Feature: Trailblazing Builder Bob Voit Retools for the Next Cycle
At this stage of a career that spans a half century—including 40 years at the helm of the diversified real estate firm that bears his name—Robert Voit is more than entitled to take a victory lap and head to the golf course. Since founding Newport Beach, Calif.-based Voit Real Estate Services’ predecessor firm in 1971, Voit has built a powerhouse that provides tenant and landlord representation, investment management, property management and principal acquisition to select markets in the Western United States.
Today, 45 million square feet of development, acquisitions and property management bear his imprint. Voit Real Estate Services and its predecessors have completed construction projects valued at $1.5 billion and transactions worth $33 billion. Voit has also made his mark as a developer, contributing significantly to the shaping of the nation’s second-largest metropolis through a series of innovative projects. Along the way, Voit’s refreshingly old-school approach to business has earned the trust of elected officials, institutional investors and the public.
“Bob has had great success because he has a great deal of integrity,” explained Brad Rosenheim, a land-use and entitlement consultant who started working with Voit on development projects as a Los Angeles City Council staffer some 25 years ago. “He means what he says, and he fulfills the commitments that he makes. As a result, he has a tremendous reputation for doing good work.”
Rather than calling it a day, however, Voit is relishing the opportunity to recalibrate the firm’s strategy in the face of a market that he calls the most challenging of his long career. Though Voit has lived through numerous market ups and downs during more than four decades in the business, “this is probably the biggest adjustment required in the 50 years I’ve been in commercial real estate,” he said.
For Voit’s team, no less than many other industry players, the years since the fall 2008 financial crisis have demanded soul searching about the company’s direction. The consensus opinion among the senior brain trust was to aggressively expand services in targeted areas such as leasing, financial management and property management. The multi-front strategy that emerged is founded on a single principle: “We wanted to have a platform that will be relevant in the good times and in the bad times,” Voit explained.
In response, Voit has re-focused the company on the service side, working to expand its presence in property management, leasing and investment sales. “I think of us as a real estate operator,” Voit explained. “We want to be able to handle all aspects of commercial real estate for institutional and commercial clients.”
The company has continued to grow in the face of economic volatility. In 2010, Voit rebooted its Phoenix office, which had closed two years earlier in the midst of the capital markets meltdown. The company’s 10th office also made its debut in 2010, when Voit hung out its shingle in Southern California’s powerful Inland Empire. Voit’s nine other offices include locations in Phoenix, Las Vegas and seven more in California.
A centerpiece of the company’s revamped strategy is services related to distressed assets. In 2009, Voit made the pivotal decision to launch an expanded business line dedicated to the discipline. The soundness of that decision has since been confirmed by industry trends. Voit cites studies indicating that sales involving distressed assets in its markets increased from 2 percent of the total in 2008 to 30 percent by 2011. By square footage, distressed properties figured in more than three-quarters of sales in those markets.
Geared toward financial institutions and other lenders, the new practice has enlisted a roster of national and regional heavyweights, like Bank of the West; Iron Point Titan; and LAMCO L.L.C., which manages the legacy real estate assets and other investment interests of Lehman Brothers Holdings Inc. Demand for services has been particularly heavy in Orange County, Sacramento, Phoenix, Las Vegas and San Diego, Voit reported.
The distressed-asset initiative has quickly gathered steam. And during a particularly productive six-week stretch last summer, Voit won assignments to handle 14 distressed properties totaling 944,000 square feet in Orange County, Calif.; San Diego; Phoenix; and Las Vegas. By August 2011, the new practice had completed 11 assignments and was handling more than 125 others. Thanks in large part to Voit’s bet on the demand for distressed services, the company’s bottom line is enjoying a healthy boost. By the fall of 2011, brokerage had improved 22 percent year over year, and revenue had jumped 53 percent.
Going forward, Voit is also eyeing stepped-up activity in the company’s principal investment business, predicting, “We’ll be looking to be more aggressive in acquisitions.” The company is particularly focused on deals in the $5 million to $100 million range and is pursuing core-plus, valueadded and opportunistic buys alike. Rather than going it alone as an investor, Voit intends to continue a career-long practice of joining forces on investments and developments with commercial banks, private investment funds, life insurance companies and other institutional players.
Another growth area is property management, which has grown by about 50 professionals in the past couple of years, Voit said. In a short time, the management business has established a stable of 15 clients. As in other aspects of the company’s activities, its property management work has a geographic focus: It favors California, Arizona, Nevada, New Mexico and Washington. That move raises Voit’s profile in a service line that the company sold to Transwestern a decade and a half ago—a move that hindsight has led Voit to view with some regret.
For Voit, the re-focus and new services bring him full circle. He started in the business on the service side, working his way up from the mailroom at Coldwell Banker to a position as an office leasing broker. But by 1971, Voit was looking for a new challenge. He left Coldwell Banker and launched Voit Corp., a development company that was the ancestor of today’s firm. The company’s first project was an 80,000-square-foot, twophase office project. During the next decade and a half, Voit gradually built the firm into a one-stop shop. He introduced a property management business in 1973 to handle the company’s own assets as well as provide services to third-party clients.
In 1977, Voit and partner John DeWeese founded Valley Commercial Contractors, which has served as the company’s construction unit for the past 35 years. In that time, Valley Commercial has completed projects valued at $1.3 billion. Yet another milestone was the 1987 debut of Voit’s commercial brokerage business, which has completed upwards of $33 billion in lease and investment sales transactions. Remarkably, 14 of the brokers who signed on to launch the transaction unit are still with the firm more than two decades later.
Although Voit has made his mark in multiple real estate specialties, he is probably best known to the general public as an innovative and community-minded developer. “Bob is one of the great visionaries that I know in the real estate industry,” said Rosenheim, the consultant and former Los Angeles City Council staff member. Persistent in the face of daunting odds, the upbeat, engaging Voit is the polar opposite of the “my way or the highway” developer. Colleagues call him an expert listener who seeks input from the community, elected officials and government agencies, then incorporates those concerns into the finished product.
The project that will likely stand as Voit’s signature development, the $500 million Warner Center in Woodland Hills, Calif., began life as the rural retreat of a Hollywood mogul. In 1974, Voit teamed with New England Mutual Life Insurance Co. to develop more than 200 acres of a San Fernando Valley horse ranch formerly owned by Harry Warner, a co-founder of the Warner Brothers entertainment empire. Voit foresaw the area’s potential, and set his sights on what seemed to many at the time like an impractical idea: transforming the Warner property into a mixed-use development and business hub for the seemingly remote western San Fernando Valley.
Over the next decade and a half, the project unfolded in two major components. The low-rise portion, Warner Center Business Park, is a 944,000-square-foot development. Voit complemented that with the 2 million-square-foot Warner Center Plaza, which includes five high-rise office towers. During the past three decades, Voit’s once improbable project has proven to be transformative. Today, Warner Center stakes a claim to being the leading business district in the sprawling, 250-square-mile San Fernando Valley.
Voit’s approach to the development was ahead of its time in other ways. “With his leadership, Warner Center created a very active transportation management association,” explained Rosenheim. Warner Center is considered a model for mass transit in a region that battles traffic congestion and smog, offering a major bus hub and a light-rail station. Those elements give it one of the best occupant-to-vehicle ratios in Los Angeles, Rosenheim pointed out. Voit also set Warner Center apart from the competition by incorporating amenities like day-care facilities, restaurants, service retail and a hotel.
After 20 years of developing and owning the property, Voit began exiting its interests during the mid-1990s. A joint venture of the Alaska Permanent Fund Corp., the state’s public investment management fund, and the Harvard University endowment fund bought a 2.3 millionsquare-foot portion of Warner Center for an undisclosed price in 1995. The following year, CarrAmerica Realty Corp. paid more than $50 million for a 12-building, 343,468-square-foot portion of the low-rise Warner Center Business Park complex. That deal marked the conclusion of Voit’s ownership stake in Warner Center, although the company continued to provide property management services for some time afterward.
The credibility conferred by Warner Center’s success continued to yield dividends long after Voit’s exit from the property. His reputation for business acumen led to a pivotal role in a unique public-private partnership. The project grew out of a proposal in the 1990s by the late Los Angeles City Councilman Marvin Braude. He wanted to build a one-stop shop of city services for constituents in his San Fernando Valley district. The proposal fell short at first but resurfaced a decade ago after Braude’s retirement.
Negotiations with city staff yielded a complex agreement for construction of a 142,000-square-foot facility. The contract provisions featured innovations that have yet to be replicated on a Los Angeles city project. Under standard city procurement rules, planners begin by selecting an architectural consultant, which submits a design to city agencies. Once approved, that design is posted for bids by construction contractors.
Instead, Voit was selected for single-point responsibility, not only building the project but choosing and supervising the architectural team’s work. Voit was allowed to lease the cityowned parcel for 30 years, then deliver the project on a turnkey basis. Former Los Angeles City Councilmember Cindy Miscikowski, a former Braude aide and his successor, cites Voit’s “stellar delivery of product and his reputation” as factors that gave city officials confidence in the firm’s ability to deliver the project on time and on budget. Voit took pains to solicit community input and incorporate it into the project.
In June 2003, Voit completed the Marvin Braude San Fernando Valley Constituent Services Center $2 million under budget and five months ahead of schedule. Upon the project’s completion, the city exercised its option to buy the facility outright. “No hurdle was too big to overcome,” Miscikowski added. “Many another developer would have walked away or said, ‘Sorry, it isn’t worth the brain damage.’ I can’t think of another developer who would have stayed with it.”
She also suggests that the project played a role in easing tensions that once threatened to pull Los Angeles apart at the seams. By the mid1990s, a sense of alienation from the rest of Los Angeles sparked a secession movement aimed at establishing the San Fernando Valley as a separate city. Miscikowski speculates that development of the high-profile Braude Center sent a much-needed message to Valley residents that they are a valued part of the city. By the time the project was delivered in 2003, she noted, discussion of secession had begun to die down.
Voit’s development projects have contributed to community-building in other respects, as well. One such endeavor started with the 1993 departure of General Motors Corp. from its longtime manufacturing facility in Van Nuys, a community in the southern San Fernando Valley. Los Angeles City Council member Richard Alarcon, who represented the area, sought to redevelop the property in a way that would shore up the community’s sagging economic fortunes. He negotiated a deal with General Motors that would re-zone the property as approximately one-third retail and one-third industrial. For its part, GM retained slightly less than one-third of the property for a testing facility, and five acres were set aside for police and fire stations.
To develop its 66-acre section of the site, Voit planned a $75 million mixed-use project on adjacent parcels. The firm took the lead on the 800,000-square-foot industrial portion, and teamed with Selleck Development Group on building 370,000 square feet of retail dubbed Van Nuys Center at the Plant.
In completing such difficult and complex projects, Voit has demonstrated a rare combination of qualities. Though a master at bringing an extraordinary vision to life, he also approaches his work with remarkable grace and style. When it comes to development projects, Miscikowski said, that means “integrating the elements of the community into the elements of the building.” For a lifelong builder like Bob Voit, there might be no finer legacy.