Abe Rosenthal and Bill Carpenter have been hiding in plain sight.
Hardly anyone seems to know them. The two men run a real estate company in Baltimore, but none of Prime Retail Inc.'s nine factory outlet centers is in Maryland. A former unit of a Chicago company, Prime has only been a public company a few months.
As he tells the story, their old boss, local developer David Cordish, practically snickers.
"They're one of the best-kept secrets in town," Mr. Cordish said.
But that secret is quickly spreading. Prime went public in March, is working on four new centers and expanding four more.
The company plans to double its portfolio to 4 million square feet by the end of 1995.
From an anonymous division, Prime will become the second-biggest outlet center developer in America. And the company, a former division of Prime Group Inc., which still owns about 40 percent of Prime Retail's malls, was only founded in 1988.
"We realized a transformation was taking place," Mr. Rosenthal said about outlet centers. There "are people who got accustomed to brand-name merchandise in the 1980s but in the '90s they have kids to worry about and their parents to worry about. They want the branded merchandise, but they don't necessarily want to pay for it."
Indeed, factory outlet centers have been springing up rapidly, and on one level Prime Retail is just riding the wave.
Outlet centers are getting new tenants from outside their traditional base in the clothing business. IBM, Sony and other tTC consumer products makers are opening outlet stores, as are distinctly nondiscount clothing manufacturer/retailers like Brooks Brothers.
By the end of last year, there were 294 outlet center malls nationwide, more than double the number five years earlier.
Six real estate investment trusts that specialize in factory outlet centers have gone public.
This year, the industry plans to add 20.7 million square feet of outlet center space, increasing by nearly 40 percent the 52.7 million square feet of outlet centers in the nation at Dec. 31.
But on another level, Prime is well ahead of the pack. Analysts and industry experts agree that Prime's centers are typically bigger, better designed and attract a better grade of store than competitors such as McArthur/Glen Realty, the Northern Virginia-based owners of big outlet centers in Perryville and Queenstown.
The company also posts sales per square foot that are second in the industry, according to banking firm J. P. Morgan & Co.
"I think when you're out to get the more upscale tenant into your center, there's a certain logic to making these centers something more than bare bones," said Tom Kirwan, senior editor of Value Retail News, a Clearwater, Fla.-based trade paper for the outlet center business. "Their projects are architecturally beautiful and very well tenanted."
But Mr. Cordish puts his finger on the biggest reason Mr. Rosenthal and Mr. Carpenter are in the process of making a lot of money. They got in early.
"The niche they saw in 1988 was that in the factory outlet side, you don't have the Rouses, the Taubmans and the DeBartolos," he said, ticking off the names of three of the nation's biggest developers of full-service suburban malls. "It didn't exist. In their business, they are the Rouses and the DeBartolos."
Mr. Rosenthal, the 45-year-old chief executive, is the construction and finance guy from Pikesville. Mr. Carpenter, the 44-year-old chief operating officer and president, is a marketing expert from Annapolis who worked for the Rouse Co. before joining Cordish. Both are true believers.
They got their introduction to outlet centers working for Cordish, where they converted a strip center to the new format. Since 1988, said J. P. Morgan analyst Chris Hartung, they have become industry innovators.
They've added features like food courts and playgrounds that older outlet centers don't have -- and most competitors still aren't using -- to attract a richer, older consumer than earlier outlet centers could when they competed on price alone.
"We're trying to 'Rouse up' the outlet center," Mr. Carpenter said.
But while Mr. Hartung and others worry that the fancier centers will eventually add so much to costs that tenants won't be able to offer the discounts that people expect from outlet centers -- especially when they drive 54 minutes each way to get there, as a company survey found Prime's customers do.
Mr. Rosenthal insists that a plusher center is the way of the future. At one center in Ohio, he said, Prime went head-to-head with a nearby competitor for seven major tenants earlier this year -- and got all seven, including Ann Taylor, Laura Ashley and Brooks Brothers.
"The tenants chose our project because they know the consumer prefers to buy at the . . . kind of center we develop," Mr. Rosenthal said.