Though real estate investments can turn unexpectedly into boondoggles, a venture in one of the fastest-growing areas in Western Pennsylvania seems like a no-brainer. Twenty years ago, however, when Ferree began to acquire real estate in Cranberry, it wasn't as easy to see the potential in a sparsely developed stretch of Butler County just beyond the Allegheny County line. Route 228, the busy commercial and residential backbone that runs perpendicular to Route 19, traversed cow pastures and woodlands through most of the 1980s.
Ferree got the 10-acre site where Brush Creek Commons now sits at a "reasonable" price about 10 years ago, but got cold feet when it came to developing it himself. He sold off a chunk when Amerisuites wanted to build a hotel there, and dealt another chunk to the Pennsylvania Turnpike Commission when the state decided to build a connecting link between the toll road and I-79.
Only then did he decide to develop the remaining parcel.
When Ferree left his family's business in the early 1980s, he thought a string of self-serve car washes in the Pittsburgh area would be a venture that might turn a handsome profit.
The first parcel Ferree found that would be suitable for a car wash was on Route 19 in Cranberry Township. But he saw potential in the site that persuaded him do a quick turn from his original plan and instead opted to develop the property as a shopping center.
Since then, Ferree has acquired and developed four other pieces of real estate, including three other office buildings and a retail strip center along the Route 19 corridor in Cranberry. He has built, owns and manages seven other properties, as well, including holdings in Virginia, West Virginia, Ohio and Maryland. In all, his company, Landmark Properties Group, manages nearly a million square feet of commercial real estate valued at $55 million.
Along the way, Ferree took up flying as a pastime and, eventually, for business as he acquired properties outside of Pennsylvania. A member of the Volunteer Pilots Association, he flew blood to New York after the Sept. 11 terrorist attacks.
Ferree might be filing flight plans more often this year. For 2004, he has set a goal of acquiring $20 million in commercial real estate holdings. To do it, he's on the hunt for two or three deal-closers.
"I need to get some aggressive people that can really go out and go after properties, see a lot of them and cherry pick the good ones," says Ferree.
You've got a pretty ambitious acquisition plan. How are you planning to implement it?
I'm in the process of interviewing. Hopefully, I end up with two people; I wouldn't mind having three guys in acquisitions.
I need more deals. We might get under contract five deals, and we might get one closed. If I can get two or three people getting eight or 10 deals under contract and have two or three good ones, that's even better. So I'm going to go out on a limb, spend a little money on salaries to pay off in the long run.
Is this a particularly good time to make deals, and is that why you are expanding your acquisition force?
No, but if I wait until the time is right, it might take me a year to find the group of good people that I need. I want to do it now, I want to get some people in place, and hopefully they turn out to be good.
How did you get interested in building car washes?
When I got out of school, I went to work for my dad. He had a company that developed chemicals for the steel industry. I did that for a couple of years.
You know, with a family business, sometimes it works, sometimes it doesn't, so I backed away. I had a friend who had a car wash. I could see maybe putting four, five or 10 all over the Pittsburgh area. So I started looking for some sites.
I found some sites that were 10 feet too small; you needed 10 more feet or a car couldn't turn, or the site was 20 acres and you needed three. So I just couldn't find the right size. I saw three acres (in Cranberry) for sale, but I didn't buy it for a car wash.
I started reading articles on Cranberry. The only thing that was there at the time was the old Cranberry Mall. I thought, why don't I build some small shops? So I hired a consultant who specialized in retail and I hired an architect and we got plans and we got a builder.
What interested you about real estate?
I was just looking for pieces of ground. When the ground couldn't be found for the car wash and Cranberry was showing a strong growth pattern, it just seemed like a simple transaction.
You didn't do the building yourself. You had an architect and a builder, you did leases and you did financing. I really thought I had a decent potential for good returns if I could buy right and build right.
Does it take any special skills to do what you do?
It's more of a general business type attitude; let's find deals that work; if we can find something and we can do our homework and we believe that it's a good business deal, let's get our hands on it.
I don't think you need a lot of skills. I think you have to be determined and have a desire to want to learn. I don't think you need to be a financial genius, because if you're a financial genius and you can't talk to people, you're not going to get anywhere.
If you're a great talker but you have no organizational skills, you're going to dance around forever and never get anything done. But if you have a real desire to do something, it's just investigate, investigate, find out the best thing that you can do or the best property, and find a way to make it happen.
I really mean anybody can do it if they set their heart to it. You don't need an IQ of 150. How to reach: Landmark Properties Group, www.landmarkprop.com