Mr. Crocker: EQR's predecessor goes all the way back to 1969, when Sam Zell and his late partner, Robert Lurie, first started managing apartments when they were at the University of Michigan. When they graduated a couple of years later they both went their separate ways, and then they got back together again and started First Property Management, and then set up the Equity Group, which is now Equity Group Investments, and bought and sold apartments, office buildings and shopping centers, etc. In 1992 Sam asked me to come onboard to take the apartment company public. He and I had known each other since 1972. So I took the core of his apartments, which was comprised of about 16,000 units, merged them in with about 6,000 of Barry Sternlicht's apartments, and we went public with just a shade under 22,000 units and a total market capitalization in August 1993 of around 750 million. Over the last nine years we put together a management team and acquired, between the mergers and the single acquisitions, 17 billion worth of apartments. That's a lot of apartments because, as you may know, they're priced in the 15 million to 35 million range, and it takes a lot of apartment properties to add up to 17 billion. We basically grew the asset base of the company from 1993 to the end of 1997, at which point we felt that the apartment market was overheated and prices were too high, and the stock market ultimately caught up in the first or second quarter of 1998. The asset accumulation phase of building the company was basically over in 1997, and we then started to focus inward to rebuild the culture of the company and the employee base, while fine- tuning the operations as well as focusing in on issues such as employee retention, employee engagement, and employee education. Our philosophy has always been that if you have happy employees who are well educated and doing a good job, our company will perform better than our competition. So we spent 1998, 1999 and 2000 really focusing in on those issues, which are starting to pay tremendous dividends. This year for the second time we did an employee engagement survey, and our company literally scored off the charts, not only relative to any real estate firm, but relative to corporate America. The company has a terrific management base that is very engaged, and, it was done by an independent firm, it wasn't self-administered. Last year we were added to the S&P 500, which has helped in the volume in the stock and created additional liquidity for our shareholders. So here we are today, the second largest REIT, the largest apartment company in the United States by a factor of at least 2.5 to our nearest competitor from a capitalization standpoint or a total unit standpoint.
Tickers included in this excerpt: EQR
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