Broe Greater than the sum ® About Investments Real Estate Infrastructure Transport Energy Newsroom Contact The Broe Story / “Seeing opportunities is not enough. You have to act – and wisely.” Pat Broe, Founder and CEO, The Broe Group Starting in Colorado, but now extending across North America, the Broe story is a history of critical investments, each one a chance to revitalize communities and transform industries, one transaction at a time. Pat Broe started by recognizing the value in Denver’s 1970s real-estate market and capitalizing on it. At the time his small share of the American Dream consisted of duplexes and fixer-uppers; forty years later, that dream has grown into a multi-billion dollar portfolio. Now, along with over 1,000 employees, The Broe Group invests and creates value in the energy, transportation, technology, and real estate sectors. Staying true to our roots, we continue our growth journey by capitalizing on emerging opportunities, being ready to seize value when it arises. With its strong asset base and willingness to take the long view, Broe is poised to help accelerate America’s industrial renaissance well into the 21st century. The timeline below highlights a few key examples of seeing value that others miss and working to make that value real. It’s just the beginning. Key Milestones 2014 Three Leaf Ventures Where Healthcare and Innovation Collide open slide Opportunity America spends more than $3 trillion on healthcare each year, often through mass-marketed and dated practices. Advances in communication technology and computing power are converging with medicine to offer a progressive approach to how we manage our health care towards a more precise, efficient and cost-effective solution. We recognized this emerging opportunity to offer far more than simply financial benefit. Innovation The Creation of Three-Leaf Ventures, to invest in healthcare innovation by funding venture-stage companies. Partnering with entrepreneurs from seed to pre-IPO stage financings across the U.S. and worldwide. Targeting health, IT, mobile and consumer applications, telemedicine and genomics. Outcome More than $50 million of capital has been dedicated to meeting the intersection of technology and medicine. Investments range from smartphone-enabled health monitoring (Scanadu), to advanced genetic testing (Invitae) and fluid-based diagnostics (HealthTell). 2013 Mile High Center at 1700 Broadway Property Development at its Best open slide Opportunity Denver’s first high-rise, the 23-story Mile High Center at 1700 Broadway, showed its age. In 2004 the fifty-year-old building was only 80% leased, and suffering along with the rest of the market. Yet the I.M.Pei building and its iconic quarter-round atrium roofs still held promise. $34 million worth of promise. Innovation A beautification campaign starting the day of closing, with widespread lighting and landscaping upgrades. Aggressive pursuit of leasing, based on keen market awareness. Paying to build a Starbucks in the lobby, despite the presence of another across the street, to dramatically boost tenant satisfaction. Upgrading three floors per year, on average. Outcome A sale nine years later for almost twice the purchase price, at 97% occupancy. 2012 Halliburton’s Sand Terminal at Great Western Industrial Park Door to Door open slide Opportunity In Colorado’s Denver-Julesburg basin, over a mile underground, lies a rich field of Niobrara shale. But cracking it open calls for a high-pressure slurry of a trillion grains of quartz, premium crystals mined from the purest sandstone—900 miles away, at Illinois’ St. Peter sandstone formation. Next to OmniTRAX’s Illinois Railway. Innovation Short-line rail for the first and last miles. Money-saving 100-car unit trains. The world’s largest dedicated frac sand transfer terminal, where each rail car empties in six minutes—twice as fast as at most other facilities. Outcome 500 jobs in northern Colorado, and more of the best sand where it’s needed most. 2005 Great Western Ranch Value from Stewardship open slide Opportunity 457 square miles of New Mexican expanse seen as over-grazed flyover land. Pat Broe saw what was missing for the park-like rangelands, what kept them from becoming one of the country’s most valuable properties. Innovation Preserve the overall ecology by restoring pastures and wildlife refuges. Develop a best-in-class water system to support four-season grazing, irrigated farming, and improved native grasses. Tailor the cattle breed to the specific New Mexico climate. Establish a resident herd of 1500 prized trophy elk, and the hunting operations to manage the herd at its optimal count. Outcome Broe sold the new American showcase for almost three times its purchase price. 2005 Great Western Oil & Gas Value Hidden in Plain Sight open slide Opportunity In 2005, Broe had nearly completed acquiring 1500 acres for its Great Western Industrial Park in Windsor, Colorado, along with some of the mineral rights—but not all. Then seller asked for a quicker closing date. Broe was not looking for oil; it was looking for opportunity. With three test wells, Broe found both. Innovation An expedited closing in exchange for discounted mineral rights. Using rail for efficient supply-chain transport. Cutting-edge technologies to pair increased production with maximum environmental safeguards. Outcome Ten years later, actively operating in the DJ basin, Great Western Oil & Gas is now a top-10 oil and gas producer in Colorado and among the top 100 in the United States. 2003 Great Western Industrial Park (GWIP) Community Partnerships open slide Opportunity Broe’s Great Western Railway moved only 500 cars each year. But that line connected to both the UP and BNSF, and ran through hundreds of acres of Windsor farmland available for purchase—just when Owens-Illinois was evaluating candidate locations for its new plant. Innovation Active public and private partnerships, including a fast-track rezoning from agricultural to industrial, and a foreign-trade zone designation. Development of previously untapped water and mineral rights. Industry synergies to support Colorado’s burgeoning oil and gas plays. Aggressive development to exploit rail, energy, highway, terrain, and workforce access. Outcome GWIP is a 1500-acre, master-planned development supporting over 2000 jobs, at employers like Vestas, Halliburton, and Cargill. 1997 Port of Churchill Northwest Passage open slide Opportunity In Manitoba, the Hudson Bay Railway ran 810 miles north to Churchill, a remote city on the western shore of Hudson Bay, Canada’s principal seaport on the Arctic Ocean. Population: 813 humans and 940 polar bears. And one port, an underused gateway to world markets for Canada’s abundant wheat. Innovation Purchasing both the Port of Churchill and the Hudson Bay Railway. The resolve and diplomacy to unite multiple public, private, and sovereign constituencies in a common solution. Consolidated operation of rail and port under one coordinated enterprise. Aggressive marketing of the port to newly opening polar routes to Asia and Europe. Outcome New worldwide markets for Canadian grain, and revived access to the expanding Northwest Passage sea route. 1996 Hawthorne Pivoting with the Times open slide Opportunity The 6-mile MJ railway was a throw-in when Broe bought the assets of CWPT. For 80 years it had served the Hawthorne Works, where AT&T built America’s telephones. But that production had ceased a decade prior. The 1.2Msf of adjacent industrial space sat mostly vacant, with foreclosure imminent. Innovation Deeply discounted real estate purchase. Repurposing empty space for warehouse use, leveraging the MJ’s unique capacity to service it via rail, doubling the railroad income. Pivoting with the market, when a real estate opportunity surpassed the increased rail income. Outcome The Hawthorne Works Shopping Center now operates on the property that Broe sold for over three times its purchase price. The MJ line remains an OmniTRAX asset. 1992 1000 Miles of Kansas Rail Speed Counts open slide Opportunity In the early 90s, Class I operators like the Santa Fe were trying to shed light-density lines. When Broe learned that their contracted buyer for 1000 miles of the Central Kansas Railway couldn’t complete the financing, he knew the window to act was short. Three Broe executives were at the Santa Fe headquarters the next day, ready to buy. Innovation Acting decisively: initial meeting to acquisition in 41 days. Viewing railroads as an engine for growth by winnowing unproductive branches. Increased development, especially of wheat transport, along a remaining core set of rail lines. Outcome Profitable operation for almost a decade, then a sale nine years after acquisition for $33 million, three times the purchase price. 1991 OmniTRAX Building Something Bigger open slide Opportunity Red ink everywhere. When Chicago West Pullman Transportation Company’s major customer shut down, their six rail lines, spanning 800 miles across America’s Midwest, headed for default. CWPT’s owner needed an exit. Pat Broe thought, “What can we build out of this?” Innovation Extensive industry research to recognize a seller needing immediate rescue. Experience cutting rail costs by 50% with lighter cars, intermodal freight, and time-definite service. The entrepreneurial acumen to sell one line the day after closing. Outcome Managing seven railroads (with thirteen more to follow, and counting) called for a common brand. OmniTRAX, that new corporate flag, is now North America’s second-largest private railroad and transportation services company. 1986 The Great Western Railway Seeing What Others Missed open slide Opportunity In 1986, when Pat Broe bought the scattered remains of the Great Western Sugar Company from bankruptcy, one asset especially caught his eye: a small railway that had hauled sugar beets for 85 years. That Great Western Railway of Colorado still turned a small profit, moving 500 rail cars annually. But Broe saw something more, something others had missed. He saw eighty miles of opportunity. Innovation Aggressive business development along a prime industrial corridor. Public and private partnerships enabling new business models. A lower cost, more skilled, and more flexible workforce. Outcome In 2014 that throwaway short-line spur ran 50,000 rail cars as the backbone of the Great Western Industrial Park. 1983 The Tabor Center Reimagining a Downtown open slide Opportunity In 1982, Denver’s new walking mall at 16th Street had just opened. Seen from above, the granite pavings of the I.M. Pei-designed pedestrian promenade resembled a Diamondback rattlesnake. Seen from street level, its blocks between Arapahoe and Larimer showed all the weathered years of Denver’s history, but none of its charm. Innovation Orchestration of the development of The Tabor Center, a 700,000sf class AA mixed-use project integrating retail, office, and hotel space. Iconic glass-fronted, two-block, three-story shopping center, with novel indoor/outdoor pedestrian traffic flow. Outcome In 1984, The Tabor Center opens as a retail centerpiece of the 16th Street Mall, giving downtown Denver its anchor and putting the city on the national retail map. 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