VIENNA, Va. – Mark W. Gregg remembers his mom’s reaction several years ago when he took her to see one of his real estate development projects near Washington, D.C.
“She told me that when I was a kid, I played in the sandbox a lot with trucks, building things, and that I get to do it for work now,” he said. “It’s just that the sandbox is bigger.”
A lot bigger.
Gregg no longer is molding miniature cities out of sand and water in the backyard of the Mendota Heights home where he grew up. He is the founder, managing partner and president of The Penrose Group, a development and commercial real estate firm whose imprint and influence have been unmistakable in the suburbs surrounding the nation’s capital for two decades. Housing, offices, industrial space, shopping centers – you name it, Penrose has built it to meet the demand for growth in even the bumpiest of economic times.
“Washington is like a big small town,” Gregg said. “Everybody knows what everybody else is doing. Zoning and entitlement are more complicated and tighter here, and the process takes longer. Some projects are years in the making. You just have to be patient.”
Gregg learned patience – and a whole lot more – from his parents. He went to St. Peter’s Catholic School in Mendota Heights and Cretin High School before matriculating at St. Thomas, and he never will forget the lessons he learned there as well as around the family dining table.
“We had Sunday dinners, often with priests or teachers as guests,” he said. “My parents were very into the arts, education and literature, so I knew a little bit about everything. They wanted to expose us to different cultures, and for 11 years in a row we had foreign exchange students living with us. It was interesting to sit around the table and hear them talk about their countries.”
Gregg enrolled at St. Thomas in 1975 as a biology major, having worked in his dad’s dentist office and thinking he might follow him in that field, “but it wasn’t my calling.” He earned a degree in business, secured a job at IDS and took off on a five-month trip to explore Europe. When he got back, he showed up at IDS. “They didn’t know who I was!” he said. “The guy who hired me had left, but I had a letter of acceptance and they had to find a place for me.”
He worked in real estate lending at IDS and then First Bank Systems (now US Banks) before moving to Denver with First Interstate Bank. He had the East Coast market, and after returning to First Bank he opened its first office in the Washington area in 1984 at age 27.
“I told them I believed Washington was a great opportunity to create profitable business,” he said. “I leased 2,000 square feet in this building – I’ve never moved from here – and told myself, ‘You’d better make it.’”
First Bank sold assets of its Washington mortgage subsidiary to Bill Reiling, a 1954 St. Thomas alumnus and trustee who owned Towle Real Estate in the Twin Cities, and Gregg worked for him. They remained business partners for several years after Gregg opened Penrose in 1990.
“I learned a lot from Bill,” Gregg said. “He is always thinking five years ahead. He would say that you always should make decisions based on your moral compass, that you shouldn’t be afraid to make a mistake but should fix it, and that you should have your next vacation planned when you go on the current one. I liked that about him.”
Gregg opened Penrose because he felt he was ready to take risks on his own, not just in running a remote office for Minnesota-based companies. He huddled with his employees and said, “Let’s come up with a name.” But they couldn’t agree on one, “so we went to the London phone book, looked at street names and found Penrose.”
“It’s not the name that’s important,” he said.
“It’s what you make the company into. You make your reputation not on a name, but on how you treat people and how successful you are.”
Penrose certainly has been successful, thanks to projects like King Farm in Rockville, Md. Until the 1990s, the 450-acre parcel was a dairy farm surrounded by suburban development and a new Metro stop (Shady Grove on the Red Line) two blocks away. Gregg patiently pursued the land for five years before negotiating a deal to buy it for more than $30 million.
King Farm today is a planned community with 9,000 residents in 3,200 housing units, 1 million square feet of office space and a shopping center as well as parks, ponds and bike trails. The family barn was renovated into a cultural center. Gregg knew it was an incredibly ambitious project, but he sold his vision and arranged financing because of one trait he learned from his parents.
“I am always honest with people,” he said. “Real estate is a risky venture. Values don’t always go up, up, up. There are going to be troughs and crests. Identifying risks and how to mitigate them is important, and we present all of the risks so people understand their investment. They like our approach.”
Reiling appreciates Gregg’s approach, too, singling out his “great integrity” and an ability “to keep 13 balls in the air. I guess you call that multi-tasking. A lot of would-be entrepreneurs are out there – good people, but not willing to take risks. Mark is a real entrepreneur because he is a risk taker.”
Gregg smiled at Reiling’s description but waved off the praise as he defined his success as an entrepreneur.
“A lot of it has to do with my upbringing and how I approach things,” he said. “It’s not about me. I enjoy a challenge. I like people, and I motivate them to work hard, to be fair and to be honest.”
His 40 employees jokingly refer to him as the “benevolent dictator,” although there is little in his soft-spoken demeanor to suggest he reflects the latter word. He tries to define the moniker.
“I won’t tell you how to do your job, but I want to know what you are doing,” he said. “I want people’s opinions on how we can collectively do the best possible job. We have a lot of great people who can attack a problem, think outside the box and make a profitable deal.”
Ole Kollevoll is one of those people. He joined Penrose in 1996 as general counsel and owns a minority interest. He repeated Gregg’s assessment of their employees in talking about him.
“You have to move fast on your feet,” Kollevoll said. “Mark is a real creative guy who has an instinctual grasp of real estate. He thinks outside the box all the time, so you have to move quickly because he’s so quick himself.”
Gregg’s youngest son, Michael, has worked at Penrose for more than a year and grins when asked what it’s like to work for his dad.
“Oh, you mean the benevolent dictator?” he replied with a big smile. “He’s great. He demands respect from employees, but he treats them the same way. He wants us to stand by our work. You ask anybody in the market about us, and they say, ‘Those Penrose guys are good.’”
Good, perhaps, because their boss always has liked playing in a sandbox. This one is just bigger.
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