Firm History I Professionals I Investment Partners

Firm History

After working for several leaders in the real estate industry, Landon Butler founded Landon Butler & Company (LBC) in 1972 as a multi-family development company in Atlanta, GA, where LBC developed apartments under the Federal mortgage insurance programs. In 1976, Mr. Butler was invited by U.S. President-Elect Jimmy Carter to join his Administration as Deputy to the Chief of Staff. After serving four years with the Carter Administration, where his duties included serving as White House liaison with organized labor, Mr. Butler recognized that commercial real estate was becoming an established asset class for multi-employer and public employee pension plans seeking additional diversification in their investment portfolios.

During that same period, many pension plans trustees started to insist that their pension plan dollars be used to strengthen their communities, provide work for their industries, and create jobs for their members. Consequently, Mr. Butler focused LBC's business on the development of real estate investment funds designed to deliver highly competitive, risk-adjusted returns, and, as a secondary benefit, create union jobs and economic activity in the regions where pension plan beneficiaries lived and worked. By 1981, LBC had become a full-service institutional investor relations firm.

In 1982, LBC, along with Kennedy Associates Real Estate Council, LP (Kennedy) of Seattle, co-founded the Multi-Employer Property Trust (MEPT), a real estate equity fund designed to address the expanding investment goals of many U.S. pension plans. From its inception, MEPT employed a core investment strategy that focused on stable income, low leverage, liquidity, and diversification. In addition, LBC and Kennedy, together with their initial investors, sought to demonstrate that a well-managed equity fund comprised of high-quality, commercial real estate investments developed from the ground up with union labor could produce superior returns and create new jobs for plan beneficiaries.

MEPT began in 1982 with $16 million in investment capital and five pension plan investors. Over the past twenty-five years, it has grown to over $7.0 billion in net assets and has more than 330 pension plan investors. Today, MEPT owns 180 commercial real estate properties in 25 urban markets across the United States. Since its inception in 1982, MEPT has earned a total return of 9.6 percent, gross of fees. As an important secondary benefit, MEPT has created more than 52 million job hours for building trades members across the country and has generated more than $9.9 billion in economic activity in its target markets.

Product Innovation

Based on the success of MEPT, LBC partnered with other investment management firms to form additional funds for pension plan investors. LBC's other products were structured to respond to investors needs to further diversify their investment portfolios.

In 1994, LBC introduced Poland Partners, LP, a partnership between LBC, Innova Capital of Poland, and Avalon Ventures. This fund was truly unique as it was the first private venture capital fund dedicated to pursuing equity and equity-related investments in small and medium private enterprises in post-communist Poland. Poland Partners was an investment vehicle specifically designed for multi-employer and other pension plan investors who saw an opportunity to participate in the new Polish economy. The fund concluded at the end of 2006.

Subsequent product launches focused on LBC's core competencies in domestic real estate investment. LBC has co-sponsored several opportunistic real estate funds and specialty value-add funds. Beginning in 1997, LBC partnered with The Bernstein Companies, a Washington, DC based real estate company, to form a series of real estate limited partnerships called the Consortium Series. These funds were established to make investments in the Mid-Atlantic region of the U.S., and by using leverage and pursuing union-built renovation and new construction opportunities, aimed to achieve favorable returns for its investors.

LBC also launched a series of closed-end, value-add funds, the Multi-Employer Series, which focused on ground-up development opportunities utilizing 100% union labor. In 1999, LBC, with Kennedy and another partner, CS Capital Management, Inc.. organized the Multi-Employer Development Partners, L.P. (MEDP). This fund was designed to enable investors to co-invest with publicly-traded real estate investment trusts and real estate operating companies in new development projects. In 2002, LBC and Kennedy launched Multi-Employer Hotel Partners, L.P. (MEHP), a limited partnership established to reposition hotel properties through renovation, improved management, and development or refinancing in order to produce superior risk-adjusted returns for investors.

Looking Ahead: Strategic Partnership

In November 2006, LBC established a strategic partnership with Bentall Capital, one of the leading real estate and investment management firms in Canada. Through this partnership, Bentall acquired a minority interest in LBC. Bentall is Canada's largest real estate investment advisor and property manager. Originally founded in 1911, Bentall currently serves as fiduciary to more than 100 institutional clients, including many of Canada's largest public sector pension funds and several private sector pension funds. Through its separate accounts, commingled funds, and property management services, Bentall has responsibility for real estate valued in excess of $14 billion.

LBC expects that this partnership will enhance its ability to further grow its platform of products and expand the opportunities to provide investor relations services to top-quality investment vehicles. It will also enhance LBC's management and financial depth to ensure a smooth transition to the next generation of leadership while maintaining continuity in LBC's operations and services.

Additionally, Bentall brings to LBC institutional depth and financial strength. The ownership of Bentall is organized as follows: one third of the company is held by SITQ, which is a real estate investment, management, and development firm whose principal shareholder is the Caisse de Dépôt et Placement du Québec; one third of the ownership of Bentall is held by the British Columbia Investment Management Corporation (bcIMC); and one third of ownership is held by the managing partners of Bentall. Representatives of Bentall’s ownership sit together with principals of LBC on a Board of Managers that oversee LBC’s activities.

Currently, LBC has 12 employees providing services from its Washington, DC headquarters and its office in Los Angeles. Four members of the team are principals in the firm.