In contrast, Klein, 69, is a New Jersey native who had visited Charlotte once before moving there in 1978. Since then, Childress Klein has developed many of the city’s most recognizable skyscrapers, largely because of its ties to the bank once called First Union, then Wachovia and now Wells Fargo. Less visible are dozens of suburban office and warehouse projects for clients including Belk Inc., TIAA-CREF and Daimler Trucks North America LLC, plus retail sites such as The Arboretum in southeast Charlotte. “You never see the Childress Klein name in lights, but that’s the way they operate their business. They aren’t self-promoters,” says Chase Monroe, who has done lots of business with the company as Carolinas market director for Jones Lang LaSalle Brokerage Inc., a Chicago-based real-estate group. In other words, Childress Klein is the anti-Trump.
Now, the partnership is in the midst of one of its more glamorous projects: overseeing development of a 43-story apartment building atop Charlotte’s Mint Museum Uptown. Scheduled to be finished next fall, the 525 South Church apartments reflect decades of relationship building and patience. Condominiums were part of the mix envisioned by former Wachovia Chief Executive Officer Ken Thompson and other civic leaders when they created Charlotte’s museum district on South Tryon Street, adjacent to a 48-story headquarters that would rival Bank of America’s skyscraper four blocks north. With $80 million in private funding complementing investments by Wachovia and local government, the district includes other museums, a performing-arts venue and retail space. Having spearheaded Wachovia’s other large projects, Childress Klein was the natural partner for the project, says Bob Bertges, a Wells Fargo executive vice president of real-estate strategy.
Then the world shifted. A week before a sales center for the Mint’s condominiums was slated to open in the fall of 2008, panic in the financial markets put a halt to the project, along with much other commercial development across the U.S. In December, Wells Fargo acquired Wachovia in a government-assisted takeover, which included ownership of the bank’s sparkling new tower being built in Charlotte. With Wells Fargo’s San Francisco-based leadership less interested in using as much space in the new building, Duke Energy stepped up to lease 21 floors and gain naming rights. Duke Energy Center opened in 2010, and Childress Klein moved on to other projects, including the Element Uptown apartments that are a block from the Mint Museum site. Both Klein and Bertges questioned when the Mint’s residential project would ever fly.
But demand for rental property in downtown Charlotte has soared with empty nesters and center-city workers preferring to live near their jobs and entertainment districts. “It became pretty obvious that the best site was the one on top of the Mint that we had worked on five or six years before,” Klein says. “We were fortunate that Wells Fargo had the confidence in us to sell us the air rights, sell us the site, for what is a complicated construction project in the middle of their business.”
Wells Fargo talked to many groups interested in building apartments at the museum, but Childress Klein was a clear choice. “They knew the site inside out,” Bertges says. “He’s proved himself time and time again.”
Don Childress and Fred Klein picked North Carolina practically at random. They met when Childress hired Klein to work at the Philadelphia office of Dallas-based Trammell Crow Co. in 1974. Klein, who has an engineering degree from Lehigh University, had just earned an MBA from the University of Pennsylvania’s Wharton School. “The two of us were in an office about the quarter of the size of this room,” Klein says, motioning to a 38th floor conference room at One Wells Fargo, temporary space while the Childress Klein offices 10 stories below are renovated. Four years later, the two men headed south, Childress to Atlanta, Klein to Charlotte, as the legendary Trammell Crow was building the largest U.S. development business. Klein, whose father was a real-estate broker in Ocean City, N.J., a resort town near Atlantic City, had been to Charlotte once, for a job interview at North Carolina National Bank (now Bank of America). He got a job offer, but turned it down. The decision to move to Charlotte was partly dumb luck, he says. “We thought Charlotte was a good town. We thought it had all the fundamentals that would be prosperous for a city over time, but I don’t think anyone in 1978 or 1979 envisioned what Charlotte has become.”
In 1980, two years after landing in North Carolina, Klein began working on the 27-story Charlotte Plaza building, the first of his downtown skyscrapers and an introduction to the ambitious bankers at First Union and NCNB. “We got this sort of crazy-at-the-time notion that we could build a speculative office building in downtown Charlotte,” he says. “Looking back, perhaps it was a little adventuresome. I think we realized how big a 615,000-square-foot building really is when you don’t have an anchor tenant.”
Filling Charlotte Plaza was one of longtime partner Landon Wyatt’s first jobs after joining Trammell Crow in 1982. It proved so successful that First Union, which leased space there, chose Klein and Trammell Crow to develop its 42-story headquarters building, known for its jukebox-like pinnacle. It opened in 1988.
While large office buildings are Childress Klein’s most visible projects, its bread and butter has been assembling land and developing tens of millions of square feet of warehouses and other industrial space. Over time, some of that real estate has turned from relatively inexpensive industrial parcels into more valuable office complexes and shopping centers, says Anne Johnson, a senior vice president with Los Angeles-based CBRE Inc. in Charlotte. An example is west Charlotte land acquired in the 1980s that Wyatt, the company’s chief industrial developer, expected to sprout distribution centers and warehouses. But in 1987, Belk chose the land to relocate its headquarters from downtown Charlotte. The department store chain’s move prompted expansion of other offices in the area near Charlotte Douglas International Airport and the old Charlotte Coliseum. LakePointe Office Park continues to grow with the new headquarters for Sealed Air Corp., which is moving to Charlotte from New Jersey. Another case is the Afton Ridge development in Cabarrus County, where Childress Klein bought land, again planning to develop industrial sites. Now, with the population growth there, the site is home to a Super Target, Best Buy and other stores and apartments. “They went from paying very little [for land acquisitions] to doing huge retail,” Johnson says. “It comes down to the fact that they have a lot of savvy…. They’re just very smart operators.”
By 1988, Childress and Klein were ready to gain independence from Trammell Crow, which was no longer run by its namesake founder and losing senior leaders in several offices. As part of their separation, the duo retained stakes in One First Union Center and other projects they helped develop. The move also kept together a group of colleagues who remain key figures at the company, with ownership interests in their various projects. The veteran partners include Wyatt, office development leader Tom Coyle, retail division head David Haggart and property-manager chief David Pitser, all of whom worked with Klein at Trammell Crow. Klein’s name is on the door, but the 18 other partners are the day-to-day face of Childress Klein in Charlotte, says Todd Williams, executive vice president of Grubb Properties Inc., a Charlotte developer. Fred Klein’s “strength is he attracts really good people, and they stay a really long time,” says Steve Ott, dean of the Belk College of Business at UNC Charlotte. The same receptionist, Judy Jones, who goes by “JJ,” has been fielding calls at the front desk for 30 years. The founders adopted a no-nepotism policy when they broke off from Trammell Crow, where they believed family connections had hurt the company. Childress Klein lifted the policy in 2003 to hire Klein’s son, Fred Klein III, who now leads the company’s multifamily housing division with Kelly Dunbar. But the senior Klein insists the firm is a partnership, not a family business.
Childress Klein’s reach has expanded across Charlotte and the region. That includes South Carolina, where it started assembling land for projects in neighboring York County about 15 years ago. Now, with some major Charlotte companies jumping the state line to take advantage of rich incentives deals, the developer is well-positioned. It is building a $57.3 million headquarters for Lash Group, a health care services company owned by Chesterbrook, Pa.-based AmerisourceBergen Corp., and a $150 million headquarters for LPL Financial Holdings Inc., both in Fort Mill, S.C.
“They definitely know the Carolinas,” says David Swenson, executive director of the York County Economic Development board. Childress Klein was also in the right position in Charleston, where it has industrial projects at the port and near Chicago-based Boeing Co.’s plants. Outside of the Carolinas, its projects include apartments on Nashville’s music row and storage buildings for wealthier families.
The latter diversification started during the 2007-09 recession when demand for most commercial real estate shrunk at its fastest clip in decades. Childress Klein survived a downturn that capsized many developers, partly because of a cautious approach; it finances most of its projects with internal funds and shares ownership through equity and debt investments from insurance companies, pension funds and other groups. In Atlanta, which was particularly hammered during the downturn, Childress Klein didn’t start any new buildings after 2004, Don Childress told the Marietta, Ga., Daily Journal newspaper in 2012.
As for that comparison — Klein as the anti-Trump: It is true, according to everyone contacted for this story. He isn’t well-known in Charlotte beyond the real-estate industry and a few top business leaders. That’s not to say he isn’t well-connected. He owns a 9,200-square-foot home valued at $3 million in the Eastover neighborhood, just down the street from Charlotte icon C.D. “Dick” Spangler. He’s been on the North Carolina Railroad Company board since 2013 and was appointed by Gov. Pat McCrory to the UNC Charlotte board of trustees this year. His company’s gift is the largest received by the UNC Charlotte real-estate center.
Still, years can go by without reading press quotes from him. He’s never been a Charlotte Chamber president. People who have worked with him say is he an introvert, but with a quick sense of humor. His company biography says he is married with two children, but little else about his personal life. “Part of why he has continued to work, even though he could have retired a long time ago,” Anne Johnson says, “is he sees that company as an extension of his family.“
Loyalty is a byword at Childress Klein, with almost half of its business coming from repeat customers and a group of partners sticking around for their entire careers. “He gives them the right authority,” Bertges says. “At the end of the day, he’s a guiding light.”