GROUND CONTROL

Ron Colter • Partner

Panattoni Development Co.
3307 Fairmont Drive • Nashville, TN 37203 • 615.383.3688
rcolter@panattoni.com
Panattoni Development Company may be headquartered in Sacramento, but Nashville-based Ron Colter is calling the shots here. Colter is one of 12 equity partners nationwide in the privately held company, and as he explains, “Each local partner has the authority to act on the company’s behalf in his particular market.” That said, Colter has spent the past three years building Panattoni’s growing Nashville-area portfolio. Existing holdings, pending acquisitions and current projects, will make Panattoni landlord of nearly 500 acres and 2.7 million square feet of warehouse/distribution space by spring of 2003. These figures include a new 750,000-square-foot, build-to-suit distribution center under construction for Bridgestone/Firestone North American Tire at its Commerce Farms industrial park in Lebanon, Tenn. Panattoni purchased the 140-acre Commerce Farms property this summer. Colter’s drawing board calls for developing three additional buildings on the property, totaling 1.2 million square feet.

But don’t look for Panattoni to break ground on the aforementioned buildings anytime soon. The company has enough balls in play to keep its local five-person staff busy through the better part of 2003. In addition to completing the distribution facility for Bridgestone/Firestone (scheduled for delivery next spring), Colter is negotiating the purchase of a 176-acre parcel of land south of Murfreesboro and expects to begin construction next year on a new 240,000-square-foot spec building at its Southpark Distribution Center. “Panattoni is known for having spec inventory available,” Colter says of the company’s pending development.

Located at I-24 and Almaville Rd. in Smyrna, the purchase of Southpark Distribution Center from Memphis-based Weston Companies (Colter’s former employer) enabled Panattoni to establish a foothold in the Nashville market. The 150-acre park offers roughly 1.9 million square feet of space. Its major tenants include Nissan North America, Graybar Electric Co. and Menlo Logistics/Ricoh Corp. Market demand will determine how quickly and how far Panattoni’s area holdings grow beyond what it already owns and are currently in the works. If and when drawing-board projects become reality, Colter and crew will control well more than four million square feet of industrial space. And they’ll have room to grow.

Nationally, Panattoni also develops retail and office projects. The company controls upwards of 60 million square feet of space, most of which is industrial.

—B.A.C.

APPRAISING EYES

Tom Corcoran & Jim Maddox • Principals

Corcoran-Maddox Companies
2002 Richard Jones Road • Nashville, TN 37215 • 615.386.9242
tcorcoran@corcoranmaddox.com • jmaddox@corcoranmaddox.com
Real estate investors Tom Corcoran (pictured below, right) and Jim Maddox (below left) are living proof that keeping a low profile pays, or, as one developer puts it, “you don’t become the biggest buck in the forest by walking in the middle of the field.”

Despite the duo’s penchant for flying under the radar, they have steadily built a stellar reputation within the local commercial real estate industry. Friends and foes alike marvel at what they describe as the pair’s uncanny ability to recognize value in properties that others bypass.

The scouting report is simple. The two partners seek to acquire distressed or under-priced properties with more potential than they are currently showing. They avoid Class A properties where REITs drive cap rates so low that returns are not sufficient to make it worth their while. They source private equity and are opportunistic in down times, buying low and selling high. Most interested in office and warehouse properties, they usually steer clear of raw land purchases unless there’s blood in the street.

Responding to the takes on them by others, Jim Maddox says, “I don’t know that we have any special ability.” Then he offers, “The thing that really helps us is that we’re in a position where we don’t have to make a deal to survive. Any time you have to make a deal, more times than not it will work against you.”

That truism might explain much about the success Corcoran-Maddox have experienced. Often, it’s been the Corcoran-Maddox team that’s benefited from situations where a buyer or seller was too leveraged to drive a hard bargain.

In searching for suitable additions to their portfolio, Maddox says the partners try to find properties “that have a story to them,” or “have some problem that must be solved, which allows us to buy it at a reduced price.”

Take for instance Nashboro Village, the 944-unit apartment complex, 18-hole golf course and commercial complex south of the Metro Airport. Corcoran and Maddox bought the property for $42 million then sold it 14 months later for $56 million. What was the secret to such profitability? They realized that with Nashboro Village, the parts were worth more than the whole. First, the partners sold the apartment component to an apartment REIT. Then they sold the golf course to Lynx Corp. Finally, they sold the commercial portion fronting the property to Kroger.

Says Maddox, “All three components, viewed separately, added up to better value than the one unit. As one unit, you couldn’t reap the value of the raw land. Also, if you keep the property together, it’s tough for a mortgage company to get its arms around the financing because of its many parts, whereas it’s easily managed individually. Individually, you gain a better understanding of its true value.”

In another instance, with Kroger as an anchor tenant, Corcoran and Maddox bought the Shops at Bell Forge on Mountain View Road in Antioch across from Hickory Hollow Mall. Over a three-year period, they enhanced the center’s occupancy. But with the Kroger lease winding down and a new negotiation period looming, the partnership opted to sell the property to a state pension fund, reaping large profits in the process and avoiding a potential bargaining loss.

The tandem has yet to make the same decision on the 350,000-square-foot Madison Square Shopping Center. Under their ownership since 1994, the hilltop property is arguably the best piece of real estate in Madison. When will they deal? Corcoran says when it makes the most sense for the partners and for their investors, a handful of whom are brought into every deal to spread the risk.

Fraternity brothers at Vanderbilt, Corcoran and Maddox are native Nashvillians who went into business together after a chance meeting at Houston’s Restaurant. After college, Maddox had spent a decade in Arkansas working in the oil business. The son of Dan Maddox, Associates Capital founder and chairman, he knew a thing or two about sizing up risk and making a deal. Meanwhile, Corcoran had recently returned home after 11 years in real estate brokerage in Dallas.

Although all their deals to date have been confined to the Nashville area, the two are now scouting opportunities throughout the Southeast. Corcoran, however, has a new venture on his plate closer to home. He’s running for election to the Belle Meade City Commission.

Maddox ribs his partner about his run for public service though he’s not at all surprised by Corcoran’s decision. He even takes some credit for it. For some time now, Maddox has been urging his partner and would-be city commissioner to serve on the Metro Planning Commission. And for some time now, Maddox says, Corcoran has been pushing right back. One thing is for certain: should either Maddox or Corcoran enter local politics, their days off the radar will be numbered.

—D.R.

CENTER STAGE

David Crabtree • Executive VP & Principal Broker

Brookside Properties Inc.
002 Richard Jones Road, Ste. 200A • Nashville, TN 37215 • 615.352.3300
dcrabtree@brooksideproperties.com
Outside the conference room at Brookside Properties, one would hardly guess that retail development guru David Crabtree is such a stitch that he could easily carve out a living as a professional comedian.

A thespian, whose parents founded the Crossville Playhouse (now the Cumberland County Playhouse, a respected regional theater), Crabtree simply doesn’t reveal that side of his personality under most circumstances.

Crabtree largely mystifies his competitors, and even some of his friends, who wonder how this seemingly regular guy known for his casual dress and incessant failures to return phone calls has become so successful at his trade. Crabtree is widely recognized as one of the most talented and creative real estate professionals in the entire south eastern United States.

Brookside chairman Nelson Andrews can’t explain exactly how such seemingly disparate traits mesh in his high-profile partner. But what he can explain, he says, are the roots of Crabtree’s success, beginning with what he describes as an inordinately high IQ. Like his prowess as a funnyman, however, Crabtree’s status as a bona fide intellectual is yet another trait that he is known to downplay.

But what Crabtree can’t conceal is his fertile imagination and his expansive vision. Crabtree literally invented the now rampant retail development in Cool Springs that has amazed many longtime Nashville area residents. Long before anyone else ordained that more retail development would be needed to support the amount of office and residential development taking shape in upscale Cool Springs, Crabtree foresaw it. Perhaps he had a keener sense than most for the population explosion taking place. In 1990, there were fewer than 38,000 people living within five miles of Cool Springs. By 2000, that number had nearly doubled to over 62,000. Between those two points in time, Crabtree made his case for more retail development to his four partners at Brookside. They were soon convinced.

“In the early ’90s, everything was right around the mall,” Andrews says. “It looked like all they could stand out there. But retail is a product of office space and where people live. David knew people were already waiting an hour to eat. It was right in front of folks but no one else saw it. When he explained it, you could see it. It then became simple and obvious.”

As the person responsible for Brookside’s entire commercial brokerage and development portfolio, Crabtree quickly moved to tie up acres and acres of Cool Springs’ property. Now he controls nearly everything south of the mall, including the land, the tenants and even the road design. Two examples of his success include P.F. Chang’s and eethoven’s. Colleagues say it took guts to take the risk he took, which has clearly turned out to be one of the smartest moves ever made in Nashville area real estate.

In filling Brookside’s $70 million, 150-acre Thoroughbred Square and Village retail centers at Cool Springs with tenants, Crabtree displayed yet another reason he is so successful in his field—his careful selection of tenants. Unlike many retail developers willing to lease space to anyone who can pay the rent, Crabtree is famous for choosing the right blend of tenants who will support each other. He also steers clear of tenants that will corrupt a plaza. As a result, he has been able to instill confidence in his broad national clientele, has made his investors and clients a lot of money, and has attracted a lot of attention. Witness his recently ended three-year term as state director of the International Council of Shopping Centers, the industry’s largest trade organization in Tennessee.

Carmike Cinemas benefited from Crabtree’s vision when it got in on a joint venture with him on land at Thoroughbred Square. Due to Crabtree’s relationship with the company, the cinema chain bought more land than it needed in Cool Springs for its own cineplex development. Carmike has since sold its out-parcels for substantial profits. Crabtree was there to assist them along the way.

Leasing attorney Ann Peldo Cargile, with Boult Cummings Conners & Berry, worked extensively with Crabtree on Thoroughbred Square. She says what makes Crabtree different and what made Cool Springs for him so successful a venture was his ability, exemplified by his workings with Carmike, to buy and sell simultaneously. “He’s my imaginative client,” Cargile says, remarking on Crabtree’s proclivity for approaching problems differently from other deal makers. “I’m the one that keeps him organized on paper. For instance, when he put the land acquisition together at Cool Springs, he bought and sold a lot of the land at the same time. By doing that, he got things done four steps ahead of time. Your average person could not do that. It was very complicated, but it worked.”

And such work requires focus, which Andrews calls another key aspect of Crabtree’s success. According to Andrews, if a bomb went off in Brookside’s offices while Crabtree was at work on a deal, his colleague would likely never even blink.

Consider that Crabtree recently won the bidding war to develop the much- desired Shell gas station property on Hillsboro Road at Richard Jones Road in Green Hills. He then worked with Bill O. Vaughan of The Shopping Center Group of Tennessee to develop a Men’s Warehouse that opened in October.

Mortgage banker Steve Wood of Vista Commercial Mortgage Group does frequent deals with Crabtree on behalf of various institutional investors. He describes Crabtree as someone who can quickly identify serious and not-so- serious buyers and sellers and as a person who doesn’t waste time talking about how great a deal something is going to be. In Wood’s words, Crabtree is “low key” and in being so, he “instills confidence.”

“These are sophisticated investors like MetLife that David is most often working with,” Wood explains. “And yet it always seems to happen that their representative will sit down and have dinner with David and come away saying ‘I learned so much from him.’”

Sixteen years ago, Crabtree broke into the retail ranks as a young buck working for Jim Caden, Joe Rodgers and Skip Christianson at famed CRC Equities. Those veteran Nashville developers obviously saw a budding star in Crabtree, a former University of Tennessee disc jockey-turned-banker. The partnership gave young Crabtree lots of rope and exposed him to the gamut of deals.

“They thought I had a burr in my saddle,” Crabtree says. “And due to their confidence in me, I worked hard.”

Hard indeed. Over his career, Crabtree has brokered more than three million square feet of retail space and developed or redeveloped projects well in excess of $100 million.

—D.R.

ROAD KILLINGS

Louis Anderson “L.A.” Green & Len Little • Co-founders

Green & Little Development Co.
1208 Nashville Pike • Gallatin, TN 37066 • 615.452.4500
la@greenlittle.com
Buy along the road. That’s common-sense buying strategy L.A. Green’s grandfather followed when snapping up sizeable tracts of Sumner County land decades ago. He knew that, in time, the road would pave the development. And it has.

“We’ve had this property for years, and it has just been sitting here,” Green says of his company’s dwindling 700-acre land tract on Highway 31E in Gallatin. “You’ve got to wait until the market allows you to develop it. Our time has come, so to speak.”

Green and Little envision a sprawling, mixed-use development for the property. They’ve dubbed the development Greensboro Village and have begun selling off parcels to companies such as Sumner Regional Health Systems, which plans to build an outpatient services facility. Other takers include ShoLodge CEO Leon Moore’s TLP Devco, which purchased 120 acres to add to its massive Last Plantation residential development. Green says McDonald’s and BP Amoco also are under contract to purchase parcels.

Meanwhile, things are heating up again at Village Green, the company’s first development project, also located in Gallatin. That project is already roughly 60% developed, thanks to a 200,000-square-foot Wal-Mart super center, sleep havens Hampton and Jameson inns, and restaurant chains that include O’Charley’s and Cracker Barrel. Green is gearing up some “nice new opportunities” heading down the pike along with the extension of Vietnam Veteran’s Parkway. Portions of Green & Little’s 400-acre Village Green development will abut the intersection formed when Vietnam Veteran’s Parkway meets State Route 109 in the next year or so.

“The projected traffic numbers at this new intersection are staggering,” Green says. “We’ll have 30 acres on one corner and 60 acres on another.”

Proceeds from the sale of this land and other undeveloped parcels might keep some laughing all the way to the bank, but not Green and Little. The pair typically takes the money and reinvests it in income-producing properties. Although the men built and own a 40,000-square-foot shopping center in Village Green, they primarily go after industrial-type properties such as the Interchange City Industrial Park building, purchased from Crescent Resources two years ago for $3.1 million. Over the years, Green and Little have quietly gone about building an impressive warehouse-rich portfolio that consists of more than one million square feet of space, most of which is located in Davidson and Rutherford counties.

As for the activity and financial rewards associated with Green & Little’s Gallatin-area land holdings, Green credits his grandfather’s fortuitous decision to “buy along the road” and the efforts of Sumner County economic development officials. “We are not doing anything special up here. We just happen to be in the right place at the right time.”

—B.A.C.

SIGNS FOR THE TIMES

Allen Lawrence • Owner

Allen Lawrence & Son Signs
615.242.7381 • 407 Humphreys St. • Nashville, TN 37203
a.lawrencesigns@mindspring.com
As a Metro firefighter back in 1962, Allen Lawrence kept a keen eye open for moonlighting opportunities between his 48-hour shifts. When a fellow fireman with his own construction business asked Lawrence if he could paint an entrance sign for a subdivision he was building in, the young portrait artist happily obliged. It launched a 40-year career as a sign maker.

Today, Lawrence’s specialty is still real estate signs. There are, however, two key differences. First, technology has altered his art form almost beyond recognition. Lawrence can scarcely remember the last time he hand-painted a sign. And now, instead of making signs for colleagues on the firefighting squad, Lawrence counts among his top clients commercial real estate heavyweights such as Colliers Turley Martin Tucker, Mission Property Company, Grubb & Ellis|Centennial and Knestrick Contractor Inc.

From the blue, yellow and red bands of a Colliers sign to the signature orange of NAI Mathews (also a Lawrence client until very recently), few marketing instruments are as identifiable amid the landscape of established and developing commercial areas as leasing and construction signs. In many instances, the property sign is the only real advertising a real estate company employs. Lawrence has a firm grip on a significant portion of that market.

Operating from a two-story workshop near the old Nashville cemetery, Lawrence’s company employs five people, including his son, Tom, a Metro firefighter with Engine 13 in West Nashville. A partner in Allen Lawrence & Son Signs, Tom is now the company’s chief designer. Lawrence, who retired from firefighting in 1986, also has in his employ his two step-sons, Justin and Paul Riley, as well as designer and project manager, Netta Mashburn. Collectively, their art is on display all over Nashville.

“The good Lord gave me talent,” Lawrence explains as he recalls his early days in the business, lettering firetrucks. Then he confesses that he works only half days. “I work from six to six,” he continues, with a look that communicates his belief that talent alone is not enough to succeed.

At his workshop, Lawrence is surrounded not by paint cans and brushes but by highly sophisticated sign-making equipment. Knives on plotting machines cut vinyl into patterns designed on a computer. A $50,000 routing board is used to carve letters out of massive blocks of wood. That’s not to say Lawrence’s hand-lettering days are behind him entirely.

“Every so often, somebody comes to me and wants a hand-lettered sign,” Lawrence beams. “But the truth is, I can talk most of them out of it when they see the vinyl.”

Four decades after his first assignment, Lawrence still creates subdivision signs—by the dozens, in fact. Over his career, he’s also become an accomplished sand blaster and etcher. Lawrence is the artist responsible for the inscriptions in the crab orchard stone walls of the Country Music Hall of Fame downtown. Lawrence’s handiwork is also on display locally at the Frist Center, the Nashville Zoo and at thousands of golf course tee boxes all over Tennessee. He also makes a habit of etching gravestones free of charge whenever a friend suffers a loss.

Interestingly, Lawrence has never employed anyone to promote his company. That has not kept him from generating well over a quarter million dollars in sales each year—no small feat considering the slower-than-usual market for commercial signage lately.

—D.R.

OPPORTUNITY PHONES

Barry R. Smith • President

Eakin Partners
5141 Virginia Way, Ste. 200 • Brentwood, TN 37027 • 615.250.1800
bsmith@eakinproperties.com
Based on his reputation, most would not figure Barry Smith as a shy one. But the all-star office broker known for cold-calling habits concedes that he’s had to overcome an aversion for the much-maligned method of drumming up business.

“I’m not afraid to ask for business, but I’m actually a shy person,” he says. Smith, described by local real estate attorney Larry Papel as the “hardest working” broker in town, knows that strong name recognition translates into business opportunities. He’s gone about achieving it one deal—or cold call—at a time.

“If the timing’s not right, I listen and try to figure out when might be the best time to approach them again,” Smith says, noting that he uses cold calls to fill downtime between meetings. “Sometimes it’s more about sewing seeds for the future.”

In some cases, those seeds never sprout. Others may eventually bear fruit, though it might be as many as five or even 10 years down the road. Fortunately, Smith is a patient but persistent man. “There have been people I’ve called for 10 to 12 years, and when there’s finally a need, they call me.”

But it takes more than phone work to produce the results Smith has realized during his 17-year career in commercial real estate. It also takes satisfied customers, repeat business, referrals and the ability to get deals done—be they build-to-suit tenant rep projects for customers such as FedEx, MetLife and Quorum Health Group, or the recent sale of Private Business’s headquarters building in Brentwood. In the last three years alone, the former Grubb & Ellis|Centennial principal and executive vice president helped broker office lease and sales transactions totaling more than $100 million. This tremendous deal volume placed Smith among Grubb & Ellis’ top 20 brokers nationally (out of 2,000 brokers) in 1998, 1999 and 2001.

Smith’s recent cross-town career move ensures that he won’t repeat on the Grubb & Ellis list in 2002. Still, the ex-steel industry sales executive continues to enjoy plenty of deal volume at Eakin Partners, where he serves as president and managing broker. Smith says the opportunity to “get in on the development and ownership side” significantly influenced his decision to join Eakin Partners (then known as Eakin Properties) earlier this year. The full-service commercial real estate firm marries the development know-how of industry veteran John Eakin with Smith’s brokerage prowess.

These days, Smith is keeping a watchful eye on the rising occupancy rates at a pair of Green Hills office buildings known as Burton Hills I & II. Smith is among the investment group that created the EP Real Estate Fund. The Fund purchased Burton Hills I & II in May. Eakin Partners provides asset management services for both properties. Smith says occupancy rates are up at each building, to 98% and 90%, respectively.

And on the sales side, Smith is marketing the 290,000-square-foot Memorial Hospital in Madison. The property includes two attached medical office buildings. If you’re interested, call Barry at 250-1800. Better yet. Stay by the phone. He’ll call you.

—B.A.C.