Zaya S. Younan and his Woodland Hills real estate investment group, Younan Properties Inc., already own a 4.5 million-square-foot portfolio that includes some of the sleekest and most modern office and retail properties in the country. Now they also own a bona fide French relic – a 17th century castle called Chateau du Petit Chene. The property, a 20-room resort on an 18-hole golf course about three hours from Paris, is Younan’s first European acquisition. It was purchased through a French holding company he established, La Grande Maison Younan Collection SAS. “We found a great opportunity,” said Younan, 52, explaining that the historical property was in the midst of a luxury hotel conversion when the prior owner halted work due to cost overruns. Younan bought the site and is now completing the interior and exterior renovations, adding luxury guest suites and relaunching the restaurant with a well-known French chef. Make no mistake, the resort is a business investment. But it’s clearly also a passion project for Younan, a history buff who collects antiques that he displays in his Topanga Canyon Boulevard office and 22-acre Westlake Village estate. He was excited when his workers recently uncovered a long-capped well inside the French chateau’s chapel, and was amazed to learn that even the doorknobs are original. “You go to open a door and you’re holding on to something that is older than the United States,” he said. Younan was in France buying antique furniture for the chateau when terrorists attacked Paris earlier this month, killing 130 and wounding hundreds more. “I got an alert on my iPhone,” he said. By the time he traveled home through Paris the following week, “there was not a single person on the streets. It reminded me of Sept. 11th.” Despite the attacks, he’s not concerned that France is headed for recession or that Europeans will stop traveling to resorts such as his. “Along with the terrible loss of innocent lives, terrorism usually causes an immediate downturn in business,” he said. “But humans are agile and we’re all realizing that we can’t live in fear.” Improving fortunes The historic Chateau du Petit Chene is located in Mazieres-en-Gatine and sits amid 160 acres of wooded park land and lakes, which are part of the property along with the golf course, driving range, and six-hole pitch and putt. Younan did not disclose the purchase price but said the acquisition was an all-cash transaction. The property is registered as a French historical monument and was built by the Viault family in the 1600s, with just three owners over the centuries. Younan envisions the resort appealing to local and international tourists who want to relax and are interested in history. “Europeans like exclusive, quiet, private places. This is a hotel where you could stay for a week and never go anywhere else,” he said. International golf course manager Blue Green Saur Group provides management of the Golf de Petit Chene through a 20-year lease. Gaetan Maetz, operations director at Blue Green, said Younan has already begun making significant improvements to the property. “We look forward to working with (Younan’s) French subsidiary to transform the Golf du Petit Chene into one of the most desirable golf destinations,” Maetz said in a statement. Younan Properties’ international expansion marks an important milestone for the 50-employee real estate investment and management firm, which suffered greatly during the recession. “It was a perfect, dangerous storm. I kept thinking it would end but it didn’t. I never thought we’d survive it,” Younan said. He lost several portfolio properties and laid off staff during the worst of the downturn, which was particularly tough for him because the firm had pursued an aggressive expansion strategy during the boom of the mid-2000s. Although he divested the company’s assets in Southern California in 2006, recognizing that they were overvalued, Younan went big with buys in out-of-state markets such as Dallas, Phoenix, Chicago and Houston, acquiring close to 13 million square feet of office space by 2008. Yet as the economy cratered, Younan Properties hung on even as competitors lost their entire portfolios and went bankrupt. “In a recession like that one, the impact lingers for a decade or more as tenants go bankrupt, you lose occupancy and rents go down. Buildings like ours, where you have 300,000 or 400,000 square feet, can take twice as long to lease up,” Younan said. While the company had prerecession real estate holdings of $2 billion, its assets are now closer to $750 million; Younan Properties expects revenue of $120 million this year. A planned 2010 IPO that would have turned the company into a real estate investment trust was tabled in October 2011. Now, Younan aims to deliver more modest returns, in the midteens, to his company’s private investors. But Younan is back to acquisition mode, buying 20 buildings in the past two years, including local pickups in Thousand Oaks, Newbury Park and Westlake Village. “We’re buying smaller assets that are easier to finance, and we’re using bridge lenders and insurance company financing,” he said. Immigrant story Younan was a teenager when he immigrated to the United States from his native Iran, where his Christian family frequently faced persecution as religious minorities. He got a bachelor’s degree in mechanical engineering from the University of Illinois and worked in the automotive industry for several years before moving his family to Los Angeles and starting what he thought would be a small real estate investment firm in 2002. “I had no idea it would turn into this,” Younan said. “I really didn’t.” He said the firm got off to a rough start. “We had nightly break-ins and I couldn’t afford to hire security, so I’d have to go into the office myself to handle things,” he recalled of the firm’s first office, a 9,000-square-foot space on Sherman Way in Reseda. He began buying small office properties in Glendale, Encino, Sherman Oaks and Tarzana, then expanded to Northern California, Florida, Alabama and Texas. Younan credits the company’s exponential growth to out-of-the-box thinking and his engineering sensibility. “I never went with the herd mentality, which is what most real estate investors do. They want to be able to own property that they can drive by and check up on,” he said. “I was always more innovative than that.” But he’s also more cautious since his company has made its comeback, concentrating on smaller properties and doing mostly all-cash deals. As always, he continues to manage his properties with his own operations staff. “Zaya manages properties very efficiently and very well. He’s an expert at it, able to do a real quality job,” said Mark Perry, senior vice president at CBRE Inc.’s Universal City office. Perry has brokered several deals for Younan Properties, including the February sale of the Briarwood office building at 299 W. Hillcrest Dr. in Thousand Oaks. That sale, which occurred 15 months after Younan Properties bought the building, netted his investors a 26 percent return after the company improved the property and leased it up. “Zaya saw the opportunity in that asset, in that market, and he was able to close quickly as an all-cash buyer, which meant he could outperform his competitors who have to go out and get funding,” Perry said. Another local property Younan Properties bought recently is the Younan Executive Center, at 2900 Madera Road in Simi Valley. It achieved full occupancy in March – just a year after the company acquired the building after it had sat vacant for four years. The two-story, 63,300-square-foot building houses the Human Services Agency of Ventura County, which has 150 employees on site. Simi Valley City Manager Eric Levitt said having county services consolidated in one building has improved life for his city’s residents. “It’s great to have a one-stop shop with services on the east side of the county, which has been our goal for many years,” he said. Younan worked closely with the city and speaks highly of its business-friendly mentality. “They reached out to us after we bought the building and I went out there and had breakfast with the mayor,” he recalled. “I was just bragging about them to the French governor, I was so impressed.” But Younan’s ambitions go far beyond Simi Valley, though he has no plans to turn his back on U.S. investments, which he calls the most stable in the world. In the future, however, he plans to make more overseas hotel acquisitions in places such as Croatia and Great Britain. He’s already scouting another golf course in France, where his oldest son is overseeing the renovations on Chateau du Petit Chene. Three other children are in college; his youngest, a 12-year-old son, attends Oaks Christian School in Westlake Village, where he and his wife, Sherry, are major donors. Although the couple enjoys relaxing on a patio overlooking their gardens, Younan is not slowing down his drive to survive – and thrive – anytime soon. “It’s very painful (for Younan Properties) to be where we are today (in terms of assets and revenues),” he said. “I want to keep growing the company.”
