News
STARS OF SEATTLE
November 10, 2011
| We were honored to have the Brad and Angelinas of development and brokerage on our panel Tuesday morning and thought we might tell you a little more about some of them. We can't help ourselves: That's our schtick, being a sort of People Magazine of commercial real estate. |
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| Developer Clyde Holland sees a silver lining in these times. Because deals aren't getting done, he expects undersupply will eventually benefit those who break ground now. And that's just what the founder of 10-year old Holland Partner Group is doing: he started eight multifamily projects this year and has another 12slated for '12, seven in Seattle. At more than 700 employees, Holland has regional offices in Seattle, Denver, and SoCal. When he launched his land fund 18 months ago, he put in $5M and expected others to add $20M, but instead they poured in $30M. And he already had plenty of dry powder from the recession: Because he'd been anticipating a bubble, he made his last start in January '05, and hunkered down; in '09, his stabilized portfolio delivered over 4% NOI. |
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| Here's a pic we snapped at 1200 Madison, where Holland Construction is creating 17 stories of high-end apartments. The firm specializes in ?core urban infill? in markets with high barriers to entry and either near transit or high-growth job centers. Previously, Clyde was West Coast group managing partner for Trammell Crow Residential, leaving to form Holland Partner Group in 2000. At that time, it was building heavily in Portland's Silicon Forest, then townhomes and gardens during the Redmond boom, plus properties in NoCal—all told, $1.3B in development. He also knew the financial side: his BBA was in accounting, he got a job at Peat Marwick in 1983, and earned a CPA along the way. He then joined Consolidated Capital, where he became expert enough in real estate syndication, REITS, private equity, and even the Tax Act of 1986 to become a controller and CFO at TCR. |
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| Look what we persuaded Clyde?s assistant to bring out of the vault: Yep, that's the boss in 1979 as he drove across the country with his brother in a five-year-old MGB en route to college in Napa Valley. Clyde grew up the son of a first lieutenant in the Air Force Medicorps, moving 19 times in 17 years. After high school, he took off a couple years to work on a contracting crew, but then decided to follow friends out to California. He moved to Seattle in ?92 but later found irresistable land in Vancouver, Wa., where he built a house and established HQ. (Note to Clyde's 15-year-old son: Don't look at the picture above if you're about to start driving.) |
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| Dave Sabey of Sabey Corporation is at the top of a red-hot space that intersects tech and real estate, running a company he founded in1970. In partnership with the National Electrical Benefit Fund, Sabey owns the largest private group of data centers in the US. This includes the 32-floor former Verizon building it just purchased inManhattan, into which it will pour an additional $300M for state-of-the-art upgrades—not to mention half a million square feet in centralWashington and one million in Seattle. All an amazing trajectory for a kid from Burien, WA, whose dad, a 43-year Boeing guy with aDepression era view of life, urged him to be a postman, railroad worker, or teacher. Yet he credits his family?s lack of money for getting him started. He was recruited as a defensive lineman for the Huskiesin the mid-'60s by legendary coach Jim Owens, who clinched the deal by promising him a summer job with a division of US Plywoodinstalling structural roof systems. It was $5 an hour and Dave says: ?I thought I?d died and gone to heaven.? |
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| When US Plywood later abandoned that line of business, Dave and the seven others in his crew decided they'd try getting clientsthemselves and created a little firm, working as forklift operators and carpenters. Though Dave?s major was English, he'd learnedestimating at his last job and about buying low and selling high. By the late '70s he was a general contractor, and his moresophisticated customers helped him master best practices. He also bought his first couple of properties: multi-tenant office buildings at 124th and Kirkland and off the ship canal at Nickerson. Boeing gave him bigger assignments; then came the Reagan defense buildup, and by the '80s, the company was doing hundreds of millions in construction. When Boeing started an electronics division, he developed many of its technical facilities in Seattle and Texas, and in the process learned about computer rooms, uplinks, and satellite transmissions. When Clinton downsized defense, he had space available for dot coms. |
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| Besides the 55% of his business that's data centers, 20% is other office buildings and warehouses and the rest government and hospital properties. Sabey Corp does all this with 100 employeesand 300 contractors. (And only two miles from that house where Dave grew up.) He's still married to his wife of 43 years, whom he met atHighline High. They have three boys: two are in the business (both Notre Dame grads, one with a Kellogg MBA) and a third is in entertainment in NY where, among other things, he's managedMariah Carey. Dave loves getting to his horse and cattle ranch inMontana, where he's developed a herd of world-class Black Angus. |
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| Just a few months ago, Justin White wouldn?t have looked quite somanagerial as when we snapped him this week in his office on 5th. Although he's mostly been in management positions for Marcus & Millichap since he joined the firm in 1999, he took his most recent year as a broker, doing 35 transactions. Now he's back in charge of things—the offices in Portland, Reno, Sacramento, and Seattle. He's spending a lot of time looking for a new manager here (as well as for accomplished brokers to lead the office and industrial divisions), flying in on Sundays and returning to his three kids in Long Beach, Ca. at the end of each week. For Halloween, his eldest, 6, was Wonder Woman, and the 3 and 5-year-olds were a clown and a Transformer. But he always dresses up, too: He was a Travelocity Gnome. |
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| We can't remember what he's pointing at out the window, but he tells us he sees good prospects for Seattle due to expected job growthand limited supply of product. He also sees this as a great time to do a 1031 exchange; there's significant rent growth and cheap and plentiful debt. His goal for the office: be number one in the city in investment sales and in the top 5 out of the 73 Marcus & Millichap offices. |
