In the midst of recession, Creighton Development got a call from 7-Eleven to build a store in a hurry. That launched a fruitful relationship and a strategy for the next downturn.
Dan Creighton has seen it before, that widening crevice between how much developers will pay for property and how much owners believe their property is worth. The last time was just before the recession.
A collection of commercial developments on both sides of College Parkway near U.S. 41 in Fort Myers stands as testimony. Where once stood an empty grocery store, a failing hotel and crumbling retail buildings is now home to new stores, quick-serve restaurants, a Wawa and more. Creighton, founder and partner of Cape Coral-based Creighton Construction & Development, was prepared to offer about $10 million for the former Clarion Hotel site a decade ago. Its owner wanted $40 million.
“He said, ‘You’ll see. I’ll get $40 million for it,’” recalls Creighton. “I said, ‘No, you’ll see. I’ll be back. Sure enough, the market changed and we ended up buying it for $3.6 million from the bank.”
Creighton has built a successful business on such principles — identifying under-used re-developable sites in high-traffic areas and not overpaying. “Good real estate doesn’t go bad,” he says. That philosophy enabled Creighton Construction to weather the recession. It also allowed it to emerge from the downturn positioned to take advantage of prime opportunities.
That, and a partnership he forged with 7-Eleven when Creighton was one of the few commercial contractors standing in Southwest Florida. “In 2010 I got a call from one of the higher-ups from 7-Eleven in October and he said they had to have a store open by the end of the year,” says Creighton. “I thought he was joking. We delivered it from groundbreaking to serving Slurpees in 65 days, and we went on to do another one in 58 days.”
'Our goal here is we want our people to make more money than they've made their entire lives working in this company. You don't want to be the only guy making money because it's not sustainable.' Dan Creighton, Creighton Construction & Development
That turned into a nine-year partnership that was the catalyst to grow Creighton Construction into a multi-state company with more than 100 employees. Now established in Texas and Colorado, it recently extended to the Washington, D.C. metro area. It has now built more than 200 7-Elevens.
Even with explosive growth — while not disclosing revenues, Creighton says the company grew by 100% in 2018 — the lessons learned from the recession are front-of-mind. That's why it has diversified, both geographically and in work. In addition to development and construction, for example, Creighton has added commercial property ownership and management and real estate brokering services.
“Coming out of that recession, one of the keys I wanted to focus on was to diversify our business so we would be in that position where if the economy in Florida suffers, it doesn’t severely harm the company,” says Creighton. “I remember talking to one of my friends in Texas about how tough it was back in ’09, ’10 and ’11, and he told me, ‘Yeah that was a tough six months.’ I knew right then we were changing.”
The company currently has 27 projects coming out of the ground, 45 in due diligence and nearly 70 in entitlement and permitting. The company is also working with a single property owner on multiple sites in St. Petersburg, Tampa, Clearwater, Bradenton and Sarasota, which Creighton expects will be a $76 million to $80 million deal with about $200 million worth of development.
This despite his belief that commercial property market is reflecting conditions that persisted prior to the last recession.
“Today we are paying some of the highest prices for land that I've seen in a long time,” says Creighton. “Anytime things are this busy, it's good, but I know the other shoe is going to drop. I am constantly trying to stay ahead of the curve. We’ve made changes and are doing things I think will help us weather the next recession. We have the right clients and the right team to get us through.”