Globest.com Q&A ORION Partners’ New Push for Growth
This Q&A by Bob Howard originally appeared on January 26, 2011
IRVINE, CA-Orion Property Partners has been involved in the development and management of more than 10 million square feet of office space in Orange County’s Airport Area submarket, is coming off of the second-most-profitable year in its 10-year history, and has negotiated some of the largest office leases in the county. And yet, the company has never made a concerted push for growth or taken a stab at creating a high-profile public image. All of that is changing as Orion, which thus far has relied on referrals and word-of-mouth, has launched a campaign to make itself known as part of a plan to grow and to expand outside of its traditional Airport Area bastion into other Orange County office submarkets. The company recently brought on industry veterans Mark C. Bennett (27 years in the business) and Mark McAdams (30 years) as principals, and it plans to bring on new junior-level people to train them in the Orion way. Jay Carnahan, managing partner at Orion, recently outlined the company’s plans for growth.
GlobeSt.com: Considering how well you have done, why change your strategy?
Carnahan: Irrespective of how well we have done, we don’t want to be the same firm 10 years from now as we are today. We want to grow, and we think the best way to do that is to bring in new people. Rather than trying to get brokers to leave other firms and come here, which is usually all about what the commission split is, we’re going to start a program of hiring new people to support the senior guys. When you have someone else you are training, it makes you work harder, it makes you think outside of the box, and it makes you responsible for that person’s success, all of which makes for good things to happen.
GlobeSt.com: How were you able to have such a profitable year in light of the economic and office market conditions?
Carnahan: Tenants that we represent made opportunistic decisions in 2010. These were companiess who decided to do short-term leases the past few years because of the uncertainties in the marketplace, but this year they made decisions that we were the beneficiaries of because we have done business with them for so many years.
GlobeSt.com: Why has Orion concentrated on the Airport Area?
Carnahan: Because that is where the biggest and best buildings are, where the highest leasing volume is, where the most competition is, and where the biggest institutional owners and investors in office space want to go to first.
GlobeSt.com: What is the next market you are going to target?
Carnahan: Our next growth area is Central Orange County because much of the class A space there is going to change hands soon.
GlobeSt.com: Despite that reference to tenants, you are primarily a landlord representative, aren’t you?
Carnahan: Yes, we are mostly landlord guys, but we do tenant rep for people we’ve done business with for many years who ask us to represent them.
GlobeSt.com: What is your approach to the landlord rep business?
Carnahan: We try to get as close as possible to an in-house leasing program for a limited number of the biggest and best institutional buildings and owners. We don’t want to have all four buildings on a corner. I don’t think you can provide unique insight for a landlord if you have all four buildings on a corner because then you really don’t care which building a tenant goes into as long as it’s one of the four. If you only have one building on a corner, your life is dependent upon landing a deal in that one building.
GlobeSt.com: Who are some of these landlords?
Carnahan: Shorenstein, Hines, T.A., Equity Office Properties, Rreef, LNR, JP Morgan.
GlobeSt.com: What distinguishes you from the others who are vying for this landlord business?
Carnahan: We are relationship and reputation guys. After 10 years, 99% of our business has been referrals. When Hines built its first signature building in Orange County and when Shorenstein decided to hire a local team in Orange County, and even in the case of Equity Office Properties, all of these firms could have gone with the “safe” choice. Instead they picked an unknown, single-office firm. These big institutional owners appreciate that our firm doesn’t look at real estate like a commodity. They like that we serve a limited number of the best of the best. We believe that is the only way to really handle the business well.