One buy at a time: Equity One CEO Chaim Katzman has proven to be a savvy shopper, purchasing retail real estate properties and managing them to the tune of $64 million in net income for 2003

South Florida CEO, Sept, 2004 by Mike Seemuth

Ensconced in a North Miami Beach shopping center, the corporate headquarters of Equity One Inc. is easy to overlook. The small second-floor office space is perched above a pink Publix supermarket at the Shops of Skylake, a strip center on busy Miami Gardens Drive. It is a low-profile location for a high-profile company in the retail real estate industry. The humble headquarters belies the size of publicly held Equity One, which owns and operates Skylake and more than 180 other neighborhood shopping centers.

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Inside the headquarters, on a wall behind the desk of the CEO, is a large map of the southern United States, the geographic region where Equity One has focused. But it may be time to buy a new map. This month, the real estate investment trust (REIT) will acquire a group of shopping centers located in the Boston area--the company's first expansion outside the South. It is unlikely to be the last.

"I don't think my forte is guardianship," says Chaim Katzman, the controlling shareholder, CEO, chairman and president of Equity One. "I love challenges. I love to build."

Katzman clearly loves being a father, too. He briefly interrupted our interview to attend to his oldest daughter, who burst into his office in tears. It was her first day as a senior in high school. Katzman later explained, and she missed several of her older friends who had graduated the year prior. "So she came to cry to daddy," he says with a satisfied smile. "It's okay."

He also has a passion for collecting art. Hanging in his office is an abstract painting by artist David Azuz, "my foray into contemporary art," Katzman says. He keeps other works in his collection at his Aventura home and his apartment in Tel Aviv, Israel.

Katzman makes time for community commitments as well. He is on the board of the Jewish Federation of South Florida, a member of the board of governors of Tel Aviv University, where he was a student, and honorary president of a group called Larger than Life, which helps children with severe cancer conditions. A music lover, Katzman is also the immediate past chairman of the Florida Concert Association.

But his mind is never far from the real estate business. Even on vacations, he has been known to spend a half-day or so inspecting opportunities to buy or build retail real estate wherever his family travels. "Ask my daughters. They know what to look for. Good visibility, good access, good lighting at night."

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A lawyer by training, Katzman leaves little doubt about his intent to acquire more properties. Since Equity One went public in 1998, its assets have grown from $120 million to $2.2 billion. And under Katzman's acquisitive leadership, the company's asset base may expand by billions more in the years ahead.

"Bigger is better in this business, no question," Katzman says. "In five years, very few companies in this business will be below the $5 billion to $7 billion mark."

TEL AVIV TO MIAMI

Katzman was born in Tel Aviv on Nov. 4, 1949, the youngest of three children. He recalls his childhood home as "quite a serious, purposeful household" where his parents made education a priority.

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"I used to read, like, a book a day," he recalls, giving some credit to the absence of television in his formative years. "In Israel, we did not have TV until the late 1960s."

He showed a flair for leadership in the military. Katzman held the rank of lieutenant by the time he finished a three-year stint in the Israeli army. He went on to earn a law degree from Tel Aviv University in 1973, after which he did legal work for real estate companies.

"I loved the law. I still love it," Katzman says. "I think I like the logic of it. I like to know how things work."

That curiosity led him on a more corporate career path. After partnering on a few real estate development deals with clients, Katzman decided to stop practicing law and instead invest in real estate. "Like a lot of real estate attorneys, I became more of a partner-type player," he says. "I just got too close to the business."

He also got far away from Israel. Katzman started developing real estate in South Florida in 1979, and by the early 1980s he was commuting heavily between Tel Aviv and the Miami area. "We were just following the opportunities," he says. "And at that time, the US presented better opportunities than Israel and other places presented."

That decade proved pivotal for Katzman, both professionally and personally. Between business trips to South Florida, he met his future wife, a US citizen, in Israel. He coyly describes their initial meeting, which was arranged by friends, as "sort of accidental." They married in 1987. Two years later, the couple moved to South Florida with the first of their three daughters. Katzman's wife, Shulamit, is an attending physician at Jackson Memorial Hospital's pediatric emergency room.

When they moved to South Florida in 1989, commercial real estate was in the doldrums, especially the office market, which was badly overbuilt in the tri-county region and nationwide. Though office space was available at rock-bottom prices, Katzman sensed better investment potential in retail shopping centers, especially those anchored by what he calls "necessity-based retailers," such as supermarkets or drug stores, which generate heavy shopper traffic.