- Dec 16, 2010
This year marks the 14th anniversary of CPE’s annual executive awards program, a longstanding tradition whereby industry executives themselves decide who have been the true leaders during the previous 12 months. This year’s winners of the CPE Executive of the Year Awards represent a striking cross-section. Along the way you will read about dynamic investors and prolific developers, canny financiers and creative service providers—and even a genuine Hall of Famer. Eclectic as their backgrounds and professional interests are, however, members of the Class of 2010 share at least one common bond: Faced with the most challenging economic climate in several generations, each one has responded with ingenuity, optimism and vigor. Their efforts are helping to assure a prosperous future for the industry.
As in years past, the leaders honored in this issue were selected through a comprehensive, months-long process. CPE invites nominations from the industry, which are then augmented by recommendations from our editors. Placement is determined by a secret ballot of the CPE 100, an invited group of the industry’s senior executives. Most categories feature one winner and two runners up. We commend them all to you as examples of the very best in the business.
Executive of the Year/Investor of the Year
Barry Sternlicht, Chairman & CEO, Starwood Capital Group
Starwood Capital Group, the private commercial real estate investment company founded in 1991 by Barry Sternlicht, seems to be everywhere these days. Whether it is recapitalizing a REIT, financing a hospitality project or bidding on a defunct bank’s real estate assets, the company is having a wide impact on commercial real estate finance, development and investment. That clout has earned Barry Sternlicht recognition for both CPE’s top award, Executive of the Year, and the Investor of the Year award for 2010.
Also the founder of Starwood Hotels & Resorts Worldwide Inc., Sternlicht has been making major moves in the hospitality industry. In June, Starwood Capital disclosed that it had purchased a 49.9 percent stake in Hersha Hospitality Management, a move intended to power an aggressive expansion. Starwood, Kaufman Jacobs L.L.C. and JPMorgan Chase & Co. recapitalized and reorganized Rubicon US REIT Inc., a non-traded investment fund that had been under Chapter 11 bankruptcy protection. The joint venture is eying a value-added play.
In October 2009, a group led by Starwood and TPG Capital won the Federal Deposit Insurance Corp.’s auction of a 23 million-square-foot portfolio of loans and foreclosed assets owned by Corus Bank. Sternlicht commented at the time, “The financial structure of this transaction affords the buyer (the opportunity) to be exceedingly patient to protect, maintain and enhance the assets while maximizing profit potential for the equity participants.” That might also sum up Sternlicht’s approach to a market that is tough—and full of opportunity.
Innovator of the Year
Art Coppola, Chairman & CEO, Macerich Co.
On Aug. 6, a flurry of beach balls flew into a crowd of several thousand people gathered to celebrate the official re-opening of Santa Monica Place, the seaside city’s 30-year-old regional mall. It was a uniquely Californian welcome that capped a two-year, $265 million redevelopment by the Macerich Co., the property’s owner. The re-opening would have been noteworthy as one of only a handful of such events to take place in a perilous retail climate. But it was the transformation of a one-time white elephant into a sparkling new destination that attracted national attention.
That achievement also brings recognition to Macerich’s longtime chairman & CEO, Art Coppola, as CPE’s Innovator of the Year. When Macerich bought Santa Monica Place from Rouse Co. in 1999, the regional mall was suffering in comparison with a younger, more glamorous neighbor. Santa Monica Place’s design by Frank Gehry had been at the cutting edge in 1980, when the property opened, but it is right across the street from the southern border of Third Street Promenade, which itself underwent a transformation in the 1980s into a vibrant, open-air plaza lined by upscale stores, restaurants, movie theaters and residential properties.
Coppola ordered a makeover that would maintain the mall’s regional scale while also taking advantage of its beachfront location and the area’s welcoming climate. Perhaps the most striking aspect of the renovation designed by architect The Jerde Partnership and executive architect Omniplan was opening the center up to the sky. The roof was removed and replaced with an innovative outdoor “Dining Deck” that gives visitors a choice of 10 quick-service eateries and six sit-down restaurants. In keeping with Santa Monica Place’s air of innovation, Nike, Hot
Topic and Charlotte Russe all rolled out new prototypes at the center. Nordstrom and Bloomingdales signed on as anchors.
Mitchell Schear, President, Vornado/Charles E. Smith
Head of Vornado Realty Trust’s affiliate in Metropolitan Washington, D.C., Mitchell Schear leads the development of innovative, high-profile projects. This fall, Vornado/Charles E. Smith opened the first office building in the city designed to Platinum-level LEED standards: PNC Place, a 350,000-square-foot trophy property and the new regional headquarters of PNC Financial Services Group Inc.
In 2009, Vornado/Charles E. Smith completed construction of 1999 K St., N.W., a fully leased, 250,000-square-foot office building that earned a LEED Gold rating. The property subsequently sold for $207.8 million, one of the highest prices per square foot ever paid in the market.
And Vornado/Charles E. Smith is a partner in Waterfront Station, a planned 2.5 million-square- foot mixed-use project in Southwest Washington. Before his current assignment, Schear served as president of Kaempfer Co., a diversified local company acquired by Vornado/ Charles E. Smith in 2003. He oversees the region’s largest office portfolio—18 million square feet—plus third-party property management assignments totaling an additional 7 million square feet.
Benjamin Lambert, Chairman, Eastdil Secured
Ben Lambert is a central figure in the development of real estate finance. In 1967, he founded Eastman Dillon Union Securities, the earliest ancestor of today’s firm, which is generally considered to be the first modern real estate investment banking firm. During the course of his career, Eastdil has been involved in many of the industry’s biggest and most complex deals, frequently representing the seller. In 2003, he represented Conseco in the record $1.4 billion sale of the General Motors Building in Manhattan to Harry Macklowe.
During the past 30-plus years, Lambert has led Eastdil through a steady string of canny mergers that have expanded the company’s platform. It came under ownership of Paine Webber in the 1970s and was then re-purchased by its senior management in 1980. From the mid-1980s to 1994, Eastdil was 50 percent owned by Nomura Securites Co. That period was marked by innovative transactions: Eastdil was the first financier to structure and place a dual-currency financing on an office building in the United States. In 1994, senior management bought the company back from Nomura in the wake of Japan’s economic slump. Eastdil has been an affiliate of Wells Fargo Bank since 1999.
Probably Lambert’s best-known and boldest move came in 2005, when he merged the company—by then known as Eastdil Realty Co.—with its leading competitor, Secured Capital Corp. Through Secured, Eastdil gained expanded strength on the West Coast. In 2006, the first full year following the merger, Eastdil Secured completed transactions valued at $60 billion. During the market’s peak in 2007 and early 2008, its volume hit $182 billion.
Roger Staubach, Former Executive Chairman, The Staubach Co., & Executive Chairman of the Americas, Jones Lang LaSalle Inc.
Roger Staubach is a member of an elite club consisting of that handful of individuals who forge world-class careers in two entirely different spheres. As every sports fan knows, Staubach is among the most accomplished athletes of his generation. Winner of the 1963 Heisman Trophy as the nation’s top college football player, he attended the U.S. Naval Academy and spent four years in the Navy after graduation. Staubach started his pro career at age 27, piloted the Dallas Cowboys to two Super Bowl victories and led the National Football League in passing four times.
In 1977, the future Hall of Famer launched the Staubach Co., which was a pioneering specialist in office tenant representation. During the next three decades, Staubach oversaw the firm’s expansion into providing office, industrial and retail users with a wide range of services, ranging from site selection and finance to acquisition and disposition. It claimed to be the world’s largest service firm dedicated to tenant representation.
By 2008, the company had grown to 50 offices and more than 1,000 employees in North America. Through a global alliance with DTZ Holdings Plc, Staubach’s footprint extended to 40 countries. In June 2008, he agreed to a $613 million acquisition by Jones Lang LaSalle Inc. The transaction greatly expanded Jones Lang LaSalle’s tenant representation business, providing a revenue stream that proved to be invaluable during the recession. Staubach, who now holds the title of executive chairman, continues to advise Jones Lang LaSalle as a board member and travels the country as an ambassador to the company’s clients.
Developer of the Year
Industrial Property Executive of the Year
Walt Rakowich, CEO, ProLogis
Walt Rakowich might be enjoying a well-earned early retirement had the recession not intervened. Instead of dedicating himself exclusively to family and philanthropic pursuits, as he had planned, Rakowich is leading ProLogis’ impressive rebound from the apparent precipice to stability and growth. “We knew it would take a Herculean effort to get done what we had to do,” Rakowich observed earlier this year. “You end up making really quick decisions, and we made a lot of really good decisions—call it lucky.”
Under the gun to restore investor confidence, the ProLogis board asked Rakowich to defer his planned January 2009 retirement as the REIT’s president & COO and step in as CEO. Rakowich quickly ordered a series of bold moves. ProLogis raised $1.3 billion by selling its operations in China plus a 20 percent stake in its Japanese funds. All told, the company trimmed its debt by $2.7 billion in 2009.
Rakowich has continued that trend this year, overseeing dispositions that have raised $1.6 billion to date. The largest took place in October, when ProLogis disclosed a $1 billion deal to sell a North American industrial portfolio and other assets to Blackstone Real Estate Advisors. Rakowich is also keeping the development pipeline flowing; ProLogis had tallied $500 million in project starts through the third quarter, many of them outside the United States. Meanwhile, Rakowich is championing green initiatives. Solar projects installed or under construction offer 50 megawatts of capacity in 41 buildings in the United States, Spain, France, Germany and Japan. Last year, ProLogis launched a global renewable energy practice that manages installations and provides project development services.
Financier of the Year
David Brown, Head of Global Private Markets, TIAA-CREF Global Real Estate
As head of global private markets for TIAA-CREF, Dave Brown oversees commercial real estate mortgages, construction financing and troubled assets, as well as timber, infrastructure and other non-real estate categories. This year, the $410 billion financial services giant continues to be a significant player on multiple financial fronts. In February, TIAA-CREF inked a $510 million deal to sell a portfolio of performing mortgages to Starwood Property Trust, the retail REIT formed by Starwood Capital Group founder Barry Sternlicht.
Some recent transactions are notable less for size than for creativity. In October, TIAA-CREF struck a partnership with Good Energies, a venture capital firm specializing in clean energy and technology. To promote energy efficiency in commercial office buildings, TIAA-CREF will invest $50 million in increments of $2 million to $8 million to further an effort to implement clean energy and technology in commercial office buildings.
In addition, TIAA-CREF and an affiliate of Castle & Cooke Holdings Inc. are providing construction and permanent financing for the Nutrition Research Institute at the University of North Carolina’s School of Public Health in Kannapolis, N.C.
Service Executive of the Year
Brett White, CEO, CB Richard Ellis Inc.
Brett White, a 26-year CB Richard Ellis Inc. veteran who has served as CEO since 2005, leads a global company that tallied $4.2 billion in revenue last year. He continues to oversee significant innovation and noteworthy wins as the real estate service sector adjusts to changing times. In January, General Electric Co. renewed its global transaction services contract, which encompasses 300 million square feet and some 4,700 properties in more than 100 countries. And in September, CB Richard Ellis re-upped as service provider for Chevron Corp.’s North American retail portfolio, an assignment that covers upwards of 650 Chevron outlets.
Other 2010 highlights include the launch of a new auction business and a solar services practice, which advises clients on renewable energy strategy, controlling operating costs and maximizing asset value. Elsewhere on the sustainability front, Newsweek ranked the firm 30th on its list of the 500 greenest U.S. companies. White was recognized by Commercial Property News as Executive of the Year in 2006 and as Brokerage Executive of the Year in both 2005 and 2006.
Sustainability Executive of the Year
Jeffrey Hines, President & CEO, Hines
Early next year, the first tenants are scheduled to move into the only office tower in Texas to earn Platinum-level LEED certification: MainPlace, a 972,000-square-foot office project that Hines is developing in Downtown Houston. The 46-story building is only one of the many projects, services and initiatives that place Houston-based Hines among the industry’s leading green practitioners. Those efforts have earned recognition for Jeff Hines, the company’s president & CEO, as CPE’s Sustainability Executive of the Year. A single Hines project, retrofitting of the Greenpoint Plaza office campus, increased the number of LEED-certified buildings in Houston by 40 percent. Five of the buildings earned Gold-level certification and the sixth received Silver-level certification.
In Washington, D.C., the company won LEED Platinum certification for its redevelopment of 1200 19th St., N.W., in the city’s central business district. Among other steps, Hines retrofitted the 46-year-old property with new mechanical, electrical and plumbing systems, and replaced the original façade with a high-efficiency glass curtain wall. Hines has 107 million square feet in 202 properties that have been LEED certified or are candidates for certification. Hines also earned its third “Sustained Excellence Award” from the U.S. Environmental Protection Agency’s ENERGY STAR program. All told, the company manages 77 million square feet in 153 ENERGY STAR-certified buildings nationwide.
Diversity Executive of the Year
Philip Hart, Founder, Hart Realty Advisors
During a multifaceted quarter-century career as a real estate developer, civic activist and educator, Hart Realty Advisors president & CEO Philip Hart has pursued multiple ways to champion diversity. As the Urban Land Institute’s first managing director for member diversity initiatives in 2008 and 2009, Hart led the development of a strategy to expand the presence of women and ethnic minorities in the organization’s membership. Among other accomplishments, he is the master developer of CrossTown Industrial Park in the Roxbury section of Boston. The 75- acre park includes all major commercial real estate property categories.
Hart’s record of civic service includes leadership positions with AbilityFirst, a Pasadena, Calif.-based organization that uses both public and private financing to develop affordable housing in Southern California. He served on the Los Angeles County Economic Development Corp.’s board of governors from 2006-09 and on a mayoral task force focusing on jobs. For more than 25 years, he was also a professor of sociology and director of the William Monroe Trotter Institute for the Study of Black Culture at the University of Massachusetts, Boston; he was also a senior fellow at the university’s John W. McCormack Institute of Public Affairs and has been a visiting research sociologist at the University of California, Los Angeles’ Ralph Bunche Center for African American Studies. He writes frequently on urban planning issues and other topics.
Multi-family Property Executives of the Year
David Neithercut, President & CEO, Equity Residential
Under the leadership of president & CEO David Neithercut, Equity Residential has been an aggressive buyer in a market that has tended to favor multi-family over other property types. Neithercut, a 15-year company veteran who will mark his fifth anniversary as president & CEO in January, has directed $1.4 billion in acquisitions of 14 properties and 4,164 units this year. Equity Residential has targeted high-end properties in affluent markets from coast to coast. In September, the REIT bought Vantage Point, a 40-story, 679-unit property in San Diego. In disclosing the deal, Neithercut called the acquisition “another example of the opportunities we have seized on this year to add high-quality, well-located assets to our portfolio at prices well below replacement cost.”
That acquisition was preceded in April by a $167 million deal for 425 Mass, a luxury property in the Mount Vernon Triangle District in Washington, D.C. And in March, the REIT closed on Longacre House, a 293- unit property in Midtown Manhattan. That was the third of three Manhattan apartment assets acquired by the REIT during the winter months. Equity Residential is also keeping its hand in disposition, selling 11 properties for a total of $172 million. All told, the company’s portfolio now encompasses nearly 135,000 units nationwide.
J. Ronald Terwilliger, Chairman Emeritus, Trammell Crow Residential
Ron Terwilliger has been a force in the multi-family industry for more than a quarter century. As chairman & CEO of Trammell Crow Residential from 1986 to 2008, Terwilliger developed upwards of 200,000 units. Since his retirement at the end of 2009, Terwilliger has continued to shape housing opportunities nationwide through his tireless civic and philanthropic efforts. The ULI-Terwilliger Center for Workforce Housing, endowed by his $5 million donation, advocates housing opportunities for working families through research and advocacy. Terwilliger is chairman of Enterprise Community Partners, which provides financing for affordable housing. And in May 2009, Habitat for Humanity revealed that Terwilliger had made a $100 million gift, the largest individual donation in the organization’s history. The gift will provide improved housing for 60,000 families. Terwilliger is a past chairman of the Urban Land Institute and was named Commercial Property News’ Multi-Family Property Executive of the Year in 2005.
Female Leader of the Year
Diana Reid, Executive Vice President, PNC Real Estate
Under Diana Reid’s leadership, PNC Real Estate maintains its position as a capital markets powerhouse. Her unit ranked second by volume on the Mortgage Bankers Association’s list of commercial and multi-family originators for 2009 and was the No. 1 Fannie Mae originator. Through its Midland Loan Services Inc. affiliate, PNC was ranked by MBA as the secondlargest loan servicer at midyear, with a $308 billion portfolio. Reid has won plaudits for controlling PNC’s real estate-related losses during the recession.
Before joining PNC three years ago, Reid was founding and managing partner of Beekman Advisors L.L.C., a New York City-based consultancy to the real estate, mortgage finance and affordable housing sectors.
Office Property Executive of the Year
Ric Clark, President & CEO, Brookfield Office Properties Corp.
Ric Clark is leading Brookfield Office Properties Corp. through a major transformation. Clark, a 25-year Brookfield veteran who has served as president & CEO since 2002, unveiled plans last July to reposition Brookfield Properties Corp. as a pure-play office REIT. As a result of the restructuring, Clark now heads a company that owns 75 million square feet of core office space in the United States, Canada and Australia.
Along with the new name, the process involved a complex restructuring among units of the parent company, Brookfield Asset Management Inc., for which Clark is senior managing partner of property operations. Brookfield Office Properties gained a significant presence in Australia through the recent $1.6 billion acquisition of an 8 million-square-foot office portfolio in Melbourne, Perth and Sydney.
“Expanding internationally in dynamic gateway cities … with similar characteristics to our current North American markets provides great operational synergies,” Clark explained. As part of its new focus, Brookfield Office Properties is also divesting its residential land business, selling it to Brookfield Homes Corp. Expected to close in January, the $1.2 billion deal will create a new entity, Brookfield Residential Properties Inc.
Hotel/Hospitality Property Executive of the Year
Andrew Cosslett, Chief Executive, InterContinental Hotels Group Plc
As chief executive of InterContinental Hotels Group, Andrew Cosslett is overseeing a growth spurt that will add considerably to the U.K.-based developer and operator’s portfolio, which is already the world’s largest as measured by number of keys. The company’s development pipeline includes 75,000 keys under construction, about 20,000 of them in properties scheduled to open by the end of this year. Looking out five years, Cosslett’s plans call for adding 1,300 hotels to a portfolio of 4,500 hotels in 100 countries. That pipeline encompasses all seven of the company’s brands.
In July, InterContinental opened properties in Manhattan representing two of those brands: the 112-key Holiday Inn Express Wall Street, located near the Downtown Financial District, and the 607-key InterContinental New York Times Square, the largest new-build hotel to open in Manhattan since 2002. In September, Cosslett confirmed plans for its upscale Hotel Indigo brand: 13 new locations by the summer of 2013, including properties in London, Madrid, Singapore, Hong Kong and New York City.
Meanwhile, InterContinental is wrapping up what the company claims is the hospitality industry’s largest-ever re-launch. As part of a $1 billion upgrade scheduled for completion this year, some 3,400 Holiday Inn and Holiday Inn Express locations are getting improvements ranging from spruced-up lobbies to fresh exterior lighting and a new version of the brands’ familiar signage.
Retail Property Executive of the Year
David Henry, President & CEO, Kimco Realty Corp.
David Henry joined Kimco Realty Corp. as president in 2008, following a stint as chief investment officer & senior vice president of GE Capital Real Estate. A year later, he became CEO of the New Hyde Park, N.Y.-based REIT, which owns a 137 million-square-foot portfolio of 948 neighborhood and community shopping centers in 44 states, Puerto Rico, Canada, Mexico and South America. Henry is further strengthening Kimco’s balance sheet by identifying opportunities for acquisition while also disposing of non-core properties and reducing leverage. Kimco recently issued preferred stock and unsecured bonds with an eye toward trimming debt by $440 million.
He is also forging ties with new capital partners, expanding Kimco’s portfolio and selectively recapitalizing existing holdings. In April, the company teamed with the Canadian Pension Plan Investment Board to acquire properties nationwide. CPPIB paid $370 million for a 45 percent stake in five assets that Kimco acquired in late 2009.
Two months later, Kimco and Israeli investment company BIG Shopping Centers paid $422 million for a 2.6 million-square-foot portfolio of mostly West Coast assets, including the assumption of $385 million in mortgage debt. Kimco owns a 33 percent stake in the joint venture and serves as operating partner and property manager.
Net Lease Executive of the Year
Marc Nemer, President, Cole Real Estate Investments
As president of Phoenix-based Cole Real Estate Investments, Marc Nemer has been instrumental in establishing and maintaining the company’s leadership in net lease investment. Through its preferred vehicles—registered, non-traded REITs—Cole has assembled a 1,200-building, 41 million-square-foot portfolio of retail, industrial and office properties. Retail is the dominant category, accounting for 68 percent of Cole’s holdings by square footage. In October, the company began marketing $2.5 billion worth of shares in Cole Credit Property Trust III, for which it had sold $2.2 billion in shares from January 2009 to September 2010.
As of last month, it was projecting 2010 acquisitions of $2.5 billion—more than in 2008 and 2009 combined. Its latest moves include a $266 million sale-leaseback deal for 32 Albertson’s grocery stores in Arizona, Colorado, New Mexico and Texas. For 2011, Cole is eyeing $3 billion in acquisitions and plans to target a higher proportion of office and industrial properties than it has in the past.