Donald Koll’s legacy in Orange County real estate can be measured in square feet, and disciples.
Koll, one of the county’s key developers who helped forge the skyline around John Wayne Airport, has been responsible for more than 90 million square feet of buildings in the county, the country, Mexico and Asia.
Along with Irvine Company’s Donald Bren and Costa Mesa’s Henry Segerstrom, Koll is one of a core group of formative developers who’ve shaped modern OC.
The area around John Wayne Airport—now the county’s premier business hub—would look nothing like it does now without Koll’s efforts in the early 1970s.
“Don was the one that basically came up with the idea for the high-rise (office market) near the airport,” said John Hagestad, managing director and principal of Irvine-based developer Sares-Regis Group and one of dozens of local executives who at one time or another worked for Koll.
Koll was “one of the founders of Orange County’s office market,” said Jerry Yahr, Koll’s son-in-law and managing principal of Newport Beach-based real estate investor Koll Co.
These days, Koll is chairman and namesake of his company but isn’t involved in daily affairs after a 2005 stroke left him in a wheelchair and made it hard for him to speak.
Koll’s lifework speaks for itself in Irvine, Newport Beach, San Diego and elsewhere, where office complexes and business parks he developed still bear his name.
The modern, multitenant business park, now a standard sight across the country, largely was forged by Koll in the late 1960s.
In the 1980s, Koll helped transform one of his favorite vacation spots, Mexico’s southern Baja Peninsula, into a major resort spot, with more than 3,000 acres of golf, hotel and other projects there.
“No idea is too big” for Koll, said Ray Wirta, chief executive at Koll Co. and who also serves as a senior adviser for the investment properties group of Newport Beach’s Irvine Co.
Besides buildings, Koll helped develop a generation of real estate executives like Wirta who have ended up leading other companies here.
John Hamilton, chief executive of Newport Beach developer Hamilton Co., joined Koll in the 1960s. He was the eighth employee at what then was Don Koll Co.
“He is (as) creative as anyone I’ve ever known,” Hamilton said.
Other Koll alums have gone on to run development companies, investment funds and commercial brokerages.
One, Larry Kellner, a former Koll chief financial officer, went on to run Continental Airlines Inc.
Now Kellner’s back in real estate as president of Emerald Creek Group LLC, a private equity firm that’s looking to do land deals in California and Texas.
Newport Beach’s KBS Realty Advisors, which has made national headlines recently with big office building buys in Chicago and Los Angeles, also has a Koll pedigree.
The “K” in the company’s name stands for Koll, who started the real estate investment company along with his former acquisitions executive, Chuck Schreiber, and Peter Bren, brother of Irvine Co. owner Donald Bren.
Vast Ties
Nearly every local real estate company that’s been in business for more than a decade has some tie to Koll, according to former colleagues.
For years, if a real estate person here “did not work for Koll Co. or the Irvine Co., people would ask what were you doing,” said Richard “Dick” Ortwein, a partner at Costa Mesa-based developer Focus Real Estate LP and a former Koll president.
“Multiple generations of guys have come through” the various iterations of Koll Co., said Lynda Lane, chief executive of Irvine-based real estate staffing company Real Estate Temps and a former Koll executive vice president who worked on acquisitions.
Through the years, other companies have gone on to eclipse Koll here. Irvine chipmaker Broadcom Corp. has created more than its share of wealth for employees. And Irvine Co.—where Koll once served on the board of directors—now is the largest name in local real estate.
But more people may have left Koll Co. to go on to become millionaires than any other company here, believes James “Watty” Watson, chief executive of Aliso Viejo-based real estate investor CT Realty Investors.
“Don put his own competition in business,” said Keith Ross, principal at Irvine developer Centra Realty Corp., and another Koll alum. “He gave guys like us a chance.”
A number of Koll alums and others are expected next week in Irvine, where Koll is set to be honored with a Distinguished Eagle Scout Award from the Boy Scouts of America.
The event is shaping up as a real estate industry tribute to Koll, who’s made few public appearances since his stroke.
Koll still has a sharp mind and keeps an active interest in real estate, according to confidants.
He’s also still involved in decision-making at Koll Co., which owns about 7 million square feet of mostly industrial space across the West Coast.
An optimistic attitude—a longtime staple of Koll’s—has helped him adapt to his current physical condition, said Watson, one of his closest friends.
“He is always positive,” said Cory Alder, president of Santa Ana developer Nexus Cos., who worked at Koll in the 1990s. “Don never felt there was a challenge that couldn’t be handled.”
A former Air Force fighter pilot, Koll was something of a cowboy developer with a risk-taking, old-school style and a fearless attitude.
Those traits, imparted to others at Koll who went on to start their own businesses, have gone a long way in making OC a real estate hub, with Newport Beach becoming home to more developers than just about any city in the country.
“If you were there for 10 years, you could be nothing but entrepreneurial,” said Centra Realty’s Ross, who left Koll in 2000 after a decade at the company.
Koll was at the forefront of practices that now are commonplace in the development business, according to former employees.
That includes enlisting corporate backers for projects as far back as the late 1960s.
A 1968 deal with what’s now Aetna Inc. to build big business parks is widely cited as the first example of a real estate developer hooking up with a corporate backer.
“The Aetna deal put him on the map,” developer Hamilton said.
Koll initially planned to ask for a little more than a million dollars in funding from Aetna. At the last minute, he changed his mind. He went big and asked for $5 million from the insurer. He got it, Hamilton said.
“He was never afraid to ask for anything,” he said.
Being a people person helped, according to Hagestad of Sares-Regis.
“Don is uncanny in his sense of being able to deal with people,” regardless of their standing, he said.
At a Christmas party for subcontractors during an industry rough patch in the 1970s, Koll showed up with “three or four” boxes of Jack Daniels and handed out bottles to guests as they arrived.
“That soothed a lot of wounds,” Hagestad said.
The next day, Koll was in meetings with senior executives at Aetna.
“He could relate to anyone,” Hagestad said.
Koll was never afraid to call anyone, “even the White House,” said Wirta who rejoined Koll Co. late last year.
Earlier in Wirta’s career, he worked for Koll for 14 years, heading up management services and construction.
When those business groups were sold in 1997 to what’s now CB Richard Ellis Group Inc., it paved the way for Wirta to take over the top spot at the brokerage a few years later.
Koll saw his share of missteps and market downturns.
“Don was wrong once. He once told me, ‘The good thing about real estate is that it never goes down,’” joked Hamilton, who left Koll in the 1970s and went on to build homes on Catalina Island. He also built the Newport Sports Museum near Fashion Island.
In 2001, Koll left Koll Development Co. after a falling out with financial backer North-Star Capital Investment Co., which moved the business to Texas.
Koll went on to form the current Koll Co.
Legendary Retreats
During good times, Koll’s companies were known for a “work hard, play hard” mantra. Boozy company retreats in far-flung, sunny locations became industry legend.
Koll used his influence during those times to meet with presidents, governors and British royalty.
In lean times, Koll figured out ways to scratch out a living. During the early 1990s crash, he turned to less glamorous but profitable property management to keep going.
“He had creative ways to hunker down,” Wirta said.
Learning how to deal with—and benefit from—down markets has made plenty of former Koll executives rich.
Irvine’s LBA Realty was founded by Phil Belling and Steve Layton in 1991 after leaving Koll Co. The investors earned a reputation in the 1990s as savvy asset managers and developers, buying property during an economic slump and seeing hefty returns as the market rebounded.
The company appears to be following the same game plan in the current downturn, with LBA taking over ownership of a good portion of Irvine’s Park Place office and retail campus at a steep discount.
Koll always was looking for the next big thing, according to confidants.
“Don is great at being a quick-change artist. He’s always looking ahead,” said Lane of Real Estate Temps.
The week Hagestad started at Koll in 1972, Koll was working to get approvals for what would become the 1.5 million-square-foot Koll Center Newport office complex in Newport Beach.
A similar plan came together in Mexico, where Koll turned Los Cabos into one of North America’s top golf and vacation spots.
“He was in Cabo San Lucas years before anyone else,” said Watson, who in addition to CT Realty heads up Aliso Viejo’s TechSpace Inc., a technology-geared landlord for smaller businesses.
Koll’s first big resort purchase in Mexico was in 1986, when he bought the 71-room Palmilla Hotel and 900 acres of land.
“There was nothing there at the time,” Hagestad said. “Everyone went ‘You’re nuts.’”
By 1992, Koll completed Latin America’s first Jack Nicklaus-designed golf course at Palmilla.
“Don was a pioneer. He caught Cabo at exactly the right time,” Alder of Nexus said.
Offshoots
Koll’s real legacy could be former executives who went on to fill the ranks of the real estate industry here.
That couldn’t have happened without Koll’s blessing. Rather than be jealous, he encouraged employees to strike out on their own.
Victor Laidlaw, another former senior Koll executive, went on to start Focus Real Estate in 2000 with Ortwein.
“The day I left, Don gave me a call and said, ‘Let me know how I can help,’” Ortwein said. “He recognized change was a positive for the company. He took pride in the number of real estate professionals who went through (Koll Co.).”
In 2000, Koll told the Business Journal: “I look at it as they come here with us and stay with us for a period of time and do great work with us, and if they want to go out (on their own), I don’t stop them at all. I wish they’d stay here forever and wouldn’t go out on their own. But that’s just the evolution of the business.” n
