The Geltmore Story
“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it”. —Steve Jobs
It’s beginnings were when Paul Silverman became the 6th man to be hired in the Dallas office of Coldwell Banker Commercial Brokerage Co, ( the predecessor to CBRE) in 1972.
After three years of good success doing retail leasing and land brokerage, Paul and his brother Harry formed an entity officially known as Geltmore Oil Co. to acquire an existing business on the Intercoastal Waterway in Surfside, TX. What was a essentially a tugboat filling station became a Texaco Marine distributorship that expanded into an oil field service business providing petroleum products to not only the marine business but also the off shore and on shore oil exploration business, It was here that Paul got his first taste of development by doing a dockside build to suit for BJ Hughes Co, and a build to suit heliport for Air Logistics. .
Geltmore Oil Co. in 1977
With the sale of the assets of Geltmore Oil Co. in 1977, Paul moved to Hobbs, NM to start a new chapter in his real estate career. While in Hobbs, he developed two mobile home parks with self storage (Yeso Village and Sunrise Village), an office warehouse complex (Sunrise Business Center) and obtained his general contractors license to learn more about construction by doing a series of for sale residential projects (Peaches Lane residences). By 1979, he had traveled NM and West Texas extensively and found many commercial development opportunities that were not readily obvious to the local developers.
In June of 1979
Paul formed a partnership with the Trammell Crow Co, in Dallas (TCC) to exploit those opportunities and thus the next chapter in his real estate career began. The first property acquired was Plaza Princesa shopping center in Santa Fe which Geltmore still owns today. Next came the development of the Vista del Sol warehouse at 1480 Common Dr. in El Paso and then the acquisition of the rail served warehouse in Albuquerque at 8225 Washington which was lease to Smith’s Food Centers as their NM distribution center.
opportunities other than real estate also began to appear. This included the first investment in K-Bob’s Family Steakhouses which over the next several years turned in to an investment in 19 separate units in the Southwest. The first store was in Ruiddoso New Mexico on a lease basis, but several years later, the real estate was acquired along with other land an the prime intersection in the town..
One of the most significant projects started in 1980 when First Interstate Bank put our an RFP for the re-development of their downtown Santa Fe location in to what was then called First Interstate Plaza I & II, now known as 150 Washington and 125 Lincoln. Paul’s TCC partnership responded to the RFP and was selected to be the developer. The two phase mixed use development, took from 180to 1983 to complete which included financing the project in one of the most difficult financial periods of US history. A prerequisite to starting construction was the need to relocate the bank’s operations center so that the buildings on Lincoln street could be demolished before the underground garage could be excavated. The Marquez Place project proved to be the solution to that problem.
With several successful commercial projects in Santa Fe, a residential opportunity was uncovered. A home at 608 E. Palace Ave. came on the market which occupied a lot that extended all the way to Alameda. A plan was devised to add three new units with access from Alameda. The units were designed by Wayne Lloyd AIA, one of the more talented NM architects.
The period from 1983-1985
saw a series of projects around NM. These included the re-positioning of a ten story office building in Roswell, NM acquired from Sunwest Bank into Sunwest Centre, the acquisition of the former IBM building in Uptown Albuquerque and leased to Gas Company of New Mexico as their corporate headquarters, the acquisition of two warehouses, 800 Comanche in Albuquerque leased to J.C. Penney and the Pan American Warehouse in El Paso that was a multi-tenant building..
From 1985 to 1987
the Albuquerque/Santa Fe market provided many retail and industrial opportunities. These included College Plaza South in Santa Fe on Cerrillos Rd., Four Hills Village at Central and Tramway in Albuquerque, the Balloon Park Warehouse at 8333 Washington Place in Albuquerque, San Mateo Theater and Restaurant Complex where the Geltmore offices are now located, The Shops at Mountain Run on Juan Tabo just east of Eubank in Albuquerque, the re-positioning and addition to Montgomery Plaza at San Mateo and Montgomery in Albuquerque, and the acquisition of the Pan American Industrial Center on I-25 south of Comanche in Albuquerque.
Tax Reform Act of 1986
Shortly after Congress passed the Tax Reform Act of 1986, at the end of the year, a major land and retail acquisition (Sierra Court at Mesa and I-10 in El Paso) was made that proved untimely. With the change in the tax law, real estate became much harder to finance and vacant land sales slowed to a crawl after a sale to Wal-Mart was completed. That trend continued through 1988 when it ground to a halt. Meanwhile in Albuquerque, the market was still strong and allowed the development of Midtown Business Center, a build to suit for the Atchison, Topeka and Santa Fe Railway Company in Journal Center, and a build to suit for Wal-Mart in 1988 at Riverwalk Marketplace on Albuquerque’s west side. And then the party ended.
the Trammell Crow Company metamorphosed from a development company to a brokerage and property management company. As a result, 183 of 186 project development partners left to do other things. This was the genesis of Geltmore as it was born in May 1991 as Paul severed his relationship with the Trammell Crow Company and began the next chapter of real estate development. Geltmore, Inc. as a newly formed real estate development company, had to adapt to the new realities following the real estate depression period of 1989 to 1992. The prior fifteen years of the business saw too much debt, too little equity and too much bank financing of real estate. In this new era, it took much more skill, deal making savvy and ability to structure transactions that would work.
Fortunately for Geltmore, the two prior chapters of his career prepared Paul for the these new challenges. The first fruit of that labor was the Bookstar project in Uptown Albuquerque which was executed under the most difficult of circumstances but got done none the less in October 1992.. Similar deals were hard to find and Paul and his brother Harry teamed up again to acquire a sheet metal manufacturing business (Comfort Air Systems) in 1993 that they owned for two years. With the success of the Bookstar deal, Barnes and Noble asked Geltmore to do a build to suit for them in Phoenix at Metro Center Mall. In 1983, Geltmore was able to assemble two different properties, both on ground leases, demolished one building and rebuilt to the other to the bookstores specifications.
Geltmore Land Ltd. Co. was formed by Paul and his brother to take advantage of land being disgorged from the RTC. This 31 acre tract of land was solid volcanic rock under about 6-8” of blow sand on top of the west mesa in Albuquerque. After many attempts at planning at a dense scale, an elegant solution was designed to overcome the very expensive cost of accommodating underground utility lines in the solid rock. Chamisa Ridge subdivision was constructed as a one acre view lot development which was very successful by offering a housing option which did not exist on the west side of Albuquerque.
Shortly after the construction on Chamisa Ridge was completed and the sales effort commenced in 1996, Geltmore was asked to consult with one of it’s lawyers family on a retail development in Grants, NM which turned into a commercial land development and sale to Wal-Mart and Denney’s in early 1997. This was a very time consuming, tedious exercise as the property had major ownership issues, transportation issues, and soil conditions issues that required creative solutions. However, the time ended up being well appreciated by all who were part of the transaction.
With the ascendancy of the computer, tech, and cell phone revolution of the late 1990’s, Geltmore participated with two Albuquerque design firms in 1998, to do a build to suit for Sprint PCS in Rio Rancho. Due to a very tight time line for delivery, and the lack of any tangible net worth of the tenant at the time, a very creative financing structure was devised to allow the project to move forward with the construction taking only 91 days in order to meet the needs of Sprint to get the facility open and operating to service a burgeoning book of new business.
On June 30, 1998
Geltmore got a call from the NM real estate manager from Wal-Mart to request a meeting later that day to review potential new sites on the west side of Albuquerque. The real estate manager was the same as the one Geltmore worked with in Grants. He knew that difficult real estate problems could only be solved by diligence, hard work and creativity all of which were demonstrated in the Grants situation. The site chosen for the new west side store presented a myriad of such problems. These included an assemblage of 35 different tracts of land from nine different ownership groups composed of over 100 different individuals. But that was just the beginning of the problem as the more difficult problem to overcome was a handful of neighbors who just didn’t want the project even though the zoning had long been in place. After two trips to the NM Supreme Court, the land purchase was finally consummated in October, 2000 and West Bluff Center opened in late 2001 at virtually full occupancy.
The events of September 11, 2001
put a chill on the US economy and all but destroyed the US travel business. Paul had been studying the hotel business for about three years thinking that was a use that would work nicely with future mixed use developments that he had visions of pursuing. In the fall of 2002 he felt that the travel market was ready to rebound and that it was an opportune time to buy a hotel to rid the wave back up. In November of 2002, Geltmore closed on the Park Inn & Suites in Santa Fe to provide it with a hands on experience in the hotel business.
In the meantime, the ten lease Geltmore had signed with Bookstar in Uptown was about to expire and Barnes & Noble had already replaced the Bookstar operation with a brand new Barnes & Noble store in Coronado Center next door leaving the Bookstar building empty. The building had originally been constructed as a furniture store and had been under parked for normal retail. With no multi-tenant retail on Louisiana for small tenants, Geltmore seized this opportunity by taking the existing building down to the slab and reconstructing a smaller building to better balance the parking ratio and to create tenant spaces suitable for smaller tenants. The strategy worked and a the very beautiful Uptown Park retail project was created and opened for business in October 2003. To further benefit the parking situation, at the time Geltmore closed on the permanent loan for the retail, it also acquired the Morgan Stanley building next door at 6701 Uptown Blvd.
Intense twelve years
After a pretty intense twelve year run of development, Paul was in need of a vacation and spent a couple of weeks touring Italy with his good friend and former El Paso Crow partner RAD Morton. As they parted ways in Rome, RAD headed back to Australia by way of Singapore to check out self storage opportunities in the island nation city state. After a couple of months, an opportunity arose to create what was then the second self storage facility in Singapore and Geltmore was invited to participate. Geltmore jumped at the opportunity to have foreign development experience. The result is a very successful operation known as Store-It! self storage.
While working on expansion plans for Store-It! by working on a mixed use concept with credit retail tenants, an opportunity to explore retail development in China presented itself with a visit to Wal-Mart China. With the demographics and economic growth of China, it was simply too good of an opportunity to ignore. Asian Development Group LLC was formed with Geltmore being a co-founding member. A Rep office was opened in January 2005 and a long cultural learning process commenced. After visiting 28 different cities and looking at many deals over four years (with 25% of that being spent in country), the right opportunity never surfaced. Beginning in October 2007, the Chinese government recognized that real estate development in China had gotten out of hand. To dampen the problem, a barrage of new taxes and regulations began to appear. It was clear that China was headed for a major real estate depression and in May of 2008, ADG closed it’s office with a desire to return to China at a future date when the market matures and becomes more rational.
Meanwhile, back in the US, the better anchor tenants still had some expansion opportunities available to them in third tier markets. Blue Mountain Junction shopping center in Roswell, NM was one of those opportunities. This project was under the control of an El Paso based general contractor who was unable to find financing. A joint venture was structured and the first phase was successfully completed. However, by the time the leasing stabilized, the next great real estate recession was upon us and the second phase had to be delayed until the downturn abates.
As Geltmore goes into the future, it has an outstanding community build development which it fully entitled in Q309 chat consists of 562 home site and 174,000 sf of retail known as La Plata Ranch in Farmington, NM and is a 8-10 yr build out.