Expanded profile of local brokers and other dealmakers in commercial real estate still making a go of it despite the down market:
Earlier this month, veteran commercial real estate broker Bob Safai took his first long vacation in 17 years. Unlike some other brokers in town, he actually needed a break.
Safai, 47, has been involved in the sales of L.A. properties owned by Louis Gonda, a one-time Wealthiest Angeleno whose fortune in American International Group Inc. stock was wiped out when the insurer nearly went bankrupt last year.
In one deal, Safai handled the $44 million sale of a Miracle Mile-area office complex, one of the biggest commercial real estate transactions of the year in Los Angeles.
Safai, who co-founded brokerage Madison Partners in 1996, said that while business is down this year, he still could complete $200 million in deals. Pretty good for one of the worst real estate slumps in decades, though just a fraction of the $2 billion he cleared in one year at the height of the boom.
“It feels fine. Hey, there are guys doing nothing,” said Safai in a phone interview from the French Riviera, where he was vacationing. “Perspective is a great thing. If you did $2 billion of business and didn’t put any money away and save for this happening, tough luck. But if you did, and you are passionate about the game, you are going to be in it.”
Safai specializes in investment sales, though during the downturn he has begun to do more leases, which he calls “the bread and butter” of the brokerage business. It’s something he had experience with early in his career. The Glendale native graduated from USC in 1986 with a degree in business administration and finance, and one of his first jobs was with Beitler Commercial Realty Services, where he brokered lease deals. But an investment deal he completed in 1990 whetted his appetite for what would later become his main line of work.
“I found what I wanted to do,” said Safai,. “Any broker that is in real estate loves the hunt.”
The Gonda sale is emblematic of the “hunt” and the business Madison Partners has become known for after a decade of solid growth. (The company now has 22 brokers spread between offices in Century City and Brentwood.)
Safai got the listing and was later about to sell the property at 6310 and 6330 San Vicente Blvd. to a joint venture of PRP Real Estate Advisors and Cambra Realty because of longstanding relationships with both sides of the deal. He also marketed the property to only a select group of real estate players who’d be able to close on the purchase.
Still, the decision to sell by Gonda, who received his AIG stock nearly 20 years ago in the sale of an airplane leasing company he co-founded, gives Safai pause.
“It’s all very scary; forces beyond nature have affected many people in this downturn,” he said. “Some of the smartest guys that have created wealth have lost massive amounts of wealth. You try to be cautious.”
BOB SAFAI
, 47
President
Madison Partners, Brentwood
Founded brokerage Madison Partners in 1996 and has sold several
high-profile buildings during the recession, including a large office property for former billionaire Louis Gonda.
Biggest Challenge: There is an educational process in which sellers and buyers need to come to an understanding of where market values are. The lack of data points in a downturn often creates difficulty in bridging this gap.
Toughest Recent Deal: 6310-6330 San Vicente Blvd. (Gonda buildings that sold for $44 million). Although these buildings had existing financing, they also had 40 percent of the project due to roll over within an 18-month period. This, coupled with a four-and-a-half-month loan assumption process,
made it extremely challenging to close this transaction.
Secret of Success: The greatest teacher in real estate has been history. Real estate goes in cycles and history tends to repeat itself.
Recession’s Silver Lining: Having more time to spend with my family and not working on the weekends.
End of Downturn: I think we are two years in on a five-year turnaround.
Stress Release: While others play golf as a stress reliever, when I played golf, it created more stress for me. I choose to play poker as my hobby to take my mind off the stresses of work. It’s a very challenging game, and a metaphor for life.
Recent Splurge: With age comes the
realization that needs and wants are completely different. My desire for things I want has diminished because I’ve been fortunate to have been provided with all that I need.
