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On September 29, real estate investor Finn Wentworth started the day hopping between separate breakfast parties for tenants in each of the three buildings at Continental Plaza, his Hackensack office complex. Wentworth’s Morristown firm Normandy Real Estate Partners had bought the 637,400-sq.-ft., Class A trophy property earlier in the month for $109 million after a hotly contested bidding process. At the meetings Wentworth and his top team talked about their plans, which include sprucing up lobbies and adding new amenities. Continental’s tenant roster boasts such big names as UBS, Sun Microsystems and Fujitsu. But many of the roughly 100 tenants are smaller firms with short-term leases, some of which have below-market rents. Getting those tenants to renew their leases at market rents is vital for Normandy to make it a winning investment. Other investors saw that as a risk; Normandy saw it as an opportunity. To Wentworth, 46, it’s déja vu all over again. He is back doing what he likes to do best: taking deals with some downside risk and then turning them into profitable successes. His equal partner in the 10-month-old Normandy venture is David Welsh, 33, a former Morgan Stanley vice president who oversaw the financing of that institution’s real estate funds. Normandy is Wentworth’s way of getting back into commercial real estate. In August 1999, he quit Gale & Wentworth (since renamed The Gale Co.), a real estate services firm in Florham Park that he and Stanley Gale co-founded in 1990. Wentworth left to head the sports franchise company YankeeNets in New York City as its president and chief operating officer. There he was also instrumental in creating Yankees Entertainment and Sports Network (the YES Network) in September 2001, a broadcasting arm for baseball’s New York Yankees, basketball’s New Jersey Nets and hockey’s New Jersey Devils. Wentworth left the YankeeNets in January to team up with Welsh, who had set up Normandy’s predecessor firm in January 2002. Normandy now owns nearly $500 million worth of prime office buildings in New Jersey, New York, Washington, D.C. and Westport, Connecticut. The properties total 1.5 million sq. ft. of space. That makes Normandy the second most active New Jersey-based buyer of office space in the past year-after The Gale Co. Normandy’s business plan is to spot properties before others do, buy them at low prices and reposition them for sale at a higher price. Wentworth first looks for properties with a good location. Then he tries to find “unique situations,” where everyone else sees a negative that he thinks he can turn into a positive. Finally, Wentworth marshals the financing rapidly to clinch the deal. Normandy, so far, seems to be getting it right. It bought a trophy office building with 350,000 sq. ft. of space at 1370 Avenue of the Americas in midtown Manhattan for $160 million in June 2002 from Westbrook Partners of New York City. “The building wasn’t on the market,” recalls Welsh. “Secondly, we had to close within 30 days, all cash-$160 million.” Normandy quickly put up a $15 million deposit, raced through due diligence and closed the deal after what Welsh describes as a “two-week all-nighter.” The building was a “unique situation” because there was a Harley Davidson café at street level and Harley motorcycles sticking out of the façade. That made it a hangout for bikers. The building, though, was also the U.S. headquarters of Absolut vodka and some high-end financial services firms as tenants. “But no one would pay top dollar to have their clients walk past a hokey restaurant at the base of the building,” says Welsh. After buying the building, Normandy got the Harley Davidson café out, redid the façade as well as the interiors and got a Chase Manhattan Bank branch as a tenant. Occupancy has since climbed from 80% and the property is now nearly full. In April 2003, Normandy purchased Riverside Properties, a seven-building office complex in Westport, Connecticut, for $40 million. The owners TIAA Realty, a New York City fund, had it on the market for sale, but potential buyers considered it risky. Although the complex was fully leased, half of the property was not occupied. Institutional investors didn’t want to touch it because it seemed unlikely that the tenants would renew their leases. Normandy, though, came up with a plan and bought it in a partnership with Lexham Private Investors of Stamford, Connecticut. Normandy got the unoccupied space back at a good price, spruced up the buildings and leased out a large hunk of the space. Riverside’s big-name tenants now include Allied Domecq, the liquor company that also owns some famous liquor and wine brands and fast-service restaurants, and Northwestern Mutual Life. In June, Normandy bought a 500,000-sq.-ft. office building in Washington D.C. for $120 million, another off-market purchase, this time from the estate of real estate tycoon Laszlo Tauber. The building has a lease with the State Department that runs into 2012. “That’s an unbelievable deal; we just collect checks,” says Wentworth. Normandy in January bought a 200,000-sq.-ft. Morristown building for $40 million. Insurance giant Crum & Forster is a tenant with 19 years left on its lease. “If they were to leave, we are confident of leasing the building without any difficulty,” says Welsh. Crum & Forster’s rents are believed to be lower than current market levels. Wentworth brings to Normandy some lessons from his tenure at the YankeeNets. One is a resolve not to allow any institutional partners into Normandy. Each of its acquisitions, however, is a separate limited liability company that has institutional partners. “When you own a team that wins or loses, the difference is razor thin,” he says. “Now, what if someone comes over and says ‘Listen, you guys are winning a lot. Can you come over and help my team?’.” He says managing buildings for third-party investors “lessens your ability to concentrate on your own properties.” Wentworth began getting disenchanted with managing third-party investments back in 1997, when Gale & Wentworth partnered with Morgan Stanley and PaineWebber to buy the Bellemead portfolio. “When you are doing third-party service all the time, in good times you can’t make enough money. The other people are making it,” he says. “And in bad times, you have your own problems that you should be concentrating on.” Welsh and Wentworth have a relationship that goes way back even though their partnership is relatively new. In 1990, Welsh was a sophomore at Penn State University studying music and history, when he had internships with Gale & Wentworth. His father Thomas Welsh, who runs a real estate appraisal business in Morristown called Krauser, Welsh & Cirz, helped him get the work. The younger Welsh eventually joined Gale & Wentworth full time, going to night school at New York University for a masters in real estate development and finance. Soon after, Wentworth left to join YankeeNets in 1999. At about the same time, Welsh moved to Morgan Stanley, where he stayed until March 2002. Wentworth doesn’t have real estate in his family tree. He was born in Mount Tabor, a quaint Morris County town, and his family had 10 children. His father, Francis X. Wentworth, was production supervisor at the Morris County Daily Record newspaper. After graduating in 1980 from Lehigh University with a degree in marketing, he joined the real estate services firm Cushman & Wakefield in East Rutherford. “I hired him when I was branch manager and it was apparent after a certain period of time that he was going to be extremely successful,” says Donald Eisen, executive managing director at Cushman & Wakefield. After three years there and another three years at Lincoln Property (now SJP Properties), Wentworth in 1986 joined Stan Gale at the Sammis Co. The two founded Gale & Wentworth in 1990. Wentworth admits he’s had his share of setbacks over the years. He recalls how the recession in the late 1980s forced him and Stan Gale to lay off some 70 of their roughly 100 employees. “It was a traumatic experience to sit with people with whom we had gotten along as friends and made partners and tell them, ‘You’re not going to be here anymore’,” he says. Another lesson he says he won’t forget is from YES Network’s bitter face-off with Cablevision two years ago over broadcasting Yankee games. “I learned that the more you can control, the better off you’re going to be,” he says. Wentworth acknowledges that Normandy’s scorching pace of growth in the past year is probably unsustainable. The firm, though, is now actively pursuing at least four other acquisitions, says Welsh. The industry can be certain that Wentworth and Welsh will keep trolling for new opportunities and new profits. Scorecard on His Life in PinstripesFinn Wentworth enjoyed quite a ride while at the YankeeNets. In 1998, that company had a value of $750 million ($600 million for the Yankees and $150 million for the Nets). “Today, those assets are worth $2.6 billion,” says Wentworth, who was instrumental in the creation of the YES Network. Its value is up from zero to an estimated $1.5 billion. New York City developer Bruce Ratner bought the Nets earlier this year for $300 million, and Wentworth pegs the value of the Yankees at about $800 million. Lou Lamoriello, CEO of the New Jersey Devils in East Rutherford, says he was particularly impressed by Wentworth’s knowledge of both the sporting business and real estate-and his network. “He seems to know everybody,” says Lamoriello. “When you rekindle a business that you had in the past, your relationships have had to be positive to come back five years later,” he says referring to Wentworth’s return to real estate. Leo Hindery, former president of AT&T Cable and the first CEO of the YES Network, is another Wentworth admirer. “In my life I’ve never met anybody I like more, respect more or trust more than Finn,” he says. “I give him credit for the improvement in the management of the Nets, for the formation of the partnership with the Yankees and a great deal of the credit for the development of the YES Network.” The management styles of Wentworth and Yankee owner George Steinbrenner, though, were very different and their parting was the end of a marriage not made in heaven.| email [email protected]