This is the second in our three-part series that uncovers our picks for 21 people to watch in the 21st Century. Members of our first group were included in the January 2000 issue, so be sure to check that out or visit our Website to view the issue at www.nreionline.com.
For this installment, we bring you seven more forward-thinking executives in our industry who we think will make a dramatic difference in the years and decades ahead.
Peter Baccile Managing Director, Group Head, Global Real Estate Chase Securities New York Question: How do you turn a traditional commercial bank into a real estate finance powerhouse? Answer: You bring in a dynamic Wall Streeter to run the show and give him some rein. That's exactly what New York-based Chase Manhattan Bank did. Since hiring Peter Baccile to run the global real estate department, the capital has been flowing.
Prior to joining Chase Securities in 1998, Baccile worked for 11 years in the real estate investment banking group at J.P. Morgan & Co. in New York, where he was a managing director and co-head of the Americas, responsible for advisory, mergers, acquisitions, and debt and equity.
Baccile is a member of the National Association of Real Estate Investment Trusts (NAREIT), the National Realty Committee (NRC), the National Multihousing Council (NMHC), the Association of Foreign Investors in Real Estate, and the International Council of Shopping Centers (ICSC).
At 37 years old, Baccile has a long way to go. He's been smart enough to surround himself with such high-brow talent as ex-J.P. Morgan colleague David Gilbert who he hired from California Public Employees Retirement System (CalPERS) to head Chase's venture capital fund.
Baccile is replicating the job he performed at J.P. Morgan, transforming it from a staid commercial bank into a dynamic investment bank. We think he's one to watch.
Dennis DeAndre President, CEO & Founder LoopNet San Francisco Dennis DeAndre is the president and CEO of LoopNet, the Internet's leading commercial real estate marketplace. As a commercial real estate broker at Arroyo & Coates, DeAndre recognized the need for a centralized system that would help real estate professionals streamline the transaction process. In 1995, he founded LoopNet and began building what has become the Internet's largest marketplace for viewing and listing commercial property, securing financing and services that expedite the transaction process.
Most of the top commercial real estate organizations support DeAndre's vision of using the Internet to streamline transactions. With exclusive support from companies such as Grubb & Ellis, Marcus & Millichap and Trammell Crow Co., LoopNet is used by more than 87,000and agents. LoopLender, the company's loan origination service, is endorsed by leading industry financial companies including GMAC.
Recognized as an authority, De Andre speaks at industry trade shows and conferences, including Real Estate Connect, Real Comm and others. He was a finalist for the 1999 Ernst and Young Entrepreneur of the Year Award and cently presented at the Net-Markets@Ground.Zero conference. He frequently gives presentations at Stanford and Berkeley universities.
Andrew Farkas Chairman & CEO Insignia Financial Group Inc. New York No, you don't call Andrew L. Farkas "Andy," mainly because he has earned a bit more respect than that these days. As chairman and CEO of Insignia Financial Group Inc., a leading international real estate services company, (NYSE: IFS), Farkas has transformed the company in less than a decade (Farkas founded New York-based Insignia Financial in December 1990). And he's only 39 years old.
Insignia's U.S. commercial real estate services subsidiary, Insignia/ESG Inc., is among the largest companies in its field, with 1998 revenues in excess of $300 million. It provides services for more than 200 million sq. ft. of office, industrial and residential properties in the United States. Insignia is also expanding internationally - acquiring Richard Ellis Group Ltd. and Saint Quintin, two premier real estate services companies in the United Kingdom.
Insignia's residential businesses include Realty One, the nation's ninth-largest single-family home brokerage, and Insignia Residential Group, the largest manager of cooperative and condo housing in the New York metropolitan area, with a total portfolio of 60,000 units.
In 1998, Farkas shed the firm's multifamily management business by merging it into AIMCO, a Denver-based REIT.
Farkas founded Metropolitan Asset Group Ltd., a private real estate investment banking and merchant banking firm, in 1983. The company specialized in syndication, corporate LBO's and workouts.
So what will Farkas do next? Service company stock prices are still at abysmal levels. Does this offer any clue? One thing's for sure - expect the unexpected.
Daren Hornig Co-founder & EVP OnSite Access New York The cry of many technology firms today is "bandwith" and New York-based OnSite Access is poised to carry the cry to the commercial masses with Daren Hornig delivering the message. Hornig oversees sales and marketing functions, including real estate acquisitions, marketing, public relations, strategic planning and new market entry.
OnSite Access deploys fiber-optic, digital and broadband networks and offers a full line of products and services to office buildings across the United States.
This infrastructure allows property owners of multi-tenant office buildings to take advantage of a value-added amenity and technology upgrade to their buildings at no cost to them.
Hornig established OnSite Access to help commercial real estate owners equip their buildings with state-of-the-art telecommunications and Internet infrastructure and to provide tenants with technologically advanced voice, data and Internet services. His background includes experience in commercial real estate, tenant services and communications technology.
In December 1999, OnSite Access launched service in 16 new markets, bringing its total coverage to 22 metropolitan markets. It also closed on $60 million in private equity financing. Called the third largest capitalization in the history of Silicon Alley, the funds were provided by six investment firms including Spectrum Equity Investors, Crosspoint Venture Partners and J.P. Morgan Capital. Theraises the firm's total capitalization to more than $100 million.
The company also filed to go public in mid-December 1999 for about $200 million in common stock.
Lisa Kolker Max Founder & CEO Redbricks.com Bethesda, Md. It isn't every day that a woman, especially in the male-dominated commercial real estate industry, breaks new ground. But then Redbricks.com founder Lisa Kolker Max has never done anything in a "small" way.
Redbricks.com was founded in late, 1999 with the mission of using the Internet to transform the loan origination process. By using Redbricks.com, commercial property owners and developers can access multiple lenders who originate and process commercial and multifamily real estate loan products online. Redbricks also provides access to everything needed to close a commercial loan, including appraisers, title companies and market and data reports.
During her 10 years as a senior vice president of development for the National Corp. for Housing Partnerships (NCHP), Max developed and financed more than $500 million of commercial property. Many properties were financed using innovative structures with Wall Street firms and major insurance companies. Max has a clear understanding of what it takes to close a deal and make the financing process more efficient. She left the real estate industry briefly in 1995 to launch Certitude, which she sold in 1998. Redbricks.com came into existence when she got an itch to get back into the industry.
One major innovation of Redbricks.com is the instant preliminary quote, providing borrowers with property-specific financing options from the nation's most experienced lenders.
Sheryl Pressler CEO Lend Lease Real Estate Investments Inc. Atlanta Talk about timely. Just as we were going to press with this issue, Lend Lease Real Estate Investments dropped a bombshell on the commercial real estate world, announcing that Sheryl Pressler, a fixture as CIO at the California Public Employees Retirement System (CalPERS), the nation's largest pension fund, would become its new CEO effective next month. Her goal: use the knowledge she gained from running CalPERS to broaden and enhance Lend Lease's real estate capabilities in the United States.
She replaces Matthew Banks, who becomes CEO of Lend Lease Real Estate Investments - International. He will focus on growing Lend Lease's activities outside the United States and enhancing its capital advisory business. Banks served as Lend Lease Real Estate Investment's CEO since 1997.
During Pressler's nearly six-year reign managing CalPERS' $168 billion holdings, the fund's assets doubled, moving it to the top of the pension fund heap. At CalPERS she did it all - developing and strategizing asset allocation, public and private equity, fixed-income and real estate investments. She led the restructuring of CalPERS' $8 billion real estate portfolio, which includes apartments, office, warehouse, retail, REITs and specialized programs, such as housing and timber.
Pressler received the 1999 Robert Toigo Award from the Institute for Fiduciary Education in recognition of her contributions to the pension and investment industry. Prior to joining CalPERS, Pressler managed the pension and savings funds for McDonnell Douglas Corp. She holds an MBA in finance from Washington University and a bachelor's degree in philosophy from Webster University.
"Lend Lease has built a strong platform in the United States and I'm excited to be taking the helm of this recognized industry leader," says Pressler. "Clearly, the real estate market today is compelling for investors, and I firmly believe there are significant opportunities to add value in this sector through active management, superior customer service and innovative product offerings. I look forward to leading a company, which has assembled all the right components for today's marketplace."
Pressler's appointment follows Lend Lease Real Estate Investments' acquisition in November 1999 of Boston Financial, a major multifamily investment management company, and the announced purchase in December 1999 of five mortgage-debt related businesses from AMRESCO Inc., which is scheduled to close by the end of March. In the United States, Lend Lease Real Estate Investments, a subsidiary of Lend Lease Corp., has $31 billion in real estate and mortgages under management for about 500 institutional and private clients. The AMRESCO acquisition will give Lend Lease Real Estate Investment total assets of $37 billion in the United States and $43 billion worldwide.
With Pressler's experience and Lend Lease's deep pockets, watch out.
David Simon CEO Simon Property Group Indianapolis Who says REITs have to be boring? David Simon, CEO of Simon Property Group Inc., North America's largest publicly-owned retail real estate development and management company, is having none of that. If ever youth and exuberance were having profound effects on a real estate organization, this is it. Simon also serves as CFO and COO of Melvin Simon & Associates Inc.
Obviously with the Simon name, David grew up around the family's real estate business. Prior to joining Simon in June 1990, he was a vice president of Wasserstein Perella & Co., a Wall Street firm specializing in mergers, acquisitions and leveraged buyouts. He also was formerly an associate at New York-based First Boston Corp.
Then in 1990 he came home, and Simon Property Group hasn't been the same since. Just consider a few of the firm's recent activities. Last October, its Simon Brand Ventures division signed a $1.5 billion, 10-year strategic alliance with Houston's Enron Energy Services to supply or manage the energy for Simon's entire real estate portfolio. In November 1999, Simon formed a strategic alliance with Turner Broadcasting System (TBS) to produce an in-mall retail entertainment network and launched a bold three-tiered "digital strategy," including the introduction of clixnmortar.com with partner Diamond Technology Partners.
Simon's portfolio of 256 properties with 181 million sq. ft. of space in 36 states captures some 2.3 billion shoppers annually, so the company is in a unique position to test the "bigger is better" philosophy to its fullest. But David Simon is also smart enough to know that size alone does not matter unless you leverage it to use innovation as the key to future success.
Simon holds a bachelor's degree from Indiana University and a MBA from the Columbia University Graduate School of Business. A native of Indianapolis, he is the oldest son of Melvin Simon, co-chairman Simon Property Group Inc. Simon says shop, and consumers do.