Before William Polk Carey was worth a few hundred million dollars, he was a newspaper man.
At 15, the editor for his boarding school newspaper landed an interview with H.L. Mencken, the acerbic social commentator, journalist and literary critic who often ripped the middle class with observations such as "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."
His interview was the first Mencken agreed to in a decade, Carey said.
"I think he was tired of telling everybody ‘No,’ " Carey said. "He’d rather give an interview to a kid than somebody who’s older and more sophisticated. I asked him why he did what he did, and he said, ‘Why does a chicken lay an egg? It’s the nature of the beast.’ "
Carey decided not to became a full-time scribe.
Instead, he made a career on Wall Street.
"Opportunities arise and you discover new things, it’s part of growing up," he said.
"But it doesn’t mean I wouldn’t have loved the newspaper business. My problem is it takes me too long to write an article. But I love it and respect people who are in it."
Carey, founder of a real estate investment banking firm, has his office in New York’s Rockefeller Plaza and his name on several buildings thanks to contributions like the $50 million donation he made last year to Arizona State University’s school of business, now named the W.P. Carey School of Business.
Besides the lucrative ties to the university, his company is showing an increasing interest in buying properties in the East Valley and Arizona.
"We’re bullish on the Phoenix area," said Anne Coolidge, managing director of W.P. Carey and Co. "If you believe in the economy improving and demographics improving in an area, then Phoenix is a better investment than other places when it comes to real estate."
Carey’s 30-year-old real estate firm employs 120 and is worth an estimated $1.5 billion, according to an industry analyst who has followed the business for years. The company began to be publicly traded five years ago, and Carey has about 35 percent of its equity.
"The way they run their business is a lot more important than their size," said David Aubuchon, an analyst with A.G. Edwards. "They’re very focused on long-term versus short-term results, which can be a problem for a public company that reports quarterly. I’ve been very impressed with them staying in touch with their original principles and conservative philosophy. They’ve been very successful and there’s no reason to think that’s not going to continue in the future."
Carey, 74 and a native of Baltimore, got his start at a car dealership. After graduating from Princeton and the Wharton School at the University of Pennsylvania, he went to work to pay off school debt owed to his stepfather, who owned the dealership.
In 1959, when he was 28, Carey used the knowledge he gained in autos to go into a business where he leased equipment, including cars, trucks, airplanes and even factories. A change in tax laws made being in the business less desirable, he said.
"I switched out of that to real estate and then to general corporate finance and then switched back into real estate," Carey said, adding that real estate deals were larger, more interesting and meaningful. Carey said he brought the first foreign investment to Australian companies in 1960.
His company, which started in 1973, was one of the first to offer an alternative source of financing for businesses that have real estate and want to free up capital, Coolidge said. Carey uses sales/leaseback deals to buy company buildings and then lease them back to the business.
The advantage for Carey is a steady stream of cash. The advantage to the business owner are proceeds from the sale can be used to help the company grow, pay down debt or buy equipment.
Most of the lease deals are for 20 years with options for extensions so businesses can stay in one place for decades. The business owner pays the taxes, maintenance and insurance on the building.
"Historically, there’s always the philosophy of you need to control your real estate, you need to own it, and if you give that up, you’re selling away the store," Coolidge said. "As people become more sophisticated in looking at their assets and liabilities, they realize you actually can have operational and investment control essentially of the property, but actually not have your capital in it. People have gotten comfortable with the concept."
Carey owns 3.5 million square feet of real estate in the Arizona, including the Tempe headquarters of America West Airlines and Caremark, one of the nation’s largest pharmaceutical services companies at the Cotton Center on the Tempe-Phoenix border.
Earlier this month, Carey acquired the headquarters of Chandler’s Prochem, a manufacturer of floor and carpet maintenance equipment, in a $13.7 million deal. Other Carey properties include a Childtime child care center in Chandler, Intesys Technologies in Gilbert, Orbital Sciences Corp. in Chandler and Universal Technical Institute, U-Haul and a PetsMart distribution facility in Phoenix. Carey owns or manages more than 680 commercial and industrial properties in the United States and Europe composed of more than 95 million square feet of space.
Tom Weir, America West vice president and treasurer, said the company does its homework and offers lower interest rates then most lenders because they understand the value of real estate.
Five years ago, the airline decided to consolidate into one building. It was designed and constructed by America West, but Carey owns it.
"It provided us with a significant amount of funding upfront and avoided the use of corporate cash," Weir said of the deal.
"At the time, the company was growing pretty rapidly — 10 percent a year — and we required the cash for growth purposes. This was efficient financing in the sense it bore a very low interest rate."
His work in Australia led Carey to think globally, where he’s been active in business and philanthropy. His latest efforts are potential investments in China, where ASU has an executive MBA program, and in India.
"These relationships we have through ASU are very helpful for that," he said. "It isn’t why we did it. We did it because we thought it was a good thing to do, because of my grandfather’s connections, and pressure from my Phoenix, Scottsdale and Paradise Valley-based relatives (cousins) who wanted me to do it very badly."
Carey’s grandfather on his mother’s side was John Armstrong, legislative founder of ASU. Armstrong Hall, the building that houses the College of Law, was dedicated to his memory in 1968.
"They named it after him and didn’t ask for a dime, which I thought was rather extraordinary," Carey said.
"It was a nice thing to do, but they didn’t let me forget it entirely because my cousins told them that I might be willing to contribute more down the road."
On his paternal grandfather’s side, there are ties to Johns Hopkins University. His family also has given to the University of North Carolina, Bryn Mawr College and to causes in Baltimore.
In India, Carey has supported 40 elementary schools, and in China, he said the company is "having a great time with the state-run enterprises helping them to make the transition from being a government-owned company to a private enterprise."
Recently, Carey met with a leader of the Kinsey Institute where he plans to finance a new Kinsey Report, well-known for its studies on human sexuality from 1948 to 1953.
Employees say Carey still comes to the office every day. He’s a lifelong bachelor, and it is said he treats staff members like family. He lets employees take weekend trips to one of two homes he owns in a quaint town in upstate New York.
A December 2001 article in a newsletter called Buyouts said Carey likes good deals, such as buying $1 hot dogs and $12 watches and trading frequent flier miles to upgrade to business class. The company motto is "Doing good, while doing well."