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Thursday, Dec 7, 2023

Timing Key To Success Of Developer

2 – Chalmers Equity Corp.

Pico Rivera

Founded: 1996 – Growth Rate: 762%

2007 Revenue: $28 million

With the real estate industry in shambles, it might be surprising to see an industrial developer among the ranks of the county’s fastest-growing businesses but not if a company knows market timing.

Annual sales for Pico Rivera-based landlord and developer Chalmers Equity Corp. surged to $28 million in 2007 after a modest $4.8 million the prior year. Much of the growth came as the real estate market began showing signs of distress and the company decided to sell a number of projects.

“It was a good time to move toward a more cash position,” said company owner and founder Trace Chalmers.

That good sense resulted in a nearly eightfold jump in annual revenue over the past few years, allowing Chalmers Equity to pull down the No. 2 spot on the Business Journal’s annual Fastest Growing Companies list.

Among the five projects the company decided to cash out was a 150,000-square-foot warehouse in the City of Commerce. But now that the market is depressed, Chalmers said that the company has switched into an acquisition mode.

It’s another case of market timing, though not one to keep the company on its lofty growth trajectory.

“When you’re in the development business, there are periods of selling and there are periods acquiring and we’re in a period of acquiring,” he said. “So we probably can’t sustain this growth.”

The company’s success is rooted in experience gathered over more than two decades. After graduating from UCLA in 1983, Chalmers joined Heger Realty Corp. as an industrial real estate developer focusing on South and East Los Angeles. As the young broker caught the entrepreneurial bug, he struck out on his own, forming Chalmers Equity Group in 1988.

The company, which adopted the name CEG Construction for its building arm, snagged some high-profile clients, including work on DHL’s Los Angeles International Airport facility and a Northrop Grumman Corp. building. The building company ranked No. 17 on the Business Journal’s 2002 Fastest Growing list.

In 1996, the company spun off Chalmers Equity Corp., which acquires, develops and manages properties. Chalmers often refers to the companies as one entity, but they are actually two complementary enterprises.

“First it was one building, then it was two buildings, then it was three,” Chalmers said. “Now there are over 30 projects that we own.

Among the company’s current projects is a 97,000-square-foot food-processing plant under construction for Real Mex Foods in Vernon.

Chalmers funded the companies himself “Everything I do I do with my own capital,” he said and he describes Chalmers Equity as a smaller version of billionaire Ed Roski’s successful Majestic Realty Co. Chalmers Equity earns much of its revenue from rental income.

The company’s strong performance has been helped by the fact that the industrial market retained its strength longer after other markets faltered. Still, the dire economic outlook has Chalmers cautious about the company’s near-term growth prospects.

“You’ve had to be disciplined about what you pay for properties and be sure not to overpay,” he said.

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