Corporate mergers can be truly life altering for executives who find themselves on the outside looking in. John Combs is a perfect example. Combs was serving as president of U.S. Property Services for Insignia/ESG, specializing in leasing and management, and was climbing the corporate ladder whenbroke in February 2003 that CB Richard Ellis planned to merge with Insignia. Recognizing that there wasn't a comparable position available to him in the new entity, he opted to leave Insignia before the merger took effect July 23.
The events dealt him a crushing blow. “It's an absolute crisis, and you go through all the steps of a death,” says Combs. “When you are in a great job and recognized as kind of like the Col. Sanders for your firm of a certain business line, you would never want to leave that job.”
After exploring many career options, exercising intensely to clear his mind and consulting with his business coach, the 44-year-old Combs decided to play to his strengths and form his own property management company, RiverRock Real Estate Group based in Irvine, Calif. “I figured it would probably provide a higher return and a lower risk, and I thought I could leverage those strengths,” he says.
Formed in August 2003, RiverRock has 4 million sq. ft. in its management portfolio, including office, industrial and retail properties in Southern California. Combs' goal is to have 10 million sq. ft. under management within the first year of operation and 30 million sq. ft. in three years.
Private investors and private funds are the biggest driving force behind RiverRock's growth thus far, according to Combs. “The private REITs are buying, and even if they self-manage they are having so much indigestion that their giving us part of the business, such as lease analysis.” The growth is particularly impressive because a “non-solicitation” clause prevents Combs from calling on Insignia's customers for an unspecified period of time. “I've had to call on strangers to get business. That's hard to do.”
Combs speaks passionately about property management and how his company stands out from the crowd. He strongly believes that non-core jobs, such as maintenance or accounting, should be outsourced. “You don't need all that corporate infrastructure to watch it, or run it.” Instead, he would much prefer property managers to focus on tenant relations.
Though it's been a traumatic transition period from real estate executive to a small business owner, Combs now says he wouldn't have it any other way. “I can't imagine being an employee now. This was the right decision for me. People want the individual to win, and not the big companies.”
On another note, we've added a new column to kick off 2004 in smart fashion. This issue marks the premiere of “Insights.” The purpose of the one-page column is to shed light on critical issues affecting not only the brokerage community but also the broader commercial real estate industry. The column will be written by thought leaders in the brokerage industry and will be published every other month. This month's inaugural column is penned by Ross Ford, president of TCN Worldwide, and appears on page 58. Happy reading.