Steve Poe, developer of two of downtown Louisville’s top hotels – the new 175-room Aloft Hotel at First and Main and the business community’s go-to event site, the 17-story 591-room Marriott Louisville Downtown on Jefferson Street – is noted for his vision, which includes the ability to see what will maximize the return on investment on a specific piece of land.
Besides sizing up job-growth projections as a harbinger of a property’s success, he lists two additional secret ingredients.
“With hotels, you’re specifically looking at what brands are available,” he said. “Brand is super important, and, more importantly, you’ve got to have the right location with the right brand.”
Poe lauds efforts by the Louisville Convention & Visitors Bureau to rebrand the city as a convention and tourist attraction – with an emphasis on bourbon.
According to Mayor Greg Fischer, who likes to tout the success of “bourbonism,” Louisville is booming with 23 hotels either announced, completed or under construction among a total of $9 billion in recent capital investment.
“I think (CVB CEO) Karen Williams is very aggressive and up to date,” Poe said. “I think she and the CVB are very excited about having new hotel rooms and the new convention center (an $180 million renovation is underway), and certainly having a real, authentic local food scene – and a real, authentic local Urban Bourbon Trail with investment from all the distilleries. I think they’ve got a lot of good things to sell here, and I feel confident that they’ll do a good job with that.”
Although Poe has succeeded by adding nearly 800 hotel rooms to the downtown corridor, he hasn’t confined his efforts to hotels. As a developer noted for his canny sense of what should go where, he has backed the famed RiverPark Place along Louisville’s Waterfront. The multiuse complex offers 2,500 luxury apartments, eight restaurants and some 250,000 s.f. of office space.
Large apartment developments are a major component of the Poe Cos. portfolio, including The Woods at Lexington Road, Blankenbaker Crossings and Fenwick Place, all in Louisville, the Reserves of Thomas Glen in Shepherdsville, and Fairway Knoll in Round Rock, Texas.
Poe foresees major trends among baby boomers and millennials ensuring ongoing demand for apartment living. Aging baby boomers and millennials alike prefer a low-maintenance, almost nomadic lifestyle, for different reasons. For millennials, the threat of mortgage problems and foreclosures has instilled a fear of homeownership. Baby boomers have a different set of circumstances.
“We’re also seeing that same thing in the 55-plus crowd that says, ‘I don’t need this big home anymore, and I may want to live in Louisville nine months a year and be in Florida three months a year,’ ” Poe said. They ask, “ ‘Why don’t I sell my house and invest that and live off the proceeds and rent?’ There’s just a lot of different things going on demographically that I think are driving more people towards the upscale rental. Job creation always drives that, and we’ve got strong job creation now.”
Success was not overnight
Today he certainly must be considered one of the top developers in Kentucky’s top economic center, but Poe got there methodically, step by step, in a process that included some bumps.
Nearly 40 years ago, fresh from Purdue University where he was still a few hours short of a pair of degrees, Poe went to work in an entry-level position at his father Robert’s construction company. But soon came a dismaying conclusion: He was not cut out for the construction business – a role he’d been preparing for from age 10 when he’d started shadowing his dad on building sites.
“I looked around at some of the people I was working for; I was driving a pickup truck and they were driving a lot nicer vehicle than that,” Poe recalls from his one-story office building on River Road, a half mile from his RiverPark Place apartment complex. “I had a college education, and I thought there’s something wrong with this picture. I need to be on the other side of this equation.”
The other side turned out to be launching Poe Cos., which today is a diversified real estate, development, management and investment firm that has helped to spark a renaissance in the Louisville commercial construction market. The company is behind a dozen hotels in Louisville – a $23 million Homewood Suites extended-stay hotel later this year will join Aloft and the Louisville Marriott Downtown in the business district – plus others in cities such as Austin and Denver.
Poe Cos. has developed and manages more than two dozen Louisville-area office buildings and apartment complexes.
Poe’s property development and management expertise prompted him to launch a real estate syndicate in 2012. Syndicates allow investors to put their money into a group of commercial properties that Poe and his team ensure are well managed, minimizing risk while sharing rewards among investors.
Success in the business world has earned Poe seats on several Louisville-area boards, such as chairman of the Home of the Innocents Capital Campaign, Louisville Collegiate School and the Louisville Free Public Library. As a member of Leadership Louisville’s Bingham Fellows 2014 class, he along with more than 40 other community leaders started OneWest, an organization billed as an incubator for prosperity in West Louisville.
It is a lengthy record of achievement, but the 30-year journey had modest beginnings.
“When my wife and I got married, we had no money,” Poe said. “We both worked. (It wasn’t) an overnight success. To get where I am today took a bunch of small individual steps; I learned you just keep your head down and keep moving.”
Education continued after college
Poe’s change of heart from construction to development early on in his career wasn’t the first dilemma he faced in charting his professional course. With input from his father, owner of Poe Lumber Co. in Marengo, Ind., Poe had dreamed of studying either engineering at Purdue or architecture at Ball State.
“My dad wanted his son to be an architect or an engineer, because that’s always what he had worked with,” Poe said.
Initially leaning toward engineering, Poe completed his freshman and sophomore years at Purdue before having to formally declare a major. The freshman and sophomore classes allow the school to weed out students who didn’t meet the engineering major’s demanding academic requirements. But another change of heart took hold, prompting Poe to opt for a major in business and minor in civil engineering.
“I remember coming home and telling my dad, ‘I’ve got good news and I’ve got bad news,’ ” Poe recalled. “The good news is I made the cut (for engineering school). The bad news is I can’t walk around with a slide rule in my pocket for the rest of my life.’ ”
In those days, engineering was largely a hand-drawn, pencil-and-paper enterprise.
“You did your calculations by slide rule and I just didn’t see myself in that role, so I switched to the business school.”
There was only one catch, which became obvious around the time Poe left Purdue in 1977. Although he had switched majors from engineering to business, not all of the credits transferred. By the time advisors caught the discrepancy, Poe had already completed upper-level calculus and other advanced coursework. To have to fulfill courses in freshman English and math to earn both degrees seemed redundant. As a result, he never finished either the engineering or business degrees.
“I wish I had done it,” he confessed.
Poe’s busy schedule in his father’s company left him little time to lament the decision, at least initially. But during those early years, the seeds were planted for the next direction of his career. Since the family firm was handling subcontracting work on several apartment buildings, Poe decided to launch his development firm in residential real estate.
No animosity or conflict resulted from his decision to part ways with his father’s business, as might have ensued in similar situations with some families. In fact, Poe refers to his father frequently as an astute advisor and observer of his son’s career.
For example, his father surmised that his son “… had made all the money in apartments as he could afford to make” when Poe tried in the early 1990s to boost his residential homebuilding from 10 to 15 units a year to 70 to 80 and found it operationally too difficult to pursue. He shifted then to developing commercial property.
Poe’s own rearview-mirror assessment today of the reasoning behind his switch from residential to commercial real estate is less cryptic.
“I’ve been doing this for 30 years,” he observed, “but you can’t take on more than your capital allows you to do, no matter how good the idea is.”
Ironically, it was car-envy that inspired him initially to change careers. Once he hit his first big success, a new vehicle for himself was not what he indulged on.
“We built some apartments and sold them,” Poe recalled, “and actually I splurged and bought my wife a new Jaguar.”
Vision derived from the bottom line
Though he may now regret the decisions to forgo degrees or change majors, it all makes sense nearly 40 years later. The combined disciplines of business and engineering may be responsible for helping him blend dreams with an awareness of the bottom line.
“I tell architects all the time, ‘We can either design a building that’s a very pretty picture that we can all sign and say we designed a pretty picture, or we can design a building that we can really build,” Poe said.
Even more than practicality, though, is the ability to sense what is good or appropriate. It’s the “vision” prominently mentioned on Poe Cos.’ website as a competitive advantage.
“I think the fact that I grew up on the construction side and was totally involved in that my entire life gives me the ability to sort of see the big picture,” Poe said. “My wife says I can take a look at a piece of dirt and sort of visualize what should go there, and yet at the same time I understand the constraints of what really can go there.”
Now, sitting in a brass, glass and wood-themed office decorated with family photos (he and his wife Merry-Kay have adopted two girls and a boy), Poe presides over a desk refreshingly free of multiple computer monitors and the other expected high-tech trappings of a real estate mogul. He has a large JBL Bluetooth speaker and admits to being an iPhone user. Otherwise, he claims not to be a tech junkie.
He may be selling himself short. His purchase of an early-model Texas Instruments personal computer after college qualifies him at least as an early adopter.
“I’m an Excel (and) Microsoft guy,” Poe said. “I was at the first wave of those who used spreadsheets, and they’ve been helpful. But as with many things in technology, I think it probably moves a lot faster than people.”
An avowed lover of travel, both international and domestic, Poe spends more time seeing the world for recreation than accumulating technological toys.
His journeys have taken him as far as the Arctic Circle by way of Barrow, Alaska, and he counts Brisbane, Australia; New York City; and Paris among his favorites.
“I loved Paris because of the greatness of the city and the architecture of Europe,” he said. “As for Brisbane, I loved the people. The Aussies are great.
“I love New York City just because I’m always in awe and marvel at how the city works – just how it runs. It’s just so big and so much going on and yet it all just seems to hum right along.”
With an eye seasoned by international travel and hotels going up in other U.S. cities, the native of northern Indiana is ideally positioned to judge the Louisville market. Poe characterizes it as a steady environment where he has never lost money, but he laments the lack of a local-option sales tax that communities elsewhere have used to fund expansion.
Whether LOST will be on the ballot one day, or whether it could be used to help fund the beleaguered Yum! Center, Poe refused to predict.
“I’ll leave that to the politicians,” he said. “People would have to vote to increase their own taxes for a building that’s already been built. In most of the cities where local option (sales tax) has worked, such as Oklahoma City, they’re proposing new projects the public wants.” ■
Robert Hadley is a correspondent for The Lane Report. He can be reached at [email protected]