156: The Richest Real Estate Investor in America

SHOW NOTES FOR EPISODE 156: THE RICHEST REAL ESTATE INVESTOR IN AMERICA

We say this is “Fun Facts Friday” but lately, we haven’t had much “fun” stuff.  So, we thought we would do something a little different and profile someone who has made a major impact through his creative efforts via real estate investing.  In this episode, Bill profiles someone who is not necessarily well-known, even though he is the richest real estate investor in America.

I remember as a geography major, one of my favorite specialized areas of study was economic geography.  Economic geography is the study of the location, distribution and spatial organization of economic activities across the world.

We had an assignment: looking at aerial land mass classes and discussing how you can look at aerial maps to find sprawling areas and spot undeveloped land between two sprawling areas to know where to invest in raw land…

Well, that’s what our featured profile person must have done.  Viewing southern California, which is one of the most expensive real estate in the world.  And seeing the massive Los Angeles swell, San Diego doing the same and right between the two, connected by the 405 Fwy is this largely undeveloped area called Orange County.  Do you know who I’m talking about yet?

When it comes to real estate wealth, one Donald is the clear winner.

California native Donald Bren is the wealthiest real estate baron in America, with an estimated net worth of nearly $17 billion, according to Bloomberg’s Billionaires Index, nearly six times President Trump’s fortune.

Unlike Trump, whose wealth is inherited according to Bloomberg, Bren is a self-made mogul who turned a $10,000 bank loan into a multi-billion dollar empire.

Bren’s privately-held real estate investment company, Irvine Company, is the largest landowner in California.

Irvine Co.’s portfolio of properties exceeds 110 million square feet and includes office buildings, apartments, marinas, and hotels, most of which is located in picturesque Orange County. Bren also has a footprint in Trump’s native New York City as the majority owner of the New York Met Life building.

In total, Bren owns one-fifth of Orange County, an area five times the size of Manhattan, according to Bloomberg.

At 85 years old, Bren, a former US Marine, is still running the show as chairman of Irvine Company — here’s the story behind his success.

Donald Bren was born in Los Angeles in 1932. His father, a movie producer, and his mother, a patron of the performing arts, divorced when he was 10. His father remarried to actress Claire Trevor and his mother to a well-off industrialist.

Bren and his brother attended Beverly Hills High School and spent their summers working as carpenters for their dad’s real estate development business. A key lesson he learned from his father: “When you hold property over the long term, you’re able to create better values and you have something tangible to show for it,” Bren told the Los Angeles Times in 2011.

Bren earned a partial athletic scholarship to the University of Washington for skiing. He was reportedly a stylish skier and an avid competitor who was set to go to the 1956 Olympics but couldn’t participate because of a broken ankle.

He earned a degree in business administration and economics from UW in 1955. After graduation he served as an officer in the US Marine Corps for three years, leading reconnaissance teams on the beaches of Camp Pendleton.

In 1958 at the age of 25, Bren took out a $10,000 bank loan to found Bren Company and build his first house on Lido Isle in Newport Beach, California. He built and flipped a succession of homes, riding the wave of Orange County’s late 1960s real estate boom.

From 1963 to 1967, Bren was also busy as president of Mission Viejo Company, an Orange County property development firm that designed an 11,000-acre, master-planned community.

In 1970, International Paper Co. bought Bren Company for $34 million. But just two years later, after a recession and downturn in the real estate market, Bren bought his company back for just $22 million.

After living and working in Orange County for nearly two decades, Bren set his sights on the county’s largest land development project: Irvine Ranch, a 93,000-acre property that includes nine miles of coastline along the Pacific and accounts for 20% of the county. Founded by James Irvine and two others in 1864, the remote and drought-stricken property was initially part of the Mexican and Spanish territory that stretched from the Santa Ana Mountains to the Pacific Coast.

In 1977, Bren bought Irvine Company, owner of the Irvine Ranch, along with five other stockholders, including the late-James Irvine’s great-granddaughter, for $337.4 million. Bren owned a third of the company initially, but in 1983 he bought out several other shareholders and increased his position to 86%. In 1996, Bren became the sole owner, buying out minority shareholders for at least $80 million.

Over the last two decades, Bren has been in charge of the ranch’s development, including the master planning of some of the wealthiest and most desirable communities in America — including parts of Anaheim, Laguna Beach, Newport Beach, and the entire city of Irvine.

The 250,000-population city of Irvine — often referred to as the epicenter of Orange County — typifies the ranch’s hallmark “live, work, and play” development vision. Irvine is home to residential villages, shopping centers, parks, top-ranked schools, and headquarters for more than one-third of Fortune 500 companies.

“Over the years, Bren has sculpted the look of modern suburbia in California and, in the process, become one of the country’s largest and most-copied developers of planned communities,” the Los Angeles Times wrote in 2011.

The Irvine Company has also donated 57,000 acres of ranch’s land — more than half of the original total — to be permanently preserved. Most of it has held National Natural Landmark status since 2006.

The Irvine Company, which accounts for almost all of Bren’s $17 billion net worth, comprises “46.5 million square feet of office properties, 160 apartment communities, more than 40 retail centers, five marinas and three golf courses, as well as three hotel resorts,” according to a company spokesman.

Though primarily focused in Orange County, the company also owns properties in West Los Angeles, San Diego, and Silicon Valley. Outside of California, Irvine Company owns a 97.3% stake in New York City’s 58-story MetLife building, worth nearly $3 billion. And in 2014, the company purchased a 60-story skyscraper in Chicago for $850 million.

Bren’s personal life has been more bumpy than his real estate career. He has five children from three marriages and one courtship. The billionaire went to trial in 2010 after his ex-girlfriend and their two children — then 18 and 22 — sued Bren seeking $130 million in damages from alleged unpaid child support. Bren, who had already paid $9 million in support over the years, won the case.

Interestingly enough, not much is known about the personal residences of one of the most prolific real estate developers of our time. It’s been reported that Bren, his third wife Brigitte, and their son, live on Newport Beach’s Harbor Island, an exclusive waterfront community made up of multimillion-dollar homes.

Most of Bren’s public persona revolves around his philanthropic endeavors, and his lifetime giving exceeds $1.3 billion. In 2010, he was given the first “Donald Bren Legacy of Giving Award” — an award started by the backers of Orange County’s National Philanthropy Day. “For me, philanthropy has always been about simply creating new community partnerships, partnerships that will be valued forever,” Bren said.

Bren regularly contributes to K-12 schools and the University of California system as well as research, the arts, and conservation. “I believe the greatest investment we can make is in the education of our children,” said Bren. According to his website, the Donald Bren Foundation has donated $200 million to educational causes.

Bren’s enduring legacy, however, will continue to be his real estate empire and his role in shaping some of the most coveted communities in America. “In terms of great visionaries who have influenced Southern California, I’d put him up there with Walt Disney,” Rick Caruso, a former member of the Irvine Company board, said in 2010.

Reference: Businessinsider.com

Real estate tycoon Xu Jiayin, founder of China Evergrande (EGRNF), is now the country’s richest man after his wealth ballooned to $43 billion, according to the latest Hurun China Rich List.

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