From retailer to real estate developer to asset manager, this family-owned company continues to grow and succeed due to its colorful history. It’s not often you find a family-owned real estate developer and landlord with a history in retail. But that’s exactly where New Jersey-based Bedrin Organization first planted its seeds. Garret Bedrin’s grandfather, Murray Bedrin, founded the company when he opened a small stationary and office supply company in the Jersey City/Rutherford area of the state. His two sons, Paul and Jerry, joined the business in ’69 and ’72, respectively. Initially called Allied Office Supplies, the company grew into one of the largest privately owned office products companies in the country.
At its peak in the ’90s, Allied had six retail stores, more then 230 employees, and more than $60 million in annual sales. Along with his cousin Michael, director of development, Bedrin, director of acquisitions and leasing, is the third generation of the Bedrin family to be in the business.
He said the company was in the right place at the right time when companies were leaving New York City in search of cheaper office space in the up and coming Meadowlands area of North Jersey. “All of these companies needed office supplies, office furniture, stationary, and everything you could imagine, and the company took advantage of that growth.”
As a result of rapid growth, the Bedrin family realized it needed to move the company into a larger space and purchased a three-building portfolio comprising a retail store, warehouse, and office building in Hasbrouck Heights. That one location was great for the office supply business, but it also paid long-term dividends into transforming the family into shopping center owners and managers.
When the Bedrins sold the company in 1998, they became landlords rather than owners who were using the real estate. “The family converted those locations to alternative uses because the new management and ownership had other plans for where they wanted to locate their office and warehouse,” Bedrin explained. “So we converted these buildings into retail.”
By 2002, the values of the buildings had risen enough that the family was able to refinance, put on a new mortgage, and use the money to purchase another property, this time in Albuquerque, NM. The acquisition of this property marked the start of a trend that lasted through 2005.
“Between ’02 and ’05, our properties came from old friends, off-market deals, and brokers we met; they just came to us,” said Bedrin. “But in ’05, when I joined the company, we started aggressively looking for opportunities rather than letting them just coming to us.”
Between 2005 and 2010, the family sold, refinanced, and acquired multiple centers, always re-deploying the capital into now what is a 95% leased portfolio nearing 1.5 million square feet and valued at approximately $200 million dollars.
Pulse of the property
Bedrin Organization’s history as a former retailer and owner and manager of retail stores separates it from its competition. It also gives the company better insight into how well its retailer tenants will do in a certain location.
That’s not to say the company doesn’t do its due diligence to make sure its initial assessments are correct. “We analyze retailers’ sales and can make assumptions on their margins with their occupancy costs,” Bedrin said. “We also analyze whether the retailer is paying the appropriate rent.”
Before acquiring a property, Bedrin Organization analyzes whether or not the rent that’s in place is a good fit for each retailer. Although many landlords would simply focus on charging the most rent possible, Bedrin said if the company doesn’t feel the retailer can pay a specific rent throughout the term, it only sets up both parties for an expensive failure.
To say Bedrin Organization takes a hands-on approach to every property it owns is almost an understatement. Before completing an acquisition, the company walks the properties, inspecting the roof, parking lots, and tenants to analyze the property’s health and whether or not the company can add value to it.
“There are a hundred things we look for with any property, but we need to add value,” Bedrin said, “We have really great relationships with TJX, Publix, Dollar Tree, and Big Lots. There are a number of tenants that we have in multiple properties. Growing those relationships becomes an effective tool for doing business.”
Bedrin said the company also personally reviews and renews each lease in every property, and all of the company’s tenants have cell phone numbers for the management team. “Once we own the property, we become property managers,” he said. “We collect the rents, so we know who is in trouble and who is paying on time. We hire all of the vendors, so if there is a problem, we can have someone there to fix it within 24 hours. We like to say we treat our tenants like our customers,” Bedrin said.
Bedrin describes Bedrin Organization’s approach to handling its properties by saying the company takes the pulse of its properties. When it does initial and follow-up tours, it analyzes its tenants’ in-store inventory levels and the quality of the inventory. It also looks at whether the retailers are paying their suppliers on time.
“We look at the lighting in the store, the condition of the floor, and so forth. We do these things because of our prior experience as retailers,” he said.
2010 marked another new start for Bedrin Organization. It’s got all of its ducks in a row and is prepared to raise $100 million in capital to expand its portfolio. “It’s an historical change from how we’ve done business for the past 60 years,” said Bedrin.
The company has hired Wren Capital to advise it and decided to focus on raising the capital to invest in more grocery-anchored and value-oriented-anchored shopping centers in the Northeast and Southeast. Although a new venture for the company, it gives Bedrin Organization a chance to bring its hands-on management skills, work ethic, accountability, relationships with tenants, and retail experience into play via a third-party platform.
“Not many large shopping center owners have upper management and shareholders who were retailers in their prior careers,” Bedrin said. “We want to take all of that experience and bring it to the investment world, whether with a high net-worth investor, a public pension fund, or a sovereign wealth fund.”
The decision to move in this direction was inspired by the current state of real estate. First, to continue growing, Bedrin Organization would have had to sell or refinance properties at a time when redeploying capital in that way is an unstable venture. Second, there are numerous opportunities to achieve good returns on properties that would’ve been much more expensive even three years ago.
“The cream is rising to the top, and we’re right there at the top,” Bedrin said. “We’re the largest of the small guys and the smallest of the large guys, and we want to take advantage of these great buying opportunities. By raising the capital this way, we’re ensuring we can continue to grow the company.”