The gamble
Those initial chances taken have given Eagle a lot of chips to play with.
The linchpin of the strategy is something that doesn’t typically come up in a discussion about an old Richmond homebuilder: a private equity fund. But the Kornblau name opens doors on which other builders may not get the chance to knock.
Markel|Eagle Partners is a $32 million private equity fund that invests exclusively in troubled real estate. Originally known as E|Class, it got its current name in 2010.
The fund’s deep pockets feed the other Eagle arms that Ohly and Kornblau created, including residential construction, commercial construction, residential and commercial realty and an in-house title company.
It is particularly keen on what it refers to as “distressed and opportunistic” properties, the kind laying dormant in developments that gambled and lost near the peak of the housing boom — the kind that bankrupted some of the area’s largest homebuilders.
Eagle is now building houses at about 25 developments, about 80 percent of which are or were considered distressed. All but about 10 of the developments are completely owned by Eagle, which purchased the properties from competitors that threw in the towel or from lenders. Banks own the rest through foreclosure. Those banks pay Eagle to help them figure out what to do with the property.
The crown jewel of the company’s evolution and the biggest piece of its risky strategy is West Broad Village, the once dying, now bustling mixed-use development between Innsbrook and Short Pump. Kornblau and Ohly told RBS in 2008 that there was no better location in all of Richmond, with such close proximity to the interstate and so many amenities. So they plowed in.
The development has now become the center of Eagle’s universe, the Eagle’s Nest.
Employees at the company’s headquarters in West Broad Village half-jokingly talk about global domination. But controlling all that real estate — at least these days — doesn’t mean money is rolling in. These days you have to hold your chips, stay at the table and see how things play out.
“A lot of people think we’re nuts or that we’re making all kinds of money,” Ohly said. “We’re not making all kinds of money. We’re just preparing for what we think is coming next.”
Today the business is marginally profitable, Ohly says.
“What we initially did is survive,” he said. “We have survived, stabilized, and now we need to be patient.”
The gamble
Those initial chances taken have given Eagle a lot of chips to play with.
The linchpin of the strategy is something that doesn’t typically come up in a discussion about an old Richmond homebuilder: a private equity fund. But the Kornblau name opens doors on which other builders may not get the chance to knock.
Markel|Eagle Partners is a $32 million private equity fund that invests exclusively in troubled real estate. Originally known as E|Class, it got its current name in 2010.
The fund’s deep pockets feed the other Eagle arms that Ohly and Kornblau created, including residential construction, commercial construction, residential and commercial realty and an in-house title company.
It is particularly keen on what it refers to as “distressed and opportunistic” properties, the kind laying dormant in developments that gambled and lost near the peak of the housing boom — the kind that bankrupted some of the area’s largest homebuilders.
Eagle is now building houses at about 25 developments, about 80 percent of which are or were considered distressed. All but about 10 of the developments are completely owned by Eagle, which purchased the properties from competitors that threw in the towel or from lenders. Banks own the rest through foreclosure. Those banks pay Eagle to help them figure out what to do with the property.
The crown jewel of the company’s evolution and the biggest piece of its risky strategy is West Broad Village, the once dying, now bustling mixed-use development between Innsbrook and Short Pump. Kornblau and Ohly told RBS in 2008 that there was no better location in all of Richmond, with such close proximity to the interstate and so many amenities. So they plowed in.
The development has now become the center of Eagle’s universe, the Eagle’s Nest.
Employees at the company’s headquarters in West Broad Village half-jokingly talk about global domination. But controlling all that real estate — at least these days — doesn’t mean money is rolling in. These days you have to hold your chips, stay at the table and see how things play out.
“A lot of people think we’re nuts or that we’re making all kinds of money,” Ohly said. “We’re not making all kinds of money. We’re just preparing for what we think is coming next.”
Today the business is marginally profitable, Ohly says.
“What we initially did is survive,” he said. “We have survived, stabilized, and now we need to be patient.”
Great to read this much-deserved praise for Eagle’s accomplishments. American exceptionalism is alive and well.
I couldn’t agree more with Phil. Eagle played the contrarian when it chose to sell its lot inventory to several builders who are no longer in the business. Eagle is now in position for the long haul and diversifying their business. Two good guys have done well together.
Could it be Bryan has the experience and foundation from Sam Kornblau and Realty Industries? Sam was always on top of the
real estate market. Good people make good decisions.
Go Gators!
Interesting story — nice to see an article of this length in BizSense. Congrats to Bryan and Bud for making some very smart moves along the way.
Can you believe a Buckeye actually worked for these guys? I too found myself at a drinking establishment and was never late in the morning. Some of the best homes built in America!
Risk and patience deserve the highest rewards–Yes they had the infinite wisdom of the”Chief” but also the many years of real estate hard knocks they each have endured–don’t think there have not been a lot of sacrifices-much like Florida football Bryan and Bud went for the extra 2 points to win instead of a tie-Congradulations to the biggest risk takers possibly on the East Coast much less Virginia
Great article. Should be required reading for MBA programs. What a perfect partnership for two different personalities and recognizing the strengthes of both. So glad Eagle is the “Eagle” in the Eagle Classic at RCC!