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Monday, May 20, 2024

Portfolio Growth for OC Property Managers

Industrial development and acquisitions resulted in year-over-year portfolio growth for Orange County’s top commercial property managers.

OC’s largest property managers boosted their local rentable footprint to 188 million square feet, up from 186 million square feet a year ago, according to this week’s Business Journal list.

This year’s list includes a mix of owner-operator property managers, such as Newport Beach-based developer Irvine Co., third-party property managers, such as CBRE Group Inc., and hybrid firms that look after their own and other companies’ assets.

The company that saw the largest growth in its portfolio is Dallas-based Lincoln Property Co., No. 5 on this year’s list.

The company greatly boosted its local footprint when it acquired Irvine-based property and asset management firm RiverRock Real Estate Group Inc. last July. RiverRock was No. 6 in the 2023 edition of the property managers list, with about 10 million square feet of local properties managed.

The total square footage run by Lincoln’s Newport Beach office now tops 13.7 million.

“Together, we’ve become a much bigger force,” added RiverRock founder and Lincoln Executive VP John Combs, noting that each firm’s markets, clientele and service lines are complementary to each other.

On top of the RiverRock merger, Lincoln—a hybrid property manager—added about 700,000 square feet organically, according to Lincoln OC Executive VP Parke Miller.

The RiverRock deal is the first of many acquisitions on the horizon for Lincoln.

“We’re looking to merge with more firms in our space to expand our service offerings,” Miller told the Business Journal.

National Draw

Other large firms that saw portfolio growth over the past year were third-party property manager CBRE, ranked No. 3, and Transwestern Real Estate Services, which is No. 4 on
the list.

Dallas-based CBRE increased its local portfolio 6.9% to 17.2 million square feet.

Transwestern Real Estate in Houston, which predominantly operates as a third-party property manager, upped its OC portfolio 9.7% to 14.1 million square feet.

“A number of self-managed clients are outsourcing and want to work with bigger firms,” Combs said. “National owners want to go with national firms.”

Some property owners, however, are going against the grain and taking back their real estate from property managers.

Seattle-based Kidder Mathews, a third-party property manager ranked No. 16 on this year’s list, lost business when one of its clients opted to manage their own assets.

As a result, the firm’s companywide portfolio, which spans across the West Coast, slipped 8.8% to 51 million square feet.

The company was one of few property managers that saw national portfolio shrinkage despite increased local footprint.

Kidder Mathew’s rentable square footage in OC jumped 11% to 2.5 million square feet.

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