VOL. 131 | NO. 81 | Friday, April 22, 2016
The Tipping Point
Before Successes, Loeb Started from Zero – Twice
JOHN KLYCE MINERVINI | Special to The Daily News
Barreling down Madison Avenue in a black corduroy blazer and a pert, pink pocket square, Bob Loeb seems distracted. Then I realize: he’s editing. Move that tree, put a mural there. Tear that down, build that up.
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“What do you think, and be honest,” he inquires. “Put the ballet over there, on the corner? Or across the street, next to Hattiloo?”
For most people, it would be idle speculation – but not for Loeb. Although he didn’t own the land Ballet Memphis ended up buying, he does own 12 acres in the immediate vicinity. Over the last five years, he’s transformed them into some of the most valuable real estate in the city.
Lately, it seems like Bob Loeb is everywhere. Among other accolades, he was named Memphis Magazine’s 2014 Person of the Year for his multimillion-dollar effort to revive Overton Square. So it’s easy to assume that this boyish 61-year-old has always been on top of the world.
In fact, it has been a long and winding road. Along the way, Loeb has built a small empire by making shopping centers feel more like neighborhoods. Maybe more importantly, he has developed a system for listening to community stakeholders and weaving their input into the fabric of his developments.
He’s also watched his net worth dwindle to zero – not once, but twice.
“The second time, I was worse than broke,” he remembers. “Not only did I not have any money, but I had convinced my mother to lend me $125,000.”
“To finance the loan, she let me mortgage her house,” he adds, ruefully.
Loeb grew up near Chickasaw Gardens and attended an alphabet soup of elite private schools: SDS, PDS, MUS, SMU. The first time he went bust was in 1980, after selling a saloon in the University District. The saloon – which he had founded – was a big hit, but the next two years in Dallas were not.
“When I came back to Memphis, my pockets were turned inside out,” he recalls.
Undaunted, Loeb and two partners launched Peregrine Securities, a financial services firm designed to raise capital for the real estate, oil and gas industries. Hopes were high – so high that Loeb convinced his mother to mortgage her house for startup money. Then Congress passed the Tax Reform Act of 1986, closing the tax loophole on which Peregrine had been built. The firm folded in short order.
“Toward the end, we were calling it Penguin Securities,” Loeb muses, dryly.
And so it happened that, at age 31, Loeb found himself flat broke with $125,000 in debt and his mother’s house hanging in the balance. It was probably the only thing that could have induced him to join the family business, a motley assortment of barbecue restaurants, commercial laundries and convenience stores.
“The common denominator of these businesses was that they weren’t very profitable, and the future looked worse than the present,” Loeb recalls. “That’s why we decided to get out of retail and into real estate.”
So they did. One by one, Loeb and his brother Lou closed the family businesses and began to lease out the buildings they had occupied. From there, they graduated to the “Gin Rummy School” of portfolio management: they would acquire a down-at-heel storefront, fix it up and lease it to a more high-end tenant, while selling less-attractive properties. It’s a model they still use today.
But Loeb’s greatest innovations came later, when he made a big bet on a rundown theater district in Midtown. At the time, Overton Square was owned by a private equity firm in Denver, and most of the storefronts were boarded up.
“They didn’t care,” Loeb recalls. “To them, it was just an investment. But it hurt Memphians to see this great neighborhood dying on the vine.”
Over the next five years, Loeb spent $31 million and 80 percent of his managerial bandwidth transforming Overton Square into the vibrant arts district it is today. He could have tried it alone; instead, he met regularly with community stakeholders like the Playhouse on the Square, Livable Memphis, and the Lick Creek Coalition.
“I’ll never forget, Sarah Newstok of Livable Memphis came to see me when she was eight months pregnant,” Loeb recalls. “She walked into my office and said, ‘Bob, don’t forget the children.’”
He didn’t. Whereas the Overton Square of the 1970s was all about sex, drugs and rock ‘n’ roll, today’s incarnation features kid-friendly dining, a candy shop, even an art lab for toddlers. On Thursday nights in the summer, families toss beanbags while local bands play on the Tower Courtyard Stage. Sarah Newstok would be proud.
Of course, Overton Square is hardly Loeb’s only project. He’s currently engaged in similar neighborhood-building endeavors on Broad Avenue and the Highland Strip. In the last year, he’s undertaken what may be his boldest project yet: after 61 years of living out east, he’s finally building himself a house in Midtown.
“It’s like me,” he observes of his new home. “It’s a work in progress.”
Bob Loeb is a graduate of New Memphis’s Leadership Development Intensive. Learn more at newmemphis.org.