The Quiet Company

You could call it the quiet company if that slogan had not been taken years ago by an insurance company’s advertising campaign.

IMG_9073For a quarter century, Fairway Investments has quietly built an enviable commercial real estate portfolio. The company has also recently begun a management arm, as well. The growth has been steady, and of late, Fairway has become more of a presence in the Birmingham business community and beyond. One aspect of that growth in awareness has been the naming of the headquarters building they recently moved into at Highway 280 and Lakeshore. The name Fairway in silver white letters graces the facade of the compact, modern building.

Fairway is owned by the Thompson family, of Thompson Tractor fame, and was founded to diversify the family’s business holdings. Birmingham business legend Mike Thompson, president of Fairway and CEO of Thompson Tractor, was the force behind the founding of Fairway. “We started very small, feeling our way in a market,” Thompson says. “The family was trying to broaden our asset base. We didn’t want all of our eggs in one basket. We wanted to have more opportunity for growth. We bought a strip center in Southlake Village in Hoover, then a shopping center in Foley, Alabama. We are 25 years old. And this has truly been on-the-job training.
“It was a whole different industry from what I was used to. We did not know what we did not know,” he continues. “But we were being introduced to a whole new industry. We wanted to try the business, own some real estate, and let that compound.”

The guiding principle behind the company’s growth is simple. In the words of Thompson, “Good properties in good locations where we had a high regard for the area and the companies that would be tenants. We wake up 25 years later and we have a great company. After five or six years, we really liked the business. We have a unique place in the industry by buying and holding and forming great partnerships with people. So we spread our risk over more properties.”

Being in the right place at the right time has helped the company weather some difficult times. “We lived through some terrible downturns, but we always had patient capital, which is one of our biggest strengths,” Thompson explains. “We survived through the Great Recession. Now the market is super heated again and that gives a lot of credibility to our strategy of managing for the long term.”
Birkdale From BalconyAs it was for many businesses, the Great Recession was the perfect storm for Fairway. “Tenants did not want to pay what they were paying. Values had plummeted and you had no ability to sell the property. And your lenders wanted more equity and more guarantees,” Thompson remembers. “We could not buy any new properties because we were protecting what we had. Everything that could go wrong went wrong.” As the economy began to improve, Fairway shifted a bit into multi-family and then added office. “Retail has come back, but we wanted to make sure we were diversified. We want to be diversified across all categories of business,” Thompson says. Now the company is adding more warehouse and office to the mix.

Agility, decision-making that does not require layers of approval, and the ability to move at lightning speeds are key ingredients to the success Fairway has achieved. A belief in old-fashioned values also plays a key role, Thompson says. “We cherish this industry and this business. We bring a desire to be very forthright. If we shake hands and say we are going to do something, we do it.”

Good lender relationships play a part as well. “We have access to great lenders and have probably used 25 different lenders on various projects,” Thompson says. “We have built some great relationships on that side.”

What began as an attempt to move financial resources into a whole new area has grown into a successful regional real estate business with a footprint that stretches north to Virginia and west to Texas. “It has probably done better than we ever thought it would,” Thompson says.

The Thompson family business history centers on their Birmingham-based and iconic Caterpillar dealership, Thompson Tractor Company. Thompson Tractor Company, Inc., founded by Hall W. Thompson, Thompson’s father, in 1957, is the full-line Caterpillar dealer for Alabama and northwest Florida and the Caterpillar forklift dealer for all of Georgia except the nine counties in the northwest corner of the state. The company specializes in sales and service of Caterpillar products, including earthmoving; construction and material handling equipment; and diesel engines used for electric power generation, on-highway, and marine propulsion applications. Thompson’s mission statement is “To Create Value for the Customers, Employees, Shareholders, and Caterpillar.” These values laid the foundation for Hall Thompson to begin building relationships over 50 years ago. “We’d like to be recognized as a business partner by our customers,” says Thompson, who became company president in 1986.

Fresh Market From SideWith his business interests straddling the two companies, the differences between the two enterprises are clear to Thompson. “How is Fairway different from Thompson Tractor? Oh, about a million percent,” he says. “At Thompson Tractor, we are under a very strict guideline to move as much equipment and parts as we can. We wake up every day with a partner that says, ‘Go do more.’ So there is an urgency to make customers happy. We understand that. You don’t do one-time deals in that business. At Fairway, we do one-time deals in buying a shopping center from a seller. You might not ever see those people again.”

In many ways, Fairway is a more strategy-focused business. “We have to go find an asset and make it work for us. At Thompson Tractor, you know what you have to do every day. We have great customers at Thompson and here at Fairway. But the customers don’t mix,” Thompson says. But both companies are customer-centric, and that focus has helped Fairway develop a unique culture, says company vice president Joanne Mummert. “I see us as a boutique company. Everything we do is very hands-on. Our management really knows our customers,” Mummert says. “That is not easy to do in this business. Our approach is very boutique and team-oriented. That is the attitude we employ in how we serve our customers and take care of investors and lenders.”

Trust is a major factor in all of those relationships, according to executive vice president Joe Clifton. “Being a private company working for a family, we can manage for the long term,” he says. “That has given us the ability to slow down and do the right thing for the long haul. It has allowed us to develop a trusting culture.”

Despite the very tangible nature of the commercial real estate business, Thompson views the company’s primary asset as an intangible. “Our best asset is our people,” he says. “There is pressure to perform, but we try to always do the right thing. Our people are not disposable, so we want to nurture them and make them the best they can be.”