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Investor’s portfolio gets fine tuning

People – December 2006

Investor’s portfolio gets fine tuning
By Chris Richter

Real estate is Chris Smith’s area of expertise. He’s president of Charlotte-based Allegiance Realty Corp., which owns about 2.1 million square feet of office space and 1,700 hotel rooms around the U.S.

So what got him to collect about $5 million from investors and sink $1 million of his own money into a local company that produces an educational cartoon? “I brought the videos home to my three boys, and they loved it.”

Danger Rangers, produced by Charlotte-based Educational Adventures, follows animal superheroes that teach playground, fire and other safety lessons. It airs on public TV and also is sold on DVD.

If you can judge an investment by the cachet of those involved, Danger Rangers is a sure bet. Edu-cational Adventures’ president is Steven Rockefeller — yes, those Rockefellers. Among the show’s producers is Howard Kazanjian, who produced Raiders of the Lost Ark and The Empire Strikes Back. Advisers include Glen Charles, co-creator of the TV series Cheers.

But this is a new kind of investment for Smith, who got interested in real estate during his high-school days in Pittsfield, Mass. His father, who was in sales at General Electric, owned some small residential rental properties. Smith earned a bachelor’s in finance from Bentley College in Waltham, Mass., in 1990 and an MBA there in 1992.

In 1994, he and his wife moved to Albuquerque, N.M., where he worked as a tax consultant and real-estate broker. He moved back East in 1996, co-founding American Property Global Partners in Wayne, N.J. Two years later, he moved the company to Charlotte, which he thought would be a better city to raise children. He changed the company’s name to Allegiance in 2004.

Allegiance looks for properties whose poor fortunes weren’t driven by market forces, such as a commercial property that has lost a major tenant, needs maintenance or better marketing. Smith won’t disclose revenue but says the company’s returns on its portfolio are “north of 20%.”

He believes Danger Rangers will have much higher returns because of its licensing potential. There are Danger Rangers coloring books and storybooks, and Smith believes car seats, smoke detectors and other safety products could follow.

Although Educational Adventures is considering video on demand, podcasts and Internet broadcasts, Smith sees value in the PBS brand. “People are attracted to PBS because they know the quality, and it’s educational. You’re going to click to PBS, and you can put your remote down and walk away.”

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