Successful real estate executives will tell you that a major factor in their success is the relationships that they have formed. But Tom Bozzuto, president and CEO of The Bozzuto Group, takes his business relationships to a higher level.
Over the past 30 years, Bozzuto has built many long-term and trustworthy relationships. His relationships are so strong that one of the reasons he formed his own company in 1988 was because Copley Real Estate Advisors – a financial institution with whom he had done several deals – wanted to work with him personally as the general manager instead of with Oxford Development Corp., his former company where he was Mid-Atlantic regional partner.
"When we started our company, we had the good fortune to have an existing relationship that we took over from Oxford," says Bozzuto. "At the time, The Bozzuto Group was the only apartment developer in the greater Washington area with which Copley would do business."
Like Bozzuto, Copley believed in relationships. "Copley believed that you could save yourself a lot of grief and aggravation by doing repeat business with people you knew and trusted, and with whom you become friends," says Bozzuto. "Having that relationship gave our young company instant credibility, not to mention capital. And, we were able to get projects started throughout the recessionary years of the early '90s because the relationship with them gave us an aura which made us attractive for other institutions to invest with us."
Primary Goals While Bozzuto's name is on the door, three additional partners – John Slidell, Rick Mostyn and the late Bernie Lubcher – all of whom helped shape the direction of The Bozzuto Group, founded the company. They bought out the region where they worked while at Oxford, which encompassed Virginia to Maine. These men had been most responsible for the operation of that region with Bozzuto.
"Tom, John and Rick are the most gracious people with whom I have ever worked," says Liz Paulson, vice president at Branch Banking & Trust. "They have a high integrity. Every time I do a deal with them, I always come away learning something new about real estate finance." Paulson has worked with The Bozzuto Group since '88. She established the company's first banking relationship and has continued to work with the company at various banks for which she has worked.
Together, the partners came up with three goals. First, the company would do only residential development. Second, it would develop only within the greater Washington metropolitan area. And finally, all deals would be joint ventures to ensure that the company didn't over-leverage its projects, says Slidell, partner in charge of development operations. "I have never in my career seen anyone as good at dealing with community groups, homeowners and public officials," says Bozzuto about Slidell.
In the early years, Lubcher helped the company say no to risky deals, says Bozzuto. "For instance, at the end of the '80s, land for apartment deals was reaching astronomical prices. And Lubcher, who was 15 years my senior, kept saying 'don't worry about it, it's not the end of the world if you miss this opportunity, it will come around again.' And, of course, we thought he was crazy in 1989, but we listened to him. And, by 1992, when half the industry was upside down, he turned out to be right," says Bozzuto. The deals came back on the market at cheaper prices.
When the company was formed, Mostyn, partner and CFO, engineered much of the financing, particularly the debt financing of the company. "Mostyn is the guy who, if I come up with a half-baked idea at 8 a.m., he will turn it into a million dollar idea by 3 p.m.," says Bozzuto. "He does all the stuff that keeps the juices of the company going."