Independent owner carves out unique niche.

Crown Properties, Inc. 's real estate strategy - know when to hold em' (and when to sell) - may sound more like a Kenny Rogers song than a business objective, but don't be fooled. The company, one of the nation's strongest independent owners and asset managers of commercial real estate, has carved out a solid, strong and profitable niche for itself based on that simple principle.

Founded in 1982, Crown Properties has emerged as a keen investor in office properties, with an outstanding ability to identify and capitalize on opportunities to enhance values through capital investments and aggressive leasing/management campaigns.

"Timing is everything in this business," explains Davar Rad, president of Crown properties. "By recognizing investment opportunities and deciphering market conditions, we can determine when to hold or sell a property. However, we bring more to the table than just an investment perspective. We also view the asset from an ownership perspective. We look to create real value in each and every property we own by implementing well thought-out capital improvements and technology programs to position our properties above the competition."

The company's strategy has proven highly effective in today's competitive real estate marketplace. In fact, Rad and the Crown Properties team's belief in this philosophy is so strong that in 1987, just before real estate hit an all time low, Crown Properties sold-off their entire portfolio. For three years, Rad and his core team went to the office every day, but didn't buy a single real estate asset. And while he laughs at the "real" benefit - spending more time with his kids he does admit that his patience paid off in other ways as well.

"Our experience and foresight told us that the commercial real estate market was headed for a major downfall in 1987," Rad says. "The triggering mechanism for this was Class B buildings trading at Class A reproduction costs. At those levels, it was just a matter of time before huge amounts of construction would come on line. Add to this mix a recession, which always comes along sooner or later, and a market correction was in the making. While many of the country's leading analysts felt that it would be short-term, we thought differently. We determined that our best strategy was to sell our assets, take our profit and wait-out the recession."

Today's market stability has provided the firm with new momentum. Since 1990, Crown Properties has rebuilt and grown its portfolio by adding more than five million square feet nationwide, and investing more than $100 million each of the last two years. The company is focused on acquisitions that allow them to do what they do best - increase value by improving building management and services, cutting costs prudently, and initiating major renovation programs. In addition, Crown Properties has targeted several markets on the road to recovery and identified quality properties for acquisition.

"Instead of just buying trophy properties, we look for opportunities where we can upgrade Class B buildings or purchase properties in under-performing markets that we feel will soon-rebound," says Rad. "These type of ownership opportunities offer larger returns than just acquiring Class A properties in saturated markets."

As REITs and other institutional owners continue to purchase real estate at breakneck speed, many small and mid-sized owners are finding purchase opportunities few and far between. However, Crown Properties has discovered a lucrative niche overlooked by the larger landlords. Since most institutional owners are only interested in properties valued at upwards of $25 million, and small investors don't often top $10 million, a plethora of buildings in the $10 million to $25 million range have been left untouched. This is Crown Properties' target market.

"Although we have acquired properties ranging in value from $5 million to $60 million, we have created a niche for ourselves in the $10 million to $25 million range," explains Bob Rosenberg, director of Asset Management. "This sized property will benefit from our hands-on, local property management, combined with our national presence and scope."

All of Crown Properties' buildings receive the same personal touch that tenants have come to expect. No matter which state the property is located - New York, Texas or Ohio - each building gets just the right mix of local and national expertise. For each building, Crown Properties hires a local property manager that works directly with one of the firm's national asset managers and executives.

"We see ourselves as a personalized manager with a national outlook," explains Rosenberg. "We never want to grow too big that we don't know what's happening at each and every one of our buildings. Crown Properties prefers to own a few 'crown' gems, where we can maintain quality levels, rather than hundreds of mediocre buildings."

With a core team of 10 national investment and management professionals that include Rad, Rosenberg, Vice President Eveline Brown and Director of Acquisitions Joseph Scimone, Crown Properties also relies heavily on local real estate experts to identify. acquisitions and assist in the ongoing management of its assets. Among the firm's properties are: 360 Lexington Avenue in Manhattan; The Sentinel Building in Edina, MN; Exchange Park in Dallas, TX; 2 Penn Plaza Center in Philadelphia, PA; 250 East Broad Street in Columbus, OH; 300 Boulevard East in Weehawken, NJ; and The Griffin Office Park in Windsor, CT.

One prime example of Crown Properties prowess when it comes to making savvy investments and smart management decisions is 400 Garden City Plaza in Long Island, currently serving as headquarters for the firm. Crown Properties bought the 175,000 square-foot property in 1994 for $10.35 million, when very few investors would even look at Long Island because of the poor market conditions. However, Crown Properties had a keen sense of market timing and dedicated itself to an aggressive leasing campaign. Within just three short years, the building went from 72 percent to a whopping 95 percent occupancy rate. At the height of its rejuvenation, Crown Properties sold the property for $24 million, earning a startling profit in just three years.

"400 Garden City Plaza was a wonderful opportunity," beams Rad. "Our instincts told us that the Long Island market would soon be booming, and with a little work and patience, 400 Garden City Plaza was primed to get its fair share of tenants. Our intuition was on target, and the building is a great example of a Crown Properties triumph."

The 400 Garden City Plaza story illustrates Crown Properties' strength with regard to market timing, but it's unusual in that the property is and always has been a "Class A" building. Most often, Crown Properties invests in Class B or Class B + properties, providing opportunities for its asset management capabilities to shine.

The property at 360 Lexington Avenue is an example of this Crown Properties' hallmark: shrewd investment combined with aggressive leasing and a comprehensive capital improvement program resulted in seven leasing deals in just six months - after years of silence at the property.

Crown Properties has also learned to go where the opportunities present themselves, to move quickly and to combine internal expertise with strong regional and local talent. As they consider themselves conservative players in a market where things are fast becoming overheated, Rad says Crown Properties looks to remain as an industry stand-out, a company that can see the hidden value that others miss by approaching transactions from a different point of view.

With this positive outlook, Crown Properties is destined to become an even more noticeable player within the coming years. And with more than $100 million in transactions closed since January and another $100 million scheduled to close by year end, Crown Properties' executives are sure they will be singing a very happy tune.