CONTRACTING UNIVERSE
Property Managers See Space Shrink After The Irvine Company Takes Work In-House
By MATHEW PADILLA
Orange County property managers work in a much smaller universe today than they did a year ago.
The total commercial space managed in OC by the top 25 property managers fell 12% to 141 million square feet, compared to last year, according to this year’s Business Journal list.
The missing 20 million square feet represent space taken off the market by Newport Beach-based The Irvine Company. The company’s commercial property had been managed by now-defunct Insignia/ESG Inc.
The Irvine Co. last year took over management of its own buildings amid CB Richard Ellis Inc.’s acquisition of Insignia/ESG last year.
The acquisition ended years of rivalry between CB and Insignia/ESG, which often competed for the top spot on the Business Journal’s list.
This year Los Angeles-based CB Richard Ellis is No.1, moving up a notch to the spot formerly held by Insignia/ESG. CB manages 26 million square feet in the county, up 4% from last year’s 25 million square feet.
CB picked up about 4 million square feet from Insignia/ESG, but it also lost 3 million square feet or so worth of contracts in the past year as a result of some properties changing hands, a company spokeswoman said.
That’s not unusual. When properties are sold, it’s common for the new owner to take over property management or hire another property manager, sources said.
In any case, CB now is the undisputed heavyweight of property management here. Its 26 million square feet is greater than the combined totals of the next two companies on the list.
The 143 million square feet managed in the county by the top property managers is up 2% from the 140 million square feet those same companies managed last year. (This year’s list actually has 26 listings, since two companies tied for No. 25 with 1.9 million square feet each: Interpacific Asset Management and Charles Dunn Real Estate Services Inc.)
It’s natural that as a group property managers didn’t expand here, since there wasn’t much commercial development in the past year.
Up a Notch
The scuttling of Insignia/ESG had another profound impact on the list: Most other companies moved up one spot.
Irvine’s Sares-Regis Group is No. 2, up one spot from a year earlier despite a 3% drop in its portfolio to 11.9 million square feet.
Dallas-based Trammell Crow Co. also moved up one spot to No. 3. Its Irvine-run portfolio grew 14% to 10.3 million square feet.
The company got a boost last year with the opening of 382,000-square-foot Arena Corporate Center in Anaheim.
Trammell manages and leases the property that it developed for Washington, D.C.-based Multi Employer Property Trust and its pension fund adviser, Kennedy Associates Real Estate Counsel of Seattle.
In November, Orange-based subprime lender Ameriquest Mortgage Co. leased 130,000 square feet at the low-rise, class A project in one of the largest lease deals of the year. Some 400 workers are set to occupy the space at 1600 Douglas Drive.
Chicago’s Jones Lang LaSalle Inc. is No. 4, moving up one place despite a 6% drop in its portfolio. The company manages 7.5 million square feet in OC.
The decline in the portfolio is a result of some buildings changing hands, according to Michael Rosen, vice president and general manager with Jones Lang. Rosen oversees property management and reports to Thomas Murphy.
Murphy said the biggest change last year occurred when Irvine-based The Colton Co. bought a couple of buildings in Clauset Center on Harbor Boulevard in Santa Ana. No. 14 Colton manages the buildings, which total 185,000 square feet.
Colton is an investor, manager and sometimes developer of commercial buildings. The company manages a few private investment funds and also pools money of 1031 exchange buyers looking to defer capital gains taxes on real estate sales by reinvesting proceeds in new purchases.
Rounding out the top five, Anaheim Hills-based The Remm Group moved up one slot to No. 5 with 7.1 million square feet, up 3% from a year ago.
Aside from Insignia/ESG, two other companies dropped off the list this year: Costa Mesa’s The Brookhollow Group and Newport Beach’s Coldwell Banker Commercial. Neither Brookhollow’s estimated square feet under management, nor Coldwell’s 1 million square feet, made this year’s cut at 1.9 million square feet.
Another company that didn’t make the list this year was Irvine-based RiverRock Real Estate Group. Its founder John Combs was a former executive at Insignia/ESG. Combs left the company amid the merger with CB. After being in business a matter of months, he manages 1.2 million square feet of space in the county.
