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Developing profits Featured

12:06pm EDT March 11, 2004
Attorney Franz Geiger always knew he wanted to be part of the real estate industry. After practicing law for six years, he made his move, interviewing at large commercial real estate companies, including the Daimler Group.

Although he didn't get the job at Daimler, Bob White, principal with the company, remembered Geiger when, one year later, NP Limited Partnership, the company formed to develop Polaris, was searching for a managing director. White was a construction partner of the partnership and told the founders -- Bob Echele of Anheuser-Busch, Don Kelley of Donald W. Kelley and Associates and Bob Weiler of the Robert Weiler Co. -- that they should talk to Geiger.

"I was the first and only candidate that was interviewed," says Geiger.

Now his love of real estate and the law enables him to handle the daily challenges of managing a development that totals more than 6 million square feet.

One of these challenges is balancing the myriad administrative and legal tasks with those that Geiger describes as revenue-producing. To find that balance, he takes advantage of technology to automate and complete tasks in a timelier manner.

Geiger says he's also learned to be more flexible.

"I wear many hats," he says. "Trying to do it all is hard to manage."

But thanks to Polaris's location, says Geiger, new retail and office tenants continue to stream in.

"There is a lot of appetite for commercial development at Polaris," Geiger says.

Smart Business spoke with Geiger about Polaris's success and its competition.

Why do you think the Polaris area is so attractive to businesses?

The primary reason is its location. It's right at 12 o'clock. It's equidistant from all the northern suburbs and different residential areas. It's very convenient to get to that location.

And there's a lot of growth in southern Delaware County. A natural population shift has occurred there.

Bob Echele was a real estate director for Anheuser-Busch and lived in Delaware. He saw that area developing. He knew a new interchange was planned in the area, and after discussions with ODOT, NP was assembled. The interchange ended up right in the middle of the land they purchased.

It's always easy to see potential in hindsight. But back then, no one thought there would be growth outside the outerbelt. Now people are talking about needing another outerbelt.

We have 300 acres out of 1,200 left to develop. We project that those 300 acres will develop at a slower pace because the area has already absorbed a lot of development, and it can only absorb so much. We need to make sure we are building the right type of product with this acreage and strategically develop it with retail and office space.

When the area is maxed out, the partnership will eventually dissolve. It was created to have a finite lifespan. We probably won't get out immediately -- we will manage and hold on to the properties. We tried to develop a long-term investment. But we won't maintain it indefinitely, just until market conditions are so favorable that we have to sell.

If the economy remains stable, I foresee that we will continue to develop and manage the properties for the next 10 to 15 years.

What are the biggest changes you've seen in the commercial development industry in the past five years, and how have they affected operations?

One of the things that has changed is the office market -- it has tanked and seen very little growth. The retail market is still strong, but the office side has struggled.

There is not the demand with the economy as it is. Companies are constructing their space, reducing their work forces. And the prediction that tech companies were going to get venture capital and explode, needing space, never panned out.

Interest rates have gone down and the costs to do a deal have gone up. It's been a major struggle the last few years. We are happy just to be stable, without losing tenants. We've done pretty well. Fortunately for us, we are a mixed use development. Like Wal-Mart that has multiple products, with both office and retail real estate, when one use is down, the other is hot.

The Polaris Mall has a strong regional draw, so we haven't done a lot of office development, but we are very strong in retail.

What are Polaris' biggest competitors and how do you get an edge over them?

In the office market, we are in the city of Columbus, but we compete with the suburbs. What we sell is location. It comes back to having freeway frontage.

The suburbs offer more incentives to companies for locating there, so our edge is our location. We are trying to convince the city to get more aggressive with incentives, but since it is larger than the suburbs, it has more diverse priorities, like the downtown. It's harder to sell the concept of incentives because the city views them as giveaways.

On the retail side, our closest competitors are the Easton Mall and the Tuttle Mall. We are all large developments with a lot of attractions and unique retailers that overlap. We compete, but they are our peer group, too. Most of the other malls in the area are not on the same scale and are really not competitors.

Retail is so strong and the area is hot, so any time there is a new concept looking at this region, we are in the running.

What are your biggest operational and personal challenges, and how do you meet them?

For me, it's balancing the mundane tasks with those that bring in revenue. The other part of that is managing technology and making it work for you.

We have invested in products that help to make my life easier. I am the president of the owners' association. I manage third-party consultants, handle legal work, prepare and manage budgets and status reports. The biggest challenge is to remain flexible and spend the most time where it will be profitable. I feel that my time would be better spent out finding new business rather than reviewing a legal document -- but I have to do it all, so finding that balance is a challenge.

What will be the next Polaris in Columbus?

I don't think we'll see another Polaris or Easton any time soon. Polaris, Easton and Tuttle are positioned well. Polaris is still developing, and we want to make it even more of a regional draw. We don't have a theater yet -- there's still a lot of opportunity here. I don't think there will be any developments started in the area to rival the existing ones in the next 10 years.

What are your thoughts on the downtown's development?

I don't think downtown's situation is as dire as we think. Compared to a lot of other cities, we have a very nice downtown. With the residential development there, you'll see the need for retail, but it may be more like grocery and more service-oriented development.

The other issue there is to bring back businesses to the downtown to give it more stability. It is a convenient place for people to work; we just need to make it a more attractive place for them. HOW TO REACH: NP Limited Partnership, (614) 841-1000