Birtcher Development LLC is back in business, minus the Australian accent.
The Newport Beach-based firm, whose family’s ties to the local real estate industry date back more than a century, recently resumed operations after a year on the sidelines.
Industrial development and acquisitions will be the privately held company’s focus. It will largely build and buy warehouses in Southern California and a few other markets. There’s less than 3% warehouse availability in the region.
The company’s headed by Chief Executive Brandon “Brandy” Birtcher, the fourth generation of the family involved in the real estate business.
The Birtchers got their start in the local industry when Justus Birtcher moved to the area from Pennsylvania and started building homes in the Santa Ana area starting in about 1911.
His son, Fayette, Brandy Birtcher’s grandfather, started the company in 1939, and under various guises it’s been involved in millions of square feet of office, retail and industrial development. Brandy Birtcher joined the company in the 1970s.
With him in the latest iteration of the company is his daughter, Brooke Birtcher Gustafson, who’s a partner and managing director and the fifth generation of the family to have an ownership stake in affiliated real estate businesses over the past 78 years.
The relaunch with her “marks a momentous occasion in the Birtcher timeline,” Brandy Birtcher said. “Returning to our family roots has always been a strategic part of our master plan.”
The Newport Center-based company has added half a dozen employees.
It’s announced no deals yet but has almost finalized a Los Angeles County site for an infill development, according to Gustafson.
She said about 80% of the company’s resources will go toward development opportunities, selective acquisitions of existing properties making up the rest.
Infill projects in markets like L.A and Orange County are likely to be in the 200,000-square-foot range, while Inland Empire projects could be as large as 1 million square feet or more.
Warehouse development, specifically in markets with formidable barriers to entry, such as Southern California, is likely to have more room for growth in the current market cycle than other product types and will be less exposed in the next downturn, Birtcher said. Ecommerce growth and related changes in meeting consumer demand is driving much of the need, he said.
The industrial sector had the highest annual return—12.4%—of all property types in the second quarter, according to a market report last week by CBRE Group Inc. That was more than double that of office and 5.5 percentage points higher than retail.
Goodman Departure
Both Birtchers have kept a low profile since departing Irvine developer Goodman Birtcher, the North American arm of Australian industrial giant Goodman Group, in September 2016.
Goodman Birtcher was formed in 2012 when Birtcher Development & Investment Co. joined forces with Goodman Group, which at the time was looking to increase its U.S. presence.
Under Brandy Birtcher’s watch, the venture with Goodman built more than 3 million square feet of industrial development in Southern California, in addition to other big projects across the country.
The company’s been rebranded as Goodman North America since Birtcher left the top spot there, and is now headed by Chief Executive Anthony Rozic.
In the past year, Goodman North America has built about than 2 million square feet of industrial space in the U.S., and as of August had more than 4 million square feet of space under construction.
Brandy Birtcher said the rapid growth at his former company under his watch is a blueprint that his latest venture is hoping to emulate, although he declined to estimate how much his firm plans to invest or build over the next year or so.
“Coupled with our deep understanding of the industrial landscape, we hope to continue to be one of the [most] trusted developers and/or lessors for companies like Kroger, US Foods, Xerox Corporation, Amazon, Walmart and Georgia Pacific,” he said in a statement.
The company has already lined up an unnamed financing partner, he said.
Prior financial partners have included Southern Pacific Railroad, Mitsui, Mutual of New York, Xerox Corp., State Farm Insurance and Mass Mutual.
