Bio
After developing high-end mixed-use projects in Washington, DC in the 1980s and ‘90s, Byrne co-founded BAA-McArthurGlen, the company that imported the designer outlet concept to the UK and Europe. After opening the company’s Paris office in 1992, he led its expansion across Europe, resulting in more than $1 billion in annual sales. His story is told in his book, Le Deal.
He then developed private residence clubs, starting with restoring Palazzo Tornabuoni, a 15th century Medici palazzo in Florence, Italy. The Palazzo underwent a $250 million re-development and is now managed by The Four Seasons. In 2010, the project won Urban Land Institute’s prestigious Award of Excellence for EMEA.
Byrne also founded DigiPlex, the world leader in sustainable data centers, located in the Nordic countries, with Bill Conway, the Co-founder of The Carlyle Group. Byrne also owns and manages Kitebrook Partners, a real estate development and investment company.
A Cum Laude graduate of Harvard College, Byrne received his MBA from the Darden School of Business at the University of Virginia.
After living in Europe for thirteen years, Byrne now resides in the Washington, DC area with his wife Pamela. They have raised four daughters.
Show Notes
- Current focus on carbon sequestration including "natural climate solutions" (5:45)
- In the learning phase to understand the built space issues and the atmospheric solutions (6:15)
- Climate solutions in open spaces
- Reference to Brad Dockser's interview (7:20)
Origins & Education
- He was in a family of 5 children...4 boys and a girl. (8:45)
- Dad was an attorney in DC in labor and property law..."6 minutes at a time" (9:20)
- Paper routes at 4am (9:45)
- Grew up in Alexandria, VA (10:00)
- Spent time sailing in the Chesapeake- Summers near Annapolis, MD (11:00)
- Gibson Island, MD
- Delivering boats up the coast (12:20)
- Story about "blue water sailing" when interviewing at Solomon Brothers for a job (12:30)
- Spoke about his voyage eventually to New Zealand on 5 boats to travel 16,000 miles (13:30)
- From Antigua he went through the Panama Canal then to the French Polynesia
- Man overboard story- saw hammerhead sharks over his head (15:45)
- Family was quite an influence- Nobody could get a "big head"- work ethic and teamwork family wide (16:30)
- Family dinners
- Dad told them he would finance all their schooling through college and all would need to finance (17:30)
- St. Stephens for high school
- Attended Harvard University
- Rather be lucky than smart (19:00)
- On Sailing team there, but was not a star (19:15)
- He realized that everyone he met was not only smart, but driven (20:15)
- He wanted to make his own path
- Sense of learning was to stimulate curiosity (21:45)
- Went on his sailing trip to New Zealand (25:00)
- Met his wife in Camden, ME (25:45)
- Decided to to apply to Darden Business School at UVA and went there due to his familiarity with Charlottesville and he applied only there and got in (26:50)
- Was deemed a "poet" instead of a "quant" (30:00)
- Asked himself why he was going to business school and decided to delay it one year and get into photography and competing in shows, thereby learning he was creative (31:15)
- Eureka moment- Was at a stoplight and looked at a building that was under construction and was motivated to meet someone in the Architecture school who recommended he go to business school (33:00)
- Decided then to attend Darden and customize a real estate program (34:00)
- After graduating he wanted to find an unusual opportunity (35:30)
Kaempfer Company
- Met Joey Kaempfer at the Kaempfer Company, who was a flamboyant visionary developer (35:45)
- Was hired and began working on the Warner Theatre project for 5 1/2 years to develop it. (37:00)
- 1980s were the "go-go" years in Downtown DC development activity
- Dutch partners were "stand up" guys and trustworthy (43:30)
- in 1991 several foreign lenders wanted out, yet the Dutch investors stood up to defend their projects and asked them to stay in (43:45)
- Traders and commerce (45:20)
- The Warner Roaring Once More- Frank Sinatra & Shirley MacLaine, Oct. 1992 (47:00)
- Glamorous event with 2000 guests (47:45)
- Looked at several opportunities including parking (49:00)
- Kaempfer Company invested in McArthur Glen (49:45)
McArthur Glen
- McArthur Glen in the US (50:15)
- Alan Glen was a mentor to Joey Kaempfer and backed him (50:30)
- John Nicolosi was Director of Construction and still is (51:15)
- Alan Glen started up outlet center company with his college friend, Liz Claiborne (52:00)
- Introduced to Ralph Lauren and Nike
- First project was in Williamsburg, VA (52:45)
- Grew in the US
- Joey and Byrne decided to look at Europe to expand the business (53:00)
- Researched outlet center opportunity in France for 10 days (54:50)
- Conversation with his wife announcing that he was wanting to develop centers in France (55:00)
- He found that the discount retail business was corrupted enough to give an opportunity for the US model of outlet centers (55:40)
- Very difficult process to get entitlements in France (Le Deal, his book describes this in detail) (57:30)
- Stories from Le Deal (59:00)
- "Life can throw you curveballs"- Prime Minister announced the day after he arrived in France that a moratorium on retail development was to be imposed prior to the national election (59:45)
- Debate with Prime Minister about his project in Troyes, France (1:02:00)
- Euro Disney was a disaster, so the American influence with new concepts were challenging (1:02:30)
- Project was approved locally and then appealed all the way to the Supreme Court in France (1:03:10)
- Formed partnership with British Airport Authority, who had built a retail business at airports that was successful (1:03:45)
- Huge opportunities with unlimited capital (1:04:45)
- He had never been at an outlet center prior to his research (1:05:30)
- Cheryl McArthur came to France and was "emblematic" of the shopper who went to the outlet centers (1:06:15)
- Politics, Politics, Politics (1:08:30)
- US is focused on future jobs, whereas France and other European countries, want to preserve jobs (1:08:45)
- Gerhard Schroder, German Chancellor, kills their project in Lower Saxony, Germany (1:10:15)
- Understanding the political pressure points and how to navigate them to get anything done (1:11:15)
- Too late to realize that France was the wrong place to start as an entrepreneur (1:12:15)
- Found allies in France to help get his projects approved (1:12:40)
- UK was a different story- Approvals were best achieved when renovating properties that improved the cultural heritage- Factory buildings in Swindon, England (Cheshire Oaks) (1:13:45)
- Princess Ann, Prince Charles and finally Queen Elizabeth came to the project (1:15:15)
- Steam engine factory retrofit with a museum (1:16:45)
- Prince Charles symposium on site (1:17:20)
- Seven outlet centers in the UK while doing only two in France (1:17:45)
- Byrne handled the continent and Joey handled the UK (1:18:30)
- Don't bother with Italy (1:19:20)
- He looked at the statistics about Italy and realized that the high ratio of clothing purchases to total household incomes
- Culture in Italy where multiple generations of family live together and have large disposable income for fashion
- Now have Seven outlet centers in Italy
- Spain was more challenging (1:21:00)
- Approached by a guy in Italy who said he wanted to be his partner who he didn't want to be involved with (1:22:30)
- Made it clear that he would not bribe people to get things accomplished in Europe (1:24:45)
- Decided to leave McArthur Glen when he noticed the growth of the internet (1:26:45)
- Needed to setup a website to access outlet centers and realized it wouldn't work at the time, but he asked about how the internet worked (1:28:00)
- Looked at large distribution and pulled plug (1:29:00)
- Asked about the source of the internet to learn about data centers
Digiplex
- Started his own platform for data center company with a private equity arm of Deutsche Bank (1:31:45)
- Level 3 was the company everyone wanted in the data centers
- They had no credit in 2000
- He pulled the plug on the operations for the project (1:33:00)
- Dot com burst happened shortly afterward
- After the fall of the tech bust, he thought that now was the right time (1:35:00)
- Introduced to Carlyle who had a portfolio of data centers- Bill Conway approached him to help operate them
- Introduced to lead it to Goldman Sachs and did a workout with them
- Realized that at a certain price they could bid one at a time with Carlyle's backing (1:39:00)
- Started Digiplex with Oslo, Norway (1:41:00)
- Hydroelectric power was a great benefit
- Thought he could get the best deal there
- Bill Conway asked to be his partner and buyout all the partners in Carlyle to form their partnership in Digiplex, their data center company (1:43:00)
- Concept of the internet too powerful to go away (1:45:30)
- Photography background might be his superpower (1:47:00)
- Weighted average invested capital over 20 years was outstanding (1:48:30)
- Realized that he was in the energy business, not real estate (1:50:00)
- Billed customers based on power per s.f. instead of rent
- Conversation in 2018 with Bill Conway to consider selling the company (1:53:00)
- Had "green power" that offered tremendous savings for companies like Microsoft and Google
- Took it to market and demand skyrocketed (1:54:30)
- Bill calls him and asks to meet and decided not to sell at the time (1:55:00)
- Bill asked him to continue to operate and not sell (1:55:45)
- In 2021 he realized that the largest data center players in the world approach Europe and he decided to sell then (1:57:00)
- Why couldn't the large tech players grow their own data center platforms? (2:01:20)
- The purchaser (IPI) includes Iron Point Partners (Bill Janes), who was patient to wait (2:01:45)
- Three overarching principals (2:02:00)
- Partnership was the most important (2:02:45)
- Commitment to the environment- Norway (2:04:45)
- Cold climate and commitment to the environment
- Largest Sovereign wealth fund (2:05:45)
- Chose Norway and would do it again (2:06:00)
- Technological innovation (2:07:00)
- Spent 30 years bringing new concepts to foreign cultures
- Go narrow and go deep initially
- Yet, keep innovating after expertise is developed
- Innovate in product design, marketing and financing (2:08:30)
- Culture- Context matters a lot! (2:09:20)
- It is critical to understand what context one is in to do business effectively (2:10:00)
- Anticipate cultural influences
- Company culture is now the most important aspect of business success today
- Give employees purpose beyond a paycheck- critical aspect is a purpose to come in and do work- he alludes to a rowing team going in unison toward a purpose (2:12:30)
- Digiplex was the company that retained employees better than other companies (2:13:30)
- Sent "care packages" to employees during the pandemic to help employees (2:14:30)
- Person at the top sets the culture...just think about it! (2:15:30)
Palazzo Tournabouni
- Urban Land Institute meeting introduced him to an opportunity in Florence, Italy (2:17:00)
- Wanted to do another iconic project in Europe
- 15th Century palazzo in Florence that needed to be redeveloped- most sought after intersection for retail there
- Bought site for retail and then had to rethink its uses (2:19:00)
- Decided on Private Residence Club use
- Determined that it is 1.75x of condominium sales in value
- Worldwide demand...Californians are the largest segment of Americans
- Taxes were a problem (2:21:30)
- Story about a seizing of the property by the local police that it should be taxed as a hotel (2:22:00)
- Right to protect the evidence- Politics and culture affected this provocation (2:24:00)
- Family competition is suspected
- This case went to the Supreme Court of Italy (2:25:00)
- HBS Case Study about Palazzo Tournabuouni in Florence, Italy (2:26:00)
Personal Philosophy
- Does not want to retire- interest in the environment (2:26:30)
- Wanted to leave a legacy
- How to use real estate skills to understand carbon sequestration
- Enterprising opportunity- Carbon credits work in some environments, yet not in others
- Analogous to TDRs mentioned before (2:30:00)
- What advice would I give today...carbon credits (2:31:00)
- Life priorities
- Most Americans don't realize that we have the sense of optimism and innovation much more so than Europe (2:33:45)
- Old World wants to protect their culture and thinking (2:35:00)
- Live better in the present than Americans
- Americans live for the future
- Pandemic brought some good changes- Millennials have a different outlook (2:38:00)
- Women in America have much more freedom (2:38:30)
- Exception is the Nordic countries (2:39:15)
- Wanted to move back to the US so his daughters could grow up here (2:39:30)
- Commuted to Europe for 17 years after moving back
- Billboard Statement (2:41:50)
- "One single focused individual can make a difference" (2:42:00)
- Listen and hear more (2:42:30)
- Culture matters (2:42:50)
- Pick an age that is old and look back at what I wished I had done- Give it a shot (2:43:20)
Postscript
- Colin Madden and Sam Glass share their thoughts
- Colin's takeaways
- Resilience
- Embraces innovation
- Continuous learning gene
- Adaptability- "Lemonade out of lemons"
- Sam is honored to be involved
- Episode resonated
- He met Byrne about 12 years ago and took away lessons for his company's startup in "Le Deal"
- Finding the importance of good partners is critical
- His wife was a huge support and "in it to win it" with him
- Digiplex story of a synch between Bill Conway and Byrne toward the company's success
- Joey Kaempfer- Colin felt that Byrne might have similar characteristics
- Sam reflects that the "seas may be a bit turbulent now" and that adaptability is important in these times
- Courageous approach to venture to Europe with an outlet concept
- Example of talent meeting capital to execute effectively
- BAA was a magical relationship for Byrne and Joey to grow their business in Europe
- Sam observes Byrne's humility and "luck surface area" along with his leadership ability with teamwork to be phenomenal
- Colin observes Byrne's confidence and courage in taking off to New Zealand on a sailboat and to Europe for the new business
- Refers to Naval Ravikant's views about positioning oneself for luck
- Sam asks the question about how a podcast guest takes advantage of luck
- Each move was tactical and rationed out well
- Reference to meeting Carlyle's Bill Conway via an indirect meeting at a cocktail party
- Put yourself in the right situations
- Byrne took advantage of each opportunity and was able to get stuff done
- Carbon Credits are his next focus
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