Vol. 41 No. 2 Week of May 21–27, 2010 houston.bizjournals.com 52 Pages, 1 Section $2.95

BY ALLISON WOLLAM

HOUSTON BUSINESS JOURNAL

Smart Meals set up shop on Shepherd Drive this week, just a few doors down from a My Fit Foods location.

! is head-to-head competition be-tween healthy fast-food retailers is in-dicative of a niche market that continues to grow fatter catering to the health-con-scious crowd.

My Fit Foods and Smart Meals share the so-called healthy convenience store sector with others such as Tru Meals and haute box meals.

All o� er an expansive variety of pre-pared meals for customers on the go who want to keep in shape.

Cullen, Brown familieslend � nancial muscleto commercial ventureBY JENNIFER DAWSON

HOUSTON BUSINESS JOURNAL

Houston’s prominent Cullen and Brown families are among the partners in a new company created to acquire and manage commercial real estate.

! e Cullens and Browns are the high-est pro" le investors of the bunch, but they are only two of 16 partners in the newly established Arcadian Real Estate Group LLC. Another key partner is NAI Houston, a well-established real estate brokerage " rm.

! is is the newest investment vehicle

Key clans back real estate deal

SEE FOOD, PAGE 44

SEE ARCADIAN, PAGE 45

I N S I D E

I N D E X

It’s a gas, gas, gasA startling theory from a Houston scientist could dramatically aff ect the future of the natural gas industry.

PAGE 2

Here comes the sunTwo Houston companies combine eff orts to introduce lower priced solar power installations.

PAGE 2

Bell tolls for CyrusOneA Houston data center operator is scooped up by a Cincinnati company in a $525M deal.

PAGE 6

Big week for layoff sChevron and several other companies announced a surprising number of job cuts this week, but experts say the region will experience overall growth in 2010.

PAGE 7

Building momentumIntegris Roofi ng Services came up with a solid business plan to boost revenue despite the shaky economy.

STRATEGIES/PAGE 17

WEEK IN REVIEW 3FACE TO FACE 13STRATEGIES 1721HERITAGE 22FOCUS 2328 PEOPLE/MOVE 2930AROUND & ABOUT 31FOR THE RECORD 3236CLASSIFIED 3743OPINION 48COMMENTARY 49INDEX 50

Tux slides overto make roomfor prom dress

Michelle Burk came up with a fashionable business plan to cope with the cost of out" t-ting her 17-year-old daughter for competi-tion in pageants.

Burk opened Only About ! e Dress, a store with an array of rental apparel for all sorts of special occa-sions.

Gowns, cocktail dresses, bridesmaid dresses and quincea-ñera dresses are available for rent at a fraction of their retail cost.

“Men have been renting tuxedos for years,” says the new businesswoman. “So why not give women the same opportunity to save?”

Burk who had pre-vious experience as an electrical engineer and manager of a women’s boutique, decided spending a lot on a dress worn only once just wasn’t practical.

She did some re-search on her rental idea and found a similar company in California, but noth-ing in the Houston area.

Burk launched the business out of her home, with tentative plans to open a store in September.

Spiraling demand accelerated the

Strictly Houston. Strictly Business.

SIPHONING AWAY VALUE:Shares of local companies associated with the

Deepwater Horizon rig disaster have plunged

to new depths/PAGE 2

FOCUS: TALENT MANAGEMENT

HBJ’s annual report on the key issues

facing human resources managers in

the Houston area/PAGE 23

THE LISTSA ranking of the region’s largest

Johnson Space Center contractors

and area auto dealers.

PAGES 20, 28

SEE CITYBEAT, PAGE 4

CITYBEAT

Fit food " ght sprouts throughout city Rival healthy fast-food convenience stores o& er everything from organic soup to natural nuts

MICHAEL STRAVATO/HBJ

My Fit Foods and Smart Meals, both located in the same shopping center, compete for consumers.

Arcadian Real EstateCapital

(Asset management and acquisitions)

Arcadian Real EstateServices

(Property management services)

All in the family fortunes: The newly formed Arcadian Real Estate Group backed by Brown and Cullen interests has three off shoots covering three commercial real estate sector components.

(Real estate brokerage services)

Week of May 21–27, 2010 Houston Business Journal houston.bizjournals.com 45

CONTINUED FROM...

for the old-money families, whose ancestors made their fortunes in energy and construc-tion and left their marks on Houston through a multitude of business and philanthropic en-deavors.

Arcadian plans to invest as much as $50 million in commercial assets this year, as well as o� er a wide range of real estate services in connection with those acquired properties.

! e Arcadian umbrella organization con-sists of three companies:

• NAI Houston;• Arcadian Real Estate Services LLC, a com-

mercial property management % rm; and• Arcadian Real Estate Capital LLC, which

will acquire properties and provide asset management.

! e three companies have a total work force of 83 — a number that is expected to climb over the next year as assets are acquired.

Arcadian’s 16 partners own an interest in all three companies.

DIVERSE INVESTMENTS

! e unique blend of partners is an o� shoot of Preferred Communities LP, which is no lon-ger in operation since its functions have been rolled into the new group. Preferred Commu-nities was formed in 2005 by Mark Kurtz to handle apartment investments for the Cullen and Brown families.

Preferred Communities helped the families acquire multifamily complexes and operate them. ! e families wanted to manage their investment risk by having their own property manager, says Kurtz, a local real estate vet-eran.

Since 2005, the families have purchased

$250 million worth of multifamily properties in Houston through Preferred Communities, Kurtz says. Properties include the 596-unit Promenade Jersey Village, the 404-unit Prom-enade Champions Forest and the 263-unit Arcadian Kirby.

! e Cullens and Browns have co-invested quite a bit, he adds.

By combining Preferred Communities with NAI under the Arcadian umbrella, the fami-lies will be able to funnel investment dollars into additional commercial product types. ! ey will keep a close eye on the manage-ment of those assets through NAI, which has the capability to manage o+ ce, retail and in-dustrial assets.

Each of Arcadian’s partners will participate

in acquisitions on a deal-by-deal basis. Addi-tional individual and institutional investors will be brought into some acquisitions.

Arcadian will acquire assets ranging in price from $2 million to $50 million, and ob-tain 50 percent to 70 percent debt on each deal depending on the product type.

! e group anticipates spending $25 million to $50 million this year for as much as 1,000 apartment units and 100,000 square feet to 200,000 square feet of commercial properties.

Most of the value-add acquisitions will be in Houston, although some will be located in Dallas and Austin.

Arcadian Real Estate Group’s operating partners include Kurtz and NAI Co-Managing Partners Jon Silberman and Randy Wilhelm.

Kurtz is primarily responsible for the real es-tate services and capital companies.

No properties changed ownership as part of the merger, but new capital was invested to fund the entity. n

jdawson@bizjournals.com • 713-395-9631

ARCADIAN: Wealthy local families gain access to di% erent commercial property typesFROM PAGE 1

Arcadian banks on local foreclosure deals

One function at Arcadian Real Estate Group LLC addresses the rise in foreclosures that has become part of the current % nancial climate.

Arcadian will act as a special servicer for regional banks that need to manage and sell commercial properties they have taken ownership of through foreclosure.

! e company can act as an outsourced real estate owned, or REO, department for lenders too small to manage the slew of commercial properties expected to go into default.

Arcadian has secured a deal with an undisclosed regional bank to handle its REO assets. ! e bank has approximately 40 branches and less than $1 billion in assets. Arcadian is dealing with smaller foreclosures, on properties valued at $1.5 million or less.

Randy Wilhelm, co-managing partner at NAI Houston, says banks often need help with distressed properties in the areas of re-pairs, management, leasing and disposition.

“We can literally walk in and take over an REO department,” Wilhelm says. “It’s very much a full-service type of deal.”

Jon Silberman, co-managing partner at NAI Houston, says the demand for such a service will grow because a lot of o+ ce buildings need to go through the foreclosure process. While foreclosures are a negative, Silberman says they are necessary for the market to heal.

“It’s like a root canal,” he says. “! e sooner they go through it, the better.” n

Jennifer Dawson

ARCADIAN’S 16 PARTNERS

• All 11 shareholders in NAI Houston, including co-managing

Partners Jon Silberman and Randy Wilhelm.

• Three partners of Preferred Communities LP, including Mark Kurtz.

• Legacy Trust Company NA, a $1.5 billion entity that handles

Cullen family business.

• Highland Resources Inc., the Brown family’s real estate

holding company.