“I have a huge aversion to losing money,” he said.
Childress, a managing partner of a privately held real estate development company with a $1 billion property portfolio, said this philosophy has kept his company alive during the most recent recession.
Childress and his founding partner, Fred Klein, co-manage the company. Klein is located in the firm’s Charlotte office. The pair rose through the ranks of commercial real estate development company Trammell Crowe. They broke from the company in 1988 with a small portfolio of properties and 188 employees, founding Childress Klein in Cobb County.
A part of the original portfolio was the Galleria Center complex on Cobb Parkway, where the company’s Atlanta office and its 51 employees are still located today.
“We wanted a regionally based business. That was our whole inspiration for starting the businesses,” Childress said.
With 247 employees and a portfolio of 86 properties, the company offers development, leasing, property management and project management services. The company manages 109 buildings for third-party owners.
High-rise office building construction has been non-existent in recent years, but despite the lack of new development, the company is only a few million dollars smaller in total assets than at the peak of the last economic cycle, Childress said.
“The recession has had a very significant impact on us. We have not built a new office building in Atlanta in eight years,” said Childress. “We simply just quit building those buildings. … I long for the days of a vibrant economy that will enable us to build exciting new real estate projects.”
In lieu of building office buildings, the company has entered into two new market segments: large-scale, climate-controlled self-storage and multi-family apartment complexes, Childress said.
“The recession gave us time to think about other opportunities,” Childress said.
Under the brand name of Space Max, the company has developed three multi-story, 100,000-square-foot storage complexes in in-town Atlanta communities, two of which they have sold. Childress said they will be announcing another Atlanta location soon and have plans to build additional ones in other Southeastern cities.
“We like this business a lot,” he said. “We are prone to label this business ‘recession-proof.’”
Additionally, the company has apartment complexes under construction in Charleston, S.C., and downtown Charlotte, N.C.
“There is a lot of competition, but we know our markets well,” Childress said. “We think we can implement a multi-family strategy and be successful.”
Childress says he has weathered other storms in the real estate business.
“For even the strongest — and I would put us there — it is still survival mode,” Childress said. “How do you continue to make your business viable?”
He said that for his company, the secret is not being dependant on new development and being your own investor in the projects you do develop.
“We own over 6 million square feet of buildings. The cash flow coming off those buildings keeps us comfortably afloat,” he said. “We own most of the buildings, so we are stewarding our own money.”
Childress’ partner attributes much of their company’s success to him.
“Don has been a good partner and a good friend,” Fred Klein said. “He has great vision, integrity and exceptional real estate skills. Any success we have enjoyed over the years is largely the result of Don’s leadership.”
CEO Profile: J. Donald Childress
* title: Senior managing partner and co-founder of Childress Klein Properties.
* age: 64.
* education/year graduated: Washington and Lee University, bachelor’s in 1970; University of Texas, Master’s of business administration in 1971.
* family: Wife, Sidney; Children: J.D., McKinley, Trevor, Stuart, Preston, Mary Collier.
* first job: Only job — real estate development.
* lesson learned the hard way: Developing the Galleria Mall, which was a financial failure because of lack of Anchor Tenants. Fortunately was able to work with Cobb County, who converted it to the very successful Cobb Galleria Centre.
* advice to the next generation: Get a good education, get involved in your community through volunteer support and leadership, and treat all people with respect and dignity.