The Secret Life of Ron Paul
Late at night last November, a man well known for running a sizable local financial institution quietly left the annual Kidney Ball at the Omni Shoreham, but instead of heading home to Maryland, turned back down Connecticut Ave to 22nd St, then made a left onto Ward Court.
When he reached the Duke Ellington Building, he parked and quietly entered, started prowling the lobby, elevator and halls, made notes, then quickly slipped back out.
By day Ron Paul is CEO of EagleBank, an institution he founded with four others 17 years ago in Bethesda. In that role, he is thought to be a mild-mannered civic leader, a one-time accountant immersed in reams of numbers and outwardly an active supporter of charitable events. But his pattern of frequent, unannounced nocturnal visits around the region has raised questions. A rigorous Bisnow investigation was undertaken. We believe the conclusion is inescapable that Ron Paul is a…
…serial real estate investor. How could this happen to an upstanding young man who grew up humbly in Oceanside, NY, where his mother was a homemaker and his dad a liquor salesman? Who was a good student at the University of Maryland from '74 to '78, married his college sweetheart Joy, and is still happily married 35 years later? And who got assigned at his fraternity Phi Sigma Delta to chair a fundraising dance marathon called "Dancers Against Cancer"?
Actually, that last fact was key. Taking the task seriously, he came to know the head of the American Cancer Society, and following a detour to NY for a job at Coopers & Lybrand, came back to DC in 1980 and got a job as his bookkeeper. But two years later, this employer suddenly died, and Ron went out on his own. His first deal was buying the 196-unit Cromwell apartment house that he still owns today (pictured above). He met a guy named Bob Pincus, who was then president of DC National Bank, and though he says he didn’t have two nickels to rub together, he requested, and got, a loan.
A year later he found an office building in Prince George’s County that was 70% vacant. He went to the owner, negotiated a low price, and said either he would lease it up and buy it (with equity freed up from the Cromwell apartments), or if he couldn’t, he’d go away and wouldn’t charge for his leasing and management efforts. It worked, and then he did the same for the building next door. Eventually this became a pattern: buying and holding DC and Maryland income-producing properties, and managing the commercial properties in-house. Today he has a portfolio of over 15 office and apartment buildings, a staff of 25, and both investment and property management entities, all under the umbrella of the Bethesda-based “Ronald Paul Cos.” He is known for being as hands-on with his real estate as he is at EagleBank--a trait he learned from his dad (above). His tenants know him personally and he’s constantly checking on properties. At the Ellington Building the night after the Kidney Ball, he found two light bulbs out and an elevator that needed cleaning.
So why is he a banker? In 1987, a close friend, Dudley Dworken, got involved in a startup bank in Prince George’s that was looking for a real estate investor for its board. Although only 31, Ron fit the bill. He became a founder of Prince George’s National Bank, learned a ton over 10 years, until the bank was sold to F&M in 1996. Above all, he learned he loved banking and how it can help a community. He and four others formed EagleBank in 1997. In 2008 he reunited with Bob Pincus when EagleBank merged with Fidelity and Trust Bank. Today, EagleBank has $5.2B in assets and a staff of 425. (Evidently Bob got paid back because here are the two more recently hitting the golf course.)
He also became active in the National Kidney Foundation. In 1990 he needed a kidney—which his brother Steven donated. In 2009, he needed another. The CFO of his real estate company, Kathy McCallum, who started as a receptionist, got both an undergraduate degree and MBA (from Maryland, of course) while on the job, and has now worked with Ron for 30 years, offered hers.
Today Ron finds most deals off-market, looking for value-adds and those with “a little hair" on them. For example, he picked up the 110k SF 6010 Executive Blvd in Rockville three years ago that was substantially vacant and began using local brokers to lease 3k to 5k SF spaces. He’s now leased up 80%. Until recently he’d never done development, but last year he bought his first gas station—at North Capitol and Florida, which he feels is a great long-term opportunity to JV at some point with a developer who wants that land. Two weeks ago, he bought another, at Bladensburg and NY Avenue. And he’s looking at two more, not to mention other investment opportunities.
As for the Ellington Building, it’s now fully leased up. His only problem with it? Technically it’s the Duke Ellington Building (named for the site of Duke Ellington’s birth). But he can’t bring himself to say the first name—seriously. Don’t forget: He’s a Terp. (Speaking of which, for further inspiration, see the Washington Post excerpts of Ron's recent Maryland commencement address.)