With more than two decades of experience, Steve Bollert is hardly a newbie when it comes to commercial real estate. But he is the “new B” at BCL Inc., a 16-year-old company that owns and manages 1.2 million square feet of commercial space throughout Southern California and Arizona.
“We're about to change the name. The 'C' is going to change to a 'B' pretty quickly. It will be BBL,” Bollert said from BCL's fourth-floor headquarters at 450 B Street Tower, a building it owns and manages in downtown San Diego.
The affable Bollert came to the firm about six months ago as the company's chief investment officer, joining Casey Brown and Paul LeBeau to comprise BCL's triumvirate. The genial camaraderie among the principals is palpable. Since BCL was founded in 1997, its principals have developed, purchased and repositioned more than $2 billion of office and industrial properties.
“Paul and Casey have done all of these developments you see around me here,” Bollert said, referring to an impressive array of photos on the walls of BCL's conference room. “Casey was in brokerage back in the day and so was I. Paul came from the banking business and so is our finance expert. Casey handles most of our leasing and I do the acquisitions. They are both terrific people with great reputations and this has been a really good fit for me.”
We're value-add guys, which means we want to buy properties that need something done to them — they need to be leased up, or rehabilitated, or reconditioned, or repositioned.”
Last year alone, BCL bought $70 million worth of property in San Diego, about 10 percent of the total volume of $690 million in deals at more than $10 million.
“It was a good year, but not a great year,” Bollert said. “We'd like to do better.”
Among BCL's achievements in 2012, was (in partnership with AEW Capital Management) its late-November acquisition of One Pacific Heights, a 120,350-square-foot, Class-A office building in Sorrento Mesa.
“The property was owned by RREEF America and they've done a fine job managing it, but we're just going to add to it — enhance the entrance, update the lobbies, guest rooms, locker rooms — bring it up to an A quality building,” Bollert said. “We're also hoping to add another building to the site, which will add a great deal of value to the entire project.”
But as “recyclers of capital,” retaining assets for long periods is generally atypical of BCL, according to Bollert. The process of acquiring, improving and selling a property usually takes place within a three- to five-year time frame, he said.
“We want to make investments, improve the buildings for our tenants and then sell them to a more passive long-term owner of stabilized assets,” Bollert said.
BCL is also in it for the long haul on its most recent acquisition: Regents, a building with roughly 100,000 square feet of Class-A office space at 4180 La Jolla Village Drive.
“Our strategy is slightly different with this asset. We are looking at it as a long-term investment, which also allows us to capitalize on the current low interest rates for longer term loans,” Boller said. “Although the loan on the project will probably not exceed 50 or 60 percent LTV, it does allow us to not only focus on creating value, but also take advantage of the cash flow. We closed the building in December. The property is located in UTC, which is an exceptional market to own real estate — so, we're very happy with the purchase.”
In a down economy and tough business climate, integrity is often in short supply. But not at BCL.
“When brokers bring you a deal, they want to know they're taking that deal to somebody that can perform and that they trust,” Bollert said. “We value brokers and their opinions and the work that they do, so they like to bring us deals. I think people enjoy doing business with us. I know they do.”