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THE EDUCATION OF Matthew Bucksbaum

Matthew Bucksbaum almost lost his shirt once. In 1954 when he was 28, he and his late brother, Martin, sold their chain of five grocery stores in and near Marshalltown, Iowa, to raise money to develop the state's first shopping center, in Cedar Rapids.

The project was a financial disaster, he says, because the architect convinced them to dig basements and add a second story over part of the property, which led to massive cost overruns. “We were amateurs,” he says.

Today, Bucksbaum's General Growth Properties Inc. is the country's second largest REIT and a stock-dividend machine, (in early March, dividends were $1.20 a share, a yield of 3.66 percent against the stock price) with ownership of 121 million square feet of mall space at 135 malls and another 27 million square feet at 35 third-party malls under management. “We learned from our mistakes,” says Bucksbaum, who at 78 has reason to be far more self-confident.

Why are things currently going so right? Bucksbaum offers unstartling answers. “The basic decision is, can you make money on the acquisition? So we look for projects that have been under-managed, that under our standards have potential for increasing the projects' returns.”

Outsiders, however, also point to management techniques that build investor confidence and grow management skills in-house. For example, the Bucksbaum family holds about 25 percent of General Growth's stock, and according to publicly available insider disclosures, Matthew has been buying more. “This tends to align the interests of management and the shareholders,” says Barry Vinocur, the editor of Reality Stock Review. “The Bucksbaums have done a great job for their shareholders.”

Family member salaries, which are about the same today as in 2002, are unimpressive; it's the stock options that count. “Every time he raised his dividend by a quarter of a cent,” Vinocur says of the senior Bucksbaum, “he made more than I did in a year.”

Matthew was paid $200,000 two years ago. His son, and the company president, John, 47, got $225,000 in that year, but also received $2.599 million in stock options.

Corporate success has left the elder Bucksbaum frustrated about accomplishing other goals. He does, however, find time to be a connoisseur of fine wine and to play tennis. He and wife Kay occasionally make time for five- to 10-mile bike trips. And he contributes to causes ranging from the Aspen Music Festival to medical schools to National Public Radio.

Don't misunderstand, says Matthew, “I like what we're doing and enjoy my work…I just would like to have more leisure time.”

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