Nathaniel Hagedorn will buy out Charles Garney’s stake in Briarcliff Realty Co. The Kansas City-based company, to be renamed NorthPoint Development, became one of the Northland’s most-active commercial real estate players as a division of Briarcliff Development Co. It began branching out last year, winning the assignment to manage the 900-acre Horizons Riverside business park and buying the Tuileries Plaza mixed-use development.

Terms of the deal, set to be finalized around Feb. 10, were not disclosed.

Hagedorn and Garney acknowledged that their respective companies will be competitors in the Northland but pledged ongoing cooperation.

“Even though there won’t be a cross-ownership between Charles and Briarcliff Realty,” Hagedorn said, “we’re still looking to work together and help Charles in any way we can.”

As part of the split, Garney is bringing in Ned O’Connor, Waterford Property Co. president, to manage Briarcliff Development’s offices, hotel, residences and retail. That includes the 221,000-square-foot office building The Hilltop at Briarcliff, which was built on a speculative basis but still reached an 80 percent lease rate before its completion.

O’Connor remains president of Waterford while assisting Garney’s team.

Hagedorn’s departure and the start of his company were anything but sudden.“After he worked here seven years, he wanted to be on his own,” Garney said. “This was all part of a plan from three or four years ago.”

The transition began when Briarcliff Realty was set up in 2008, with Hagedorn owning 80 percent and Garney the remaining 20 percent.

Horizons and Tuileries, soon to be recast as The Village at Burlington Creek, will become 20-employee NorthPoint’s primary focus, though Hagedorn said the company will seek to build its
presence in the Northland.

Briarcliff Realty, now NorthPoint, will have raised more than $136 million in outside capital for projects, which is remarkable considering its founding at the height of a terrible economy, he said.

Hagedorn joined Garney’s team right out of college in 2000.

“My perception of it is that Charles (Garney) saw a bright young man who had tremendous potential, and he asked him to come join him, and as a result, the experience grew,” said David Hinchman, a first vice president at CB Richard Ellis who is marketing the Horizons Riverside project. “Charles has done some real estate but has done a lot more with Nathaniel on board, so they both grew together, and Nathaniel grew on his own from that experience and taking the ball and running with it.”

O’Connor said Hagedorn would do well starting his company, just as he and Garney did with their businesses.

“Both of us thought it was the best decision we ever made,” O’Connor said. “So we’re both excited for Nathaniel.”

Hagedorn plans to sell 15 percent of NorthPoint to an unnamed investor and set aside part of the business for employee ownership. Longer term, he wants to reduce his ownership further to
make more shares available for employees.

“It was the same opportunity I had,” Hagedorn said. “I feel passionately that that’s the right thing to do.”

Meanwhile, Briarcliff’s holdings remain in steady hands. O’Connor’s experience includes managing Corporate Woods in Overland Park for 10 years. More recently, he shepherded Applebee’s Services Inc.’s move from Lenexa to Kansas City’s Ward Parkway corridor.

“We’re really fortunate to have Ned,” Garney said.

Garney, a student of J.C. Nichols’ development styles, said Briarcliff entities leased about 90,000 square feet in each of the past three years “in the middle of a so-called recession.”
Office space at Briarcliff is 95 percent leased, which O’Connor called a risk for existing tenants who want to expand.

As such, Briarcliff Development plans separate 45,000-square-foot and 60,000-square-foot new office construction projects once they reach 50 percent commitments from tenants.Steve reports about real estate and development.

ARTICLE BY: KANSAS CITY BUSINESS JOURNAL – BY STEVE VOCKRODT, STAFF WRITER

Date: Friday, February 3, 2012

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