By DANIEL TAUB
Ed Roski is getting to be a household name in Los Angeles. He's the co-owner of the Los Angeles Kings hockey team with Denver oil magnate Philip Anschutz. He's developing, with Anschutz, the downtown Staples Center sports arena. And he's part of a group trying to renovate the Memorial Coliseum for NFL football.
For all that glitz and glamour, however, Roski makes most of his money quietly, privately and with little fanfare by developing warehouses, light manufacturing plants and distribution facilities in L.A. and around the country.
Now in its 50th year, Majestic Realty Co., which is controlled by Roski and his 85-year-old father, Edward P. Roski, Sr., remains the biggest industrial real estate developer in Los Angeles County.
Nationwide, Majestic Realty has more than 30 million square feet of real estate with assets valued at more than $1.2 billion including 3.3 million square feet developed last year. This year, 3.8 million square feet of space is expected to be developed nationwide. Both nationwide and in L.A. County, Majestic's industrial properties have an occupancy rate of about 97 percent.
Among the current projects: the Majestic Airport Center in Ontario, which includes the 11.3-acre Archibald Business Center adjacent to the Ontario International Airport; the 42.2-acre California Commerce Center IV, and the 1.4 million-square-foot Hoffer Ranch distribution center, which already is more than half leased.
Majestic also is developing industrial parks in Aurora, Colo., Plano, Texas and Las Vegas.
"They just have a quality reputation," said Keith Ross, senior vice president of Newport Beach-based Cole Development Co., which is developing a 1.5 million-square-foot industrial park in the City of Industry. "They've had nothing but a fabulous reputation through the years."
Unlike most of its competitors, Majestic holds onto its projects after it develops them, rather than selling space to tenants or to another property manager. That way, it gets to manage the industrial parks itself, reaping the profits from leases.
"That's a huge difference right there," said David Wheeler, executive vice president of Majestic. "The vast, vast majority of developers are merchant-developers. They buy the land, develop it and sell it."
Why does Majestic do things differently? Roski said owning real estate tends to be an investment that pays off in the long run, particularly in Southern California, where the company does most of its development.
"We've pretty well researched those areas that we go into and we think, over the long term, they have good growth potential and are a very sound investment," said Roski, whose wealth has been estimated at around $700 million.
In fact, from the time Majestic first begins a project, almost everything is done in-house. The company has its own real estate brokers to buy land; its own architecture and engineering department to design the industrial parks; its own construction company, Commerce Construction Co. L.P., to build the projects; and its own management company, Majestic Management Co., to maintain the properties after they are completed and leased.
"When we're to own those buildings for 50 years, we want to know everything about those buildings," Wheeler said. "If you're just going to build the building and sell it, the developer doesn't care; he's just going to sell the building to someone else."
Roski said it is helpful to have so many operations in-house.
"If we're building a building and a tenant says he wants it in March rather than June, we have the forces to put on the project to do it by March," he said. "We're probably one of the few (developers) that are fully integrated. I don't know of another company that does all the things that we do in the development business."
When Majestic was first started by Roski Sr. in 1948, the company focused on brokering, not building, industrial real estate. By the early 1960s, Majestic was L.A. County's largest industrial real estate brokerage house a status that allowed the company to move into development. In 1968, Majestic formed Commerce Construction, which has built more than 25 million square feet of industrial, distribution, warehouse, hotel, recreational and casino space.
Nine years after starting Commerce Construction, Majestic formed Majestic Management, which manages more than 25 million square feet of office, industrial and retail space, in L.A. County and nationwide. The division provides landscape maintenance, tenant relations, accounting and Americans with Disabilities Act conformance review.
Although Majestic has ventured into building shopping centers and hotels something Roski expects it will continue to do 75 percent of the company's work remains industrial parks.
While Roski acknowledges that the Southern California market is getting tighter, he says there are still more development possibilities here.
"California, and especially Southern California, are a little bit behind the rest of the country," he said. "We have some additional room to grow."
Whatever Majestic does, it's likely to be done quietly and that means avoiding the temptation to go public.
"We've looked at it over the years, but we've decided it's best for us, the way we operate, to operate as a private company," Roski said. "As a private company, you have more flexibility, and if our projects take a couple months longer to do, we're not faced with quarterly earnings or doing something to perform as we did the last quarter."
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