Post Properties, Inc.

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Post Properties, Inc.

One Riverside
4401 Northside Parkway
Suite 800
Atlanta, Georgia 30327-3057
(404) 846-5000
Fax: (404) 504-9388
Web site:

Public Company
Employees: 1,600
Sales: $203.4 million (1997)
Stock Exchanges: New York
Ticker Symbol: PPS
SICs: 6798 Real Estate Investment Trusts

Post Properties, Inc. is known throughout the Sun Belt states for its landscaped apartment homes, but in business terms it is a real estate investment trust, or REIT. Typically, an apartment developer merely builds dwellings, but does not manage them. Similarly, most apartment management companies are not in the development business. A defining feature of Post is that it participates in all phases of the creation and operation of its apartment communities, from initial site selection to construction to leasing to ongoing maintenance and management. As of 1998, Post had more than 29,000 apartment units in Georgia, Florida, Virginia, Tennessee, andthanks to its 1997 acquisition of Dallas-based Columbus Realty TrustTexas. Using a formula involving garden-style apartment dwellingsusually three-story structures which cover a relatively large area of landthe company has experienced steady growth. In the mid- to late 1990s, however, Chairman John Williams began taking Post in a new direction. Keeping with the New Urbanism movement in the United States, Post Properties began constructing and/or renovating multi-story high-rises in urban centers.

A Business Started at the Breakfast Table

Post founder John A. Williams began his multimillion-dollar enterprise at an International House of Pancakes (IHOP) restaurant. Armed with slides of development sites and lots of chutzpah, wrote Jeanie Franco Hallem in 1987, Williams would commandeer a table for the morning and meet prospective investors. Williams began his work day with a 6:30 a.m. breakfast meeting, he told Hallem. We would say good-bye at 7:30 a.m., then my second appointment would arrive. Normally I had two or three breakfasts.

Williamss background included attending the Georgia Institute of Technology, where he earned his B.S. in industrial management in 1964. At the age of 20, he went to work as a financial systems analyst for Georgia Power, the states leading electrical utility. A year later, he moved to the Southern Company, where he worked as a sales engineera job that put him into contact with developers throughout metropolitan Atlanta. In the late 1960s, Atlanta was on the verge of phenomenal growth, which would continue through the end of the century. Williams would become a significant part of that growth. In 1969, at the age of 26, Williams decided that he wanted to start his own business. In 1971, with just $25,000, he founded Post Properties.

Growing with the Post Formula in the 1970s and 1980s

Much of Williamss formula for success with Post Properties revolved around careful attention to detail. The company purports to have started the landscaping concept for apartment complexes. I can promise you, Williams told Business Atlanta in 1987, in 71 or 72, you didnt see flowers in apartment complexes. Ben W. Johnson, in a National Real Estate Investor editorial nearly a decade after the 1987 Business Atlanta piece, expressed similar ideas: Weve lived in Post communities for five years now, he wrote, and weve been pretty darned impressed (and spoiled) by the companys attention to the big things, like attitude (the customer comes first), and the little (beautiful landscaping and grounds maintenance).

Posts overall formula, however, was about much more than flowers. Its upscale apartment communities featured amenities with its yuppie clientele in mind. For instance, Post Lenox Park in Atlantas Buckhead district includes a 24-hour business center with a fax machine, copier, and computer. The company also puts on a number of social events for its renters, many of whom are single and transient; and, of course, service is paramount. For example, a 1987 Business Atlanta article detailed a time when an apartment air conditioner broke down in the heat of the summer. The companys maintenance team had to order a part that would take a few days to arrive. But, because Posts stated policy is one-day service, the company remedied the situation by sending a limousine to pick up the residents and take them to a hotel.

On the management end, the company grew steadily, but carefully. In the early 1970s, prior to the mid-decade recession, there was a lot of capital available in real estate. Many developers entered too many deals, and many people entered into the business of developing who probably should not have done so. The result was exposure to debt, and lenders who possessed little staying power. Post, on the other hand, selected its financing carefully, grew slowly, and thus was able to account for fully 100 percent of Atlantas new apartment construction in 1975 and 1976during the recession. Such a feat could hardly have been replicated in the period of fast growth the city of Atlanta experienced in the 1980s, 1990s, and beyond, but by then Post had become a more significant player in both the Atlanta market and in other cities.

The New Urbanism in the 1990s

Post went public in the summer of 1993, with its stock priced at $25.50 per share. The company had to make another 1.38 million shares available because the initial offering of 9.2 million shares was so far oversubscribed.

Post had certainly succeeded with its well-manicured garden apartment complex formula; but by the 1990s it appeared that the company had possibly succeeded just a bit too much. Numerous other apartment developers in Atlanta and elsewhere were catching on to the idea pioneered by Post and others, spawning thousands of rapidly built units in cookie-cutter complexes that one observernoting the sameness and apparent regimentation in the designcalled yuppie prisons.

The company itself had become aware of the phenomenon, and had begun to look in new directions. It issued a statement, under the heading The Future, at its site on the World Wide Web: In recent years, we have become concerned about the future of garden apartments, particularly those located in suburban areas. Such apartments have become a ubiquitous element of modern suburban sprawl, and have increasingly taken on the undifferentiated characteristics of a commodity product. Due to its misgivings about the potential for garden apartments to appreciate in value, in the late 1980s the company began to explore urban in-fill locationsthat is, areas in once-vacant urban centers that were beginning to become residential again.

The rebirth of the United States cities and towns, termed New Urbanism, spelled an end to years of decay in the nations downtown centers. Interstate highways, the growth of suburbs, and the destruction of historic landmarks during the 1960s and 1970s in favor of box-like glass and concrete buildings had all contributed to the flight of residents from the urban centers. This was particularly true of downtown Atlanta, whose nighttime population consisted mainly of conventioneers and the homeless. In the late 1980s, Post became part of efforts to turn this situation around, and in 1991 it entered into a joint venture with developer Ackerman & Co. to build Renaissance City Center in a blighted area near the Atlanta Civic Center.

With the advent of the 1996 Summer Olympics nearing, Atlanta became the first major city in decades to create a new downtown parkCentennial Park, which was built in an area of abandoned factories and housing projects near the CNN Center, the Georgia World Congress Center, and other important Olympic venues. In March 1996, the Atlanta Journal and Constitution reported that Post had expressed an interest in building apartments adjacent to the park, which was expected to become a magnet to downtown development in coming years. Following the Olympics in 1997, Post proposed a number of additional projects, including a six- or seven-story apartment building near Peachtree Battle Shopping Center and a mixed-use development in a decayed area near the Lindbergh Center MARTA (Metropolitan Atlanta Rapid Transit Authority) rail station. Neither development was likely to be a traditional Post product in the eyes of most Atlantans, but both projects were in line with the companys new focus.

Moving Beyond Atlanta in the Late 1990s

In August 1997, Post announced a merger with Columbus Realty Trust. The $600 million company, based in Dallas, Texas, would expand Posts holdings by more than a third, from over 21,000 units to more than 29,000. In a company press release about the merger, Williams stated that Post considered Dallas to be one of the few major metropolitan markets in the country with the long-term appeal of our home base, Atlanta. Industry analysts agreed that Posts expansion into markets outside its typical geographic area was a smart move, and noted that the decision was made in order to expand, rather than because the company was not faring well in the Atlanta area.

Company Perspectives:

We are committed to building better neighborhoods throughout America, not only for our residents, but for the greater community, taking care to preserve the environment, improve infrastructures, and enhance the beauty of our settings.

Posts expansion beyond Atlanta, however, may have been partly due to other environmental factors as well. A May 1997 Atlanta Journal and Constitution article indicated that increasing levels of government regulation regarding development had made Atlanta a more and more difficult place to build. The company stated its desire to reduce the percentage of its overall holdings that were based in Atlanta from the 70 percent level. Rather than doing this by divesting some of its Atlanta holdings, the company wished to expand into other markets and obtain holdings elsewhere that would increase the companys percentage of non-Atlanta properties.

In October 1997, the Constitution reported that development of the Peachtree property was being held up due to inadequate sewers. An Atlanta official was quoted as saying that the city would prefer to see a sewer developed along Peachtree Street, and it appeared that Post might have to bear the sewer expansions financial burden in order to speed up the process. The problem provided evidence of the sort of bureaucratic boondoggle that was driving Post away from its Atlanta base. Fellow developer Blaine Kelley told the Constitution that the developers were not willing to pay for a major overhaul of the city system down a city street.

Around the nation, evidence of Posts presence began to appear in formerly depressed downtown areas. In November 1997, Max Jarman of the Arizona Republic reported that The missing link to successful redevelopment of downtown Phoenix is about to be added to the chain, noting that Post Properties had taken over a $75 million, 800-unit project in that area. The facility would be built on an 11-acre site, and would incorporate several historic buildings such as the old Gold Spot Market and the bishops house for the Episcopal diocese. It was thought that when completed, the project would help bring a new wave of downtown residents into the area, who would then support the citys restaurants, drugstores, and other service businesses.

In Denver, Colorado, another project was under way, and Erika Gonzalez wrote in the Rocky Mountain News that Post Properties would breathe new life into the site of a hospital closed since 1993. The project, which would cost $80 million, would include 1,100 residential units, 70 loft apartments, 50,000 square feet of retail space, and two 500-space parking garages.

Throughout the country at the end of the 1990s, Post left its mark on many once-dead urban centers. In 1998, in its Atlanta base, Post was putting the finishing touches on a development which exemplified the New Urbanism. Riverside, located off Northside Parkway near the Chattahoochee River, would feature living spaces modeled on New York brownstones, with retail shops on the first floor and apartments above. Residents would be able to live, work, and socialize in the same place, without once having to get in their carsan idea almost previously unheard of in Atlanta. There is quite frankly nothing like it in existence in the Southeast, Williams told Martin Sinder-man of the Atlanta Business Chronicle.

The development, meanwhile, had sparked controversynot over its design, but its history. The latter was an entirely fictionalized account which Post presented in advertisements that were pen-and-ink drawings of the buildings and browning photos of the imaginary residents. The advertisements fine print, however, revealed that the history was simply a tale spun to add interest to the project. Hence, for instance, it was not true that one building in the complex was a grist mill and a boarding house a century ago. During the Civil War, that building became a hospitalone that camouflaged a small arsenal that played a crucial role in the Battle of Peachtree Creek. In reality, the buildinglike the rest of Riversidehad been built in the late 1990s. Although the hoax inspired quite a few letters to the editor, few residents seemed truly concerned. As for Williams, he said that the whole affair was a lot of fun for us.

Post, in fact, decided to move its corporate headquarters to Riverside in June 1998. There, the company continued to focus its energies on fulfilling its stated mission: To provide a superior apartment living experience for our residents. As the 20th century drew to a close, Post Properties seemed to possess the past experience and future focus to succeed well into the years to come.

Further Reading

Boyd, Jennifer, More 4th Ward Apartments, Business JournalCharlotte, April 6, 1998, p. 1.

Friedman, Alan, Post Initial Offering in Big Demand, Marietta Daily Journal, July 20, 1993.

Gonzalez, Erika, Builder Breaks Ground at St. Lukes Site, Rocky Mountain News, December 16, 1997, p. 8B.

Hallem, Jeanie Franco, Post U.S.A., Business Atlanta, September 1987, p. 34.

Harte, Susan, and Maria Saporta, Post Properties Goes West, Atlanta Constitution, August 5, 1997, p. El.

Jarman, Max, Vital Urban Housing to Fill Bleak Area, Arizona Republic, November 14, 1997, p. Al.

Johnson, Ben W., Giving Post-Haste a Whole New Meaning, National Real Estate Investor, June 1996, p. 4.

Lawson, Richard, Post Ready to Move Ahead on Bennie-Dillon Revitalization, Nashville Business Journal, May 8, 1998, p. 1.

Lunsford, Darcie, CityPlace Sparks Downtown Homes, South Florida Business Journal, May 1, 1998.

McCarthy, Mike, Downtown Apartments: Major Developer Plans to Build 800 Units, Business JournalSacramento, April 17, 1998, p. 1.

Salter, Sallye, Post Properties to Use Funds from Stock Offering to Cut Debt, Atlanta Constitution, May 14, 1993, p. F5.

____, Two Peachtree Road Projects Held Up by Sewer Inadequacy, Atlanta Constitution, October 16, 1997, p. D2.

Saporta, Maria, Post Hoping to Hang Its Hat at More Places Outside Town, Atlanta Journal and Constitution, May 23, 1997, p. E3.

Schneider, Craig, A Charming, Fictional Story: Plan Invents Past in Present, Atlanta Journal and Constitution, March 23, 1998, p. El.

Sinderman, Martin, Post Now Embracing New Urbanism Movement, Atlanta Business Chronicle, May 1, 1998, p. 17B.

Sotto, Cindy M., Post Downtown Is a Go, Atlanta Business Chronicle, May 27, 1991, p. 1.

Westfall, Jill Elizabeth, Apartment of the Week, Atlanta Journal and Constitution, September 7, 1997, p. H53.

Wilbert, Tony, Bidders Lining Up for MARTA, Atlanta Business Chronicle, January 16, 1998, p. 1A.

____, Post to Develop Apartments Near Peachtree Battle, Atlanta Business Chronicle, September 19, 1997, p. 1A.

Judson Knight