When it comes to the world of American real estate, Donald Bren is the undisputed heavyweight champion. Following the success and acquisition of his first property development company in the early 1970s, Bren, along with a group of investors, purchased a California-based real estate investment firm called the Irvine Company, which was originally founded in 1864 by prominent farmland owner James Irvine I.
Within the first two decades since the takeover of the Irvine Company, Bren bought out all of his fellow partners, and, as a result, became the company's sole shareholder. Under his leadership, Bren grew the Irvine Company into a multi-billion-dollar real estate empire. In addition to being the owner of a 93,000-acre ranch, the Irvine Company owns and operates a collection of residential, office and retail properties throughout California.
With an estimated personal net worth $15.2 billion, Bren is one of the wealthiest people in the world. As of December 2017, Forbes ranks him as the richest real estate developer in the United States. Bren has also built a reputation with his philanthropy. His lifetime donations greatly exceed $1.5 billion and, in 2008, BusinessWeek listed him as one of the "50 Most Generous Philanthropists in the United States." Here is an overview of how Donald Bren became one of the wealthiest real estate investors in the world.
Early Life and Schooling
Born in 1932, Bren grew up with wealthy parents who were both successful in their own right. His father, Milton Bren, was a Hollywood movie producer of Jewish descent. Bren's mother, Marion Jorgensen, was an influential civic leader who was the granddaughter of a successful Irish railway wheel manufacturer. She was also a close friend of Ronald and Nancy Reagan. After Reagan was elected the president, Jorgensen became a member of the White House kitchen cabinet. Bren's parents divorced when he was 16.
To keep their children grounded and unspoiled, Bren's parents enrolled him and his younger brother in public schools. Additionally, they were required to work during school vacations and help their father conduct repairs on his rental properties.
During a 1990 interview with Fortune, Bren's brother Peter described him as a perfectionist. He said, ‘‘In high school we would take old cars and turn them into street hot rods. I'd build one, and it would run, but there would be a couple of screws left over. Not Donald. He would spend hours in the garage going over every detail. Everything had to be perfect. He starts at A and ends up at Z. He goes right down the alphabet.’’
In 1956, Bren graduated with a bachelor's degree in business from the University of Washington. He financed his tuition with his own funds and a skiing scholarship. In that same year, Bren placed in the National Alpine Ski Championships. He then applied to join the U.S. Olympic skiing team, but he was not able to participate after sustaining injuries in an accident. After graduating, Bren served as an officer in the Marine Corps for three years. (See also: How Grant Cardone Built a $350M Real Estate Empire.)
The Beginning of His Career
Bren's career in business began in 1958 when he founded the Bren Company, a property development firm that built houses in Orange County, California. His first development was a small home on Lido Isle, a man-made island off the coast of Newport Beach. He financed the construction with a $10,000 loan from the Bank of America. Bren sold the homes that he built and reinvested the profits into new developments. As a result, the Bren Company's size increased significantly over time. By the early 1960s, Bren was designing suburban master-planned communities. At that point, his largest project was a 10,000-acre city development in Mission Viejo, Calif.
In 1970, International Paper Co., the largest pulp and paper company in the world acquired the Bren Company for $34 million. Two years later a recession hit California. This resulted in a dramatic fall in property values, and it gave Bren the opportunity to repurchase his company from International Paper for much less than what he sold it for. He ended up acquiring the company for $22 million.
The Irvine Takeover
In 1977, an 185-square-mile ranch known as the Irvine Ranch was up for sale. The property was once owned by Scottish-born James Irvine I, but ownership was transferred to a non-profit organization following his death in 1886. The foundation that owned the Irvine Ranch began attempts to divest the property after tighter tax legislation was enacted in California.
Many deep-pocketed companies expressed interest in purchasing the ranch. One such company was Mobil Corp., which later merged with Exxon. Bren was also interested in taking over the property, but the money he made from the earlier sale of his company was not enough. To get his hands on the ranch, Bren partnered with the late A. Alfred Taubman, who was a prominent shopping-center developer. Taubman agreed to put up 40% of the down payment. With enough money to put down for a loan, Bren and Taubman managed to secure multi-million-dollar loans from some banks. They successfully acquired the Irvine Company, the holding company that owned Irvine Ranch, with their bid of $337.4 million.
Taubman later sold a portion of his shares to some of his close friends as a means of cashing out. Some of them were iconic figures in American business, including Henry Ford II, Milton Petrie, Max Fisher and Herbert Allen Sr. Despite being the Irvine Company's largest shareholder, Bren wanted to have control of the entire business. Shortly after the acquisition, he borrowed $560 million and quickly bought out the other shareholders. By 1996, Bren was the sole shareholder.
For almost four decades, the Irvine Company has developed many residential and commercial properties. Today the company owns more than 110 million square feet of investment property, with a portfolio that includes 500 office buildings, 41 retail centers, 130 apartment communities, five marinas, three hotels and three golf courses in Orange County. Also, the Irvine Company has pledged to protect more than half of the Irvine Ranch as a wilderness and recreational preserve.
The Bottom Line
Donald Bren made his fortune in real estate. After graduating from college with a business degree, he started a property development firm that he eventually sold for millions. Bren later partnered with a group of investors to purchase a real estate company that was founded in 1864. As time passed, he bought out his partners and became the company's sole shareholder. Today he is the wealthiest real estate developer in the U.S. (See also: How Zhang Xin Built a Real Estate Empire.)