Norm’s bio from Amterre Property Group website.
Norman Kranzdorf has
had a distinguished career in the real estate industry spanning more than 50
years. He founded Kranzco Realty, Inc., a general commercial real estate
management and brokerage company, in 1979 and in 1992 was a co-founder
of Kranzco Realty Trust, A New York stock exchange Real Estate Investment
Trust. He served as its President and Chief Executive Officer until the June
2000 merger with CV REIT, which created Kramont Realty Trust. He was
Chairman of Kramont until he retired in 2003. From 2003 until 2013 he served as
Senior Vice President for Retail at Urdang Capital Management, Inc., a unit of
The Bank of New York Mellon. From 1972 to 1981 he was president of Amterre
Development, Inc., a successor to Food Fair Properties, Inc., a major
shopping center owner and management company.
Norman is a founding
member and past Trustee of the International Council of Shopping Centers.
He was also a
founding member of the University of Pennsylvania Wharton School Real Estate
Center and served on its Advisory Board.
He currently is an
occasional lecturer at Hunter College in New York City. He has lectured at the
ICSC University of Shopping Centers since its inception in 1957 on various real
estate topics and has written or co-authored a number of real estate books. (Steve
note: Norm’s autobiographical book, A Man of Many Centers, is a must
read for anyone in the shopping center industry).
Mr. Kranzdorf also
served on the Board of Directors of NAI Global, one of the largest commercial
real estate organizations in the world.
Norm and I first met via the ICSC probably in the mid-1980's. He is one of the most respected men in the industry and he has always been an approachable guy. While we never did any deals together, our paths would cross from time to time. Norm has always been passionate about the shopping center industry - and his enthusiasm has never waned. Norm's son Mike, who is President of Amterre Property Group, and I met during the early commercial real estate Internet days when CREOL, the company I was with, had launched the first data platform focused exclusively on retail real estate. Mike has been a great friend, sounding board and trusted advisor for me.
Q. How did you get started
in the commercial real estate industry?
A. I graduated law school in
1955 and went to work in a law firm that did all of Food Fair Supermarkets
work. Food Fair Properties was the company started by Food Fair
Stores to build shopping centers. That happened in 1955 or
1956. They hired Ralph Biernbaum to run that new
company. Ralph, who later became President of ICSC (International
Council of Shopping Centers), wanted his own staff, including an accounting and
a lawyer. I was a young lawyer working at Food Fair Real Estate at that
time and they said, “You go over there and work for Ralph and become part of
his team because you’re the youngest man, maybe you know something about
shopping centers.”
Food Fair Properties was a separate
company, independently owned, listed on the stock exchange by itself but
basically controlled by Food Fair through some common stock and
bonds. Ralph hired me as house counsel, which was almost like a Vice
President of Real Estate.
There were only four employees at the
company at the time: Ralph Biernbaum, Roger Smith, a secretary and
me - otherwise we hired all outside consultants. Ralph then started teaching me
the business. We started getting into bigger projects like regional malls. I
stuck around with Ralph and then in 1965 or 1966 Ralph decided he had made
enough contacts, while President of Food Fair Properties, to go out on his own.
I then was appointed president of the company because I had learned enough from
Ralph to take over. At that time we were a pretty big company. We
had our own real estate department, which included architects and contractors
and everything. So that’s how I got into the real estate business –
as a lawyer assigned to a real estate company.
The Beginnings of the ICSC: I have a
picture on my wall of the 2nd ICSC convention ever
held. This meeting was in February 1958, so 1957 was the first meeting of
the original members of ICSC. Leonard Farber was a developer in
Westchester County, NY and he had the inside track with A&P Supermarkets.
He built a lot of A&P strip centers but he was tired of getting beat up by
the A&P lease negotiations. He decided there should be a group where all
the developers got together, exchanged information and had a standard lease and
discussed how do deal with the chains and the problems presented by dealing
with chains.
In 1957, Len called a meeting in
Chicago and he asked all the companies that were interested in retail
development to come to the meeting. There were not more than a dozen of
us. It was Len Farber and the guys from Monumental Properties and some
others. We were the founders of ICSC. We hired an Executive Vice
President named Al Sussman to run the organization. Al got paid
based on the number of people he could get to join. It got so big,
we had to change his contract – he was making too much!
Q. What advice would you give to
someone who has worked in the commercial real estate industry for a few years
or a college student looking to get his or her start?
A. First of all, if they are
sure they want to be real estate people, then they have to devote their time
and effort to the real estate business. They can either go to work
for one of those very large companies, CBRE or JLL, and get training there. Or
they can go to work for one of the REITs. As a number of people who have law
degrees go into real estate (like me) across have done they could go to work
for one of the retail chains in the real estate department.
I give all of them the same piece of
advice: take advantage of the ICSC and what it does for
students. You know the ICSC has special programs for people who are
in college or law school. It’s very inexpensive to join and go to all their
meetings. They now have a whole division called "Next Generation."
Its' job is to help younger people get involved more.
The ICSC is where Ralph and I got much
of our training and where we really helped run the ICSC for a long
time. Ralph became President and I became Secretary/Treasurer. I was
very involved in their legal work. Ralph was still at Food Fair
Properties. When Ralph left we had come to the understanding that
the words “Food Fair” in our title was really hindering the company. Nobody
wanted to open a ladies wear store in a shopping center owned by a company
called ‘Food Fair’. So, I hired a Madison Avenue ad firm, I don’t
remember their name but they were very big and expensive at the time. They did
word searches and came up with the word Amterre - American Terre (Terre is
French for 'Earth'). We
adopted Amterre Development Inc. as the company name. Food Fair
properties went away and it proved very beneficial and we were able to grow the
company considerably. We did try some other things besides retail, like
apartments but none of that worked and we stuck to malls and strip
centers.
Q. As you look back on your career, is
there anything you wish you had done differently? If so, what?
A. I stayed at Amterre too
long. It was a public company but Food Fair had a lot of control
over the company. There were only two outside directors on the
Board, the rest were Food Fair people. So they basically controlled a lot of
the big decisions. They did not give the employees of Food Fair
Properties, like myself, any encouragement other than our salaries. They
wouldn’t give us stock options; they didn’t give us any equity in the company.
Looking back, I realize I had stayed there too long.
I was there for almost 25 years until
Food Fair went bankrupt and there was a huge bankruptcy case between Food Fair
and Amterre. Amterre never went bankrupt and but Food Fair wanted to
take control of our company and liquidate it for their own
benefit. I went to court and got the judge to agree that I would
liquidate the company. By the time the case was over they got their 40% which
is all they were entitled to.
Q. Who has most influenced your career
and why?
A. Ralph Biernbaum was
definitely a major influence. I got 10 or 12 years of his
experience. He was a developer when Food Fair first hired him. He
took me to every negotiation. After, he would decide, for example,
“I’ve made a deal with Federated for a department store in Baltimore. Norm,
take it over from there.” He was the front man and then he gave it
to me and I had to make all the decisions, not just legal, but the business
decisions as well.
I was involved with all the top guys at
ICSC. One of the great things about the early years of the ICSC was the
camaraderie amongst the developers. I was very close with both Mel Simon,
one of the co-founders of what is now Simon Property Group and Eddie DeBartolo,
founder of The Edward J. DeBartolo Corporation.
One of my favorite stories: Eddie
DeBartolo and I bailed each other out numerous times because, even though we
were competitors, we liked and trusted each other. I once got stuck with a
piece of land outside St. Petersburg, FL and I didn’t know what to do with it;
I just didn’t know. Eddie said, “I’ll put something
together. Sell it to me for what you paid for it.”
But the biggest example of the
relationship he and I had is this: We were building a mall in Beloit,
WI. Ralph Biernbaum and I started it; he left and I took over. The
anchors were Montgomery Ward and J.C. Penney. That was a big deal in those
days and we had an additional piece of land for a third department
store. I made a deal with what was then called Weise Department
Stores to go in as the third anchor. They drove a hard bargain,
which included a clause that said if I don’t get the store built and open in
time for Thanksgiving business, they didn’t want the store and they could, and
would, cancel the lease.
In the summer of that year, it became
evident to me that I wasn’t going to make the deadline. I went and
got an extension on the construction mortgage and I really didn’t know what to
do. The contractor was way behind and I became desperate and I called
Eddie. He had just built a Weise Department Store in a mall about
60-70 miles away. He had his own construction company. “What
should I do, Ed?” He says, “On Friday, fire your contractor. On Monday my
company will show up and finish this store.” Monday his company showed up, had
the store open in time for Thanksgiving and then he sent me a
bill. That’s the kind of relationship there were among the major
players then.
And then I once went to Mel Simon to
see how he was handling his Woolworth leases – which were
horrible. He said, “I’ll tell you what I’ll do, I will FedEx you a
copy of my last Woolworth lease and you can read the changes I got them to make
before I signed it.” Cooperation on things like that was common.
One of the things that you, and probably most people don’t know about,
must’ve been in early/mid-70s when malls were really starting to flourish, The
department stores who had all the power insisted that their leases (or
operating agreements if they owned the land under their building) had
restrictions against the developer leasing to more than 2 shoe stores, for
example, and absolutely no discount stores, like E.J. Korvette’s. We
developers had no choice so we signed those leases. The SEC and FTC sued
all of us both individuals and corporations for restraint of trade - they sued
Federated Department Stores (which, over the years included Shillito's, Lazarus & Company,
Abraham & Strauss (A&S), Filene's and Bloomingdales,
Foley's, Stern Brothers Burdines, Rike's, Goldsmith's, Bullock's
I. Magnin and Rich's). They sued The May Company (a holding company whose
brands included Famous-Barr, Filene’s, Foley’s, Hecht’s, The Jones Store,
Kaufmann’s, Lord & Taylor, L.S. Ayres, Marshall Field’s, Meier & Frank,
Robinson-May, Strawbridge’s and Caldor). And they sued the
developers. There was no defense against it, it was
wrong. We all had to sign a 20 - year consent decree that we would
take those restrictive clauses out of the lease document.
And, 20 years to the day, I got a certified letter that the restriction
was released!
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| Norm Kranzdorf |
