Sure, there’s been unprecedented turmoil in the commercial real estate market. But amid all the chaos, six local brokers saw something else – an opportunity.
L.A. Realty Partners Inc. was started April 1 by former principals of Madison Partners at a time when most brokers are more worried about job security or their employers’ futures.
The way broker Lisa St. John tells it, she and her five partners believe the tough economic climate is actually making it easier to establish the Century City firm, which is focusing on West L.A. office leasing.
“We are going to need new office space – let’s go take advantage of this market. And a lot of brokers in the bigger realm have really felt the (recession) in terms of expenses and layoffs of administrative staff,” said St. John, a veteran broker with more than 20 years experience who joined Madison in 2008.
The immediate tipping point that led to the spinoff was Madison’s Century City office lease, which expired in December. St. John and her partners – Chris Houge, Rick Buckley, Hunt Barnett, Gary Weiss and Peter Best – worked out of the office, which largely operated separately from Madison’s Brentwood headquarters. In fact, the office controlled the lease, so the partners decided to retain the space on a month-to-month basis for their new company.
That isn’t the only connection to Madison that will remain. Weiss, 53, said that he and his partners would maintain business relationships with their former employer, Madison founder Bob Safai, even though they are taking clients such as Equity Office Properties with them.
“We are still going to stay friends with these guys,” Weiss said.
Safai said the split with St. John and her partners was indeed amicable, as he came to the realization that their practices and business philosophies had grown apart.
High-profile
His high-profile boutique specializes in investment sales and has represented some of the biggest names in L.A. real estate, including Louis Gonda, a former billionaire whose fortune in American International Group Inc. stock was wiped out when the insurer nearly went bankrupt in 2008.
“We were going in two different directions,” Safai said. “They want to build a midsize firm, and I want to stay small. I wish them the utmost success.”
Excluding the principals, L.A. Realty Partners has nine brokers and four other employees. Meanwhile, Madison retains 12 brokers, though Safai would like to hire two more.
Matthew May, a retail broker who worked at Madison before starting a company of his own, said that he doesn’t expect much to change for Safai’s business.
“He’s got a tremendous reputation. You treat him well, he takes care of you. You screw him, you’re dead,” said May, owner of May Realty Advisors of Sherman Oaks.
Safai knows all about starting a company during a tough economic climate. The 1986 USC graduate had a handful of jobs in the real estate business, including a stint in leasing at Beitler Commercial Realty Services, before launching Madison in 1996. He co-founded the company with Lynwood Fields just as the economy was recovering from a long, painful recession. Fields remains at Madison as senior executive director.
“I formed Madison Partners with two people and a secretary,” Safai recalled. “It was time for me to start my company, and they felt like it is time for them.”
Meanwhile, Weiss believes that he and his partners will be able to capitalize on the downturn and expand the firm’s leasing business by offering what many big rivals can’t.
“The experience, clients and efforts are the same as before,” he said. “The bigger shops have constantly cut back on services. It’s an opportunity to hear from other people in the industry who may not be happy where they are at.”
