Christine Deschaine Lee & Associates LA North/Ventura Inc. Many real estate deals are a fairly straightforward transaction, with a buyer or lessor on one side and a seller or lessee on the other. We all know how challenging even those seemingly clear-cut deals can be. So imagine the complexities of a redevelopment project like the Third Street Promenade, Hollywood & Highland, or The Burbank Collection, opening later this year. Those are all projects that Christine Deschaine, principal of Lee & Associates-LA North/Ventura Inc. has been instrumental in bringing to fruition. It’s not a quick and dirty process, but Deschaine says the process and the result are both rewarding. The Third Street Promenade in Santa Monica was her first introduction to redevelopment. “A lot of people thought we were wasting our time,” she said. “There were lots of dynamics going on with the city council and the homeless community. It took 10 years for people to see that happen.” Her work often begins even before a developer is brought on board. “Usually there is a group of people who have a vision and they meet with their city council people and their residents and their existing business owners and decide how they see their typical downtown area,” said Deschaine. “My relationship usually starts with them. Sometimes they will ask me to find them a developer that I’ve worked with before who can pretty much come to the table with the sort of theme or quality of project that they’re looking to see.” Even if they ultimately select a developer she hasn’t previously worked with, Deschaine said she finds a way to secure a relationship. Then she hits the bricks, educating tenants, local business owners, residents and even other brokers about the goals that the community is trying to achieve through the redevelopment project. So how does a broker make money on a project that can take three to five years before any commitments are made? “We get paid half typically when the lease is signed and then the second half when the tenant takes possession,” she said. “Some brokers actually will get sort of a monthly fee from the developer and use that against commissions that come in.” That’s a route she said she’s thinking about taking. In the meantime, though, she does a lot of what she calls “bread and butter leasing” to maintain cash flow. Her redevelopment agency clients appreciate Deschaine’s expertise. “She’s great working with us because she sees both sides of the picture,” said Gail Stewart, downtown manager for the Burbank Community Development department. “She sees the big picture of what we’re trying to create in downtown and works with us to bring in the right tenants that will be exciting and that the community would like to have.” And while some might think that any project steered by municipal government would be the very definition of hell, Deschaine said she considers redevelopment projects actually to be easier. “You have a cohesive group moving forward to achieve the same goal,” she said. Further, unlike a typical retail developer, a downtown redevelopment agency and a city have to be true to the residents. “It’s good to work with people who have accountability,” said Deschaine. Sheryl Mazirow Mazirow Commercial Inc. Laser focused. Those are the words Sheryl Mazirow uses to describe her success as a tenant representative. “All we do is specialize in working on the tenants’ behalf,” said Mazirow who heads the boutique firm Mazirow Commercial Inc. in Westlake Village. “There are a couple other firms who do what we do, but they are not laser-focused on one geographic area,” namely the San Fernando and Conejo valleys. She considers herself truly a tenant advocate. “Our premise is that you would never go into court permitting the opposing party’s attorney to represent you,” Mazirow said in describing her role. “Tenants do this once every five years, typically, and are not very well informed, but the landlord does this day-in and day-out.” When Mazirow started her real estate career 28 years ago, she looked around the office and saw that the person making the most money in the office was focused on tenant representation. So she copied everything he did. “Earlier in my career I did lease buildings from the ground-up,” said Mazirow. “So I understand the landlord’s perspective having worked on that side very early in my career.” It’s not all leasing either. Mazirow does represent tenants who want to own their own building. She’ll perform an analysis that helps a business owner decide whether it would be more beneficial to lease or to buy. But even there, she is “laser focused on office product, some R & D;, but not hard-core industrial. I don’t sell apartment houses.” Mazirow does not only represent clients when they move, but also helps them when they want to stay where they are. “We represent them when they exercise an option, renew a lease, or sublease excess space,” she said. “Anything that has to do with office space that a tenant occupies.” Her relationship with clients can span multiple transactions over many years. She began working with what is now one of her larger clients, Employers Direct Insurance Co., back when leasing an executive suite was all they could manage. Years later, Mazirow said, they took a sub-lease on 12,000 square feet. Growth then caused them to lease 35,000 square feet and in what Mazirow believes is one of the largest transactions in the Conejo Valley, they recently signed up for 67,000 square feet of space. That’s the entire building. The relationship even continued after the company was sold to an out-of-town owner. “My opinion of Sheryl is, she is probably the best business relationship that I ever made coming out the door,” June Duxler, vice president human resources and administration for Employers Direct. She’s worked with Mazirow since the company’s inception in 2002. “She’s incredibly knowledgeable. She does what other brokers promise to do. There’s not enough wonderful things I can say about her,” said Duxler. With more than $22 million worth of transactions to date, Mazirow’s business may be boutique, but it’s certainly not small potatoes. She does it all with one other agent and two support staff. And while most of the industry is fairly stagnant, she is not seeing much of a slowdown on her end. Most leases, she said, have a holdover penalty that can be anywhere from 125 percent to 300 percent of the current rent, even if the tenant stays on the premises. So tenants don’t have the luxury of procrastinating. “It’s a much more favorable environment for tenants,” said Mazirow. “There are many more options than previously.” Jeffrey Peldon REMAX Some people don’t know when to quit, some people are overachievers, and then there’s Jeffrey Peldon, who is both of those and then some. He has an MBA in finance and organizational dynamics and a Juris Doctor degree; has been admitted to the bar in New York and New Jersey; and also has a California real estate broker license. In 2007, Peldon was named the top REMAX commercial broker associate in the state and was number two out of 7,200 nationally. He did that without any staff, assistants or associates. He’s not just trying to pinch pennies, either. Peldon cheerfully admits that he’s just too demanding. “The combination of the hours I work, and the way I work, and the demands I put on myself,” are just too much for most, he said. “I would rather spend more time and get the job done and know I don’t have to check it.” He said he will work on deals with other agents, but doesn’t see the value in having a partner. “That’s my OCD of real estate,” he said. “That’s the way that I am. Other people are more effective than me, I’ll give them that, or will out-earn me, and I’m comfortable with that.” A self-admitted geek, Peldon utilizes technology to work smarter. He never goes anywhere without his PDA. “I can do everything I need to do with that,” he said. Keeping paper to an absolute minimum is another way to streamline. “All of my computers are interconnected. If I make a note on a file while I’m in the field it’s replicated in three different locations.” Peldon also works only with title and escrow companies that use PDFs and he’s trying to get all of his regular clients to begin using electronic signatures. Multi-family projects are the focus of his business model. While the apartment sector of the market is very healthy, with vacancy rates in most of the region below 5 percent, transactions have been almost nonexistent, especially in 2008. “We’re probably running about 15 percent of the activity level compared to 2004 to 2006,” he said. The interest is there, but lenders, Peldon says, are making things very difficult. That’s where creativity and tenacity come into play, as illustrated in the following example. “I was working with a client selling a 27-unit busted condo deal it shifted from condos to rentals At 27 units, this deal was going to appeal to a relatively small owner type. So I went to seller and said, ‘believe it or not, we need to make this more expensive. We need to make the project itself bigger. You have two other buildings. Instead of 27 units, I’d like to sell all 84.'” The seller agreed and Peldon converted the deal to a portfolio sale on which he has received multiple offers from well-heeled borrowers that don’t need to go through the typical lending channels. “I went from a building that was going to sell in an $8 million to $9 million range to now a $22 million portfolio,” Peldon said. Client Denise Baruch of J & D Baruch Management has had a business relationship with Peldon for the past four years, selling seven of her own properties and eight or so belonging to other investors with whom she partners. “We put our buildings into sale mode last spring,” said Baruch, “and he brought in the buyer there were lots of complications as there always is but he just juggled things around and made everybody think they were winners.” The sellers, said Baruch, “had an idea of what our buildings were worth, and I don’t know how he did it, but he got us more money as the sellers. We felt overly pleased with the results.” John Sabourin, Will Adams and Paul Stockwell CB Richard Ellis This triple-threat almost didn’t make it into this report as their business cards have a downtown Los Angeles address. Even with Sabourin and Stockwell both being Valley natives and residents and having the bulk of their clients and deals in the Valley, we were still iffy about including them. But then they invited us to their Warner Center satellite office, in the newly-completed LNR Corporate Center that makes up the bulk of vacant office space in Woodland Hills, and for which they are the landlord’s representative. Points for persistence, score for locality. All three were top dogs at Studley through the end of 2007 Adams was corporate managing director and Sabourin and Stockwell were senior managing directors. Then in January, the trio become a team under the CBRE umbrella. “We have nothing but good feelings toward our former partners at Studley,” said Stockwell about the move. Studley, he said, “was heavily focused on the tenant representation side and the three of us just wanted to do some other stuff, like I’ve done with the landlord and agency leasing; get more involved in the investment side of things, and round out our capabilities through a much broader and deeper kind of real estate platform.” So why the team approach? “If you look at most of the very successful brokerage operations, not just at CB but almost any company, you find the majority of the successful people are in teams of differing sizes,” said Stockwell. “There’s one group I know that’s probably got 15 people on a team and others that are just two guys; but one way or another it does seem to work well in our industry for a variety of reasons.” In addition to being able to capitalize on the differing skills sets, personalities and knowledge bases of each other, fee sharing is another good reason to band together. “There’s no question that this is a cyclical business,” Stockwell said, “and if one guy on the team is having a good year, it helps support the guy not having as good a year.” Stockwell lives in Burbank and as the former head of corporate real estate for Disney in the early 90s, his specialty is entertainment; Sabourin lives in La Ca & #324;ada Flintridge and has an expertise in office and tenant representation; and Adams lives elsewhere and has an expertise in office and law firms in particular. “John and I do more of the landlord work and Will and I maybe do more in the entertainment side,” said Stockwell, “but having a balance both in terms of skill sets and, candidly, in terms of geography is just a prudent way to approach the brokerage business.” Major client Ken O’Neill, vice president of LNR Property Corp. agrees. “The biggest issue for me is both of those guys are incredibly experienced,” said O’Neill. There’s definitely a benefit to having two very experienced brokers on a team, “rather than one experienced guy and a rookie runner.” That has helped in a very competitive market where, O’Neill said, there are few fish in the pond and a whole lotta fishermen. “You have to be very creative, very analytical to make deals,” he said. “John and Paul have allowed us to do that.” Yair Haimoff NAI Capital As one of the newer kids on the block, NAI Capital’s 2005 Rookie of the Year, Yair Haimoff, 32, has found that strong mentors and good old-fashioned hard work have been the keys to success. His focus for the past five years has been in Santa Clarita Valley, a market he has studied intently. “You really have to know your territory your streets, the areas, city ordinances, zoning,” said Haimoff. “You really need to be an expert in the area that you work in. We do it first through canvassing knocking on doors and meeting individual owners and tenants.” He also joined the Chamber of Commerce, the Valley Industrial Association, and has developed relationships with the City of Santa Clarita-designated enterprise zone officers. “Basically, he’s probably one of the hardest working brokers we have,” said one of his mentors, Tim Foutz. “Helping to train Yair I get phone calls at 10 at night or six in the morning.” That Haimoff has been able to garner trust from people in their 60s and 70s is a testament to the dedication he has given in becoming an expert in the Santa Clarita Valley marketplace, said Foutz. “A lot of new brokers have a problem because people don’t want to entrust their portfolio or building with someone who has only been in real estate a few years. Because of his knowledge and drive he has been able to make a tremendous amount of money.” The company declined to release particulars on Haimoff’s earnings, but a quick calculation of his accomplishments suggests he has been involved in the acquisition, disposition and/or leasing of more than a half million square feet of space so far. For just one entity, IST International Finance, he has handled a total of 13 buildings: 11 in Santa Clarita, one in Van Nuys and one in Sylmar with a value of “close to $20 million,” said Haimoff. It’s not exactly what he expected to be doing when he graduated from California State University Northridge with a bachelor’s degree in criminology in 2003. “I was going to go into the law enforcement field,” said Haimoff, “But when I met my fiancee’, she’s a developer, she suggested I try commercial real estate it’s still high-stress, but safer.” Stacy Vierheilig-Fraser Charles Dunn Company The name Vierheilig has been on Charles Dunn letterhead for the past 50 years. It started with Ed Virheilig who was a broker there for 40 years, retiring about 10 years ago. Following in his footsteps is his daughter Stacy Vierheilig-Fraser, who has represented Dunn for 20 years now. After graduating from the University of Southern California with a bachelors in business administration, emphasis on real estate, Vierheilig-Fraser processed home loans before starting at Dunn. “My dad told me I had to have a salaried job before I went into commissioned sales,” she said. Now the senior managing director of the Studio City office Vierheilig-Fraser, at the ripe age of 45, is doing for the other younger six agents what she has always done in her career mentor young talent. “I’ve trained probably two dozen ‘kids’ in the company and right now there’s seven of them still working with the company,” said Vierheilig-Fraser. One of her current mentees, agent Stella Kanyan, 27, attributes Vierheilig-Fraser’s success to a great work ethic. “She puts the same amount of time and effort into the small deals as the really big ones,” said Kanyan who also praised her willingness to help other agents succeed. “She’s had relationships for, like, 20 years that she’s built and if she’s worked with someone before, she tells you everything she knows about them.” Knowing her market intimately is also another key to success, said Vierheilig-Fraser who recounts a time when she first started working in the east San Fernando Valley and wasn’t able to tell a client the fastest way to get to a property viewing. “I know a lot of people like to jump around but I wanted to know everything about my market,” she said. “My office is in it, I live in it, my kids go to school in it.” About 80 percent of her clients are somehow related to the entertainment industry, with income derived about equally from leasing and sales. “I’ve sold over 100 buildings which is a lot for commercial,” said Vierheilig-Fraser. “I probably handled almost every building in my market at one time or another.” She holds the record of most consecutive top producers titles at Dunn. “You have to make a certain amount of money to join ‘Charlie’s Club,'” she said, “and I’ve done that for 15 years and so far I’m on track for this year, too.” And even though the market is, in her words, “just dead,” Vierheilig-Fraser said she got started in real estate in 1988, which was one of the last great years of an economic slowdown very similar to current times. She knows that in addition to a strong knowledge base and long-term relationships, going the extra mile is the key to closing deals. “I’m trying to do extra marketing things virtual tours, solar lighting for my signs so they can be lit up at night. Just little extra things that you have to do,” she said.
