Opportunity. It's one of those words that's often overused and abused, like "relationships," but in Greg Gregory's case, he saw it coming like a freight train and climbed on board.

The president and CEO of Atlanta-based Industrial Developments International (IDI) had a vision for a business in industrial real estate, and he followed it.

"I can remember seeing this back in 1986. I was leasing space and a light went on," says Gregory. "I saw a company consolidate, and I saw the information that was following the goods and I thought this was a trend, this is a major evolution. And in order for companies to compete, they're going to have to evolve this way in their distribution patterns. And that would mean that some of the space that's out there is not going to work."

That space is industrial. It ain't all that glamorous, and shucks, investors may never see 20% returns on their money, but my oh my it's good, steady business. For longer than most people remember, industrial has been considered the stepchild of the commercial real estate industry, but nowadays it is being recognized as one of the most stable property businesses around.

"It's not nearly as glamorous as, say, office," says Gregory. "Its margins are clean. I knew industrial, and I felt industrial was more fundamental to the customer needs than nearly any other product out there. It is a fundamental part of their business. I could run this business (IDI) from an office in a lot of different locations and a lot of different types of facilities. But you can't say that about a distribution center. It is a fundamental part of your business. Call the distribution center the heart."

IDI is a major player in the industrial business. While not the biggest, it holds the distinction of being the leading developer of industrial property in the United States. Since its founding in June 1989, IDI has opened offices in Atlanta, Chicago, Cincinnati, Dallas, Memphis, Irvine, Calif., and Salt Lake City. Its customers now number in the hundreds, while its employees number about 65.

As a wholly owned subsidiary of Kajima International Inc., the huge construction firm based in Japan, IDI has some deep pockets behind it. Every quarter, Gregory treks to New York to present to the Kajima board, but otherwise, it's a pretty hands-off relationship.

"They have been an excellent parent in that they have been very supportive," says Gregory. "They have let us run the company under the vision that we originally had. They haven't interfered with that. Our financial relationships with the Japanese banks are excellent and those introductions were all made by Kajima. So that's been a great benefit."

Gregory originally headed up the industrial group within LJ Hooker, during which he put together a strong management team. He broke away before Hooker's well-publicized financial ruin, to become an industrial development company.

"Based on some premises, No. 1, we wanted to be primarily a merchant builder. No. 2, we would be a national developer, meeting the needs of our clients and customers on a national basis because distribution is done on a national basis. And No. 3, we would specialize in just industrial. We wouldn't do anything but industrial. Those three things made us a little bit unique," says Gregory.

As he shopped the idea around, he got a mixed bag of responses. "I went out and talked to several groups and ended up making a deal with Kajima. They were willing to be somewhat patient. The other people I was negotiating with, I would share this vision of building a national company for industrial which would take some time and investment and recognition with the customer base. Then when we began to negotiate some of the basic terms, they wanted their principal back in five years. Now how are you going to do that?"

Ultimately, with Kajima's backing, Gregory figured he could build a national company by building relationships with major companies that would continue coming back to IDI for their distribution facility needs.

"If you take many companies out there, with distribution needs all over the country, there's a lot of power if they can look at IDI and say, `IDI can meet these needs anywhere we have them.' And over time as they have good experience with us and they get value from us and they understand our customer focus, they will say, "Wait, why are we going out here going through this brain damage in these other markets every time we want to build a distribution center when IDI is the single source that can do it?",

Most recently, IDI has leaped into the Southern California industrial market by opening an office in Irvine. The company is building one 500,000 sq. ft. facility and plans to acquire two land parcels for development. "We took at Southern California as a very active market," says Gregor) "It has had its problems, but we were founded in June 1989. We started this business in absolutely the worst market possible!"

"To build relationships as well as building buildings, we needed to be able to deliver on a national basis, and eventually on an international basis," says Gregory.

That geographic diversification also keeps IDI in good stead even in market downcycles.

"We were so successful through the last recession because we focused on the big users and the big users continue to move because even though there was a recession, they could see through the other end of the recession, and most of the time when they're redoing these big buildings they're saving money on them," says Timothy Gunter, IDI's chief operating officer.

"It's a decrease in overhead. If you read about what companies are doing, the major companies have started to embrace the new technologies so I think it's going to continue. We've got buildings now where we were building big boxes and they leased immediately. Toward the end of last year it started to slow a little bit. Where they were leasing just as soon as we started them, now they're leasing soon after completion. Still, there are more people that haven't converted than have converted," says Gunter.

Time is the key and saving it (as well as money) is what drives many a distribution system decision. "It's creeping into all businesses," says Matt O'Sullivan, senior vice president for IDI's Southeast region. "People are redoing their service environments in order to provide their customers with delivery tomorrow."

Many of those redos are following a "me-too" mentality. O'Sullivan calls it the "McDonald's/Burger King theory," where one company signs on for a huge distribution center, and soon its competitors all follow suit.

As companies continue to consolidate and downright change their distribution systems, IDI will continue to diversify geographically to service them. In 1997, the company will open an office in the Northeast market. "There's a big area of the country that we're really not operating in," says Gunter.

Each time it opens an office, the company extends its reach a little further and learns a little more.

Before moving forward, any typical IDI project must pass the internal muster first before IDI's own Asset Allocation Committee, which is made up of company developers and managers.

"It may come to the committee one, two, three times before it's approved, or it may not be approved at all. But it has the input of all the key developers and key management here, so we make sure that the lessons that we are learning in Memphis we are applying in Dallas. The most important communication you have is with your employees internally. And we try to enhance that communication all the time," says Gregory.

Of course, like everyone else, IDI has stiff competition, including the likes of huge national REITs like Security Capital and First Industrial Realty.

"They're awesome. They do it all," says Gregory. "The thing that's very important for IDI is that we always keep our word. We keep our promises, even if it costs us money. If you do that every time, you build that reputation. The people we deal with are extremely loyal."

IDI's strong ties to Japanese banks have given the company something many other industrial companies have had to turn to the real estate investment trust (REIT) structure to get -- access to capital.

"We explored the possibility (of becoming a REIT) with our parent, and there are a lot of advantages to being a REIT. But frankly, they weren't of particular advantage to us. We have great access to capital, so that fundamental reason wasn't there," says Gregory.

IDI's principal source of capital is bank financing, primarily through a group of Japanese banks but also supplemented with U.S. banks including First Union and Nationsbank. Japanese lenders include Sumitomo Bank (Kajima's and IDI's lead bank), Sakura Bank Ltd., Asahi Bank Ltd., Industrial Bank of Japan, Bank of Tokyo, Mitsui Bank and Trust, Mitsubishi Trust, and Long-term Credit Bank of Japan.

The strength of the relationship is really based on the strength of the relationship of the parent company with these banks, which in many cases is over 75 years and sometimes over 150 years," says Gunter. "The beauty for us is we are a very small corner of a very large corporation. For instance, Sumitomo is the lead bank for Kajima Corp. in Japan and they're also our lead bank. They're looking for places to loan money and IDI is the ideal place to loan money because we're a profitable company and we've always paid back our money."

The company also takes a long-term approach to its properties, as evidenced by its internal management team. The company goes into 1996 managing and leasing about 10 million sq. ft. of space for other people. As IDI sells its buildings, it retains the management contracts "in nearly every case. For that reason, we have not sought third-party management, but we have evolved into doing a lot of third-party business through the selling of our buildings," says Gregory.

Therein lies yet another opportunity for new business growth. "We've begun to take a hard look at our property management and make sure we are delivering the same quality and service to the customer that we are on the development side," says Gregory. "We are devoting the resources to doing that."

In 1997, Gregory hopes to begin actively seeking third-party business "because we will have the product to sell. We will have a property management team that is of the quality that we would be proud to have go out. You don't want to sell what you don't have yet."

What IDI does have, and plenty of it, is work in the pipeline. For 1996, IDI anticipates starting 8 million sq. ft., with 4 million sq. ft. of it being speculative space (50%). Traditionally IDI has more spec in the pipeline than build-to-suit.

"Speculative by its very definition has to be a riskier business," says Gregory. "I do not view it as risky a business as a number of people might, because, again, if you have a strong customer focus, you're building the right product, in the right place, at the right price, at the right time. Those are four things you have to do. And if you do those four things on a speculative basis you're going to be successful. Much of the success of the speculative project you're doing is done at the planning stage, because you've got to plan for those four elements."