Accomplishments of David Lichtenstein

Chairman and CEO of the Lightstone Group

David Lichtenstein founded the Lightstone Group in 1988 and has led its extraordinary growth into one of the largest privately held real estate companies in the country.

The Lightstone Group has consistently expanded its diverse portfolio in the residential, industrial, office, retail and hotel industries throughout the United States. Today, it is one of the largest residential and commercial owners and operators of real estate in the United States.

The company is now ranked among the 25 largest real estate companies in the industry with a diversified portfolio of over 19,000 residential units and approximately 20 million square feet of office, industrial and retail properties in 24 states, the District of Columbia and Puerto Rico.

Headquartered in New York, the Lightstone Group has over 1,000 employees and maintains regional offices in Maryland, Illinois and New Jersey.

A First-Generation Entrepreneur

David Lichtenstein began his real estate investment career by purchasing a two-family house for $89,000 in 1986. The down payment came from his savings and credit cards. Two years later, when he founded Lightstone Group, his real estate investment firm, he owned three apartment buildings. In its first decade, the Lightstone Group focused on multifamily residential properties, including many HUD Section 8 Housing properties.

When Lichtenstein came to view the multifamily market as becoming overpriced, he altered the Lightstone Group’s investment strategy by transitioning to retail with the purchase of Prime Outlets, a chain of outlet malls, in 2003.

David Lichtenstein Identifies More Opportunities for Outlet Malls Investments

In April, 2005, Lichtenstein added two Orlando shopping icons to the Lightstone Group’s outlet mall portfolio — the Belz Factory Outlet World and Belz Designer Outlet Centre. At the time of purchase, the two outlet malls had a combined 900,000 square feet of retail space and attracted millions of tourists and local every year.

At the time of this acquisition, the Lightstone Group’s portfolio included more than 16,000 residential units and about 26 million square feet of commercial space, with Florida properties in Jacksonville and Naples, ranking the company as one the largest owners and managers of residential and commercial real estate in the country.

When the retail market became “tight,” Lichtenstein shifted Lightstone’s investment strategy once again — this time to industrial.

David Lichtenstein Enters the Chicago Office Market

In 2005, when Chicago commercial real estate became a buyer’s market fueled by robust construction projects, the Lightstone Group gained a significant foothold in the Chicago office market with the purchase of a portfolio of office buildings from the acquisition of Prime Group Realty Trust (NYSE:PGE), a Chicago-based publicly traded real estate investment trust that owns, manages, leases, develops and redevelops office and industrial real estate, primarily in metropolitan Chicago.

Discussing the purchase, Lichtenstein said, “An element of our business strategy is to acquire companies with good management teams and high-quality assets in locations that we believe provide opportunities as markets recover. We believe the acquisition of Prime Group Realty Trust fits this strategy.”

David Lichtenstein Called The “Rembrandt” of Chicago Office Buildings

Lightstone’s Chicago portfolio included the landmark IBM tower, an architectural icon and the last American building designed by modernist architect Ludwig Mies van der Rohe. Lichtenstein immediately planned a $130-million renovation, stating that the building is a “Rembrandt” that can do well even if the market doesn’t improve substantially.

Fast Forward to 2009

In December 2009, Lightstone Group transfered Prime Outlets, their portfolio of 22 retail outlets, to big mall operator, Simon Property Group, for $2.235 billion.

David Lichtenstein, Lightstone’s founder and chief executive, said in a statement. “I am very proud of the company we were able to build over the past seven years and equally delighted that we were able to transfer Prime to a world-class company like Simon. This is truly a win-win transaction.”

Investment Opportunities in 2010

In February 2010, Lightstone Group closed on the $10-million purchase at auction of Crown Plaza Hotel, a 366-room, eight-story, full-service hotel and the adjacent CoCo Key Water Resort , a 65,000-sq.-ft. indoor water park in Danvers, Mass, five miles from historic Salem. Known jointly as the CP Boston Property, it encompasses 26 acres and is located 20 miles north of Boston’s Logan Airport and 22 miles north of Boston’s Central Business District. David Lichtenstein made plans for over $10 million in renovations on the property.

Crown Plaza Hotel’s amenities include restaurants and a lounge, a health & fitness center, spa facilities, a business center, game room, a gift shop, and 37,000 square feet of meeting room and ballroom space.

Holding Value in a Down Market

In an August 4, 2010 article in Real Estate Weekly, Lightstone’s former President and CEO Stephen Hamrick talked about the winning strategy of Lightstone Value-Plus REIT, Lightstone’s first registered Real Estate Investment Trust.

“LSVP’s first investment in 2006 was a mall with a huge vacancy,” he said. “We were able to fill the mall up, expand it and raise rents significantly. The value of this and other malls continues to appreciate.”

Under the guidance of David Lichtenstein, Lightstone Value-Plus’s portfolio held its value during the 40 percent-plus drop in the real estate market because they were able to drive increases in the values of some of its properties.

Hamrick further said in the article, “The best results in our Lightstone Value-Plus portfolio have come from our investments in outlet center malls. During the recession, consumers have demonstrated a willingness to drive right past their regional malls to get to stores offering the brand names they want at reduced prices. While all other retail sales have declines, sales at outlet centers have gone up.”

Hamrick emphasized that Lightstone Value Plus REIT will continue to invest opportunistically. “We don’t depend on a macro analysis to lead us to a specific property acquisition. We are simply following a basic formula: We are looking for cheap properties with problems we can solve.”

Investing in 2011

While the focus of the Lighthouse Group’s investment activities may vary in terms of asset class, the company’s investment strategy, guided by Chairman and CEO David Lichtenstein has always been consistent: we are always looking for properties whose prices do not reflect their intrinsic value.

David Lichtenstein’s Disciplined Approach to Investing

The Lightstone Group’s disciplined approach to investing has consistently generated outsized gains relative to risk through several real estate cycles. With hundreds of transactions behind them, David Lichtenstein’s real estate investments now rank among the largest real estate companies in the United States, with a portfolio of properties valued in the billions of dollars.