O'HARA TOWNSHIP -- Chances are that you're going to hear the name ECHO Real Estate Services Co. again, again and again.

After two years of laying the groundwork, the owners of Giant Eagle Inc. have decided to jump into development, founding a new company to create office, retail, housing and golf course projects.

With Giant Eagle clout behind it, ECHO plans to quickly become a development force.

Combined, the value of ECHO's initial slate of projects exceeds $100 million.

Giant Eagle chairman David Shapira serves as co-chair of ECHO along with Richard Nimtz, who for 10 years headed the grocer's real estate arm, Kappa Properties, which is being dissolved.

For starters, ECHO has made an offer to buy Green Oaks Country Club in Verona where it plans to build a new golf course, clubhouse and 250 upscale homes.

ECHO also begun development of strip centers in Cranberry Township and Gibsonia, started a new retail development for #1 Cochran in Monroeville, and secured an option on the Brooks Brothers building on Smithfield Street, Downtown.

Including work on Giant Eagle-anchored real estate developments, ECHO soon will control $400 million in assets. And by mid- 2002, ECHO should have a real estate portfolio of 16 million square feet, ECHO said.

Long tethered to supermarket-anchored retail developments, Giant Eagle and Kappa were not able to take advantage of an increasing number of investment opportunities not tied to new grocery stores.

"By the end of the 1990s, we had a chance to do a lot of different things," said Mr. Nimtz, a 30-year veteran of the real estate industry who founded Kappa in 1991.

Now, Giant Eagle wants to take advantage of the explosion of development occurring in this region. Hence it is phasing out Kappa and transferring its assets to ECHO, according to Mr. Nimtz.

ECHO's formation will also lead to a greater understanding of the real estate market.

"We needed to get the right experts to help manage that asset base and focus on the growth opportunity available in that industry in a way that would be unfettered by traditional supermarket thinking," said Laura Karet, senior vice president of marketing for Giant Eagle Inc., whose husband Tom is a vice president with ECHO. "We were managing our real estate assets like supermarket guys. Now we're going to manage our assets like real estate guys."

Giant Eagle will continue to operate its real estate department, which always operated separately from Kappa.

ECHO, meanwhile, will work with Giant Eagle on various projects that include grocery stores. For example, Giant Eagle is in the process of expanding in the Toledo market. If Giant Eagle -- ECHO's largest client -- needs assistance in developing sites, then ECHO will become involved.

Kappa Properties will remain in existence until the end of the year, then be absorbed by ECHO. Kappa employees will become ECHO employees. ECHO currently employs around 50.

Not only will ECHO serve as a developer, but will also act as a full-service real estate company, similar to Oxford Development Co. or the Gustine Co., Mr. Krahe said.

ECHO, which is owned by Giant Eagle shareholders, will be financed through debt, inside equity and other financing on a per-project basis.

"We have developed the ability to syndicate and we syndicate" real estate partnerships, Mr. Nimtz said. "We consider ourselves asset managers. Part of asset management is creation. We're a full-service real estate company from A to Z."

"We're young and entrepreneurial, yet we have the strength of Giant Eagle," Mr. Krahe said.

According to Forbes, Giant Eagle ranked 30th on its annual survey of the 500-largest privately held U.S. companies. Forbes estimated Giant Eagle's 2000 revenue at $4.2 billion.

"I am flattered (ECHO) compared themselves to us," said Gregg Baldwin, president of Gustine. Mr. Baldwin said he views ECHO as a friendly competitor.

"We might do some projects together and we might compete. But, they're good guys with great talent."

The projects that ECHO is actively involved with run the gamut from retail development to office building rehabilitation, new office construction to housing and golf course development. The company plans to focus on the local marketplace and then expand nationally when opportunities arise.

You can view this article on the web at: http://pittsburgh.bizjournals.com/pittsburgh/stories/2001/07/16/story4.html