Company: Edens & Avant
Time in current role: Five years
Biggest accomplishment: Developing our great team of people
Short-term goal: The launch of some exciting new projects in 2007
When Terry Brown took the helm as CEO of Edens & Avant in 2002, his top priority was to take the largest private owner and developer of neighborhood, grocery-anchored shopping centers in the country public. The strategic move seemed fitting. After all, Brown had arranged new institutional investment partners for Edens & Avant as his client while working at Andersen Corporate Finance.
But the more Brown immersed himself in the family-run company based in Columbia, S.C., the more he recognized the value locked inside Edens & Avant as a private firm. His challenge was finding the right balance, leveraging what founder and chairman Joe Edens had built starting in 1966 into an aggressive expansion into more urban areas and mixed-use developments.
What he has achieved to date is nothing short of a metamorphosis. Since his arrival, Edens & Avant, which controls a $3.2 billion portfolio of 170 properties in 18 states, has sold some 90 shopping centers and plowed that cash into the purchase of 65 new assets. The number of employees has grown by 75% to 250. Its development pipeline is brimming with more than $1 billion in new deals.
And, to spread its risk profile, Brown has steered the company's portfolio away from its concentration in only one region, the Southeast — from 46% of assets in 2002 to 26% today — and spread it up and down the East Coast, with major offices in Boston, Washington, D.C., Columbia, Atlanta and Miami.
“When I first came here I thought we would become a public company because that was the way things were headed,” says Brown. “We were an anomaly, but now everyone else is headed our way. We were private when private wasn't cool.” Brown says from day one he used that private status to his advantage. “Our competitors didn't understand our strategy and knew less about what we were doing.”
Obviously there are two sides to the public vs. private debate. Investors in Edens & Avant's primary competitor, publicly traded New Hyde Park, N.Y.-based Kimco Realty Corp., earned a healthy 24.5% return over the last five years. Kimco has also shown its ability to grow through acquisitions, issuing new stock in 2006 to purchase Vista, Calif.-based Pan Pacific Retail Properties in a $2.9 billion deal.
But at Edens & Avant, Brown has tapped into his experience as CEO of Andersen Corporate Finance, where he advised companies on their mergers and acquisitions and capital transactions, to revamp the firm's balance sheet. “We're a real estate company, and we'll take risk at the real estate level but we're not going to combine that with taking risk at a capital markets level,” says Brown. “We're fortunate that we've had a great investor base to work with over the last decade that understands the real estate and the long-term time horizons it sometimes takes to maximize returns.”
That base of patient money includes the State of Michigan Retirement System, which has been an investor for the past 10 years, as well as the New York State Teachers' Retirement System and institutional investors advised by JP Morgan Asset Management, both for the past seven years. Most recently, this group closed on a $300 million capital infusion in September 2006 to help fund Edens & Avant's new developments, such as Davidson Commons in Davidson, N.C.
High on Brown's priority list is being nimble enough to move with retail trends. “We're doing more urban deals and more of our product is lifestyle-oriented and big-box oriented. And more of our investments are in infill areas, in assets which we will significantly alter,” says Brown. “If you love retail and you love the retail real estate business and what it's all about, then you've got to love this time.”