Build Speculatively Every Year Unlike most developers, St. John Properties builds speculatively every year — year in, year out — delivering roughly between 300,000 and 1 million square feet of space. Interestingly, the company generally does not offer build-to-suit development options. “Build-to-suits just slow us down,” explains the chairman. In 2018, the company developed and broke ground on 1.2 million square feet of speculative space from its Maryland headquarters. It has also begun to develop or construct 600,000 square feet in other markets for a total of 1.8 million square feet of multi- and single- story office, retail, flex/R&D and residential space. For 2019, St. John Properties expects to add an additional 1.3 million square feet of space. How Projects Are Developed St. John Properties’ development sweet spot is the 50-acre site, although the company will go down to 25 acres or up to 200 acres for the right location. Like everything else about the company, its projects’ size must satisfy the company’s focus on the long view: it wants projects that it can build out over seven to 10 years — not the in-and-out 5-acre, single-building project. When St. John Properties finds a site it likes, its architectural and engineering team puts a design together, and then the company’s leasing agents scrutinize it. “Our leasing people tell us what to build,” says St. John, “because they are the ones who have to lease the space.” Once the concept passes muster, the land goes under contract, usually with a 90-day window to conduct due diligence. After clearing the land for purchase, St. John Properties makes a substantial payment on the contract with the stipulation that it has 18 months to obtain a building permit. St. John Properties initially builds two speculative buildings on the property. When those buildings become 50 percent occupied, work begins on the next two buildings. If a market or economic downturn occurs, and the first two buildings are not yet 50 percent leased, the company stops building at the site until market conditions change.
Following its expanded office and retail mix, St. John Properties incorporated residential uses as integral parts of its communities. For example, at its Greenleigh at Crossroads project in Middle River, Maryland, it responded to a request from the late Baltimore County Executive Kevin Kamenetz to include residential in what had originally been designed as predominantly office, industrial and retail space. At its Melford Town Center in Bowie, Maryland, where it has already constructed more than 1 million square feet of office and flex/R&D space, St. John Properties has responded to requests for affordable residential products. The company rezoned the project to include up to 1,800 residential home sites, apartments and senior living units. St. John Properties is vertically integrated and is proud that no third party gets between it and its tenants. When tenants speak to a property manager, they know they are speaking to St. John Properties. This customer-centric approach has helped the company maintain a portfolio- wide occupancy rate of 90 percent. Its founder’s focus on listening to the tenant has become formalized into company policy over the years with two staff people dedicated to interviewing all of the tenants in the portfolio once a year. The company finds the interview process so important that it has taken it a step further and also interviews all of its employees annually, using a list of about 10 questions. “We interview every one of our employees on how they are feeling about the company, about their job and about how their supervisor is treating them,” says St. John. St. John said that he used to conduct the interviews himself when the firm had only 25 employees. St. John has a passion for excellence and focuses on surrounding himself with the very best people. He explains: “Everybody who stays with our company for four to five years or longer is the best there is, or they don’t stay. It’s just the atmosphere around here; everybody is very good at what they do.”
St. John Properties is a strong supporter of NAIOP, which it views as the nation’s leading commercial real estate trade association. Edward St. John is a founding member of NAIOP’s Maryland Chapter, which was established in 1985 and currently has more than 400 members. St. John Properties hosts monthly chapter meetings at its headquarters in Baltimore. St. John Properties is one of three major financial contributors to the chapter’s “Penny per Square Foot” fund, which supports the NAIOP Maryland Legislative Committee and acts as a unifying voice and lobbying force for both NAIOP Maryland and its sister chapter, NAIOP DC | MD. The legislative committee tracks bills, enacts strategy on relevant legislative issues and represents the general legislative interests of commercial real estate companies in the state. Twenty-six employees of St. John are currently members of NAIOP; three executives are members of NAIOP chapter boards. • Richard Williamson, senior vice president of leasing and market- ing, currently serves on the board of NAIOP Maryland. COMMITMENT TO NAIOP • Thomas Pilon, senior vice president of development, currently serves as public affairs chair, NAIOP Maryland. • Matt Holbrook, regional partner, Northern Virginia and Central “You cannot do it all yourself,” says St. John. “That’s why we support NAIOP all the way and in any way we can. We attend every function, and we always have at least two people involved at the board level every year.” Maryland, currently serves on the board of NAIOP Northern Virginia.
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