Now that the proverbial dust has settled on one of the largest real estate purchases in U.S. history, Michael Prentiss, the Dallas mover-and-shaker who orchestrated the deal, looked at what he acquired in California and concluded:
“The (commercial real estate) market in Southern California is probably stronger than any other place in the country, so our goal is to significantly increase the level of involvement we have here.”
Through a joint venture with Copley Real Estate Advisors (the real estate investment arm of New England Mutual Life Insurance Co.), Prentiss has already bought 7 million square feet of office and industrial space here as part of a $2.5-billion package, for 17 million square feet throughout the country, from Toronto-based Cadillac Fairview.
One of First Stops
“But there is plenty more opportunity,” he said, between bites of berries and oatmeal at the Four Seasons Los Angeles Hotel.
It was one of the first stops on his first publicly announced visit to California since the acquisition a year ago this month, when the Canadian company sold, in what has become known as “the deal of the century,” a total of $6 billion in assets, mostly to JMB Realty Corp., out of Chicago.
“We will be cautious,” Prentiss said, about developing in California. “We won’t go in and build pell-mell. But with a little footwork, I think we can develop more.” Later, he termed what he plans to do as “selective development.”
Robert H. Short Jr., Prentiss Properties’ principal in charge of the western region of the United States and senior development officer, added:
“Certainly, we will want to do something in Los Angeles. We’re looking for more opportunities in Fontana, and we’re also taking a hard look at San Diego . . . but as far as California goes, our main thrust will be L.A. and the Inland Empire.”
It will be office and industrial space, not retail. Why not? “Because,” Prentiss answered, “a Horton Plaza (the successful San Diego shopping center developed by Ernest Hahn) is tough to pull off.”
In an equally difficult arena, however, Prentiss Properties has just started managing office buildings for other companies, and the first two firms are among the Southland’s largest: the Irvine Co. and Nissan. The Dallas firm will manage 1.4 million square feet, in several buildings, for the Irvine Co. and a 216,000-square-foot building, contiguous to the Pacific Gateway Center in Torrance, for Nissan Motor Acceptance Corp.
The still-developing 275-acre Pacific Gateway Center (an industrial park) and 23-story, 436,000-square-foot 6500 Wilshire office building, which still has about 130,000 square feet to lease (see today’s Hot Property column) are among the California assets Prentiss acquired from Cadillac Fairview.
Proud of his company’s abilities to manage its own properties, Prentiss figures the so-called “third-party property management” was a natural progression. “But I don’t have any desire to get bigger as a company.”
That’s one way he considers himself different from New York tycoon Donald Trump, to whom Prentiss has been likened. Prentiss also has been called “a boy wonder.” He repudiates both:
“I don’t want to be compared to Donald Trump in any way, and I’ll be 45 (Oct. 16), so it’s nice to think that I can be thought of as still young.”
Has Fax Machine
Perhaps it’s because of his boyish good looks, or maybe his energy, that he’s perceived as younger than he is. He plays basketball at least twice a week, takes horseback-riding lessons in the mornings before going to the office, and still finds time, he says, to play tennis and golf, scuba dive, read and enjoy his wife and three children.
“OK,” he admits, “I do have a fax (machine) at the farm,” his 400-acre Virginia spread, complete with 15 horses and 60 head of cattle, “and I almost always have a phone at my elbow.” Yet, he’s making plans “to take a group of guys from the office sailing in the Caribbean this winter” on his 61-foot sloop, which he keeps moored at St. Thomas. “And sometime in April, I want to go down the Amazon.”
It’s a glamorous life style, but more than likely, it was his ability to cut what many thought was an impossible deal that brought him the “like Donald Trump” label.
Prentiss was the president of a Cadillac Fairview subsidiary (its urban development company in Dallas) when the grandchildren of Canadian distillery magnate Samuel Bronfman decided to dissolve their holding company, which held a 51% share of Cadillac Fairview, Canada’s largest publicly traded real estate company. The sale involved 58 million square feet--46 shopping malls, 35 office buildings, 9 industrial parks, 7 million square feet of space under construction, and 35 parcels of land--all mostly in Canada.
Prentiss’ joint venture purchased most of the U.S. holdings.
“It was a tough deal, because it was very, very complicated,” he remembered. “We had to close before JMB, and we had to get 150 third-party consents. The night before we closed, we were still not sure we would, but we did.”
Financially comfortable after seven years with the Cadillac Fairview subsidiary, he had a dream, before the negotiations, of taking a year off, but he changed his mind, mainly because he took a personal interest in the 17 million square feet of space his joint venture acquired. He had overseen most of its development.
After the deal closed, Prentiss formed Prentiss Properties Ltd. Inc. to manage the portfolio.
But wait a minute: Isn’t that just like Donald Trump, to use his own name?
“If I had my druthers, I wouldn’t have my name on the company,” Prentiss said. “I was convinced to do it because I am reasonably well known in the industry, but that’s where it ends.
“I don’t say, ‘I, I, I.’ With me, it’s ‘we.’ I’m grateful to have a good crew. We really are a team.”