Business View Caribbean interviews Gershwain Sprauve, President & COO of the Lockhart Companies Inc. Real Estate Sales and Development division.
Lockhart Companies Inc. , a U.S. Virgin Islands corporation, together with its subsidiaries, owns and operates commercial real estate, insurance, and financial services businesses. In the U.S. Virgin Islands, Lockhart is one of the pre-eminent and most visible commercial enterprises, and the Lockhart family is one of the most established and best known. Founded in 1884 by Alfred H. Lockhart, a progenitor of the current controlling shareholders, the Company was incorporated in 1936. Lockhart is one of the largest businesses in the U.S. that is majority-owned by two minorities: African Americans and women.
Alfred H. was born on the Island of St. Croix and migrated to St. Thomas, a major port of commerce back then, explains Gershwain Sprauve, President & Chief Operating Officer of the company’s Real Estate Sales and Development division. “He started out importing major popular goods from Europe; started a lumber yard business; they had a dry goods store, a general store, a variety of farms and a hotel they managed and operated; as well as a bakery and various real estate interests.”
By the early 1900s A.H. Lockhart’s businesses had expanded to include a major importing company, with exclusive distribution rights to many popular items, including various types of European distilled spirits, as well as increasing developed and undeveloped real estate interests all over St. Thomas and St. John. Indeed, by the time of his death in 1931, A.H. Lockhart’s holdings included approximately one-eighth of the privately held real property on St. Thomas and a larger percentage of St. John, as well.
“In 1936, the company was incorporated and started growing into what it is today. In St.Thomas we operate major shopping centers; there are seven in totality in the U.S. Virgin Islands,” Sprauve adds. Lockhart also owns and operates commercial real estate parks in which the Company provides the necessary infrastructure, such as roads and utilities, and then enters into long-term leases with selected commercial tenants.
Lockhart also owns approximately 400 acres of undeveloped real estate zoned for commercial and residential development. “We are looking at a variety of things for the undeveloped land,” comments Sprauve, “Some of it is zoned residential and some is zoned commercial. So you are limited to what you can do with the various sections. We have often considered partnering with someone who may want to develop in either sector, whether commercially or residentially. Certainly, affordable homes seem to be something that folks are looking for and something we have been considering lately.” In terms of the commercial aspect there is room for growth as well. The least mature of their shopping centers, Market Square East, for example, has 30 undeveloped acres and the company would certainly like to expand their portfolio by bringing in more companies.
As Lockhart has changed, so have the types of its holdings. It has acquired two insurance companies and a financial services company, and has focused on the continued development of its business presence in the U.S. Virgin Islands and the Caribbean. The insurance companies, Guardian Insurance Company, Inc. and Heritage Insurance Company (Caribbean) Limited, provide property and casualty insurance, including commercial, residential, and automobile lines, in the U.S. Virgin Islands and selected Caribbean countries. The financial services company, Premium Finance Company (Caribbean) Limited, finances insurance premiums for individuals and businesses.
“We probably have 60 employees across all that,” says Gershwain, “And the focus has changed a bit. Real estate was the major economic driver at one point; I think that the insurance company being what it is, in terms of the revenue stream for the organization, this seems to be the lions share right now.”
Sprauve is cautiously optimistic about the future. “Like everyone else we are thinking about the economy,” he says, “and the Caribbean is a step back from the rest of the world in terms of what happens with the economy. We are a U.S. territory so the things that happen in America affect us, just sometimes with a delayed effect. So, basically, we try to strategize as we deal with the dips and curves of the economy. We hope to navigate it all and keep our business as strong as we can.”
Lockhart knows that it is an anchor in the community; most of its property caters to the locals and they want to have continuity. At the same time, the entire Island’s economy is mostly based on tourism. “The fact that we don’t grow anything or manufacture anything on the island makes a huge difference,” Sprauve states. “It is almost impossible for our economy to depend on anything aside from tourism. The locals’ income comes as a direct byproduct of people coming to our shores and spending money. And we are part of that as well with two properties focused on the tourist market. But it is all interdependent.”
Lockhart’s long-term existence it not only due to its well-known name; but rather to the company’s fortitude and its embrace of diversity. No doubt, it will continue to be an essential part of the U.S. Virgin Islands’ economy for many more years to come.
AT A GLANCE
WHO: Lockhart Companies Inc.
WHAT: Owns and operates commercial real estate, insurance, and financial services businesses
WHERE: St. Thomas, US Virgin Islands
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