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Size matters to Greenwalt: After cutting ties to construction firm, developer focuses on small projects

September 24, 2007

Greenfield was up to about $150 million in sales by 2000, when the Greenwalt family sold its commercial construction firm. Founder Max Greenwalt then went to work with his sons Jeff and Lynn at the development company.

About the same time, Greenwalt Development tweaked its mission to focus on senior-living communities and medical office projects-scaling back the size of the firm in the process. The leaner company now has $15 million in annual revenue and nearly $14 million in projects under development.

And in this case, smaller is more manageable.

"Greenfield Builders ... was a pretty sizable company, but there are a lot of headaches that go along with that and a lot of risks," said CEO Lynn Greenwalt. "Now we're more concerned with profitability than growth."

It's a philosophy that affects quality, too.

"[Greenwalt's] ambition is to do projects well as opposed to grow and grow and grow into a mega-conglomerate," said Ehren Bingaman, who worked with the company in his former role as executive director at the Fort Harrison Reuse Authority. "They tend to stick with a core group of people with a strong set of values."

Although counterintuitive, experts say growth sometimes can be a burden.

"The thought has always been that the larger you get, the more insulated you get from competitive pressures," said Larry Cox, director of Ball State University's Entrepreneurship Center. "There's some truth in that, but at the same time a smaller company can be much more profitable.

"Growth is not costless. ... Everything becomes more complicated and a mistake is much more devastating."

In fact, research shows that a third of businesses that fail go under the same year they post their largest revenue, Cox said.

With its smaller firm, Greenwalt's main push now is in building and owning senior housing communities and medical office buildings. Max Greenwalt still owns 50 percent of the company and remains involved, despite spending a good deal of time in Florida.

Greenwalt's senior housing operates under the brand GreenTree. It has two facilities in Indianapolis-one at Fort Harrison and one on Post Road. The company also has properties in Kokomo; West Lafayette; Columbus, Ind.; Mount Vernon, Ill.; and Fairborn, Ohio.

The residential developments start with patio homes-usually duplexes-built for people 55 and older who can live on their own. Most residents are 70 or older, Greenwalt said.

The communities also include assistedliving apartments for seniors, who can have meals prepared for them and get some nursing supervision.

Now the company is rolling out a third residential option that caters to residents with Alzheimer's disease and dementia. Dubbed "memory-care centers," the apartment-like units have more oversight than assisted-living units. Usually, residents share a two-bedroom apartment.

Greenwalt's first such center is open in Kokomo, and the company has started the permitting process to add a 44-bed unit at its Post Road location.

In the transition to its new form, Greenwalt sold most of its retail and industrial holdings, but still is developing and managing office buildings, focusing on smaller projects under 100,000 square feet-ones that huge developers don't bother with.

"[These projects] have enough size to make them good projects but they're not ... profit centers for the big developers so they're not going to spend a lot of time going after them," Greenwalt said.

The company has been very active in Fort Harrison, where it has developed two office buildings and has seven acres under contract at the northwest corner of Lee Road and 56th Street that could accommodate up to 10 office buildings.

Greenwalt snapped up land in the area before the market drove up prices, Bingaman said, and has done its homework to make sure projects deliver the return on investment expected.

"They're a very pragmatic bunch," he said.

But even with an eye on the bottom line, the company didn't try to scrimp on design.

"Sometimes [a developer] comes in and the conversations are about the very minimum they can do to meet the development standards," he said. "The conversations aren't like that with Greenwalt."

In Fort Harrison, the company developed the 30,000-square-foot office building at 8225 E. 56th St. that houses InDesign LLC. Just to the west, Greenwalt is putting the finishing touches on an 18,600-square-foot office building that's 65-percent leased.

In November, Greenwalt should wrap up a 25,000-square-foot medical office building in Greenfield that's already 90 percent leased. And it's making moves to get back into the light industrial side, wanting to focus on smaller warehouses.

Through all the changes, Lynn Greenwalt's Christian faith has been his guide.

"There will be times when you make decisions that aren't always profitable but are the right decision," he said.
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