Executives of the Year/First Place: Raising the Bar
- Dec 15, 2016
This year marks CPE’s 20th Executives of the Year Awards, which recognizes commercial real estate’s top achievers as selected by their peers. The leaders you will read about in the next few pages represent the industry’s main business lines, from investment and development to finance and advisory services. Also recognized here is outstanding achievement in the major asset categories. As always, the winners of first-place and honorable mention awards were selected by a confidential vote of the CPE 100, an invited group of industry leaders.
During a dynamic year, these executives have orchestrated some of the largest, most complex corporate-level mergers and acquisitions in recent memory. On the transaction front, a number of winners directed blockbuster portfolio and single-asset deals.
Still others shed an entire business line, streamlining their companies’ missions and making way for fresh opportunities. Each of these accomplishments required creativity, persistence and vision.
Many of the individuals recognized here have looked for opportunities to expand globally. These industry leaders set their sights on untapped markets, seeking to forge or deepen relationships with international counterparts. Their efforts produced handsome gains and satisfied clients.
In 2017, commercial real estate stakeholders will grapple with uncertainty about the direction of the economy as well as robust opportunities. With much at stake, the industry will rely on the executives honored in this issue to lead the way.
Executive of the Year
Arne Sorenson, President & CEO, Marriott International
Headquarters: Bethesda, Md.
Years as CEO: Four
Years with Marriott: 20
Previous Roles at Marriott: COO, CFO, principal accounting officer, senior vice president of business development
Marriott by the Numbers: 5,700 properties in more than 110 countries, with $14.4 billion in annual revenue
In the Pipeline: 1,663 properties comprising more than 270,000 rooms, including nearly 600 properties with roughly 97,000 rooms under construction and 160-plus properties with about 27,000 rooms approved for development.
Star Attraction: Marriott paid out $13 billion to acquire Starwood Hotels & Resorts Worldwide in September, creating the world’s largest hospitality company and more than doubling its footprint in Asia, the Middle East and Africa. The new company will franchise or operate in excess of 5,700 properties and 1.1 million rooms across 30 brands.
Global Growth: In 2015, one third of Marriott’s hotel openings were outside North America. The company launched a host of new brands in emerging markets as part of a push to provide sustainable economic development and local employment. This year, the company announced a partnership with Eastern Crown Hotels, a rapidly growing Chinese hotelier, which will bring the Fairfield by Marriott brand to mainland China.
Tech Savvy: Marriott became the ﬁrst global hotelier to offer Apple Pay, enabling guests to engage more often and more deeply with the company’s suite of hospitality offerings. The company recently launched the Marriott Mobile app, which exceeded $1 billion in gross bookings last year.
Lifetime Achievement Award
J. Ronald Terwilliger, Chairman Emeritus, Trammell Crow Residential Co.
When he was inducted into the National Housing Association Hall of Fame, Ron Terwilliger encapsulated his life’s work in this way: “Advocating for and taking action to secure affordable housing are my passions,” he told Habitat for Humanity in 2008, “and this occasion inspires me to work harder so we can reach more people.”
Evinced in this succinct remark is the idea that helping others is—simply—the right thing to do. This guiding principle has led Terwilliger to devote his time, ingenuity and largesse to expanding housing access to those that need it most. Paying tribute to his many contributions, CPE’s 2016 Lifetime Achievement Award salutes an unwavering commitment to philanthropy.
Terwilliger is no stranger to industriousness. At age 12, he began working to support his family in Arlington, Va. While attending George Washington University on a basketball scholarship, he drove a bus to earn additional income. As a freshman, he was diagnosed with a rare spinal condition that threatened to end his athletic career. He took a break from sports to recover, and during his hiatus the U.S. Naval Academy recruited him.
He would go on to graduate Annapolis at the top of his class and return to athletics as a star basketball and baseball player. After five years of service in the Navy, Terwilliger attended Harvard Business School, where he would again top his graduating class, receiving the Baker Scholar designation. Upon graduation, he joined Sea Pines Plantation Co., advancing to president within three years. A stint as CFO at the Henry C. Beck Co. jetted him toward a partnership offer from Trammell Crow Residential Co., the leading multifamily developer in the United States. Six years later, he would assume the role of CEO at TCR, remaining in the position for 23 years.
Terwilliger has estimated that his company developed around 250,000 apartment units during his tenure as CEO. Over nearly three decades, he also maintained an emphasis on mentorship. A number of the professionals that rose to leadership positions at TCR would later assume executive roles at prominent development firms, including AvalonBay Communities, Alliance Residential and Wood Partners. As financial markets tightened, Terwilliger shifted his focus to philanthropy.
In 2007, Terwilliger made the single-largest financial contribution to the Urban Land Institute in the organization’s 72-year history: a $5 million gift founding the ULI Terwilliger Center for Housing. Two years later, he made a $100 million legacy donation to Habitat for Humanity, the largest ever received by the affordable-housing nonprofit. In addition to helping 60,000 low-income families access affordable housing, the gift established the J. Ronald Terwilliger Leveraged Impact Fund.
With the financial markets on the brink of collapse in 2008, Terwilliger stayed on as TCR’s chairman through July 2009, steering his colleagues and peers through an historically precarious time. His guidance helped TCR emerge from the downturn stronger than ever. A 2012 merger with California-based GLJ Partners expanded TCR’s footprint in Southern California.
The following year, TCR and Atlanta-based Pappas Properties LLC formed Terwilliger Pappas Multifamily Partners to develop multifamily projects in the Southeast. In spring 2015, TCR and its partner, Northbrook, Ill.-based Prime Property Investors, completed Alexan Auburn Lakes, a 346-unit luxury development in Houston.
In addition to housing, education is a cause that remains dear to Terwilliger. He is chairman emeritus of the Wharton Real Estate Center and a board member of the U.S. Naval Academy Foundation. In 2014, he was bestowed the Horatio Alger Award, which acknowledges individuals who have overcome adversity to foster higher education opportunities for young people.
Investor of the Year
Jonathan Gray, Global Head of Real Estate, Blackstone
Headquarters: New York City
Years as Global Head of Real Estate: 2011
Years with Blackstone: 14
From the Ground Up: Gray joined Blackstone fresh out of the Wharton School in 1992, later spinning off the company’s global real estate division, which employs 420 people in 12 offices and manages assets and debt valued at $200 billion.
All-Cash Acquisition: 2016 was a banner year for Blackstone affiliate Blackstone Real Estate Partners VIII LP, which in January bought BioMed Realty Trust for $8 billion in cash in one of the largest REIT privatizations in recent years.
Billion-Dollar Bet: Sealing another billion-dollar deal, Blackstone purchased a portfolio of 49 retail properties across the Northeast and Texas from RioCan Real Estate Investment Trust for $1.9 billion.
Deals of this scope are nothing new to Gray. In 2007, he arranged the $26 billion acquisition of Hilton, generating $13 billion for Blackstone and its investors.
Developer of the Year
Jeff Blau, CEO, The Related Cos.
Headquarters: New York City
Years with Related: 28
Years as CEO: Four
Previous Roles at Related: Analyst, associate, vice president and president
Related at a Glance: The company employs more than 3,000 professionals worldwide and manages more than $30 billion in assets and $3 billion in equity capital.
West Side Story: Earlier this year, Related closed on $8 billion in financing for the 28-acre Hudson Yards redevelopment on Manhattan’s West Side. Ten Hudson Yards, a 1.8 million-square-foot office tower, made its debut in late May and was the massive mixed-use project’s first building to be completed. Its high-profile tenants include Coach, L’Oréal and SAP, with another 7,000 workers expected at the office building.
In July, together with Oxford Properties Group, Related spearheaded the $2 billion full capitalization of 35 Hudson Yards, a 1.1 million-square-foot tower slated for a hotel and apartments.
Branching Out: Blau unveiled plans for a large-scale public artwork created by the renowned British designer Thomas Heatherwick. The sculpture, surrounded by a winding maze of open space and parkland, will serve as a cultural centerpiece at Hudson Yards.
Developer of the Year
Matt Khourie, CEO, Trammell Crow Co.
Previous Job: CEO, CBRE Global Investors (2010-16)
Homecoming: A 29-year Trammell Crow veteran (1980-2009), Khourie rejoined the company as CEO in 2016.
Previous Roles at TCC: Included president of Southeast operations and president of Central operations.
TCC by the Numbers: The company employs 215 professionals in 16 offices. Developments in progress total $7.1 billion, with another $3.7 billion in the pipeline, making TCC the nation’s largest commercial real estate development and investment services firm by revenue.
In the Pipeline: In partnership with MetLife, TCC is working on two of the largest mixed-use projects in Texas. Development is underway at Park District, a nearly 1 million-square-foot complex comprising a 20-story Class A office tower anchored by PricewaterhouseCoopers and a 32-story luxury residential tower being
built by High Street Residential, a TCC affiliate. Lush green spaces and high-end restaurants and retail will round out the mixed-use development.
Competitive Edge: “TCC’s senior developers build projects that contribute to a more livable environment—whether that be a mixed-use project solving an urban need or a fulfillment center creating an e-commerce solution. We have been in business well over 60 years, and thus have learned how to proactively manage both our firm and its projects through cycles, so we can be on the offensive in both up and down markets.”
Urban Renaissance: Downtown Austin’s former Green Water Treatment Plant is currently under redevelopment by TCC. When complete, the master-planned project will feature more than 1.7 million square feet of commercial space, including a 500,000-square-foot Class A office/retail tower.
Elsewhere in Austin, a team of High Street, TCC, The Hanover Co. and Pacific Life Insurance Co. are nearing completion on Northshore, a mixed-use tower with 439 apartments and 50,000-plus square feet of office and retail space. The final phase of development will add a 32-story Austin Proper Hotel and Residences, along with a tower combining office and residential spaces.
Financier of the Year
Willy Walker, Chairman & CEO, Walker & Dunlop
Headquarters: Bethesda, Md.
Years with Walker & Dunlop: 13
Years as CEO: Nine
Previous Roles at Walker & Dunlop: Executive vice president & COO
Walker & Dunlop by the Numbers: 500 professionals in 24 offices nationwide contribute to combined revenue of $468.2 million and total transaction volume of $17.8 billion.
Record-setting revenue: The company experienced its most successful third quarter ever, with year-over-year growth of 28 percent revenue and 26 percent earnings per share.
Teamwork at work: A close partnership with Fannie Mae has enabled the company to pull off complex transactions involving flexible financing schemes. The largest to date this year was the arranging of $672 million in acquisition financing for University Housing Communities, one of the nation’s largest Class A student housing portfolios, on behalf of a joint venture between Scion and a Canadian pension fund. Due to the size of the portfolio, Walker & Dunlop turned to Fannie Mae’s credit facility structuring option to formulate an efficient loan structure.
On Deck: The company’s recent acquisition of George Elkins Mortgage Banking Co., expected to close this year, will add nearly $1.7 billion in life insurance company servicing to Walker & Dunlop’s existing $57.3 billion servicing portfolio.
To-Do List: Along with continued elevated HUD volumes and a proposed 25 percent increase in new hires, Walker & Dunlop will aim to grow earnings per share by double digits in 2017. Freddie Mac predictions point to a 6 percent increase in loan originations, to $300 billion, in 2017, a trend that can only bolster the multifamily market.
Office Property Executive of the Year
Ric Clark, Chairman, Brookfield Property Group
Headquarters: New York City
Years with Brookfield: 22
Previous Roles: President & CEO of Brookfield Office Properties
Brookfield by the Numbers: The company’s 100 million-square-foot portfolio of prime Class A office space comprises 149 properties in 18 cities.
Trophy Assets: Ninety-two percent leased, the company’s office portfolio includes such iconic properties as Canary Wharf in London and Brookfield Place in Toronto, Perth and Manhattan (formerly the World Financial Center).
Big Berlin Buy: In January, Brookfield acquired Potsdamer Platz, a major mixed-used estate comprising 17 buildings, 10 streets and two squares and covering a gross area of more than 2.9 million square feet in the city center.
Skyrocketing Sales: In 2016, the company sold eight office properties for aggregate proceeds of $1.8 billion.
In the Pipeline: More than 7.3 million square feet of office, hotel, retail and luxury apartment product
2017 Goals: Opening world-class headquarters in London, Calgary and Rio de Janeiro, and making significant progress developing mixed-use sites in New York, London, Washington, D.C., Dubai and elsewhere. At Manhattan West in New York, Brookfield will complete the $350 million redevelopment and relaunch of Five Manhattan West, slated to open next year as collaborative urban office space with an 844-unit residential component.
On the Horizon: “The ongoing rise of cities around the world, coupled with innovations in how people collaborate and companies think about and use space, makes this a very exciting time for investors and developers of urban office properties. Brookfield had a very active last 12 months, and we are eager to realize the potential of recent acquisitions and new opportunities in 2017.”
Retail Property Executive of the Year
Jodie McLean, CEO, EDENS
Headquarters: Columbia, S.C.
Years with EDENS: 25
Previous Roles at EDENS: Chief investment officer and president. In more than two decades with EDENS, McLean has been responsible for the development, redevelopment, acquisition and disposition of more than $10 billion worth of assets.
EDENS by the Numbers: 265 employees in six regional headquarters and three satellite offices
Texas Hold ’Em: In early 2015, EDENS completed the $765 million, all-cash acquisition of Houston-based AmREIT. The transaction privatized the formerly public REIT and is helping EDENS raise its profile in Texas and the South.
South Bay Buy: In August, EDENS broke ground on South Bay, a $200 million, 700,000-square-foot mixed-use development. Located at South Bay, EDENS’ 427,289-square-foot power center in the Dorchester section of Boston, the project will consist of 60,000 square feet of local and national retail operators, a 12-screen AMC Theatre with IMAX, a 150-key hotel and 475 housing units.
Garden State Standout: EDENS led the redevelopment of Closter Plaza, a new Whole Foods-anchored shopping center in Closter, N.J. The 208,337-square-foot retail destination is the only full-service shopping center within a five-mile radius. It is also home to the state’s first “flexible-format” Target store, which opened in November.
McLean on 2017: “In the year ahead, EDENS will continue our dedication to enriching the neighborhoods we serve. When we see residents of the areas around our centers embrace them, turn them into a key part of their lives and make them a meaningful destination for the community, we know we are succeeding in our mission.”
Industrial Property Executive of the Year
Len O’Donnell, President & CEO, USAA Real Estate Co.
Headquarters: San Antonio
Years as CEO: Five
Previous Company: Crimson Real Estate Fund
USAA Real Estate Co. by the Numbers: $15 billion in assets under management
Energy Excellence: USAA Real Estate received the ENERGY STAR Sustained Excellence award for the 14th consecutive year, a nod to the company’s continued pursuit of energy efficiency across its portfolio.
Central Texas Corridor: In August, USAA Real Estate broke ground on the I-35 Logistics Center, a 397,000-square-foot Class A distribution center on Interstate 35 in the San Antonio suburb of New Braunfels. Scheduled for completion in March 2017, the facility is 20 minutes from San Antonio International Airport, 50 miles from Austin and 177 miles from Houston.
E-Commerce Expansion: Collaborating with Chesapeake Real Estate Group, USAA Real Estate signed a lease in October with e-commerce firm XPO Logistics at Perryman Logistics Center in Aberdeen, Md. The lease covers the entire 571,000-square-foot Class A industrial building, which was completed in late 2015. The center occupies a 48-acre site located 32 miles from the Port of Baltimore and 42 miles from Baltimore-Washington International Airport. According to the Baltimore Sun, XPO plans initially to employ 400 people at the facility.
Hospitality Executive of the Year
Christopher Nassetta, President & CEO, Hilton Worldwide
Headquarters: McLean, Va.
Years as CEO: 2007
Previous Job: President & CEO, Host Hotels & Resorts Inc.
Hilton Worldwide by the Numbers: More than 4,700 properties comprising 775,000 guest rooms in 104 countries and territories. This year, an additional 77,000 keys were approved for development worldwide.
In the Pipeline: 1,898 hotels consisting of 300,000 keys
Spinoff Sale: Blackstone expects to close the sale of a 25 percent interest in Hilton and two planned spinoff companies to Chinese conglomerate HNA Group in 2017.
2017 Goals: The company plans to open its first Tru by Hilton properties. It estimates the brand willl add 18 million travelers to Hilton’s 140 million annual guests. Two established brands, Hilton Garden Inn and Hampton by Hilton, have stimulated expansion into markets in Latin America, China and Europe, a trend the company aims to continue next year.
Nassetta on What Guests Want: “The world is changing at a rapid pace, and it is an incredibly exciting time in our industry. We are seeing more travelers than ever before—and these guests want hospitality experiences that are personalized, are simple, and most important, give them choice and control over their journey.”
Multifamily Executive of the Year
Timothy Naughton, Chairman, CEO & President, AvalonBay Communities Inc.
Headquarters: Arlington, Va.
Years as CEO: 2012
Previous Roles at AvalonBay: COO, chief investment officer, senior vice president and regional vice president of the Mid-Atlantic and Midwest regions.
Growth Spurts: Naughton joined an AvalonBay predecessor in 1989, during a period of recession. The 1990s brought growth and expansion, highlighted by the merger of two exchange-traded apartment REITs. In 2007, AvalonBay’s growth landed it a spot on the S&P 500.
An Active Year: Between January and October, AvalonBay purchased five new communities, representing more than 1,200 apartment homes, for around $530 million. The company sold nine communities, representing more than 3,300 units, for nearly $1 billion.
Triple Play: By the end of November, the company’s largest consolidated disposition of the year was the $275 million sale of 1,051 apartment homes across three wholly owned communities in New Jersey, New York and Massachusetts.
REIT Resilience: Having weathered numerous real estate cycles, AvalonBay is riding the wave of increased apartment demand. Through the third quarter, the company completed developments valued at $510 million and raised $1.8 billion in capital.
Service Executive of the Year
Barry Gosin, CEO, Newmark Grubb Knight Frank
Headquarters: New York City
Years as CEO: 37
NGKF at a Glance: 14,100 professionals across 400 offices on six continents
A Bestseller: In July, the company arranged the sale of Amazon.com’s 12-story corporate headquarters, situated in Seattle’s South Lake Union district, for $246.8 million. The company led representation and arranged financing for the core investment.
Market-Making Moments: Gosin has been instrumental in NGKF’s decade-long global expansion. In 2005, the company partnered with London-based Knight Frank. In 2011, it was absorbed by BCG, the financial services giant.
Apartment Acumen: The company acquired several brokerage firms, including Apartment Realty Advisors in 2014 for $100 million. NGKF continues to leverage its expertise in leasing, property management, capital markets and brokerage, remaining one of the world’s leading commercial real estate service providers.
Winning Deal: In April, The Real Estate Board of New York awarded NGKF first place for Most Ingenious Deal of the Year, recognizing the firm’s role in the $215 million sale of a 1.1 million-square-foot Department of Sanitation site in Manhattan to Memorial Sloan Kettering Cancer Center, where Hunter College faculty will train the medical center’s nurses.
Originally appearing in the December 2016 issue of CPE.