When the namesake and founder of Alexander Haagen Properties Inc. stepped down as chairman and chief executive almost two and a half years ago, he could have just hit the golf course after a long career in real estate.
Instead, the then-78-year-old Haagen turned around and formed a private firm based in Torrance, Haagen Co. LLC. The new company has attracted relatively little public notice, but has actively delved back into Haagen's original line of business developing shopping centers.
"We're right back in business where we started," said Haagen, now 80. "Times change, but in a way, everything is the same. We intend to do what we've always done find the best locations and put in the best tenants. Who knows? We might build another 125 centers."
Haagen, indeed, built or redeveloped 125 centers over 40 years, including Media City Center in Burbank and the Baldwin Hills Crenshaw Plaza. He was a pioneer in the inner city at a time when other developers wouldn't touch the area. And although he was criticized for erecting security fences, he was vindicated when the centers escaped major damage in the 1992 riots.
After going public in 1993 to pay down debt and bring in more capital, Haagen became frustrated by Wall Street's constant demands to acquire properties and quickly increase net income and fatten profit margins, rather than undertake ground-up projects, which can take much longer to yield returns. And the company's financial performance sometimes missed analysts' estimates.
"We'd always developed. We weren't happy about the fact we couldn't develop from the ground up," said Alexander Haagen III, the company founder's 57-year-old son, who is now vice chairman and CEO of Haagen Co. "We thought we'd have more freedom to do ground-up development, but we were wrong."
Now the family is back in the game, on their own terms.
"We are much happier as a private company," said Alexander III. "We love the retail business. It's the main thing we've done and what we want to stay focused on."
Haagen Co. is a three-generation family business. The elder Haagen and his son review and prioritize deals and arrange for financing. Alexander IV, the company founder's 32-year-old grandson, assists in leasing, while Haagen Sr.'s wife Charlotte is a senior advisor. (The company founder is actually Alexander II, but is referred to as "Sr.")
Two other longtime executives with the old company also came over to the new one: President and Chief Operating Office Christopher Fahey, who oversees construction and design, and Senior Vice President Andrew Natker, who handles site acquisition, entitlement and major tenant leasing.
"I enjoy being with the people I've been with for many years and doing things we've always done and seeing my grandson learn the trade," the senior Haagen said. "Everyone's family here."
Meanwhile, the Haagens' former company, a real estate investment trust, has been renamed Center Trust Inc.
That company owns about 60 shopping centers, some of which were developed by Haagen. The two eldest Haagens are emeritus members of Center Trust's board, but are not actively involved in running the Manhattan Beach-based company, which has struggled along with other REITs to catch fire with Wall Street investors.
When Haagen stepped down in November 1997, he and his family netted a reported $65 million in the deal, which they used to capitalize the new private firm. They also brought about a dozen properties under the auspices of the new company properties that were held apart from the REIT because they are potential development or redevelopment sites, not the kind the REIT is interested in owning.
They include a 1926 Sears store in Hollywood that the company is still eyeing for redevelopment, as well as shopping centers in Watts, El Monte, Oceanside, Oakland, Phoenix and Stone Mountain, Ga.
The company is also pursuing a host of ground-up development projects, both urban infill and suburban.
Marva Smith Battle-Bey, president of the Vermont Slauson Economic Development Corp., said she welcomes the Haagens back to the inner city. "I certainly thought they were very good at working through the government maze and working with communities, and they have a number of relationships with tenants," Battle-Bey said. "They have had a tremendous impact and can do more."
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