Lehr

You may not have heard of Lauth Property Group — the company might be one of the best kept secrets in the real estate industry. But that will likely change soon. Lauth is active in several regions of the country, from Colorado to Florida. The vertically integrated, full-service real estate company is working on projects ranging from high-tech office space to industrial to lifestyle centers to healthcare facilities. The privately held, Indianapolis-based firm is expanding with a national business platform in mind.

Western Real Estate Business recently visited with executives from Lauth Property Group at the company’s Indianapolis headquarters to see exactly what is going on behind its doors. While there, we met with Bob Lauth, chairman and CEO; Greg Gurnik, president; Mike Curless, executive vice president; Eric Mallory, senior vice president, retail; Todd Jensen, senior vice president, healthcare; Mike Orr, vice president, development, Denver; Tommy Catone, vice president, corporate services, Charlotte, North Carolina; and Tom McKittrick, senior vice president, development, Charlotte. The firm is owned by Lauth, Gurnik, Curless and the firm’s CFO, Larry Palmer.

Trottier

In 1977, Lauth started as a retail developer. The company quickly developed into an office developer and became active in the property management business. Soon after, the company began developing industrial and healthcare property types.

“This company is 27 years old,” says Bob Lauth, “and we like to think that we are just getting started.”

Lauth, like most developers, is an opportunity player. Since it is involved in multiple property types, it goes where the action is. Some years, the company may have more retail in its pipeline than office, or more healthcare than industrial. Currently, the company is very active in industrial, retail and healthcare. In 2003, retail was Number 1, industrial was second, healthcare was third and office was fourth in terms of revenue for the company.

Lauth entered the construction business in the 1980s and today a large part of the company’s technical personnel is dedicated to its in-house construction group.

“It is a major undertaking in terms of overhead and investment in people and technology to be fully integrated in the construction business,” says Curless. “We feel that it provides us with such a unique advantage on a local and national basis that it is worth all the effort we have put into it over the last 16 years. We entered the construction business largely because we weren’t satisfied with the lack of customer control when you hire third-party contractors. Being vertically integrated enables us to maintain our customer relationships from idea to move-in and beyond.”

Lauth’s Denver office has developed a 100,000-square-foot distribution center for Mygrant Glass in Denver.

Bob Lauth credits the construction division as being one of the reasons that the company does such a large amount of repeat business.

In 1990, the company branched out from Indianapolis and developed its first out-of-state property in Orlando, Florida, where the company built a 100,000-square-foot distribution center for a client.

“That was the beginning, in a lot of ways for us, for a lot of new growth,” says Lauth.

Lauth has gone on to become a national player; it has done projects in more than 30 states. Its construction company is a licensed contractor in 49 states. It now has regional offices in Charlotte, Denver and Salt Lake City. The company has plans to open other regional offices in the next couple of years. Florida and New Jersey are on the short list for consideration.

“Our growth aspirations went way beyond what we could do just in Indianapolis,” says Gurnik. “Our expansion to other regions was a function of realizing growth possibilities and gaining geographic diversity.”

Another differentiation of Lauth is the company’s perpetual investment in technology. Nearly every person in the company carries a wireless PDA device, keeping them constantly in tune with what is going on. The company also uses several proprietary software programs. One, called ProjectLink, is Web-based and enables clients access to their projects 24 hours a day. The company places a Web camera at each site to allow constant monitoring through ProjectLink. The system allows a client in Florida to see real-time photographs of what is going on at his project in Kansas City, for example. Updated project schedules, meeting notes, budgets and other reports are also posted on the system. Another innovation, called ProjectView, uses a desk-mounted screen that is plugged into a telephone line to provide real-time photography of a project.

“The system is particularly effective for us when we are not physically located in a market where the building is under construction,” says Curless, who runs the office and industrial divisions of the company. “Our customers can see the building being completed from start to finish without ever leaving their offices.”

Lauth is currently working on several sizable retail developments across the country.

“The retail segment of our business is growing rapidly,” says Eric Mallory, who joined the company in 2003 from Developers Diversified. “It should continue to be one of the largest segments of business for this company.”

Lauth’s vertical integration helps it land opportunities for retail development. Because it controls the construction of its projects, it can control the timeline and opening of a building or center.

“We are focused on the schedule during development,” says Mallory, “and to most retailers, getting in on time is everything.”

In an effort to expand its national retail portfolio, Lauth welcomed Craig Trottier to the company in 2003. As vice president, director of development, Trottier manages all phases of development leading to the operation of new shopping centers. This includes identifying and acquiring sites, securing government entitlements, negotiating tenant leases, coordinating design and engineering, and overseeing construction.

“The American shopper possesses tremendously high expectations for every retail experience, and retailers in turn need developers who can deliver premium sites and aesthetically pleasing architecture at competitive costs within aggressive time frames,” says Trottier.

According to Mallory, Trottier has been responsible for the development of more than 2.5 million square feet of retail space in the western U.S. “Craig has shown his ability to lead teams of engineers, architects, contractors, attorneys and others to implement successful projects for tenants,” says Mallory.

Lauth has developed a 115,375-square-foot speculative industrial building in Denver.

In 2001, the company opened an office in Denver to pursue land positions and build in the local market. The company has developed several projects there, and uses the office as a base of operations for other projects to service clients in the western region of the country. In the airport industrial market in the Denver suburb of Aurora, Colorado, Lauth is purchasing 160 acres at I-70 and E-470 that will be named Aurora Commerce Center. The site will enable the company to build several industrial buildings ranging from 30,000 square feet to 500,000 square feet over the next several years. During 2004, the company plans to break ground on a speculative distribution on the property. It is also actively pursuing build-to-suits for the project. The firm also recently completed a 115,000-square-foot speculative industrial building at 52nd and Pecos.

“Denver has also been a great location for us to access the Southwest,” says vice president of development Mike Orr. The Denver office has grown to include project management, construction superintendents and pre-construction services, as well as business development and administrative support.

Lauth recently added senior expertise to its Colorado operations when it welcomed Austin Lehr as a regional partner. Lehr is responsible for the identification and implementation of construction and development opportunities throughout the western United States, in addition to supporting corporate users with multi-market facility needs.

According to Curless, the addition of Lehr not only builds on the strong skill set of Lauth’s Denver team but also enables Orr to focus sales efforts in other potential markets such as Phoenix and Las Vegas.

“Lehr has a demonstrated ability to conceive and implement successful projects of large scale and on a national platform,” Curless adds. “We are looking forward to building upon the momentum Orr and [vice president of development] Michael Lloyd have created with our Denver operation.”

Lauth has entered the Denver market in a time when industrial is the top demand for development. The company has made its first mark in the city with that property type, and will be expanding into other segments as they become more active.

Lauth is making new inroads in the healthcare segment, an area that is highly fragmented in the development community. Lauth’s healthcare division is headed up by Todd Jensen, whose goal is to mold Lauth into one of the leading design/build developers of healthcare facilities in the country. Jensen was previously a partner with the Hammes Company, a nationally known healthcare developer. Lauth has developed medical office buildings, outpatient services buildings, ambulatory surgery centers, specialty hospitals, oncology centers, and medical fitness and wellness centers. Ultimately, hospital construction is another goal for the company. Since a number of the larger hospitals in the country are more than 50 years old, there is a great demand to replace or renovate a number of older hospitals around the country. Lauth sees a growing market in medical office due to physicians wanting to own their own real estate as an alternative to other investments.

“A lot of physicians are partnering with developers who allow them to own a substantial portion of the building, but utilize the developer’s expertise and financing capabilities,” says Jensen.

Lauth has been very active in the healthcare segment in the greater Indianapolis area. It is constructing a bariatric surgery center at INTECH Park, a 210-acre, 2.5 million-square-foot Class A office development that, when complete, will be the largest office park in Indiana, and has recently built an orthopedic surgery center for Central Indiana Orthopedics in nearby Anderson, Indiana. The regional offices are also searching for healthcare opportunities, the development of which will be supported by the healthcare staff in Indianapolis.

“We have a unique organization that has attracted very talented individuals,” says Greg Gurnik.

“It is all about people,” adds Bob Lauth. “If you can attract and retain the top caliber of people in the right markets, you will have a superior company. That’s what has driven us for 27 years.”

©2004 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.