Executive Interview: Jim Petrucci, JG Petrucci & Co.

Jim Petrucci

Founder

JG Petrucci & Co.

Jim Petrucci founded JGPCO in 1987. As president of the Company, he has guided the JGPCO team through a program of measured growth with a focus on providing complete accountability and total client satisfaction.

J .G. Petrucci Co., Inc. (JGPCO) is a privately-held, full service design/build specialist, owner and developer of industrial, office, retail and other commercial properties. Having developed and built more than six million square feet of space for a highly diverse corporate clientele, JGPCO has become widely known for its assurance of total client satisfaction, as well as for taking full, single-point accountability on each project.

Jim attended Delbarton School in Morristown, NJ, and graduated Magna Cum Laude with a degree in American History from Princeton University, where he also Co-Captained the Varsity Football Team. He served two terms as Chairman of the Raritan Township, Hunterdon County Planning Board and is a Director of HealthQuest, a family health fitness and recreation center in Flemington designed and built by JGPCO, as well as a Founding Director and Vice Chairman of Team Capital Bank and a Trustee for Delbarton School. Jim has also been honored by numerous times for community service by organizations such as The March of Dimes, Boy Scouts of America, Arc of Union County and others.

Q: As a company, tell me about the niche you have carved out for yourself and how you feel you are different from the competition. Why do you find this product type more appealing than alternative real estate asset classes?

A: At one point a couple of years back we seriously considered a marketing plan based on saying “Our niche is that we have no niche.” While you can’t be all things to all people, our firm has the kind of can do attitude that allows us to accomplish anything we set our minds to. Five years ago I would never have imagined that we would have entered the multi-family rental business, but we’re leasing up our first project and have 400 units set to start this year.

Q: How has your strategy changed as a result of the credit crisis? Have you expanded/narrowed your acquisition criteria? If so, to what, and why?

A: Our strategy really hasn’t changed. Throughout our history we have been opportunistic, low leverage buyers. We don’t chase deals. When the right situation comes along – and it does in good markets and bad – we are ready to move. The right deal is a combination of location, price and whether or not we can add value. We often accept challenges that others can’t or won’t and for that reason, find ourselves as the most logical buyer for a piece of real estate.

Q: How did you get your start in the business?

A: Right out of college I took a job with a firm that specialized in developing and building for its own account. I was there 15 months and thought I had it all figured out. The last 23 years continually disabuse me of that notion!

Q: What is your favorite part of your job? Least favorite?

A: I love watching the people in our Company rise to the next challenge. We have a culture here that is all about opportunity, and everyone embraces it. It’s invigorating.

One of the least favorite parts of the job for any developer is dealing with regulatory red tape. Time is money both in terms of possibly missing a market and in lost opportunities elsewhere.

Q: Are you implementing any green technology into your assets? Do you think it is a good strategy economically? Why/why not?

A: We have been for some time now. I think the jury is still out as to the investment implications, but from an environmental perspective it’s certainly positive. We make sustainability a driver of savings rather than a drain on profits.

Q: Real estate is cyclical. In terms of the specific asset classes you look to acquire, where in the cycle do you think we are right now? How long do you think it will take before we are at par again?

A: There’s still a lot of money on the sidelines. At the same time, almost from day one in this downturn, there has been a disconnect between buyers and sellers – and there still is.

As far as “at par” – you need to define that. Hopefully no-one thinks that the overleveraged spree of the past 5 years is at par…

Q: What three adjectives would you use to best describe yourself as a business person?

A: Principled, disciplined and resilient.

Q: Pretend for a second that investors/shareholders and returns don’t matter. Tell me about your dream commercial real estate project and why you would love to do it.

A: We would like to build a mixed use urban project that puts people to work, generates opportunity within the community and has an educational component.

Q: What is the hardest challenge you have faced in your career? How did you overcome it?

A: Starting out at age 23 with $7500.00 to my name wasn’t easy, but I think the challenges build over the years because so many people are dependent on our success. We’ve got 30 or so heads of households working in our companies – and need to deliver for all of them.

Q: Who is the person in commercial real estate you most admire? Why?

A: There are two families in New Jersey real estate – the Mandelbaums of West Orange and the Visceglia family of Federal Business Centers that I really admire. They both have great integrity, are outstanding contributors to the community, and have figured out the multigenerational work ethic.

Q: What effects, both negative and positive, do you foresee resulting from increased foreign interest in U.S. commercial real estate investment?

A: Foreign investment is obviously an important component of the U.S. economy and at times, has provided much needed support to various sectors, including the commercial real estate market. Although I can’t put a number on how much foreign investment is too much, the danger is that a significant sudden pullout, for whatever reason, would be highly disruptive to our markets.

Q: Do you feel the federal government has taken sufficient action in restoring confidence and liquidity in the commercial real estate markets? If so, why? If not, what steps would you like to see the federal government take?

A: The federal government likely helped prevent a collapse of the financial markets, but I don’t believe they have done much specifically to restore confidence and liquidity in the commercial real estate markets. Nor probably should they. The real estate market fell victim to a massive buildup in leverage. Many investors misjudged the risk in their portfolios and are suffering the consequences. I don’t see it as the province of government to bail out investors but I do think the regulators should let banks operate more freely in the conventional lending arena.

Q: If you weren’t in real estate, what would you be doing with your life?

A: Coaching and mentoring young people in urban settings.

Q: What keeps you up at night?

A: Did I mention that I have (4) children ranging in age from 19 years to 18 months?

Q: What organizations, charities etc are you a member of? Why are they important to you?

A: One of the five points of our firm’s Leadership Pledge is “Respond to the needs of the community.” We are active in a number of charities and organizations. In no particular order: March of Dimes, Displaced Homemakers Network of NJ, New Choices/New Options of PA, the Lehigh Valley Military Affairs Council, NJ National Guard Family Foundation, Valley Youth House, Irvington NJ High School and many others.

A common theme of the charitable organizations we sponsor and support is that they provide people with opportunities and give them the tools to succeed. I am also a Trustee of New Jersey NAIOP and we support organizations such as CoreNet, SIOR and IOREBA.

Q: If you won the $300M mega million jackpot tomorrow, what would you do with your life? The money?

A: My life wouldn’t change.

Q: What do your weekend activities include?

A: My older son plays football and lacrosse so in the Fall and Spring there’s always a game. I usually work ¾’s of the day Sunday and we like to entertain family and friends on Sunday nights.

Q: You forgot to pay your real estate taxes for the last ten years and “the man” puts you on death row. What’s your last meal?

A: I’m part Portuguese, and since it’s a last meal I’d go hog wild – shrimp in garlic sauce, watercress salad, boiled whiting, pork chops – with red wine of course and port and a cigar after…

Q: Assuming you are able to get time off this year, what vacation destination would you like to visit in 2010? What about this vacation destination is so appealing to you?

A: We take our family vacations pretty seriously and always enjoy visiting Italy. It offers a hard to beat combination of history, beautiful scenery and great food and wine. We have relatives there who we particularly

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