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Bio
A founding principal of Stonebridge, Doug Firstenberg directs firmwide strategic planning, oversees landmark development projects, and plays a key role in major transaction negotiations. Under his leadership, Stonebridge has developed several of the region’s most innovative and successful urban mixed-use properties, including breakthrough transit-oriented developments and public/private initiatives.
Doug Firstenberg has more than thirty-five years of real estate industry experience, leading complex development projects totaling more than 10 million square feet and $4 billion in value. Doug Firstenberg started his career with K.S. Sweet Associates, a Philadelphia-based real estate and investment firm where he was named partner. In 1993, he co-founded Stonebridge Associates in Washington, D.C., and led the transformation of the firm into an urban infill mixed-use developer. Doug Firstenberg graduated from Duke University with a Bachelor of Arts and currently serves in leadership roles of several industry and charitable organizations.
Show Notes
Role
- Guide overall direction of firm (3:05)
- Help in creation of projects and enjoys conceptualization (3:35)
Pandemic Crisis
- Elderly at 60 (4:55)
- 1982 closed a loan at 12 3/4% a 5 yr. deal (5:07)
- 2008-09- Undertaking largest deal- Constitution Square spent 13 months cobbling together debt (5:40)
- Today- 3 different projects underway and capital does come in on large development projects (6:30)
- System is functioning yet the economy is fundamentally frozen now
- We will get through it and hard to understand where we will be- we will all learn how
- Out of crisis will bring opportunity (8:25)
Origins & Education
- NY native- Doug Firstenberg grew up in suburbs and grandparents lived in Midtown Manhattan (101 Central Park West) (9:20)
- Story about Macys Parade as a kid (10:00)
- Moved to Princeton, NJ while in Middle School (10:40)
- Dad became CFO of Princeton University
- His Mentor and first employer transformed Princeton (Forrestal Center)
- Grateful that he was not accepted at Princeton Univ. and was accepted at Duke Univ. (12:05)
- Played lacrosse at Duke. Princeton and Duke look similar architecturally. (12:30)
- Important to have changes in life was good for him
- Foundations at Duke (14:00)
- Lacrosse team influenced his passion toward teamwork
- Public Policy major (14:45)
- Faculty was young and engaged
- Removed business program
- Articulating policy presentations were great experiences (16:08)
- Sr. Yr. he was introduced to Ken Sweet, his eventual first employer- Offers him a summer internship (17:30)
- Internship at K.S. Sweet evolved into his eventual career (19:00)
Career Arc
- Doug Firstenberg plans for post undergraduate work fell through and Sweet offered him a full time job that has evolved to his job now at Stonebridge (20:15)
- He was the youngest person at K.S. Sweet and he was able to run a marina on the Eastern Shore and he got the property to “breakeven” (21:55)
- At 24 he got the opportunity to go to Chicago to asset manage a 600,000 s.f. office project in Downtown Chicago (23:00)
- Wiley Tuttle was the partner on 150 N. Michigan Ave.– “Diamond Shape building” (24:00)
- Story about “water view”
- Gave building back to lender in 1993- Real estate didn’t love him, but he loved it
- Margins were too thin during market issues (27:00)
- Early 1990s the firm did not have a “business plan” and the firm split up in the mid 1990s (27:50)
- Doug went to Ken Sweet and was asked whether the firm could continue without him and it did not happen well (28:15)
- He had come to DC area and his partner Ellen Miller had come to manage projects in the DC area in 1987 (29:20)
- Stonebridge started in 1993 with Doug and Ellen and representing high net worth investors and advised academic institutions (30:20)
- $300,000 in capital to start firm (31:25)
- Didn’t spend as much time on investments (32:00)
- Built consulting practice in academic institutions based on his parents’ influences
- UVA was first large client (32:15)
- JV between UVA and VA Tech (33:00)
- Leonard Sandridge at UVA Foundation hired them to build a campus of buildings in Charlottesville (33:30)
- Built a series of 60,000+ s.f. office and research buildings over a 10 year period on fee development basis (33:50)
- First vertical project was a warehouse in Connecticut (34:45)
- Relationship with Chevy Chase Land Company (37:45)
- Introduced to Ed Asher and mentioned Newlands Building (2 Bethesda Metro) (38:20)
- Entered in as a JV investor and brought in TIAA-CREF as lender (39:20)
- Took over development lead on Newlands project with help of a new development manager, Kevin Cosimano from Shooshan Company (39:45)
- Delivered Newlands on time and on budget
- Chevy Chase Center and retail- Stonebridge became fee developer of complicated mixed use project
- George Carras returned from NY and came into their office to sublet (42:00)
- Met George in late 1980s (42:45)
- In 2004 George and he began looking at deals together, but in 2005 formed StonebridgeCarras (43:15)
- George was a partner at JMB Realty from Chicago and led DC office for them (45:20)
- Worked with a bank and subsequently joined JMB in Florida
- Portfolio Mgr. for Penn State Employment Pension Fund
- George was a tough negotiator
- JMB sells firm to Heitman and George joined them (47:30)
- John Schreiber hires George at Blackstone as a RE partner
- George is a detail guy
- George decided that the Blackstone way was not a fit for George (50:30)
- He wanted to join a developer and joined Doug
- Constitution Square– 2.5MM SF Mixed use development (50:55)
- Walton Street Capital- George’s former employer at JMB (Neil Bluhm) became their partner(51:30)
- Land purchase on a speculative basis- Walton St. believed in George, but they wanted to see CC Center and Newlands to verify capabilities (52:30)
- Harris Teeter lease was transformative to the project (53:20)
- Half office and half residential with retail on the ground floor (55:30)
- DOJ solicitation comes out during construction (56:00)
- Won because of HT and residential mixed use
- March 2008 lease signed
- Term sheets with lenders all went away in Fall 2008 before closing
- Walton St. funded construction according to lease requirements for construction- $88MM land loan was paid off (56:40)
- StonebridgeCarras paid $1MM of personal capital to keep the deal going with Walton St. (57:15)
- Residential and retail delivered and then DOJ took occupancy
- P.N. Hoffman helped with residential (1:00:15)
- Residential experience gotten from Chase Point with P.N. Hoffman (Monty Hoffman) (1:00:30)
- Condo project
- Harder to build residential- Up to 60 different unit layouts (1:02:00)
- Lot 31, Bethesda– JV with P.N. Hoffman (1:03:15)
- Doug decided to keep Woodmont open and split the project on each side of Woodmont Ave. (1:04:10)
- Won a significant competition on a MoCo RFP (1:05:15)
- Tipping point for company (1:05:45)
- Apartments, Condominium, Retail
- Placemaking is the mantra at Stonebridge (1:06:15)
- Two business lines (1:07:00)
- Mixed Use development
- GSA Platform
- Purchase of 5001 Eisenhower-Victory Center with Rockwood Capital (1:07:40)
- Checks all boxes for GSA
- Tee it up for a new GSA lease
- Sold site for townhouses
- Purchase of 5001 Eisenhower-Victory Center with Rockwood Capital (1:07:40)
- Flats at 8300– Purchased site for mixed use project with Harris Teeter (1:10:15)
- Walton St. was partner
- Harris Teeter lease at closing of site
- Sold project for Walton St. fund liquidation
- Clark Building, Bethesda– Acquisition with Rockwood (1:12:17)
- Oakville, Alexandria- Blackstone is partner (1:12:50)
- Mixed use project
- Inova Healthplex
- Third iteration and was originally retail and now mixed
- Carlyle Crossing, Alexandria– (1:14:10)
- Wegmans agreed to come to the site on 2nd Floor of project
- Slope of site allows for this
- Great relationship with Wegmans (Listen to Richard Lake Episode)
- 700 unit project, 1.7MM s.f.
- Transformative for Carlyle
- Wegmans agreed to come to the site on 2nd Floor of project
- Wheaton, MD- MNCPPC HQ relocation from Silver Spring, MD (1:17:30)
- Town square in Wheaton next to new building
- JV with Bozzuto to do the existing site (1:18:20)
- PPP with MoCo
- Avocet, Bethesda– Partnered with OTO Development (Hotel developer bought site) (1:19:40)
- Mixed use project- Hotel and Office
- “Better lucky than good”
- Spec office
- Well positioned for COVID- Highly efficient and flexible that is adaptable
- Core factor very good
- Aspects of building will allow for accommodating for “social distancing”
- Well positioned for post COVID
- David Kitchens architect
Company Strategy
- Filtering Process for New Business (1:24:00)
- Not as large as JBGS and Meridian
- More flexible and partnering
- JV with Rockefeller on WMATA HQ (1:24:40)
- Core investment group meets each week to source business
- Services (1:25:20)
- Development & Asset Management
- Commercial Property Management
- Outsource residential PM, construction and design
- Hiring and Company Structure (1:26:30)
- Development
- Hired Architects and Engineers out of undergraduate programs
- Looking for technical expertise
- Leaders of development group- Jane Mahaffey and Kevin Cosimano are technical people and that has influence
- Having the technical expertise gives them an edge on complicated projects
- Finance team led by Kent Marquis (1:29:00)
- Analyst program
- Advantage of understanding complexity of mixing use in projects is more important than the numbers (1:30:00)
- Example of Wegmans situation at Carlyle Crossing to fit on 2nd Floor (1:30:50)
- Corporate structure (1:32:10)
- Separate investments from service company
- Stonebridge Associates- Service company
- Properties owned in LLCs and allowing for vesting in projects for people involved
- Strong retention of leadership with Jane Mahaffey, Ken Cosimano, Kent Marquis and Stephanie Duncan
- Strong culture
- Characteristics (1:35:00)
- Smart and hard working
- Looks for balance- most people do charity work
- Passion for education
- Jubilee Housing
- Well rounded people
- Diversity- women and minorities
- Ellen Miller was his original partner and has retired
- Development
Personal Balance, Challenges, Surprises and Advice
- Life Balance (1:37:30)
- Parents influenced him to care about children
- Halloween is best day
- Family is most important- didn’t miss any of his children’s events
- Important to give back- 25 yrs. coaching lacrosse
- Involved with Duke U. and local colleges
- Working with Bill Hard on Mont. College efforts
- Involved with UDC in helping them to help their turnaround
- Work, Family, and Charity- Make the time.
- Challenges (1:41:10)
- Chicago building failure
- Not many bad real estate decisions
- Dealing with people
- Only get upset when someone says they don’t have time
- Sometimes faith in people does not work
- Want to do good projects with good people
- Hilary Goldfarb– Enjoys the relationship
- Building relationships is critical- Able to pick up the phone and work it out
- Surprising event (1:44:35)
- Being wrong about the firm when Ken Sweet asked him whether it would work and it didn’t and he forgave him
- Get a Mentor- Most important thing for a young person to do (1:45:30)
- Advice- The World is different and simpler in the 1980s (1:47:00)
- Loyalty is not what it was
- Understand it will get a little while to get someplace
- Have patience and work hard- “It’s a long game”
- Posting a sign on the Clark Building saying “Thank you to our heroes” due to the crisis (1:49:15)
