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Grubb & Ellis|BRE Commercial highlights gains of 2004

Anticipating positive indicators for 2005

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On March 1, the affiliation of BRE Commercial, the largest broker-owned commercial real estate brokerage firm in San Diego County, with the Grubb & Ellis Co. created overnight a Pacific Southwest powerhouse: Grubb & Ellis|BRE Commercial.

Now 10 months into the affiliation, Grubb & Ellis|BRE Commercial's John D. Frager, president and CEO, and Marc H. Doyle, executive vice president and COO, have every reason to be pleased. Just as the entrepreneurial broker/owners of the firm anticipated after more than a year of study and research, affiliation with the Grubb & Ellis Co. has proven a win-win for the real estate professionals and their clients alike.

In quantifying terms, Grubb & Ellis|BRE Commercial has grown significantly. Just in the first six months of affiliation, referral activity has increased tenfold; its rosters of industry-leading brokers grew to 84, and it added an Otay Mesa/South County office to its strategically located offices in UTC, downtown San Diego and Carlsbad.

Already an established powerhouse in the San Diego region based on the expertise and resourcefulness of its brokers, Grubb & Ellis|BRE Commercial has optimized the special services and programs available to Grubb & Ellis affiliates in order to better service new and existing clients.

As entrepreneurs, Grubb & Ellis|BRE Commercial's brokers recognize the universality of the concept "we receive back what we give." A generous contributor of time, effort and financial support to a wide array of educational, community, social and charitable efforts and causes, this month the Grubb & Ellis|BRE Commercial board approved a $100,000 pledge to the Real Estate Program of San Diego State University's College of Business Administration. The pledge will be combined with other donations to help fund a faculty professorship in real estate.

In addition, Grubb & Ellis|BRE Commercial will initiate a rotational internship program through which SDSU students will gain exposure to various aspects of commercial real estate, and is collaborating with SDSU on future market research services.

Frager and Doyle anticipate a regional commercial real estate market in 2005 that will keep their clients and colleagues very busy. Barring unforeseeable events and issues in governmental and financial sectors, they predict the market will experience another year of substantial growth.

"We expect the continuing maturation of the region's established biotech and high-end industry clusters to result in many benefits, including jobs and the transition of many firms from strictly research to manufacturing," Doyle said. "We expect our major universities -- SDSU, the University of California, San Diego and the University of San Diego -- to play even greater roles as integral links between the community and our cutting-edge industry clusters, thus expanding demand for office and industrial facilities."

"We have every indication that investment activity will remain heated in the region," he continued. "San Diego will remain a favorite among institutional investors seeking to place their capital."

According to Frager, the competition for quality tenants as well as consumer dollars is fierce in San Diego. Grubb & Ellis|BRE Commercial professionals expect to see owners of existing retail properties further embrace redevelopment and repositioning as ways to maintain and improve the value of their properties.

The constraints on the region's commercial real estate market are well known, Doyle and Frager agreed, and include a dwindling supply of appropriately zoned and developable land, and the region's high cost of housing.

Presently, three major business park areas are being developed in North County in Carlsbad, Escondido and Oceanside. After these are built out, there will be limited new industrial zoned land coming to the market in the region's urbanizing areas, Doyle said.

Several of the established communities in the South County are as built-out as metro San Diego, he noted, while the vast Otay Mesa -- for decades an ideal location for the region's 21st century industrial hub -- is subject to ongoing environmental and sewer capacity constraints.

Many Grubb & Ellis|BRE Commercial experts are at the vanguard of real estate efforts that address the housing and land shortage issues, Frager and Doyle said. For example, Diane and Darcy Miramontes, the firm's dynamic mother-and-daughter team, are among the region's most prolific broker duo specializing in existing multifamily residential properties. Many of their clients invest in rental residential properties in established neighborhoods for conversion to condominium sales -- a practice that generates more affordable housing or purchase opportunities for households otherwise priced out of the region's sizzling market.

As they evaluated Grubb & Ellis|BRE Commercial's solid growth in 2004 and previewed their expectations for the greater San Diego region's commercial real estate sector in 2005, Frager and Doyle could not say enough about the knowledge and accomplishments of all of their colleagues.

Citing but a few of the firm's many talented teams, they lauded the expertise of Regan Tully and Rodolfo "Rudy" Mendoza, veteran leaders of the South County industrial commercial real estate community who recently joined Grubb & Ellis|BRE Commercial and helped to open its Otay Mesa office.

Likewise, they noted the industry-leading achievements of such teams as Dennis Visser and Mark Emerick, who head the leasing team for H.G. Fenton's developing business park at the former Carlsbad Raceway site; Peter Curry and Matthew Campbell, the brokers dominating the North County Coastal office market; Mike Erwin and Barry Hendler, experts on the North County Inland submarket who also head up marketing and leasing for JRMC Real Estate Inc.'s developing Escondido Research & Technology Center; the trio of Rick Reeder, Dave Odmark and Bill Cavanagh, the "go-to" experts that major institutional office developers and investors turn to for advice throughout the region; Tim Winslow and Josh Vasbinder, experts on finding prime and infill locations for developers of urban mixed-use residential projects throughout the region; Glenn Arnold for his expertise and success in owner-user sales; and the team of Bruce Schiff and Phil Lyons, both CCIMs and retail specialists whose "territory" extends throughout North City/North County and into southern Riverside County.

These teams constitute the figurative "tip of the iceberg" of Grubb & Ellis|BRE Commercial's expertise and strength, Frager and Doyle said. During 2005, Doyle added, the brokerage firm has its sights set on opening a fifth office in Temecula, in a sense following along the same path as its senior brokers extend their services on behalf of clients.

When the fifth Grubb & Ellis|BRE Commercial office is established, it will be the decision of the broker-owners of this San Diego-based firm, not that of a distant corporate office with little direct knowledge of the region, its dynamics and the companies that drive its economic engines.

"That, finally, is what compels us to always improve, always learn, always extend better service -- we all have vested interests in the company as well as the community," Frager said.

For more information about Grubb & Ellis|BRE Commercial, visit www.brecommercial.com.

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