Through development and acquisitions, this office REIT plans to provide steady growth for years to come.

Nowadays you rarely hear a company isn't concerned with being the largest in its particular business, but Washington, D.C.-based CarrAmerica isn't. So what is it concerned with? Steady, predictable growth.

"There's no question that size alone cannot shelter companies from the need to provide predictable, sustainable growth over time," says Thomas A. Carr, president and chief executive officer. "And that has been a real hallmark of our company's strategy to provide balanced growth from a number of fronts which will be sustainable for the foreseeable future."

Beginning in 1962, CarrAmerica was (and still is today) an office developer, which originally focused on the Washington, D.C., market.

Throughout the '60s, '70s and '80s, the company expanded into some of the city's key suburban markets. And in the '70s and '80s, it built a strong build-to-suit capability, developing headquarters for such organizations as American Association of Retired Persons, MCI, The American Automobile Association and, in 1997, the International Finance Corp.

After the capital markets changed in the early-1990s, CarrAmerica took advantage of the opportunities in the public market by taking itself public in February 1993.

"While we came public as a very tightly focused regional company with every square feet of office space we owned being located in downtown Washington, we saw the opportunity in the broader national markets," says Carr. "So, in November of 1995, we announced our new national strategy, which was concurrent with our announcement of a major strategic investment of Security Capital U.S. Realty."

This affiliation with Security Capital provided CarrAmerica with a research vehicle that has allowed a precise, research-driven strategy for growing the company's reach.

Today, CarrAmerica owns, develops and operates office properties in 15 markets across the United States, distinguishing itself as one of the few REITs that is diversified nationally. The company has a total cap of $3 billion and approximately 17 million sq. ft. in its portfolio.

One reason for CarrAmerica's growth is its large number of acquisitions. Carr-America has concentrated its acquisition efforts in its 15 markets, and it has focused on the one-off transactions, i.e., the individual building or the small group of buildings, with the average size being in the 100,000 sq. ft. or less range. And although the company has made several acquisitions of regional companies or regional portfolios, that has not been the focus of its strategy, adds Carr.

"It has been a small-bite acquisition strategy," Carr says, "which has led to very big results, with close to $2 billion invested over a 24-month period of time."

Along with acquiring product, Carr-America is growing through its continued development efforts as well.

"As of Oct. 1, we had about 2.8 million sq. ft. under development and, by year's end, this number should be approximately 3.4 million sq. ft.," says Robert E. Peterson, managing director of development. "We also plan to start 4 million sq. ft. in 1998 at a total project cost of $600 million."

Over the next 12 months, Carr-America will be either the top one or two office developer in terms of total construction volume, says Peterson. Therefore, as a REIT, CarrAmerica has a headstart on the development front against its competitors.

Continuing to look toward the future, CarrAmerica has made way for future development with its intense land acquisition program, which it began about 18 months ago.

"It is important to have good land positions in the markets where we see pent-up demand and where we see significant future growth," Peterson says. "So, particularly in our case, we were way ahead of our competition in buying land."

CarrAmerica has also entered into a new niche in the market, and that is the executive office suites business. Recently, CarrAmerica acquired Omni-Offices, an executive suites company in Atlanta, which further diversifies the company's services and provides it with yet another avenue for growth, now and in the future.

"With Omni, entering into the executive suites area is an example of how we are trying to provide a product line that is extremely responsive to the needs of our customers," says Philip L. Hawkins, managing director of operations. "So we will continue to make sure that we are providing a line of product, both physical assets as well as services, that responds to really providing workplace solutions for our customers."

"We are tying [Omni] into our overall strategy of serving the customer literally down to needing an office and a telephone for as short as one hour or, in our development program, providing space needs for as long as 10 or 15 years or more," Peterson says.

To further help its customers, Carr-America also provides a transition team, which discusses what needs to be done when handing over a completed acquisition or development to the operations group.

"We have a system where the transition team comes in, probably three or four months before completion, and talks about the issues that need to be handed off, and they work through the entire process together in an orderly fashion," Peterson says. "That prevents having any confusion with the customer or who's in charge at any given time and who's the contact within the organization. Even though development is somewhat a new process in the mid- to late-'90s, we think we're ahead of the curve and doing a great job of transitioning from the development process to the manager process."

This sort of customer-driven strategy has given CarrAmerica the strongest growth tool of all: strong client relationships.

One way that CarrAmerica strengthens its client relationships is by having people on the ground in each of its markets. These executives, called "market officers," are responsible for the execution of business for their particular market as well as sourcing acquisition and development opportunities and building relationships.

"We have a principal, if you will, called a vice president/market officer in the markets who is responsible and able to make the decisions necessary to serve our customers in a way that is reasonable for them and for our company," Hawkins says. "There is no bureaucracy that encumbers that relationship."

The market officers are supported by a property management and leasing person in that market, a construction person and, in most markets where the company does its own leasing, there would also be at least one leasing professional on staff.

"It is very important that as we develop, we be in touch with the market with respect to the location, the product type and timing that's appropriate to properly take advantage of the development opportunities that we see," Hawkins says. "Having a seasoned real estate veteran on the ground is critical to that and has allowed us to compete really at the forefront of the development wave as a result of the presence of the market officers."

This strategy of maintaining good relationships with customers as well as acquiring and developing product will provide the stable growth and the strength CarrAmerica will need to succeed now and in the years ahead.

"A key part of our strategy has been to really focus in areas where we think the company can continue to add value for a very long period of time," Carr says. "Many companies in the office sector have acquisitions-driven strategies on existing assets; we have tried hard to balance our investment approach with land and development in order to provide multiple avenues for growth for the company in the future."