include the Collier Center in Downtown Phoenix, a 2.1 million-square-foot office and retail project that opened in 2000 and was a key to the area’s revitalization. That year, Opus also completed Phase I of Arbor Lakes, a 2,000-acre, master-planned community that created a new Downtown for Maple Grove, Minn., and a 1 million-square-foot, 30-story office building in Downtown Minneapolis for American Express Financial Corp.
In 2003, Opus delivered the 1.5 million-square-foot corporate headquarters for Best Buy Co. in Richfield, Minn., just outside Minneapolis. It negotiated a large tax-increment financing package for the project and coordinated site acquisition with about 90 landowners and the municipality.
The company has increasingly focused on green development, and 2001—when the firm completed the American Honda Northwest Regional Facility in Gresham, Ore., the first LEED gold-certified industrial facility in the United States—was a benchmark year. And in March of this year, Opus opened the Environmental Protection Agency’s Region 8 headquarters, also designed to achieve gold certification, in Denver.
Simon Property Group Inc.
Bulk Buyer
Founded in 1960 as Melvin Simon & Associates Inc., Simon Property Group Inc. has since expanded significantly, developing and possessing some groundbreaking retail projects, particularly during the past 20 years.
Simon owns or has an interest in 323 properties totaling 245 million square feet of gross leasable space across 41 U.S. states and Puerto Rico. The company is also an international player, with interests in five outlet centers in Japan, one outlet center in Mexico and 53 shopping centers in France, Italy and Poland. All told, Simon owns 190 regional malls, 71 community/lifestyle centers, 36 premium outlet centers and 59 international projects.
The company built The Forum Shops at Caesars, one of the first high-end retail projects in Las Vegas, in May 1992, and opened the Mall of America, in Bloomington, Minn., in August 2003. In December of that year, the company became Simon Property Group through what was at the time the largest REIT IPO to date.
Simon has also grown through acquisitions and partnerships. In 1997, the company acquired DeBartolo Realty Corp. for $3 billion, creating the United States’ largest retail firm. One year later, it formed a strategic alliance with Chelsea Property Group to develop large upscale outlet centers. They acquired—in partnership with The Rouse Co. and Westfield America Trust—Rodamco North America N.V., giving Simon control of such high-profile assets as Boston’s Copley Place. Simon then acquired Chelsea in 2004. And this April, in a joint venture with Farallon Capital Management L.L.C., it acquired The Mills Corp. for $1.7 billion, absorbing its 37 properties, which total more than 45 million square feet of gross leasable area.
By: Eugene Gilligan, Senior Hotel Editor
During the past two decades, plenty of real estate companies have distinguished themselves as dynamic, sophisticated models for business excellence and growth. The executives that CPN interviewed for “Leaders Look Ahead” on page 48 guide five such accomplished firms. Here, senior editor Eugene Gilligan profiles five others.
The Blackstone Group L.P.
Fast Learner
With the number of landscape-altering transactions in which The Blackstone Group L.P. has participated, it is all the more notable that the firm is barely more than 20 years old. It opened an office in 1985 with a staff of four working with a balance sheet of just $400,000.
Blackstone formed its real estate group in 1992 and has been a prolific acquirer of properties ever since. To date, it has invested in 213 transactions totaling 3,200 individual assets worth $103 billion.
Its acquisitions can be described as monumental, its signature being the February 2007 acquisition of Equity Office Properties Trust, which had been the largest publicly traded owner and manager of office properties in the United States, with whole or partial interests totaling 103.1 million square feet in 543 office buildings. But the the $39 billion purchase, the largest leveraged buyout in U.S. history, is just one of the firm’s major real estate acquisitions, which have focused on large, publicly traded office owners.
In 2006, Blackstone and Brookfield Properties Corp. acquired Trizec Properties Inc. and Trizec Canada Inc. for $9 billion. Blackstone also acquired CarrAmerica Realty Corp. for $5.6 billion last year. And the company has also shown a particularly voracious appetite for hotels. In 2005, it acquired Wyndham International Inc. for $3.2 billion and LaQuinta Corp. for $3.4 billion. Last year, it acquired MeriStar Hospitality Corp. for $2.6 billion. And in May, Blackstone announced that the Chinese government’s soon-to-be-established State Investment Co. will purchase $3 billion worth of non-voting units as part of Blackstone’s IPO. That gives the investment company a stable foothold in China’s boiling market. Blackstone is also a member of the private equity consortium that owns CPN’s parent, The Nielsen Co.
Forest City Enterprises Inc.
86 & Still Developing
Owner, developer and manager Forest City Enterprises Inc. has $9 billion worth of assets in the United States, primarily targeting Boston, New York City, Philadelphia, major California markets, Baltimore, Denver, Chicago and Washington, D.C. The company was born when four siblings from the Ratowczer family, which emigrated to the United States from Poland, launched a lumber yard in 1921, growing it into the real estate power we now know. The family later changed its name to Ratner.
Known for complex mixed-use projects in markets with high barriers to entry, Forest City operates three units: By the end of January, its commercial arm owned 91 retail, office and hotel properties; its residential division owned 123 apartment communities totaling more than 38,000 units; and its land development group had 7,700 acres of developable land. At the end of 2006, Forest City had 18 projects, representing $1.7 billion, under construction.
Signature projects from the past 20 years include the 3 million-square-foot redevelopment of a Cleveland railroad station into the 3 million-square-foot Tower City Center retail and office complex. In 1998, Forest City was named master developer of the redevelopment of the 7.5-square-mile former Stapleton Airport site in Denver. And the company is developing the $4 billion Atlantic Yards—a long-term, skyline-altering project—in Downtown Brooklyn, N.Y., with retail, office and residential space, as well as parks and an arena for sports and concerts.
Jones Lang LaSalle Inc.
Global Grower
Real estate money management and services firm Jones Lang LaSalle Inc. has 160 worldwide offices and operates in 450 cities across 50 countries. The company is an industry leader in property and corporate facility management, with a portfolio of 1 billion square feet worldwide.
Jones Lang LaSalle came into being in 1999 via the merger of Jones Lang Wootton and LaSalle Partners Inc. The merger created a firm with significant global coverage, combining LaSalle Partners’ real estate management services stature in North America and Jones Lang Wootton’s strong presence in Europe and Asia-Pacific.
Jones Lang Wootton also had a strong U.S. footprint at the time of the merger, having opened an office in New York City in 1975 and then taking advantage of the increased flow of capital from the United Kingdom and the Middle East. LaSalle Partners had launched a strong growth initiative in the 1990s, acquiring property and development management firm Galbreath Co., the Satulah Group Inc.’s project management business, top-five management services firm COMPASS Management and Leasing Inc. and Lend Lease Real Estate Investments Inc.’s U.S. retail property management business.
In July 1997, Jones Lang LaSalle completed an IPO of the company’s common stock and is now considered one of the nation’s most prominent real estate services firms, with 7,200 employees.
The Opus Group
Versatile Leader
Since its 1953 beginnings as a general contractor in Minnesota, the Opus Group has developed 2,375 projects, and it now has 34 million square feet in the pipeline. The $2.1 billion firm, with 28 offices in the United States and Canada, develops office, industrial, retail, government and institutional properties and has a green building arm.
Signature projects from the past 20 years include the Collier Center in Downtown Phoenix, a 2.1 million-square-foot office and retail project that opened in 2000 and was a key to the area’s revitalization. That year, Opus also completed Phase I of Arbor Lakes, a 2,000-acre, master-planned community that created a new Downtown for Maple Grove, Minn., and a 1 million-square-foot, 30-story office building in Downtown Minneapolis for American Express Financial Corp.
In 2003, Opus delivered the 1.5 million-square-foot corporate headquarters for Best Buy Co. in Richfield, Minn., just outside Minneapolis. It negotiated a large tax-increment financing package for the project and coordinated site acquisition with about 90 landowners and the municipality.
The company has increasingly focused on green development, and 2001—when the firm completed the American Honda Northwest Regional Facility in Gresham, Ore., the first LEED gold-certified industrial facility in the United States—was a benchmark year. And in March of this year, Opus opened the Environmental Protection Agency’s Region 8 headquarters, also designed to achieve gold certification, in Denver.
Simon Property Group Inc.
Bulk Buyer
Founded in 1960 as Melvin Simon & Associates Inc., Simon Property Group Inc. has since expanded significantly, developing and possessing some groundbreaking retail projects, particularly during the past 20 years.
Simon owns or has an interest in 323 properties totaling 245 million square feet of gross leasable space across 41 U.S. states and Puerto Rico. The company is also an international player, with interests in five outlet centers in Japan, one outlet center in Mexico and 53 shopping centers in France, Italy and Poland. All told, Simon owns 190 regional malls, 71 community/lifestyle centers, 36 premium outlet centers and 59 international projects.
The company built The Forum Shops at Caesars, one of the first high-end retail projects in Las Vegas, in May 1992, and opened the Mall of America, in Bloomington, Minn., in August 2003. In December of that year, the company became Simon Property Group through what was at the time the largest REIT IPO to date.
Simon has also grown through acquisitions and partnerships. In 1997, the company acquired DeBartolo Realty Corp. for $3 billion, creating the United States’ largest retail firm. One year later, it formed a strategic alliance with Chelsea Property Group to develop large upscale outlet centers. They acquired—in partnership with The Rouse Co. and Westfield America Trust—Rodamco North America N.V., giving Simon control of such high-profile assets as Boston’s Copley Place. Simon then acquired Chelsea in 2004. And this April, in a joint venture with Farallon Capital Management L.L.C., it acquired The Mills Corp. for $1.7 billion, absorbing its 37 properties, which total more than 45 million square feet of gross leasable area.
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