Safe Harbors: Worden Steers Scout Real Estate Capital to Resort Success

In the year it took Alan Worden and his wife to sail from Nantucket, Mass., to New Zealand, plenty of unexpected events barraged the CEO of Scout Real Estate Capital L.L.C. The 2000 voyage navigated through multiple storms and a near collision with a freighter while anchored off the coast of the Galapagos Islands.Alongside their boat, the Windwalker, tagged along a leaky yet effective dinghy that allowed them to explore. Aptly, it was named Scout. Five years later, it seemed only natural for Worden to name his new company after the dinghy. “As a company, we will consider many opportunities, but we will only invest in stunningly beautiful and authentic places,” he said.To that end, Scout Real Estate has redeveloped and restored the Harbor View Hotel & Resort in Edgartown at Massachusetts’ Martha’s Vineyard, has built The Westmoor Club recreational center in Nantucket, is planning to open the 32-acre Southampton Beach Resort in Bermuda in 2011 and is conserving 5,800 acres of former sugar-cane property in the Big Island of Hawaii’s Kau district, which was struggling after a sugar-cane company closed shop.Other parts of Hawaii had weathered economic hardship through resort development, but the remote Kau district is not a resort area. Scout instead formed a plan that would respect, celebrate and support the region by preserving much of the land for farmers. “When you acquire a property, you don’t know everything,” Worden said. “You have limited time and limited due-diligence budgets, so project development is a process of twists and turns. It’s never a straight line from Point A to Point B.”That sort of complexity appeals to Worden. “It’s an amazing jigsaw puzzle,” he said, citing the variety of issues—such as design, permitting, construction, financing and local businesses and residents—that factor into development. The youngest of five children, he had always wanted to demonstrate that he could do big things, the more complicated the better. When discussing the complexity of a particular transaction, his colleague once made the connection that if he and Worden liked such work, they must also enjoy root canals. Growing up near Cape Cod, Mass., Worden learned: “Buildings can really speak to you beyond their physicality.” The shingled-cottage architecture that typifies the area, for example, reminds Worden of summer, family and friends and clambakes. He graduated with a Bachelor of Arts degree in architectural studies from Hobart College and then received a Master of Science degree in real estate development from Columbia University’s Graduate School of Architecture, Planning and Historic Preservation.With 12 years of experience in New York City—10 at Guggenheim Brothers and two at Wells Hill Partners Ltd.—under his belt, he returned to Nantucket with his wife, Nicole, recognized opportunity in the area and launched an advisory and brokerage firm serving local home and summer-rental needs. He named the company Windwalker Real Estate after the boat that carried the couple to New Zealand. As that business proved successful, Worden started to concentrate on resort investment and development, and Scout Real Estate was born.He applies lessons from his younger sailing days to the business. “When you learn to sail a small boat single-handedly as a young person, you can gain so much confidence,” he said. Racing taught him team building—that while each individual has a job, communication brings it together—and that an ego onboard is a disaster. “No one wins or loses a race single-handedly, although the big-ego sailors think it’s all about them,” he said. “At Scout, we make it clear to everyone in the firm … that you have to leave your ego at the door. We never care who has the right idea. We always care what is the right idea.”Lehman Brothers senior vice president Masood Bhatti attended Columbia with Worden, sailed with him and backed Scout financially through his firm. “I’ve never seen Alan lose his cool, whether on the boat or in business,” he said. “He allows people to make mistakes and empowers them to make decisions.” Bhatti added that though Worden does harbor strong opinions, he is open-minded and he often overturns his own decisions when presented with better research.Worden sits at the helm of preparation and research according to those with whom he does business. Before developing or redeveloping assets, he talks to prospective resort guests or investors to find out what they want out. “It seems to me that a lot of real estate investment is backward looking,” he stated. “While we (on the other hand) certainly want to understand absorption in a market, we spend an enormous time researching the actual, individual guest or the buyer of a resort property.” He aims to understand the habits and practices of affluent, leisure-focused Baby Boomers.Environmental, economic and social sustainability also factor into Scout’s goals. By 2028, the company intends for each new development to feature LEED certification, reduced consumption of natural resources and waste, buy-local programs, employment practices that help families advance, green-education programs and community support through local oral history events, walking tours and favorable terms for local non-profits using the company’s facilities.“He spends a fair amount of time interacting with people,” reported Scout director of research Lou Ann Gleason. She recalled one night in Martha’s Vineyard, sitting at the bar at Harbor View. It was 10 p.m., and the day had begun at 7:30 a.m. “He saw a couple sitting at the bar and said, ‘I’m going to go interview them.’ And he talked to this couple who had been coming to the hotel for years. He can’t get enough of talking to people. … He soaks it all in.”