American Property Management Corp.
Michael S. Gallegos
President & CEO
Michael Gallegos already had helped build New Mexico's largest privately owned professional architectural/engineering firm when he made the decision to move into real estate. So it was with the know-how of an experienced entrepreneur that he started American Property Management Corp. in 1991.
With very little capital, Gallegos and co-founder James Long convinced the Bank of New York to sell them the foreclosed Comfort Inn in Albuquerque, N.M. The partners invested every dollar they had and welcomed in two other individual investors. Under Gallegos' guidance, hotel performance turned around immediately, generating an 85 percent first-year cash distribution to all four investors.
Gallegos and his partners saved every penny of their Comfort Inn ownership distributions to invest in their first full-service hotel, a Hilton in Las Cruces, N.M. This hotel had never been successful and was bought out of bankruptcy. Once again, the hotel's performance, spearheaded by Gallegos, rapidly turned around and produced over 30 percent annual cash distributions to its investors.
Since then, the formula of purchasing previously nonperforming hotels has been executed again and again by the company. To reverse the productivity of these properties, American Property Management provides its hotels with state-of-the-art financial systems, innovative food and beverage concept development, preventative maintenance, human resources support and creative sales and marketing.
The success of American Property Management has moved like a juggernaut. Within 13 years the company has acquired a total of 42 hotels. Four hotels were sold, yielding over 100 percent average annual return on investment to the partners. The firm is now the United States' 10th largest hotel management company, with 38 hotels offering 9,393 rooms across 12 states.
With a strong corporate infrastructure of talented and consistent leadership, the confidence of its deep investor pool, strong banking relationships and a hotel market that offers a selection of acquisition opportunities, American Property Management faces an extremely promising outlook for the future.
Principal & Co-Founder
Yehudi "Gaf" Gaffen and his wife, Pam, migrated from South Africa to the United States in 1979. Already experienced in the construction business, Gaffen was hired by Sunroad Enterprises.
While working in the midst of San Diego's construction market in the mid 1980s, Gaffen witnessed firsthand the need for a third party to represent project owners and be an advocate for them during the development and construction process, as well as manage projects on their behalf. Distinctly different from the industry's traditional construction management and design management services, Gaffen's vision for an owner-focused project management firm was virtually an untested market.
Gaffen left his secure job with Sunroad to pursue the concept. Undeterred by naysayers who insisted there was no market for the company, he and Pam launched Gafcon Inc. in 1987.
As their fledgling firm struggled to make inroads into the competitive building industry, the Gaffens adopted the entrepreneurial credo "perseverance in the face of adversity."
Finally their belief in the company and their dream began to pay off. Their first project was an expensive private home in La Jolla, and a second project followed just a week later. Two other projects were secured by the end of the month, and Gafcon was up and running, proving the skeptics wrong.
Today, Gafcon's seasoned team includes construction project managers, architects, civil engineers, financial analysts, estimators, schedulers, quality inspectors and computer professionals.
The firm's diverse range of services include construction program management, project management oversight, estimating and quantity surveys, scheduling and cost control, claims preparation/litigation support, management of information systems, construction loan management, construction inspection/quality control, testing and startup coordination, contract administration and much more.
The company has grown from a two-person home operation to over 95 employees. With headquarters in San Diego, Gafcon also has offices in Orange County, Los Angeles and, very soon, Beijing, China.
With more than 160 projects under its belt, the Engineering News-Record lists Gafcon among the nation's "Top 100 Construction Management Firms."
JMI Realty LLC
President & CEO
When John Kratzer became president and CEO of JMI Realty in 1998, he changed the company's focus away from passive real estate investment and onto urban and high-barrier-to-entry suburban development.
This new specialization and Kratzer's track record of accomplishment led JMI to be chosen as master developer of the Ballpark District, a massive redevelopment effort in the 26-block neighborhood surrounding the Padres' new urban ballpark.
The goal in the Ballpark District redevelopment was to transform the blighted East Village district into a vibrant, 24/7 urban neighborhood.
In assuming the unprecedented obligation required by the city of San Diego in the development of private projects around the ballpark, JMI Realty master-planned the neighborhood, processed all necessary entitlements and ultimately facilitated the development of two hotels, over 850 residential units, an office building and a 1,000 space parking garage.
The crowning achievement was securing a four-star branding partner and the largest hotel loan since the Sept. 11, 2001 terrorist attacks. The loan financed the construction of the new 511-room, 32-story Omni San Diego Hotel.
The financial and execution risks associated with taking on the role as master developer of the Ballpark District were enormous. The project marked the first time in U.S. history that a city conditioned its investment in a professional sports facility upon a commitment from a team's owner, in this case John Moores, to redevelop the surrounding neighborhood. Failure to successfully implement this private development program would have canceled rebuilding of the ballpark.
In the accomplishment of this task, JMI Realty became one of the few development organizations to successfully implement a true urban mixed-use project. The benefits of this type of development can be seen in the example of the Omni Hotel and Metropolitan Condominiums, a 32-story tower physically linked to the ballpark. Condominium owners have privacy through dedicated entrances and parking areas, but also have access to room service, concierge services and the physical amenities of the hotel and restaurants.
The future is especially promising for JMI. In successfully achieving the Ballpark District redevelopment, Kratzer has built expertise for his company that places it at the forefront of the re-urbanization movements taking place across the United States.