The president of Opus West Corp.’s Southern California operations is leaving the troubled Phoenix-based developer to start a venture that will look to buy and manage local commercial real estate.
Paul Marshall, who ran Opus West’s largest division out of Irvine, said last week he is starting his own business, Sequoia Property & Development.
The company is expected to be based in Irvine.
He plans to work with private and institutional investors to buy, manage and reposition distressed properties.
Existing Opus West properties, in Orange County and elsewhere, could be potential sources of deals for the venture, according to Marshall.
There could be a number of Opus West buildings available for the taking in the next few months. Bankruptcy rumors have been swirling in the past few months around the embattled developer, for both individual projects and the company as a whole.
Company officials confirmed earlier this month that bankruptcy was an option for Opus West. They said they had hired lawyers to explore restructuring options. Atlanta-based Opus South Corp., its sister company, filed for Chapter 11 bankruptcy protection in April.
Sequoia hopes to have “a couple assets” under its belt by the end of the year, Marshall said. Apartments and offices are the most likely sources of deals in the near term.
Marshall said he’d be interested in taking ownership in the 314,074-square-foot Opus Center Irvine III office tower the company opened in 2007, if it becomes available.
The building,which still is owned by Opus West, although the developer has no more equity left in it,has been put on the market, he said.
Sequoia also will work on entitlement issues for existing properties and could begin development efforts in a few years, once the market stabilizes.
“The end game is vertical development,” said Marshall, who helped Opus West develop close to 10 million square feet of commercial and housing space since opening up the company’s Southern California office in 1996.
Opus West has been one of OC’s largest developers during the past 10 years, building about 2.5 million square feet of properties locally, including office and condominium towers, apartment complexes and retail properties.
Marshall said he’s currently approaching investors to help fund deals. Private capital is more likely to be used for apartment deals, while institutional money is expected to be used on office acquisitions.
Sequoia will be starting up operations with just a handful of employees. Joining Marshall at the venture is Matt Montgomery, former senior director of real estate development at Opus West’s Irvine office.
Marshall technically left Opus West a few weeks ago but has remained at the company’s office, acting as a consultant.
He and Montgomery were among only a handful of employees still remaining at Opus West’s Southern California division as of last week, following several rounds of layoffs.
The division counted close to 100 employees in Irvine, Los Angeles and San Diego at the peak of the market.
The office closures and layoffs resulted in a number of high-ranking local officials losing out on sizable amounts of deferred compensation and bonuses.
Former local employees said it was expected that Opus West’s parent company, Minnetonka, Minn.-based Opus Corp., would step in to pay out employees’ deferred compensation. That didn’t happen, according to those employees.
That’s left a bad taste in the mouth of several ex-employees, who also cite Opus Corp.’s unwillingness to work with its lenders as one big reason for the issues facing Opus West.
Much of Opus West’s local financing was provided by Bank of America Corp. and Wells Fargo & Co., according to Marshall.
Marshall said that the structure of Opus Corp. was set up in a way that keeps the company’s founding family and the parent company out of trouble in the event of a big downturn in the market, and that he’d felt the financial hit from Opus West’s financial issues as much as anyone locally.
Marshall is the second-highest Opus West executive to have left the company in as many months, following former president Thomas Roberts’ departure in May. He ran the business from Phoenix.
