Ahmanson hires Lowe to manage bunch of projects: deal continues giant's withdrawal from development.

The nation's biggest thrift holding company, Irwindale-based H.F. Ahmanson & Co., has hired Brentwood's Lowe Enterprises to manage the development of 30-some ongoing commercial and residential real estate projects valued at about $600 million.

Included in the "outsourcing" asset management assignment -- which Ahmanson Chairman and CEO Richard H. Deihl characterized as "part of our continuing orderly withdrawal from the real estate development business" -- are the new Pasadena Towers office property and the idled Calabasas Park Center business campus development.

Like other thrift holding companies, the parent of the $48 billion-in-assets Home Savings of America had already been phasing out its real estate development activities to meet federal guidelines mandated under the Financial Institutions Reform and Recovery Act.

Sources also noted that while Ahmanson's development subsidiaries had achieved impressive returns during the early- and mid-1980s real estate boom years -- including the development and profitable sale of downtown L.A.'s Home Savings Tower -- earnings from such activities have been disappointing during the more recent commercial property bust.

Managing the developments in-house under the current regulatory and market environments "no longer makes sense from the financial standpoint," said Ahmanson spokeswoman Mary Trigg. She also stressed that Home Savings' key capital ratios already exceed the targets FIRREA requires to be "phased in" by June 1994.

Lowe Enterprises, founded by developer Robert Lowe in 1972, is already providing asset management services on more than $2.5 billion worth of properties around the U.S. for a variety of private and public institutional owners, according to last week's joint announcement.

Ahmanson interviewed eight "well-known" development and asset management firms during April before selecting Lowe, Trigg noted.

About 80 Ahmanson employees involved in Ahmanson's development subsidiaries will report to Brian Prinn, president of the Lowe Enterprises Realty Services subsidiary. The varying "arrangements" Ahmanson has made with these staffers, including "severance bonuses," will remain in effect, and they will continue on Ahmanson's payroll, Prinn explained.

Banking and real estate consultants suggested that outsourcing not only helps thrifts exit the development business -- such arrangements can also generate significant cost efficiencies.

When asset management firms take over development operations, the work has typically been handled by about 20 percent fewer employees, said Mike Evans, the San Francisco-based national director/real estate services with "Big Six" accounting firm Ernst & Young.

And with so many idled developers vying for "third-party" asset management assignments, the bidding wars frequently entail "incredible price competitiveness," Evans continued. Where asset managers typically earned 5 percent of a portfolio's gross revenues during better days, some big firms are willing to render their services for as little as 2 percent today, he explained.

Beyond the cost efficiencies, such outsourcing strategies can also help institutions dispose of their big development portfolios more resolutely than would be the case with in-house staffers, added Ron Greenspan, downtown L.A.-based director of restructuring with Price Waterhouse, another "Big Six" accountant.

The second of Ahmanson's twin 205,000-square-foot Pasadena towers is in the lease-up phase, and many sources have speculated that the Calabasas project will be redesigned to emphasize retail over office facilities. Also included among Ahmanson's ongoing local projects that Lowe will handle is a Whittier shopping center called The Quad, where the 412,000-square-foot first phase opened in 1989.

The huge and hugely controversial Ahmanson Ranch community planned in Ventura County will remain under an Ahmanson subsidiary's direction, Trigg said. Ahmanson will also retain responsibility for the big Sutter Bay community planned in the Sacramento area, she added.

Lowe will take over management of Ahmanson's big office development under way along Oakland's Lake Merritt, a 600,000-square-foot shopping center planned for Market Street in San Francisco, a Chicago office highrise project, the Owings Mills community outside Baltimore and two Florida residential communities.

In the near term, the Lowe team "will evaluate the plans now in place for each asset in the portfolio," Prinn noted. "Some we're likely to simply continue as planned. With others we will take a fresh look at plans and consider some alternatives. We will then make recommendations to the Ahmanson Realty Board in two or three months."