|
FEATURE ARTICLE, OCTOBER 2005
RINGING IN THE DEALS
Steven D. Bell & Company reaches $2 billion in assets by providing the best value for its investors.
Susan Fishman
One of Steven Bell's most important long-term goals is to have a grandchild working at his company while he's still alive (his son, Jon Bell, already serves as vice president).
“If you have a grandchild here, what that says is you've been doing things the right way for a long time,” he says. “Our company is almost 30 years old, but a grandchild would suggest that maybe this company will be around for another 40 or 50 years.” The company chairman and founder of Steven D. Bell & Company didn't just jump into his own business. He intentionally started out learning the ropes through finance, mortgage banking and property management.
“One of the things I learned in my mortgage banking experience is that we want a location that we truly believe will be as good or better down the road,” he says. “Our cardinal rule is that we have to believe that when we acquire a property or jointly develop a property that the location is good today, but will also be good 10 years down the road.”
The Greensboro, North Carolina-based company's primary focus is to structure deals that will be a good value for its investors. In the first 6 months of this year, Steven D. Bell & Company distributed $66 million to its investors.
“We try to find assets where we can add value,” says President Edward Harrington, who also has experience in mortgage finance and has owned his own development company. “In retail, maybe it's an under-performing lease, under-performing sales or a short-term lease that is maturing. We also look for a location that's improving in demographics. If there's any slight decrease in demographics, we're not going to buy it.” Steven D. Bell & Company manages a property portfolio valued at more than $2 billion. The portfolio is made up of approximately 19,250 apartment units under management, 16 senior living facilities, and about 4 million square feet of retail space in 25 shopping centers and three office buildings.
The diversified real estate firm has around 115 properties scattered throughout eight southern states. In one of the company's largest single transactions in its 29-year history, Bell led a group of investors in the acquisition of the Edgewood Retail District, a 37-acre concentration of major retail stores now being completed in the Edgewood area of east Atlanta. A Bell group bought the 536,604-square-foot shopping center from Atlanta's The Sembler Company, one of several deals made between the two companies in recent years. Sembler, the center's developer, is retaining a small ownership position in the Edgewood property and will continue to handle the property management and leasing at Edgewood, and the Bell firm will serve as an asset manager for the property.
 |
Steven D. Bell & Company recently purchased The Stratford apartment community in Cary, North Carolina, for approximately $20 million.
|
|
Another Atlanta project currently under construction is Perimeter Place, located near Perimeter Mall. The $165 million mixed-use project is a joint venture with The Sembler Company and will include 500,000 square feet of retail space, including a SuperTarget, and more than 500 condominiums and apartments. In recent apartment transactions, the Bell company bought the 514-unit Flagstone Apartments in Huntsville, Alabama, for about $26 million; the 312-unit Alta Towne Lake property in Savannah, Georgia, also acquired for about $26 million; and The Stratford apartment community in Cary, North Carolina, a 247-unit property purchased for roughly $20 million.
“Our goal is to reach 25,000 multifamily units over the next 2 to 3 years,” says Harrington. “We think that's a good size operationally to give our employees a chance to grow and improve their skills, and gives us a good revenue balance.”
 |
This past June, Steven D. Bell & Company investors acquired a portfolio of three Summit Place eldercare communities located in North Myrtle Beach, South Carolina; and Mooresville and Kings Mountain, North Carolina.
|
|
This past June, Bell investors also purchased a portfolio of three Summit Place eldercare communities located in North Myrtle Beach, South Carolina; and Mooresville and Kings Mountain, North Carolina. The three properties, purchased for almost $22 million, consist of 156 total residential units and offer both assisted living and Alzheimer's disease care. The purchase makes 16 senior living facilities owned and/or managed by Steven D. Bell & Company in the Mid-Atlantic area. Over the last few years, this has been the fastest-growing segment among Bell investment initiatives. “Senior housing is still a relatively small portion of our company, but we're aggressively trying to grow that part of our business,” says Bell. “We think there's a strong demand and certainly a good opportunity for it, and in some ways, it has similarities to our multifamily.”
One of the company's favorite senior living properties is in New Bern, North Carolina. There, Bell developed an assisted living property that was so successful that he then developed a senior living property adjacent to it.
“We've really found that that combination of assisted and senior living is a real plus,” says Bell. “Both properties are performing well with around 98 percent and 100 percent occupancy.”
 |
Edgewood Retail District, Atlanta
|
|
In New Bern, Bell also owns a successful and consistent apartment property of 228 units and a Food Lion-anchored shopping center.
“We're really enamored with some of these smaller communities because there's not as much competition,” he notes. “The big boys aren't going to go to these smaller towns because they've got to build something much bigger to justify their time and effort. So we've been able to create a little niche in some of these smaller communities.”
Along with recent purchases, Bell executives also sold two apartment properties. The Cove apartment community in Daytona Beach, Florida, and Barrington on the Green in Birmingham, Alabama, were sold in late June for a total of $41.6 million. A majority interest in the 342-unit Barrington on the Green property was sold to DRA Advisors of New York City, one of the nation's premier institutional investors. Late last year, an investor group led by Bell sold the 720,710-square-foot Henry Town Center shopping center in Atlanta for $61 million to Inland Real Estate. The deal is the largest single-property sale in the history of the Bell company.
 |
This past June, Steven D. Bell & Company investors acquired a portfolio of three Summit Place eldercare communities located in North Myrtle Beach, South Carolina; and Mooresville and Kings Mountain, North Carolina.
|
|
“We analyze properties every month to determine whether we should buy or sell,” says Harrington. “It depends on the existing debt structure, the existing pre-payment structure, and on the composition of the partner group. With a lot of our owners, the whole goal is to defer taxes, so they want to re-invest. It depends on the ownership structure and the group who owns it.” As Bell looks to the future of the company, another long-term goal (after bringing a grandchild on at the firm) is to continue offering investors good diversification and good investment opportunities. In keeping with this goal, Bell, himself, personally invests a lot of time traveling to visit his properties.
“Not only is it good for me to know what's going on and enables me to have credibility with our investors, but the other benefit is that our employees know that I care,” Bell says. “Another key ingredient to good investments is interest rates. We've been able to secure a lot of very favorable loans over the last few years, and that has certainly helped our investors.”
©2005 France Publications, Inc. Duplication
or reproduction of this article not permitted without authorization
from France Publications, Inc. For information on reprints
of this article contact Barbara
Sherer at (630) 554-6054.
|
