R.J. Waters at 25: Smart growth, simple principles
11/14/2017 02:58PM ● Published by Richard Gaw
Now in its 25th year, R.J. Waters & Associates, Inc. in Kennett Square is a commercial real estate development, management, leasing and brokerage firm that has to date developed over 3.6 million square feet of retail space. Centers under their care and attention contain over 385 national, regional and local tenants that achieve over $800 million in annual retail sales.
Trace the history of nearly every successful company back to where it began and chances are that its beginnings do not come from the incubation of great fortune. Most of the time, they are the very definition of what 'Humble' means, and in the case of R.J. Waters & Associates, Inc., it began at an A&P grocery store in Claymont, where Bob Waters worked as a bag boy.
Born near Lake George, N.Y., Waters moved to Delaware when he was ten with his parents and five siblings, when his father, an accountant with the Scott Paper Company, took a job transfer to Philadelphia and moved the family to Claymont. From the time he was old enough, the young boy always seemed to have a job. He would mop the floors and clean the toilets at the local Knights of Columbus. He took a paper route. He worked at Gussie's Sub Shop along Philadelphia Pike, and when he was old enough to drive, he worked as a delivery man for Chicken Delight.
When he was 17 years old, Waters began a job at the local A&P, and continued to work there part-time when he was in college. After graduation, he accepted a full-time job at the store.
He loved the grocery business, and absorbed every facet of it, much to the delight of store management, who placed Waters in a management training program, where he learned the business beside meat department managers and store managers.
In the early 1970s, Waters took an internship in A&P's Corporate Real Estate offices in Philadelphia, and later accepted a full-time job in the department. He eventually left A&P to take the position of Real Estate Director at Charlie Brothers in Greensburg, Pa., a division of the Super Valu grocery store chain.
In 1982, now a married father with two small children and another on the way, Waters moved back to the eastern part of the state as the Vice President of Real Estate and Construction with Giant Food Stores near Harrisburg. Giant had been purchased by Royal Ahold, a company that worked with the Leo Eisenberg Company, a Kansas City-based national shopping center development firm that helped Giant expand in Easton, Reading and Thorndale, and helped acquire new sites in Winchester, Va., as well as in Yardley and Warminster.
"The folks I knew at Eisenberg told me that they were looking to open up an office somewhere near Philadelphia, so I decided at the time that I had spent 12 years in corporate real estate finding supermarket sites for corporations and I knew the leasing business," Waters said. "So I told my wife Denise, 'I can do this. I'm going to throw my hat in the ring and see if I can get that office. I'm 36 years old, and this is my best shot. If it doesn’t work out, I know I can always get a job in corporate real estate.'"
In late 1984, the Leo Eisenberg Company worked out a partnership arrangement with Waters to open the Philadelphia office, and told him that he could place his office anywhere in Pennsylvania east of Harrisburg.
"I decided to put it in Chadds Ford, because my wife’s ancestors were from Chester County, and both of our families were still in Delaware, so it was like coming home," he said. "I began the business in my house. I bought a desk and I put it in my kitchen and worked there, with my small children running around me."
A few months later, Waters moved his office to the second floor of a real estate firm in Mechanicsburg. He received a call from Eisenberg people, informing him of a young intern from Long Island who was going on college break. They asked him if he could work with Waters for a few weeks. He agreed.
The young man's name was Kevin Lahn, who began working with Waters -- searching for locations, conducting research, absorbing information like a sponge -- and when he got back to Eisenberg's offices in South Carolina, he called Waters and told him that he wasn't going back to college to finish his Master’s.
"Could I work for you?" he asked Waters. That was 32 years ago, and Lahn has been with Waters ever since.
"I was doing an internship in South Carolina, and they had me putting dots on maps and identifying trade areas,” said Lahn, vice president at R.J. Waters & Associates. "I was looking for a challenge, and when I began with Bob, we hit the ground running and he worked with me like I had been there for years. He also treated me like a son.”
“Kevin had the same work ethic I did,” said Waters, “and over the years we grew to complement each others strengths.”
Fran McDonnell, residing locally in Pocopson Township, is another long-term member of the organization, handling leasing duties for almost 25 years.
Over the next 15 years, Waters and Lahn -- with help from office manager Nancy Talley, who, like Lahn, has been with the company for the past 32 years and is now a partner -- developed ten shopping centers that made up more than 1.5 million square feet of new retail space.
In the early 1990s, the real estate market went into a downslide. Banks weren't lending to developers. Several developers went bankrupt or were on the verge of it, while others sought refuge in joining real estate investment trusts. In the midst of this calamity, coupled with the news that the Eisenberg Company was selling off some of its assets, Waters saw it as an opportunity to go into business on his own.
In May 1992, Bob changed the name of the company to R.J. Waters & Associates, Inc. in Chadds Ford, later moving the office to Kennett Square in 1994. Since that time, the company has become one of the Northeast's leading providers of commercial real estate development, leasing and property management, and has developed and now manages 23 shopping centers in three states. Those closest to Kennett Square include The Shoppes at Longwood, the Shoppes at Dilworthtown Crossing in West Chester, Goshen Crossing in West Chester, Fairfield Place in Exton, and the Shoppes at Jenners Village in West Grove. Each center supports tenants that sound like a roll call of nationally-known names: Starbucks Coffee, TJ Maxx, Famous Footwear, Giant Food and Hallmark, as well as hundreds of locally-owned businesses.
With every project, R.J. Waters & Associates incorporates the Smart Growth model of development that creates retail opportunities based on consumer need; targets those opportunities in areas convenient to existing communities; and develops attractive-looking centers that incorporate architectural details and natural landscaping that compliments the surrounding area and enhances "curb appeal."
Waters said that one of the keys to the company's success is to be able to identify opportunities early, through studying demographics and determining need versus existing supply. Sometimes, the keys are right in front of you, he said.
"In the planning that became the Shoppes at Longwood Village in 1987, for example, I lived in Pocopson Township," Waters said, "so it was easy for me to look at the growth in the area, and after living here for two years, I knew that people needed to go to the other side of town or all the way out to Concord Pike in Wilmington just to do their grocery shopping.
"Often, it comes down to determining whether an area is over-stored or under-stored. The Kennett Square area at the time was vastly under-stored."
Lahn said that the Shoppes at Jenners Village was developed out of the same need.
“We realized that area didn't have any flexibility in its retail choices, which was forcing nearby residents in the area to go all the way out to Oxford and Kennett Square to do their shopping,” he said. “We looked around and found a location that made sense on Baltimore Pike and Route 796. At first, some of the potential tenants were reluctant to come on board, because all they saw was farmland. We drove them around for five hours to see the number of new developments in the area, and then we took them up in a helicopter, which gave clear evidence that this would be a prime location for them.”
Like his father, Joe Waters spent the better part of his younger years putting the strong work ethic he inherited from his father into practice. He worked at the Arby's in Painters Crossing, at Molly's Ice Cream, at the Hartefeld National Golf Course as a valet parking attendant, as a landscaper at J. Franklin Styers Nurseries, and as a laborer for a general contractor in New Jersey. After college, Joe spent nearly seven years in Washington D.C., which included four years at PricewaterhouseCoopers and two years at the private equity firm the Carlyle Group. Although his father never pushed him to join the company, "he may have hinted at it and shared his knowledge of the real estate industry," said Joe, who joined R.J. Waters & Associates 12 years ago, and is now its president. "In the back of my mind, I always figured that I would come back home and work with my father. I put my time in and learned a lot in Washington, D.C., but after seven years, I realized that it was time to come back. It started as one day a week, and one day turned into three days a week, and eventually, there I was, working full time."
Bob said Joe joined him at an ideal time and brought management and technology skills that they really needed to move them into the 21st century.
Bob and Joe are far from the only family members to work for the company. Bob's brother Dan, the company’s CFO, has also been with Bob for 25 years, while his wife Denise works part time as director of marketing. Prior to starting families of their own, his niece Jessica worked in lease administration, whilehis daughter Michele worked in property management and leasing. In the last year, Joe’s second cousin Kevin started with the company as well.
Managing 23 shopping centers is a constant challenge, one that dovetails with a population that has embraced the computer as the "go-to" form of shopping. The comfort factor in tapping a few keys has effectively killed off two former top players in the shopping center market: bookstores and video rental locations, and new online grocery order and delivery services has made grocery shopping more convenient and sometimes less expensive.
These surging trends have left companies like R.J. Waters & Associates re-imagining the use and purpose of the shopping center, a matrix that Joe said the company has put a lot of effort into.
"We've always focused on neighborhood and necessity-based shopping centers that provide convenient food stores, pharmacies and dry cleaning businesses, that are to an extent recession proof, and less affected by the internet, rather than rely on tenants/concepts that ride purely on the up and downs of the economy," he said. "Because people's lifestyles are changing, we've also added more restaurants, lifestyle tenants, and medical uses to our centers as well.
"The future of the shopping center is to create them in a way that they become mixed-use destination points that give consumers an experience at their shopping destination, which may include live, work and play. We’re always looking for ways to incorporate a mix of uses while constantly evaluating the synergy of the tenants. Outdoor gathering spaces have also become a focus as they compliment the changing face of a traditional retail center."
The 70-acre Shoppes at Belmont, located in the vibrant commercial center of Manheim Township in Lancaster County and scheduled to open in 2018, is a prime example of Joe's description. In partnership with B&F Partners and Charter Homes & Neighborhoods, R.J. Waters & Associates is transforming a commercial-zoned tract of land into a dynamic Main Street-like setting of retail stores and restaurants and residential housing, with a central plaza with a small stage, a bus stop, a 50-foot-tall water fountain, several restaurants with outdoor seating, and multi-modal accessibility for bicyclists along an intricate trail system that connects residents and shoppers to downtown Lancaster and other trails in the township.
Perhaps most importantly, the Shoppes at Belmont will preserve several areas of the historic property, including the renovation of an historic home and the inclusion on the historic registry, a relocation of the main barn, and the renovation and preservation of several lime kilns which once serviced the 3 acre quarry on the property. Through the Manheim Township Transferrable Development (TDR) program, the project will also be preserving farmland in Lancaster County through the purchase of 77 TDRs, which equates to approximately 40 acres of preserved farmland.
As the company begins its second half century, it does so with an eye toward continued Smart Growth, and while it continues to look for opportunities for development, it is also looking for opportunities to bring their breadth of knowledge and experience to lease, manage and maintain the day-to-day operations of existing shopping centers for other third-party owners and operators.
"Ten years ago, we were creating a development project every other year, but now, there is increased competition, less opportunities, and obtaining entitlements are taking longer while the cost of these projects are becoming more and more expensive," Joe said. "While we continue to seek development opportunities, the reality is that we're not predicting the same growth in the next 25 years as we did in our first 25 years."
"We tell our staff that if we're going to handle a shopping center for another company or owner, we're going to treat it like we own it," Bob said. "People can feel, sense and touch our existing centers, but the same is true for those we help to manage. We want those who visit them to be proud of them, and it's our job to make them look appealing and take care of them."
R.J. Waters & Associates' reputation has been built on being smart but also very choosy; rather than pitch its development tents in several locations, it has chosen to develop a finite number of shopping centers in markets where the need is at its greatest, and the location is second to none. It's a long-term view of real estate that has served the company well, Bob said.
“Most of the real estate companies who started when we started are no longer around,” Lahn said. “They either went out of business or were bought out by real estate investment trusts, but we've persevered, which is a testimony to Bob and the many people in our company.”
Bob said he has been fortunate to have several mentors in his life, as well as some great long-term partners. Among those has been Denise, his wife of 43 years, who he said has believed in him and supported him as he developed the business. Now beginning its second half century, R.J. Waters & Associates, Inc. has been a family of several generations, connected from one to the next, and beyond.
"I am grateful that the next generation is ready to carry on the business, but the credit for this really goes back to my parents, and my grandparents before them," he said. "We haven't done the most of any real estate developers in the world, but what we have done has been done with quality, while also fulfilling a community's need. We're a fairly conservative company, and that's one of the reasons we're still around today.”
To contact Staff Writer Richard L. Gaw, email firstname.lastname@example.org.