Before they had fancy suits or fast cars, the four owners of Lauth Property Group were resourceful teen-agers, busy finding ways to make money.
Chairman Bob Lauth, President Michael Curless and CEO Greg Gurnik each started neighborhood lawn-care businesses. The company’s treasurer and chief accounting officer, Larry Palmer, hawked programs at the Indianapolis Motor Speedway.
At the time, their hard work and entrepreneurial instincts helped scrounge up date money. In the last few years, it’s helped them turn Indianapolis-based Lauth into one of the nation’s largest real estate developers.
The company built $592 million in projects in 2006, up from $143 million in 2004. During the same time period, the company grew from 168 employees to 405. It doubled in revenue from 2004 to 2005, then doubled again from 2005 to 2006. The company plans to pull back the reins on growth a bit now, having carved out an impressive resume.
Lauth is 13th on the 2007 Commercial Property News list of top developers, behind national powerhouses such as Sacramento, Calif.-based Panattoni Development Co., Dallas-based Trammell Crow Co., and Indianapolis rival Duke Realty Corp. And they’re building high-profile projects, most notably the 19-story NASCAR Plaza in Charlotte, N.C.
“They have grown substantially,” said Abbe Hohmann, senior vice president and principal at the local office of St. Louis- based Colliers Turley Martin Tucker, who worked with Lauth on land assembly for Clay Terrace. “They’re now a national developer, dealing with Colliers brokers all over the country.”
The privately held company has projects in more than 20 states and is licensed in every state except for Hawaii. Their focus is on the “smile” states, from California down to Texas and up through the Southeast. They’re also nurturing a healthy pipeline of future projects, with more than 2,500 acres under control across the United States.
Only about 20 percent of the company’s projects are in Indiana these days-not bad for a firm that has focused on Indiana for most of the 30 years since it was founded in 1977.
In 1995, Lauth bought out his original partner, Terry Eaton. The firm is now owned by Lauth, 56, along with Curless, 43, Gurnik, 52, and Palmer, 49. The men would not disclose the ownership breakdown.
The owners say they have no plans to take the company public, unlike fellow local development powerhouses Duke, Simon Property Group and Kite Realty Group. Bob Lauth said private ownership is one of the company’s greatest advantages, since it allows for more of a longterm focus.
“Public companies are judged quarter to quarter,” he said. “In the real estate business, the cycles are much longer than that. We think it’s a fundamental benefit being privately held.”
Another strong point for the company is its diversification. The company’s efforts are spread, roughly evenly, over office, distribution, health care and retail. Lauth said that should help shield it from downturns, including the housing slowdown. So far, Lauth’s growth has been organic, but it may consider acquisitions in the future.
Taking care of employees
The executives say Lauth’s biggest challenge is to attract and retain the highestcaliber talent. They’ve made it their top priority over the last several years.
Perks include an in-house gym, drycleaning service and top-of-the-line pay and benefits. Top employees are awarded with free lunches on Fridays, upscale dinners and all-expenses-paid vacations. All the efforts are paying off: Lauth’s turnover is about 14 percent, compared with an industry average of 36 percent.
New employees are welcomed with an actual red carpet and a personal note from Lauth, who also writes to each employee on their anniversaries.
They decided to close the office at 4:30 p.m. on Fridays, with no exceptions. When the early closing time began, tow trucks circled the lot and hooked up cars still on the premises at 4:35 p.m. They didn’t actually tow the cars away, just circled the lot with them attached to make a point.
“It’s important because people have families,” Curless said. “There’s a balance.”
Some days, Bob Lauth pushes an ice cream cart around the office. He even shares his favorite motivational books with employees. He buys them in bulk, leaving several copies in conference rooms.
Recent selections include “The Purpose Driven Life” by Rick Warren, “It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy” by Capt. D. Michael Abrashoff, and “Father to Daughter: Life Lessons on Raising a Girl” by Harry H. Harrison Jr.
Lauth has three daughters, all in their 20s. One is a lawyer, another a physician, and the youngest is a sophomore at Indiana University. At least for now, none of his daughters plans to follow in the development business.
One of the challenges of fast growth is maintaining the culture with new hires, and across regional offices. Even at this, Lauth said the company is strong.
Asked about any weaknesses in the company, Lauth said he couldn’t think of any.
“Are there things we can get better at?” he asked. “Everything.”
One challenge will be cultivating another generation of company leaders with the same sort of entrepreneurial instincts.
Lauth, Curless, Gurnik and Palmer didn’t know each other at the time, but each attended public high schools in Indianapolis, where they played basketball, wrestled and ran track. But that’s only when they weren’t delivering newspapers or selling stuff door-to-door.