November 11, 2015

Successful African American Real Estate Mogul Inches Closer To Billionaire Status

by Chloe Sorvino - 

Don Peebles is already one of the most successful African American CEOs in the country, but his recent building spree has put him one step closer to becoming a billionaire.

Forbes now estimates that his net worth is more than $700 million – and with several nine-figure developments underway, his fortune could very well keep going up.  Peebles, 54, says he’s built up his six million square foot portfolio by picking deals that transform and open up opportunities. He’s known for weaving in $10 million and up apartments alongside redevelopment projects in some of the most impoverished areas in cities across the Eastern seaboard.

“The projects we tend to be attracted to are those that have greater impact, greater symbolism,” Peebles said. “Our number one focus is that our buildings are vehicles or symbols of opportunity. Our goal is to develop projects that transform communities.”

The son of a car mechanic, Peebles grew up in D.C.’s Petworth neighborhood until age 5, which is now a rapidly gentrifying area. After his parents divorced, he moved briefly with his mom to Detroit before they came back to D.C. for good. It was then that he began volunteering for political campaigns and working as a page on Capitol Hill during high school. Peebles said long-serving D.C. mayor Marion Barry mentored him, and at the age of 24, Barry appointed him as the city’s chairman of the real estate tax appeals board.

In 1987, the Rutgers University drop-out began working on his first project in the down-and-out D.C. neighborhood of Anacostia, a development he said was necessary to revive “once a thriving commercial quarter destroyed by the 1968 riots.”

Peebles announced he was exploring a bid for D.C. mayor in 2009 before dropping out to support his wife after his mother-in-law was diagnosed with cancer. He currently serves as the vice chairman of the board of the Congressional Black Caucus Foundation Board of Directors and is a member of President Barack Obama’s National Finance Committee.

He’ll likely be on a ballot somewhere soon. Peebles said he wants “another challenge” and with personal residences in New York, Washington D.C. and Miami, he has options.

“Mayor of New York sounds like an interesting job. So does Mayor of Washington, D.C.,” he said.

His company's recent building boom has kept him busy, though. His Peebles Corporation secured the bid for its first project in Boston, a $330 million contract to develop a hotel, condo and retail corridor connecting the Berklee and Fenway communities with Newbury Street. The contract, announced earlier this month, marks the company’s second-largest deal in its history. The biggest is a joint condo and retail project at 108 Leonard Street in New York City's Tribeca.

The company’s focus on working in cities lends well to developing both luxury and affordable projects, and his company has recently tripled the space in its New York office – a city with one of the world’s largest wealth divides. What’s pushing him, he said, is shrinking the wealth gap by providing greater access to opportunity, and says his company focuses on helping women and minorities.

“I attribute my success to access to opportunity,” Peebles said. “The status quo is not a sustainable situation for businesses. It’s in our interest as entrepreneurs to provide greater access to opportunity.”

The most blatant example of that is his 1998 acquisition of Miami’s prestigious Bath Club. Two years before buying it, he was the first African American member to gain admittance to the exclusive social scene.

“I found the purchase of it somewhat ironic. It was a club that didn’t allow African American or Jewish members. The fact that I was able to buy it sent a message at the time of how far Miami had come as a city,” he recalled.

Now, he’s building an intimate, 13-residence property, dubbed The Bath Club Estates, as an expansion of that landmark deal. With apartments that will range in price from $10 million to $50 million, the property even boasts a three-story penthouse, one that Peebles said they designed with the goal of building “the best penthouse in Miami Beach.”

That luxury property, which is scheduled to be completed in 2016, is worlds apart from the redevelopment project in Miami's Overtown neighborhood that his company will be breaking ground on soon. He said he hopes to transform the combined 3 million square feet with office, retail and condo space, helping to lift the community out of poverty.

The Peebles Corporation is also currently courting other potential developments in high-profile areas, including Times Square, Chelsea’s technology corridor in New York and downtown D.C.

Jack McCabe, a Florida-based real estate analyst at McCabe Research & Consulting, said the company has very few competitors of the size which have as big a range in the types of properties they build, from neighborhood redevelopments, hotels, high-end office space, historic projects and luxury condos.

“He basically just picks what he likes,” McCabe said. "It's usually these entrepreneurial companies that are successful in producing a diversified portfolio that you wouldn't be able to see anywhere else."

October 15, 2015

D.C. Real Estate Icon Don Peebles Talks Possible NYC Mayoral Bid

By   – Associate Editor, Washington Business Journal

Real estate bigwig R. Donahue Peebles, unhappy with the current direction of his city and its leadership, is weighing a run for mayor. The Democrat hasn’t made up his mind, but he is “absolutely” interested and says if he does run, he’ll fund his own campaign.

This sounds familiar.

Peebles, a Washington native whose development company is active in D.C., Miami, Boston, Philadelphia and New York, is eyeing a 2017 mayoral run in the Big Apple. You may recall, Peebles was actively considering ( and then not considering, and then considering again) a 2010 D.C. mayoral bid until his mother-in-law's terminal cancer diagnosis forced him to rule it out. She died days after the primary.

The 55-year-old Peebles, who honed his real estate and political skills during the Marion Barry administrations and now has an estimated net worth of $700 million, appears to have first floated a potential New York City run against Mayor Bill de Blasio in a January interview with The Real Deal, a New York real estate publication. He said it again in August and again in September and again in October — to Fox News, to Bloomberg, to New York’s ABC affiliate and to the New York Post, among others. The news section on the Peebles Corp. website is dominated by recent articles about the developer as a possible challenger.

“He’s the mayor of the city,” Peebles told me Wednesday, speaking about de Blasio. “He’s going to be mayor for the next two-plus years and he doesn’t get a pass. He needs to be held accountable for performance, and he needs to start performing.”

In 2010, Peebles called out then-D.C. Mayor Adrian Fenty for dividing the city, for creating a class of haves and have-nots, for failing to lead and provide basic services and opportunities to all residents no matter their location or status or race. While he didn’t run, he was on the stump and spending money on anti-Fenty ads. He said Wednesday he believes “for good or bad, I created the environment for [Vincent] Gray to actually run" and win.

Fast forward to 2013, and Peebles, now active in New York real estate, threw his support to de Blasio for mayor. But that support, following de Blasio's victory, quickly waned. On school choice, minority contracting, public safety, Peebles said de Blasio has failed the voters.

Peebles told Neil Cavuto during a recent Fox News appearance: “de Blasio is left of being a Democrat. He’s more of a socialist. I’m a Democrat with a responsible approach to management.”

Whether or not he runs, Peebles he is committed to fully advancing his projects, including those in the District. Fifth and Eye in Mount Vernon Triangle, he said, "would be well underway by the time I take office." Other Peebles Corp. developments in the pipeline include the Viola Back Bay in Boston, 108 Leonard St. in New York, 1801 Vine Street in Philadelphia and several blocks of downtown Miami.

"I'm giving it a lot of thought," he said of the race. "I'm continuing to have discussions with people in the community, business leaders, religious leaders civic leaders. I probably spend a third of my day doing that. And it tends to grow."

Candidate or not, Peebles has the microphone (and this is New York, so it's turned up to 11) and he's running with it.

June 14, 2015

Don Peebles on Letting Employees Change Lanes

This interview with R. Donahue Peebles of the Peebles Corporation was conducted and condensed by Adam Bryant.

Q. What were some early influences for you?

A. My parents divorced when I was 5, and I lived with my mother. She was a working single parent, and I learned to be a bit more independent. By the time I was 8, I would often cook for myself and take care of myself. My mother worked really hard, so I didn’t want to burden her with me.

As a teenager, I played a lot of sports and tended to lead the teams. But my mother felt I needed a little more discipline, so she thought I should be a page on Capitol Hill. She had worked at the Urban League years earlier, and one of the congressmen she knew was John Conyers. He helped me get me a position as a page on the Hill.

I was 16. Instead of attending high school near my home, I went to the U.S. Capitol Page School from 6 to 10:30 in the morning on the top floor of the Library of Congress. From 10:30 on, I worked in the House of Representatives. After working all day, I would go home and then have basketball practice until about 9 p.m. Then I would do my homework, go to bed around midnight, and then get up at 4 the next morning to do it all over again. I learned to budget my time very efficiently, and I would catch up on sleep on the weekends.

Then my mother had a prolonged illness and could not really work for about a year and a half. But with my job as a page, and work I did in Representative Conyers’s office, I was able to help support our household. I made some tremendous relationships over the years. My graduation ceremony was in the Cannon Caucus Room on Capitol Hill; President Carter gave me a certificate of achievement earlier in the day. I spent a lot of my childhood watching others lead and learning how to lead.

Did you have specific career plans when you went to college?

I was going to study medicine at Rutgers. One of the frustrating or difficult things for me as a child was the instability. I planned on having a family at some point, and I wanted to be able to take care of them and give them opportunity and stability. So I figured I would be a doctor because I had a good aptitude for sciences.

But after the first year, I decided I wasn’t going to go into medicine, and I went back to D.C. My mother had a real estate appraisal business, and so I worked for her. By the time I was 23, I was the youngest person appointed to the Property Tax Appeal Board in the district. The next year, I was named chair of the board, one of the most powerful positions in Washington’s real estate industry.

What leadership lessons had prepared you for that?

I learned from watching my mother, and I learned from watching politics. It’s about getting people vested in the outcome of success. I also knew I didn’t need to take credit for everything. I was the chairman, so if the board did well, I was going to get credit for it. But I felt it was important to let other people get credit and recognition, and it gave them more of a sense of ownership in the goal.

Now you’re in real estate development. How big is your company?

We have about $3.5 billion of projects in development. Our executive staff is about two dozen people, and we have fewer than 100 over all.

What other insights about leadership have you learned?

One is that our company should be a vehicle for our employees to accomplish some of their personal goals. It is a two-way street, but we should give people the opportunity to evolve and learn and grow and not put them in slots or force people to stay in their own lanes. People need to focus on their primary responsibilities, but I want to foster an approach where they can broaden their skill set.

I also, for many years, thought the best reward I could give to anyone working in our company was money, whether it was a bonus or a promotion. But I’ve learned that encouragement and acknowledgment are sometimes more important than dollars.

Another thing is that I give a lot of autonomy. I’ve always considered that a good thing — being a hands-off person, and giving people a lot of responsibility and leeway. But one of the things I’ve learned is that people also want more direction because they want to learn. So I’ve become more engaged in specific areas to be more of a teacher.

How do you hire?

I want to know the candidates’ personal goals and how they think our company can help them achieve those goals. And then to see if there’s a good fit, I’ll tell them a bit about our company’s goals and then ask them how they can help our company achieve those goals while accomplishing their own goals.

And then I’ll ask them what are the three things they do best and why, and what are the three things they feel they need to improve on and why. But I’ll also talk to them for the first 20 minutes about their life — where they grew up, what their parents do, and what their goals were when they were growing up. And I’ll ask them if they are happy with their choices.

Do people ever say no?

Most people will say that they are happy with their choices, but some will say they’re looking for more opportunity. What I’ve generally found is that people do not feel they have the opportunity to grow — they’re stuck in their lane and they have a greater interest in doing other things.

August 28, 2014

Don Peebles: Real Estate’s Self-Made Mogul


Don Peebles, the son of a mechanic, built a real-estate empire that includes three palatial family homes in the Hamptons, Washington, D.C., and Coral Gables, Fla.

The Bridgehampton, N.Y., home purchased by Don Peebles in 2007 for just under $5.4 million. ERICA GANNETT FOR THE WALL STREET JOURNAL

As the founder and chairman of a multi-billion-dollar real-estate development and investment company, Don Peebles knows how to hold out for a deal.

"I was sitting in Miami one summer, and it was so hot," Mr. Peebles recalled. So in 2004, he started to look for someplace cooler—and found an 11-acre compound in Bridgehampton, N.Y., listed for around $20 million, he said. He waited as it came down to $9 million, then $5.95 million. In 2007, he and his wife Katrina paid just under $5.4 million for the home.

"When I buy, I want to be able to feel good that I can sell it in any market and not lose money," Mr. Peebles said.

Today, the Peebles, who have a 20-year-old son, Donahue III, and an 11-year-old daughter, Chloe, typically spend long summer weekends at their Hamptons home, arriving by helicopter from Manhattan, where the family rents a penthouse in the Financial District. If instead the family is coming from home in Coral Gables, Fla., or Washington, D.C., a private plane takes them to the Hamptons.

Mr. Peebles, 54, grew up in Washington, D.C., the son of a car mechanic. His mother worked in real estate to support the family after his parents divorced, giving him an early look into the industry. As a teenager, he began volunteering for political campaigns, and served as a page on Capitol Hill in high school. He left college after a year to work as a real-estate agent and, later, a property appraiser. His early years of political work paid off: At 24, he was appointed by Marion Barry, then D.C.'s mayor, as the chairman of the city's real-estate tax-appeals board.

His Washington connections both in politics and the close-knit world of real estate helped fuel his ascent. In 1987, he broke ground on his first building. His company, Peebles Corp., with offices in Miami and New York now includes a multi-billion-dollar portfolio of condo projects, hotels and office buildings. African Americans are rare in the upper tiers of real-estate development, and Mr. Peebles noted that people would often underestimate him as an African-American man on the rise in the industry. Since there weren't any industry mentors for him to look up to, "I had to figure it out myself through trial and error," said Mr. Peebles, who has written two best-selling books on wealth and investing.

In 1992, he married Katrina, a former public-relations and advertising executive who grew up in a military family. They met in Washington—he saw her walking down the street in Georgetown on a summer evening and asked her out. They moved in together a month later. She is now principal and creative director at Peebles Corp.

Together, their development projects include the Royal Palm Hotel, a 420-room hotel in Miami Beach, and the Residences at the Bath Club in Miami Beach, a 1928 private club that was restored and developed with 107 luxury condominiums and six oceanfront villas. The company is currently developing a Standard Hotel in D.C. that will have 59 condominiums and 198 hotel rooms, as well as a luxury condo building in Tribeca, 108 Leonard Street.

"One of the things I like about this business is it gives you the opportunity to live many places," said Mr. Peebles, who tends to buy homes in the areas in which he's working.

Mr. Peebles has had a few high-profile stumbles. In Washington, a $47 million office-lease deal in the mid-1990s fell through, and Mr. Peebles took some criticism over his close friendship with controversial former Mayor Barry. The incident ultimately drove Mr. Peebles to start looking for business in Miami, where he relocated with his family in 1998.

While driving his son to school in Coral Gables, Mr. Peebles spotted a Mediterranean Revival-style property under construction that was designed as three homes under one roof. Around 2003, he offered to buy the property unfinished, a deal the owner rejected. In 2004, the home's contractor called to tell Mr. Peebles the home was still available. By the end of the year, the couple purchased the property for $5.45 million.

"We knew we wanted a compound," recalled Mrs. Peebles. But the place still needed lots of work—more than they initially realized. "After we closed, I went to look at it and I couldn't believe I had bought it. I couldn't go back there." Mrs. Peebles spent the next year overseeing the home's completion, which came together just in time for Mr. Peebles's 45th birthday party, which they hosted at the home just a couple of hours after the construction crews pulled away.

The 17,000-square-foot home on 3½ acres was built mostly of concrete, to withstand hurricanes. But the facade is now covered with vines. "It was so much cement, I had to grow something so it wasn't just 17,000 square feet of stucco," Mrs. Peebles said.

Inside there are ornate crown moldings, tile and hardwood floors and a chandelier hanging in almost every room. Interior archways and columns give the home a historic feel, and there's a walnut wood-paneled library as well as a lake-like saltwater swimming pool out back.

The formal vibe is something almost all of their homes have in common. "Formal is friendly and familiar to us," says Mrs. Peebles. "It's just the way we live."

Their Bridgehampton home, designed by Peter Cook, was built in 2000, but has Gilded Age amenities. French doors open to wrought-iron Juliet balconies in the 11,000-square-foot, four-story main house. A dramatic Versailles-esque double staircase off the back of the home overlooks a large, manicured lawn where the family plays football and softball.

A French country kitchen with copper sinks is downstairs on the home's lower level—a nod to a time when cooking was done by the staff, out of sight of homeowners and guests. The Peebles say they hire a local chef for events and special occasions, but also enjoy doing much of their own cooking. Every morning, the staff sends a tray of coffee from the kitchen up to the Peebles's second-floor master suite via dumbwaiter. When hosting company in the main dining room, the staff sends up trays of prepared food on the dumbwaiter. Having food prepared by a staff separately downstairs, Mrs. Peebles said, "lets me focus on our family and my guests."

In 2007, the same year they bought their Bridgehampton home, the couple acquired a 1929 Tudor-style home in D.C.'s Massachusetts Avenue Heights neighborhood, near the vice president's residence. With espresso-colored hardwood floors, white walls and minimalist window coverings, the home has a more contemporary feel than the other properties. In the family room, there are painted white stone walls and a large abstract painting. Mr. Peebles, who briefly considered a run for the mayor of D.C., described the 10,000-square-foot house as "understated from the front, but very grand in the back." The couple paid $5.9 million for the home. In 2011, the Peebles hosted an event for President Barack Obama there, and they have hosted various political fundraisers at their other homes as well.

In most of their homes, they've added a few whimsical and kid-friendly touches that offset the formality. In Bridgehampton, for example, there's a trampoline out back and a giant abstract painting called "Tree of Life" at the bottom of rotunda. In a bathroom nearby, two tiny bronze figures rappel down a wall.

The Peebleses said that perhaps the only thing missing from the Bridgehampton home is the beach. A few years ago, they decided to buy another home in the area that's right on the water. On a recent afternoon they cruised over to Sag Harbor, about five minutes away, in their Rolls Royce Phantom convertible to their 2,500-square-foot home in a quiet, predominantly African-American enclave.

They purchased the beach house in 2008 at an estate auction, placing the winning bid over the phone for $2.2 million. They spent several months and about $800,000 gut renovating the property. (Their son, 14 at the time, earned money that summer helping with demolition and roof work.)

The three-bedroom, 2½ bathroom home is close to its neighbors and perched a bit above the beach, which is just down a wooden staircase from their back deck. On a small lot, the home has a wood-and-brick exterior that has been painted white. A terrace spans the upper level with a clear Plexiglas railing—a design element "borrowed from the development world," said Mr. Peebles. Crisp, white-leather chairs and a couch surround a fireplace clad in stone. The master suite has a vaulted white ceiling, and the walls are decorated with nautical map artwork.

Sometimes they'll retreat to the smaller beach house just for the day, or spend a night or two away from their larger Hamptons home. In the summer they'll gather with friends on the deck to watch the Fourth of July fireworks over the water.

Mr. Peebles said they plan to hold onto the beach house for a few years because his son, who works for Mr. Peebles in addition to attending college, said he wants to save up to buy it for himself.

"I'll sell it to him at cost," said Mr. Peebles.

March 2, 2014

Dynasties: A Son’s Positive Influence

R. Donahue Peebles III Is Influencing His Father's Decisions—for the Good

R. Donahue Peebles III was mentioned in a newspaper story about his father in 1995 when he was younger than 2 years old.

The Washington Times wrote that Don Peebles was selling his mini-fleet of luxury cars, in part because of the demands of fatherhood. A four-door Mercedes "was more practical" than his Porsche and Bentley for taking around a toddler, said the older Mr. Peebles, who was on his way to becoming one of the country's biggest African-American real-estate developers.

Today, the younger Mr. Peebles is 19 and a sophomore at Columbia University. But he's involved in the family real-estate business, Peebles Corp., and already having more impact than determining what kind of car his father gets around in.

Indeed, the son has been the driving force behind the Peebles bid on the redevelopment of Long Island Community Hospital in downtown Brooklyn. The project has been met with community opposition and is heading into its third round of bidding.

The Peebles bid has a major affordable housing component, which was included because the younger Mr. Peebles has been encouraging his father to expand into that business.

"He's been a good influence on me," said Don Peebles, 54, who would earmark 35% of the apartments in the redevelopment for low- and moderate-income renters.

It isn't unusual in the world of New York's real-estate families for a son to follow in his father's footsteps. But the Peebles are exceptional because of the extent of the son's involvement at such a young age.

In the summer after his freshman year at Columbia, Donahue Peebles launched an effort to develop a Standard Hotel with condos in the Mount Vernon Triangle neighborhood in downtown Washington, D.C. The company is one of the finalists for that parcel of land.

"I've watched this process so many times, it almost felt like dinner-table conversation," the younger Mr. Peebles said.

The grandson of a hotel doorman, the older Mr. Peebles was raised in Washington and Detroit by a divorced teenage mother. He dropped out of Rutgers University to join his mother in her real-estate appraisal business and went on to create a real-estate empire that includes about 6 million square feet of hotels, condos, office buildings and other properties either managed or under development mostly in New York, Washington and Miami.

He also was drawn to development at an early age, completing his first project at the age of 26 in Washington's Anacostia section.

"I thought he was a winner and took a chance," recalled Stephen Maged, his partner on the deal. "I'm an old guy now and so proud of him. He's surpassed even my wildest dreams."

Mr. Peebles's success stemmed in part from his participation in government projects that set aside business for minority developers and his use of minority-owned construction companies. He's best known for such developments as Miami Beach's Royal Palm hotel and Washington's Courtyard Marriott Convention Center.

The younger Mr. Peebles entered the family business in part because his parents—mom Katrina is responsible for the company's marketing and design—believe a strong work ethic is important, especially growing up in an affluent family. Both father and mother tell the story of their son as a young boy asking for a stuffed rattlesnake—a real one—and making him work all summer in the business until he had earned enough to buy it. He still keeps the rattlesnake as a reminder.

If Peebles Corp. lands the Long Island Hospital redevelopment, it will be the company's biggest project in New York. Currently, Peebles is redeveloping the criminal court building at 346 Broadway in TriBeCa.

The Peebles also have an 11-year-old daughter, Chloe, who is interested in architecture and design.

"I think I'd be very good at that," she said.

—Sarah Rose