Ryan Cos. is a real estate developer like few others
Ask Doug Dieck what makes Ryan Cos. U.S. different from most commercial real estate developers and his multi-pronged explanation boils down to a single word: Structure.
For starters, the Minneapolis-based company with 14 offices, including one in Tampa that Dieck heads that has operated for the past two decades, is family owned and operated. Since its formation as a construction concern in the late 1930s, there’s been a Ryan in a senior position. The company today is on its fourth generation.
Unlike some companies that specialize in one particular sector, say shopping center development, Ryan handles everything from senior housing to massive fulfillment centers for e-commerce giants like Amazon.
In Ruskin, for instance, Ryan developed Amazon’s 1.02 million-square-foot distribution project in 2013; the building, with mezzanine space that expanded usable space to 2.6 million square feet with 60-foot-clear ceiling heights was sold two years ago for $103.6 million to a Phoenix-based investment firm.
But Ryan further differentiates itself by keeping construction services, architectural design, engineering work and other services in-house, rather than farming them out to consultants or third parties.
“We are full service,” says Dieck, whose Southeastern region runs from Florida north to Virginia. “And as such, we can adapt our style and approach and services to match what the customer wants.”
Just as important, in regards to structure, Dieck says, is what Ryan is not.
“We’re not a real estate investment trust,” he says. “And that’s important because it gives us flexibility that REITs don’t have because of how they have to conform to Wall Street expectations.
“We don’t have to look a certain way, and we can do what’s best for varying customers. If we were a REIT with a specialty in developing, say, senior living, then we could not be an industrial developer, too.”
Dieck points to Publix Super Markets Inc. as a real world example of Ryan’s flexibility. The company has developed, constructed and remodeled numerous stores for the Lakeland-based grocery giant, but it’s also recently put the finishing touches on a new milk production plant, as well.
“We’re constrained by our risk management, and that’s about it,” Dieck says.
Ryan’s inherent flexibility and diversity also provides the company with some internal cushioning against sector overbuilding or recessions, the theory being that when hospitality goes south, charter school development — of which Ryan has done nearly three dozen — likely won’t have dipped.
“As a generalist, when the economy goes down, we have a better chance of being able to perpetuate ourselves,” Dieck says.
The latest manifestation of Ryan’s diversity, in Florida and elsewhere, can be found in senior housing. Beginning in 2014, Ryan began developing a new breed of senior living communities through a partnership with Grand Living Management LLC.
“We do that by being laser-focused on our clients. It means everything to us. A lot of people and companies say that, but here, we really do it.” — Doug Dieck, Southeastern Regional president, Ryan Cos. US Inc.
To date, the two companies have developed a half a dozen properties, including a 165-unit Grand Living community in Citrus Hills, in Hernando County, which debuted last April.
Another Grand Living project is under construction now in Lakewood Ranch, slated for completion next year.
Unlike many senior communities, Grand Living offers multiple dining options, customized activities and a focus on wellness with private trainers. The communities also are licensed in a way to keep residents in a single apartment, rather than physically shifting them when their physical needs change or mental capacity diminishes.
To that end, Grand Living is structured to contain independent, assisted and specialized memory care units within a single community.
Eric Anderson, a Ryan vice president of real estate development for senior living, says America is facing a 20-year outlook in which aging demographics — and caregivers — won’t be able to keep up with housing supply.
The units are not inexpensive — ranging from $3,000 monthly to $6,000 a month — and cost slightly more than many competitors, Anderson acknowledges, but they offer a new approach to aging-in-place and a focus on lifestyle.
He hopes Ryan will eventually develop one to two Grand Living projects in Florida a year going forward.
“People are still retiring here to Florida, so the demographics are definitely right, but the big question comes in finding the right pockets,” Anderson says. “A lot of others are developing senior living in Florida.”
Dieck notes that Ryan limits its annual development work to 50% of its total business to limit risk and potential capital exposure.
“But then the downside to that is we have to convince people that we are better than the rest to gain that business,” says Dieck, 49 and a nearly 25-year veteran of Ryan.
“And we do that by being laser-focused on our clients. It means everything to us. A lot of people and companies say that, but here, we really do it.”
Dieck hopes to leverage that focus and convert it into further growth. Currently, the Tampa regional office generates gross revenue of roughly $135 million annually, or about 8% of Ryan’s total $1.7 billion.
Dieck’s goal is to push that percentage higher, to 15% of the company’s overall revenue figure. To get there, the Minnesota native plans to expand geographically, possibly with offices or operations in Orlando, Charlotte, N.C., and Atlanta by 2021.
He expects Ryan could generate $250 million from the Florida regional office, and $125 million in revenue from Tampa operations alone, if current economic growth continues.
“We’re in the third most populous state, and growing,” Dieck says. “But what’s sustainable from a business perspective and what makes sense is more important simply than how big we can be.”