What’s to learn from 5 recessions?
Three of Jacksonville’s veteran developers told a crowd of 225 real estate professionals, including some who are relatively new to the industry, how they’ve survived the slowdowns since 1980.
“You got knocked down, but you got up and went to work every day,” said Ed Burr, president and CEO of GreenPointe Holdings LLC, referring specifically to the Great Recession of December 2007-June 2009.
Burr has worked in the industry for decades, and founded GreenPointe Holdings, a diversified holding company, in 2008.
Burr served on a panel at the Urban Land Institute North Florida’s Emerging Trends in Real Estate event Thursday night at EverBank Field.
He was joined by John Carey, managing partner of Whitehall Realty Partners, and Hap Stein, chairman and CEO of Regency Centers Corp.
The panel was moderated by Bruce Johnson, who has more than 30 years of experience with Regency Centers and its predecessor companies. Johnson retired in December 2012.
The four experienced at least five recessions. A six-month recession in 1980 was followed by a 16-month recession in 1981-82. The 1990-91 recession lasted eight months, as did the 2001 recession.
The 18-month Great Recession crash took down stock values, capital availability, jobs and optimism.
Carey founded Whitehall in 2006 after serving as president and COO of Flagler Development Co., and before that, working with The St. Joe Co., Trammell Crow Co. and an accounting firm.
Whitehall is a real estate development and advisory firm that is developing multifamily and senior living projects.
Carey said that in the fall of 2008, when the Lehman Brothers investment bank collapsed in the global credit crisis, Whitehall had a multifamily project “ready to go.”
The 158-year-old Lehman firm filed for bankruptcy protection in September 2008, and its collapse roiled international markets. It was one of several financial giants that had to take emergency action in the crisis.
Carey said the multifamily project went dormant for three years.
During the recession, Whitehall diverted into the workout business because banks had assets to divest.
Now, the company is developing projects like the East San Marco mixed-use project and assisted living centers for seniors. “We have a very dependable pipeline of customers,” he said.
Jacksonville-based Regency Centers focuses on shopping-center ownership in a dozen markets and dependable anchors like Publix Super Markets Inc.
Stein served as a vice president from 1976-81, when he became president of the predecessor real estate division. He became CEO in 1993 with the company’s initial public stock offering and has been chairman since 1999.
That means he’s also familiar with the 16-month recession from 1973-75.
During the Great Recession, “we sharpened our strategy,” Stein said, selling assets, raising equity and eliminating 200 positions, which he called a “painful reduction in force.”
“We kept the muscle of the team,” he said.
Stein told the group that “you learn in down markets.”
Today, he said the shopping-center business is good. Among the new local projects are East San Marco and the Shoppes on Riverside, a pioneering Brooklyn-area retail center near Downtown that will feature a Fresh Market.
Stein said there’s “robust demand” by retailers and restaurants to expand, and there’s a low level of a new supply of space.
Emphasizing that Regency focuses on “two dozen great markets,” Stein said occupancy is almost back to the 95 percent enjoyed before the recession, when rates dropped to 92 percent at the trough.
Regency owns, operates and develops grocery-anchored and community shopping centers, featuring anchors such as Publix, Target, Trader Joe’s, Whole Foods, Safeway and Kroger.
Burr started his career in 1979 with an accounting firm before starting LandMar Group LLC in 1987 to create master-planned communities in Florida and coastal Georgia.
LandMar was sold to Crescent Resources, which filed for Chapter 11 bankruptcy in June 2009.
Before the recession, Burr said there was a rush “to put single-family product in the ground,” and then the market collapsed.
While the market has improved, Burr cautioned that he is seeing some parts of the market “revert to build, build, build.”
Johnson asked the three their expectations for 2014 and 2015, and each said he was bullish.
Each also was asked if he was a buyer or seller of real estate assets, and all said “both.”
Stein explained that lower-growth prospects are sold and the proceeds used to buy better-growth prospects.
One of the final questions came from former ULI Chairman Peter Rummell, a Jacksonville civic and business leader and the inaugural chair of the influential private Jacksonville Civic Council.
Rummell asked what each of the panelists would do first as “king of Jacksonville.”
Burr responded first, and the others agreed.
Burr said he would “do all the (Downtown) dreams.”
“We will never be a great city until we get a great Downtown,” he said, eliciting broad applause.
Rummell responded that he was “in Ed’s camp, it all starts there.”
Burr, a member and immediate past chair of the Jacksonville Transportation Authority, drew a second round of applause by adding “there’s not a great Downtown without a great transportation system,” promising that the authority is focused on improving the transit system.
Orlando-based Parkway Properties Inc. completed its purchase of the JTB Center office complex for $33.25 million, a deal announced Jan. 6.
DRA CRT JTB Center LLC, in care of DRA Advisors LLC of New York, sold the property to PKY Carlton LLC Thursday. The deed was recorded Friday with the Duval County Clerk of Court.
Parkway said in January it had reached an agreement Dec. 20 to buy the JTB Center office complex for $33.3 million.
The center comprises three Class A office buildings, including the Carlton and Collier buildings at 5011 Gate Parkway, totaling 248,000 square feet.
The deal also includes a 25,000-square-foot building at 7596 Centurion Parkway.
Parkway expected to complete the sale by the end of the first quarter. “JTB Center will allow Parkway to gain additional scale in the highly desirable Deerwood submarket of Jacksonville,” said a news release.