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Tuesday, May 22, 2012 Five Questions With...
CREF: How did you get into the real estate business? RR: I was a real estate major at San Diego State and one of my professors said I should go down to check out a job opening at the Chamber Commerce's Economic Research Bureau. The job was putting together a research piece. I got the job and putting that together gave me the opportunity to meet pretty much everyone in the business as a broker. I thought it was a lot of fun, and after I finished that piece for the Chamber, I went to work part-time for a broker here at Grubb & Ellis and then when I graduated college I started working full-time for Grubb & Ellis. I ended up leaving the firm in 1990 to go work for a small local company called BRE Commercial. We ended up taking the majority of the people who were left at Grubb & Ellis over to BRE Commercial. Grubb & Ellis came back to us and said 'Maybe you should affiliate with us since you took all our guys' (laughing). That's kind of the genesis of where we are today. CREF: What notable deals have you been involved with? RR: Just a couple weeks ago we closed an $88 million land sale transaction that Kilroy Realty just purchased. It was a very competitive process for 23 acres of land in Del Mar Heights that Pardee Homes owned. We had a tremendous turnout - initially over 20 offers - and pricing got to be somewhat aggressive. We ended up selling it at $88 dollars per land square foot. CREF: In what commercial real estate industry do you specialize? RR: I do some industrial but I'm primarily an office guy. I've gotten involved with several relationships that took me over into industrial - I do an industrial deal or two a year as well. But primarily my background is in office. CREF: How has the industry changed since you've been involved? RR: It has changed radically from being a very localized business to being much more of a global institutional business. It's gone from being a 'lone ranger, protect your information' as an individual broker to a real team orientation of sharing a tremendous amount of information and specializing in working with large groups of people in various specialties. Today, it's long-term relationships. It's not about selling something but rather being there as if you're the owner of the property and offering strategic advice as to whether to sell, buy, lease, enhance, reposition - whatever it may be. And your skill set needs to be much broader than what it used to be. CREF: How does the market look over the next 12 months? RR: I would say we're going to continue to see an imbalance between buyers and sellers. I don't see a whole lot happening in the first half of the year. There are a lot of people talking about the fact that they have money to get out into the market but they don't seem to be wavering on their valuation of commercial real estate today and unless the sellers come around in the second half of the year, I think it'll be slow as well. You may see a fair number of projects come to market, but unless the sellers have a bit of an adjustment in pricing, I don't know that we're going to see many transactions. The state of the credit market has brought most of the investment activity to a halt. We had five projects go to market this last quarter and none of them sold. Not that there wasn't the capital or the buyers, it's just the difference between buyers' and sellers' perception of value. Filed Under: Five Questions With... E-mail this article to a friend | Printer friendly format| DIGG this| Post to del.icio.us Comments on this article
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