Mark Ordan seems to have a persistent habit of fixing things that need fixing. Maybe some would call it a gift or calling rather than a habit, but whatever the case, Ordan is both consistent and skilled at turning ailing companies around.
In 2012, five years after taking charge of a failing chain called Sunrise Senior Living, he sold the Virginia-based chain to Toledo, Ohio–based Health Care REIT for $845 million. This was Ordan’s second successful turnaround in 10 years. He had also taken The Mills Corp., one of the largest mall operators, from the threat of bankruptcy to a roughly $1.6 billion buyout deal in 2007.
Shrugging off invitations to keep running Sunrise, Ordan instead began contemplating his next move. “Once things are fixed, I think there are better people at maintaining the day-to-day operations [of companies],” he said. “I like volatility.”
Today Mark S. Ordan is CEO of Washington Prime Group, the REIT spinoff of 44 enclosed malls and 54 strip centers that mall firm Simon formed last May. Simon knew for sure that Ordan was the man to head up the new venture. Interestingly, though, at that time, there happened to be three things Ordan himself knew for sure: He would not go to work for a public company, he was going to stick to investments by just himself and a small pool of people, and he was definitely going to avoid corporate boards of every type.
That was the plan. Until Simon telephoned.
“Mark has a very broad set of experiences as both a chairman and chief executive officer of public companies,” said Rick Sokolov, president and COO of Simon. “He founded [natural-foods chain] Fresh Fields and has had specific experience in retail as CEO of the Mills and chairman of Federal Realty Trust.”
What was a talented turnaround man to do? Say yes, apparently. Setting aside all his earlier determinations, Ordan answered the call. “I violated everything I said I would do,” he said with a laugh. “But the opportunity to work with Simon is, by definition, unique. I think they’re the best in the business.” Furthermore, he felt compelled to retest his skills at creating shareholder value, and the sense of personal challenge was overwhelming. “Most people thought Mills would go bankrupt, then everyone knew Sunrise was going to fail,” he said. “Now everyone says retail and malls are dead. They’re not dying — they just need to reinvent themselves.”
Six months after taking the Washington Prime reins, Ordan acquired Glimcher Realty Trust — which owns two dozen enclosed regional malls, open-air centers and fashion outlets — for $4.3 billion. Given the merger’s 119 properties and roughly 68 million square feet of leasable space, the deal set industry-insider tongues to wagging for both its potential and the speed at which it was completed.
Perhaps Ordan’s mastery of re-creation should be no surprise. With a half-dozen career experiences under his belt to date, Ordan looks like the epitome of re-creation. He began his retail career in the trenches, as a stock boy at Harvey Electronics, in New York City. And in keeping with a time-honored tradition of generations of ambitious, overeager, adventure-spirited boys, Ordan laid the foundations of that career through a bit of innocent prevarication: “I was 14, but I lied and told them I was 16,” he recalled.
Ordan loved working in retail but was not content to climb his way up the management ladder the normal way. So at age 20, armed with a bachelor’s degree in philosophy from Vassar College and a healthy dose of plain-old chutzpah, Ordan persuaded the owners of Harvey Electronics to hire him as director of operations. “I knew the business pretty well at that point,” Ordan said. “I said, I’d be better at the job than anyone else, but they’d only have to pay me what they’d pay anyone out of college, which was pretty much nothing. But if after six months, they felt I’d done a good job, they’d pay me what an industry veteran was making.” Management consented, with the agreement that Ordan could be fired at any time. In the end, they promoted him instead. “I worked all the time,” Ordan recalled. “Years later a salesman told me that if you love something, you’ll make money at it. And I loved retail. I poured myself into the job.”
Ordan left that business to pursue an MBA at Harvard Business School. While there he received a recruitment letter from Goldman Sachs. He nearly threw the letter away. “I didn’t know who Goldman Sachs was,” he said. “I went to the career center and asked: ‘What does Goldman Sachs do?’ They thought I was such an idiot.” Goldman Sachs hired him as a summer associate, and after graduating he worked at the firm for five years.
He still had that retail bug, though, so he left Goldman Sachs in 1990 to launch his own business. Goldman Sachs thought well enough of Ordan to give him an office from which to work, and later the firm became one of the largest investors in his first venture: Fresh Fields, a string of 25 high-end natural-foods stores that got sold to Whole Foods for $150 million in 1996.
Colleagues hail Ordan for his prescient vision, but he claims his real gift is observation. “I went up to Newton [Mass.] one day [to Bread & Circus, an upscale supermarket chain] and saw that the store was packed in the middle of the day,” he said. He says he thought that was curious. “I went around to other supermarkets, and they were all empty.” He realized he was witnessing the beginning of a market trend and was convinced he could take that high-end, specialized food concept and run it better.
“Other companies were devoted to food principles but weren’t running the company like a business,” he said. “Fresh Fields applied supermarket principles to the natural-foods market.” The chain came to be among the fastest-growing supermarket companies ever. After the chain was sold to Whole Foods, Ordan dipped his feet in a few other ventures — starting and later selling a health care brokerage firm and an organic-foods chain.
In the mid-2000s the Mills board came calling; the company was buried under debt and faced an SEC investigation over an accounting issue. The board members turned to Ordan. “They knew I had a background in retail and wanted someone who understood the governance of turnaround and retail.” He agreed to help. “I knew they had great assets and great people,” he said. “Their problems had to do with their balance sheets.” Everyone, including investors and present and future tenants, believed that Mills was going under. “I had to make sure people weren’t giving up,” Ordan said. “I had to convince the tenants and the bankers we weren’t going under.” Ordan succeeded, prompting a bidding war between Toronto-based Brookfield Asset Management and Simon, with Farallon Capital, for the properties, which Simon acquired.
Ordan says coolheadedness and the ability to sit out the rough spots have helped him as a turnaround specialist. “I’m not looking for the emergency exit to rush out of,” he said. The ability to juggle and hold dozens of contrasting visions and ideas in his head has been helpful too — specifically when putting together the pieces of the Sunrise buyout.
“Mark does a great job of running multiple paths simultaneously,” said C. Marc Richards, formerly vice president of accounting at Mills and now CFO of Washington Prime. “He’s great at putting together a long-term growth strategy for the company while also focusing on short-term restructuring and the balance sheet, and while all of that is going on, he is also great at looking at strategic alternatives that could bring immediate benefits to the shareholder.”
One of the most important insights Ordan gained from his varied career paths was the importance of having a strong, reputable partner. And this is why among the first things he did upon taking over Washington Prime was to search for a well-regarded company to merge with. He found it in Glimcher. “They had the best combination of assets, steady cash flow, high-quality retail and very talented people,” he said. “It would have taken many years to grow [by ourselves] if we had just bought the assets.”
In Washington Prime, Glimcher saw synergy potential. “Not having to repair a balance sheet and a portfolio all at once is an easier task,” said CEO Michael Glimcher in a published statement. “The new company will benefit from a broader range of tenants and property types. There’s probably not a retailer that we won’t be doing business with.”
WP Glimcher will be using its financial strength to buy investment-grade properties, Ordan says. “I think we have some very well-located assets that need some TLC,” he said. “Tenants should know that they’re at the top of the food chain in my company. I’ll do whatever I can to make them successful.”
