Staubach Scores in L.A. Rematch
After fumbling a previous effort to break into the Los Angeles market, football legend turned real estate executive Roger Staubach has fielded a new team of brokers that has made surprising inroads in a relatively short time.
In the 18 months since its opening, the Los Angeles office of Staubach Co. has closed several major deals representing such clients as Farmers Insurance and Internet advisor IXL Consulting. The firm, which represents only tenants, now employs about 20 brokers in a Westwood office and is preparing to open an outpost in downtown Los Angeles and eventually the San Fernando Valley.
Staubach said his Dallas-based firm could not afford to stay out of Los Angeles if it was to serve its national clients--which have ranged from bookseller Barnes & Noble to Shell Oil Co.--and compete effectively against much larger rivals, such as CB Richard Ellis and Grubb & Ellis.
“Los Angeles is critical for us to continue to grow our business,” Staubach said last week during a Southern California visit.
Staubach, who led the Dallas Cowboys to two Super Bowl victories as quarterback, began his firm more than 20 years ago after working for many years as a broker during the football off-season. The firm now employs more than 700 people and generates $175 million in annual revenue. Its services range from leasing and buying real estate on behalf of clients to financial consulting and construction project management.
Instead of expanding rapidly through acquisitions, the company has pursued a more cautious approach by building its own network of offices--about 30 across North America--from scratch. It’s a slower approach but one that allows Staubach and his partners to carefully select and groom a top tier of managers.
“We are trying to grow leadership instead of buying other companies,” Staubach said.
The firm has also stuck by its strategy of representing only tenants, becoming a major player in the field. Unlike many brokerages that represent tenants as well as landlords and developers, Staubach’s tenant focus minimizes the potential for conflict of interest and helps cement closer ties to its customers, although it must pass up some lucrative offers, company executives say.
“We have to turn down business and money to remain true to our ethic,” said Robert Chavez who opened the Los Angeles office in late 1998.
Staubach had operated in Southern California since the mid-1980s with a large office in Irvine, which is headed by well-respected industry veteran Kevin Hayes. Hayes is also president and majority owner of the company’s Western operation.
In 1994, Staubach attempted to expand from Irvine by opening a downtown Los Angeles office. But the new office failed to live up to expectations and Staubach was forced to retrench.
“They had no vision or profile,” said one Los Angeles building leasing manager.
The lack of a Los Angeles office put the firm at a big disadvantage as it tried to serve the nationwide needs of its large clients.
“It was a huge hole for them,” said Tony Morales, who heads leasing for Los Angeles developer Maguire Partners. “If Staubach couldn’t handle it, then [competitor] Insignia/ESG would.”
Staubach attributes the failure of the Los Angeles office to a variety of factors, ranging from bad timing to insufficient management oversight. But he knew he eventually needed to build a Los Angeles presence.
“Being in Irvine does not satisfy the customer who says, ‘Roger, we need help in Los Angeles.’ ”
In 1998, Chavez was wooed away from Metrospace (now Cresa), which also focuses on tenant representation, to open a Los Angeles outpost. Chavez, along with colleague Peter London, opened the office in Westwood and focused on the booming Westside of Los Angeles.
In a business where personal relations remained highly valued, Staubach has benefited by having Chavez, London and other local veterans on board, said industry observers.
“It’s not about the company per se,” said Michael Pollack, director of leasing at Howard Hughes Center. “It’s all about attracting the right talent.”
The growth of the Los Angeles office--which leased more than 750,000 square feet of space--has provided Staubach’s firm the geographic breadth it needs to stay in the running as real estate companies continue to merge and consolidate. Staubach has no plans to do so.
“We are large enough in our sector to be independent,” said Staubach, who recently teamed up with European real estate firm DTZ Debenham Tie Leung to form an international partnership. “We are now in every major market.”
