.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Housing development projects all around Central Iowa, audacious residential bets downtown, a major acquisition of the Clarke Cos. and a testing of the volatile Florida market – yes, you could say Hubbell Realty Co. is in an aggressive phase.

And even though bad news continues for the nation’s housing industry, the West Des Moines-based company shows no signs of concern about the future. “There’s some excess inventory that will take a while to burn off,” said Hubbell President Rick Tollakson. “But we’re not going to stop building so (other builders) can sell houses, because we’re selling ours.”

It’s shaping up as the third major phase of a company with a long history in Central Iowa. Hubbell Realty traces its roots to the mid-19th century, when F.M. Hubbell came to Des Moines as a young man and saw opportunities everywhere, including real estate. Explosive growth followed. But by the time Jim Hubbell III joined his family’s real estate company in 1973, it had become a quiet, cautious place.

The founder of it all had created a trust that would ensure a comfortable life for his descendants – and tied their hands when it came to business decisions. “F.M. said he had worked hard for what he had, and he didn’t want the family to squander it,” Jim Hubbell said.

The rules of the trust prevented the sale of many valuable pieces of property, and its money was managed conservatively. “The company was dramatically smaller,” Hubbell said. “We were just renting out what we owned.”

The trust was dissolved in 1983, and the philosophy changed. Just one year later, Tollakson came on board to work on a project he describes as “extremely aggressive at the time”: the construction of Hub Tower and the Kaleidoscope at the Hub shopping mall in the heart of downtown Des Moines.

In 1990, Hubbell Realty bought a local residential real estate firm, First Realty. “It was a terrible business for us,” Hubbell said, “but it got us into land development and home building. We sold it to Iowa Realty and made a few bucks.”

During the past few years, Hubbell has jumped into the still-unproven downtown residential trend with apartments in the Hubbell Tower and the Spaghetti Works building, condominium units on Grand Avenue and two buildings under construction on Fourth Street, one for apartments and the other scheduled for condos.

Hubbell Realty now includes divisions dealing with construction, renovations, brokerage, retail operations, apartment management and commercial management. The commercial brokerage is affiliated with CB Richard Ellis Group Inc., a company with enormous national and even international connections.

“I’ve called Hubbell the sleeping giant,” said real estate magnate Bill Knapp, “and they woke up.”

Rapid growth

Hubbell Realty moved into a new building at 6900 Westown Parkway in West Des Moines five years ago, thinking that it would be sufficient for its needs for a long time. “We planned for 20 to 25 percent expansion, and we’ve blown through that,” Hubbell said. “We’re wondering, should we add 5,000 square feet here, but we’re trying not to.”

Employment rose from about 70 people at the time of the move to more than 100, then the Clarke acquisition added another 25 or more. However, most of the Clarke people work at other locations.

That’s because so many of them are involved in managing apartment buildings and other multifamily operations, the key to the Clarke deal from the buyer’s point of view.

“Particularly with apartments, scale is important,” Hubbell said. “You have the manager and processes in place; you can use the same accounting package for 5,000 units as for 500.”

Buying the holdings of Lloyd and John Clarke gave Hubbell Realty a foothold in the Sioux Falls, S.D., market that could lead to more activity there. “We’ll continue to look in that area,” Tollakson said.

“Rick and I have spent the past 10 years traveling to different markets,” Hubbell said. With 600 residential units in Sioux Falls, “that’s some scale,” he said. “You can afford to have people travel up there.”

However, markets much larger than Sioux Falls are also on the Hubbell radar. Torto Wheaton Research, an independent firm owned by CB Richard Ellis, has advised the company to focus its expansion plans on Florida, Arizona and California.

“We are starting to look at geographic expansion,” Tollakson said. “We’re still cautious and conservative, and we’re very busy in our marketplace, but there are two or three targeted markets we’re looking at.”

So far, Hubbell and Tollakson said, they’re most interested in Florida for a basic reason: they know people there. Fifty-seven people own a piece of the company and “a lot of our stockholders live in or spend time in South Florida,” Hubbell said. “We have a lot of friends there and connections with lawyers, accountants, whatever.”

For one example, there’s Harry Bookey. The president of Des Moines-based BH Equities LLC sits on the 17-member Hubbell board and has significant business interests in Florida.

That state is always one of the first places mentioned when talk turns to soaring foreclosure rates, but Hubbell Realty is more interested in what will happen after this crisis passes. “The dynamics of the Florida market are totally different than here,” Hubbell said, but noted the most important detail in the home building industry: “There are more people living in Florida today than yesterday.”

“When (builders) are leaving, there are opportunities,” Tollakson said, and the company has already put a toe in the water by buying a 60-lot subdivision in Florida from a national builder.

Still cautious

Hubbell Realty expects to set a company record for houses sold this year, but is far from dominating the Central Iowa market. Of 4,000 or more Central Iowa building permits in 2007, Hubbell will account for only “a couple hundred,” Tollakson said. “We’re diversified. We don’t just live off home building; the commercial side is very strong for us.”

The company took risks with projects in Altoona and Pleasant Hill when little building activity was taking place there, and those moves seem to be paying off. Now it’s trying the same tactic in Carlisle and Norwalk.

But the conservative feel remains, because Hubbell only buys when it’s ready to build. “We don’t buy and hold,” Tollakson said.

“Bill Knapp has land he’ll probably never see developed,” Hubbell said. “That’s a whole different business.”

Knapp was happy to see Hubbell enter its aggressive phase, figuring that activity by one developer leads to opportunity for others. “They’ve got the capability of doing it,” he said. “They own a lot of land; they’ve been around for years; they’re in a great position to do a lot of great things for the community through business and charity. The more people are successful, the better for all of us.”

Knapp sees a bright future for the Hubbell company. “It looks to me like they have a lot of momentum going and I think they’ll continue to be aggressive as long as the market allows them to,” he said.

“They’re very shrewd operators. They make sound decisions and think things out before they act. They won’t get in trouble.”