In 1950, when developer Raymond Watt was just beginning to make his mark as a homebuilder in Southern California, he spent about 40% of his time chasing capital providers. But the hunted have long since become the hunters: Today's lenders regularly knock on Watt's door with offers to fund his developments, which to date include more than $6 billion in completed projects. The Watt Cos. has developed 8 million sq. ft. of industrial and office space, including Watt Plaza, a 23-story office complex in Century City.

As incredible as it now seems, California in 1950 was a capital-starved region for real estate. Money for construction and permanent loans was in short supply. “There just weren't enough people here. There just wasn't enough industry to generate the dollars that we needed,” Watt, 85, remarked to real estate professionals at the Wilshire Grand Hotel in Los Angeles in October as part of the 11th annual Real Estate Finance and Investment Conference. UCLA Extension honored Watt, chairman of The Watt Cos. and former assistant secretary of Housing and Urban Development, for his civic and commercial real estate contributions.

“Being a capital-shortage region meant that we had to travel to other areas to attract dollars for investment,” Watt recalled, adding that in the early 1950s it took three days by train to reach the East Coast. Convincing Northeast-based capital sources that they could double or triple their returns by investing in California residential real estate proved to be a tough sell. For starters, only about one in 10 lenders he met with had ever been to California, Watt said.

Furthermore, many Northeast lenders of that era expressed concern about the possibility of an economic depression occurring within the next 10 to 12 years and that California would bear the brunt of it, Watt said. “They actually thought the people of California would be going back to where they came from.” But some of the more aggressive S&Ls and commercial banks finally agreed to open their pocketbooks for housing, provided the developers paid a 10% discount — essentially an upfront fee amounting to 10% of the value of the loan — in exchange for a more favorable interest rate.

Those investors who bet on growth in the Golden State were smart to do so. According to the U.S. Census, the population of California has ballooned from nearly 10.6 million in 1950 to an estimated 35.4 million in 2003. That influx was something that Watt couldn't conceive of following World War II. “We always thought that there would be adequate land and plenty of [development] opportunities,” Watt said. “We were so used to buying all the land we wanted at such a reasonable price up until the middle 1970s.”

Through Watt Commercial Properties, The Watt Cos. owns and manages more than 10 million sq. ft. of real estate in several states. Watt has a development pipeline of $300 million, including 1 million sq. ft of retail and 800 condominium or apartment units.

A graduate of University High School in Los Angeles, Watt also taught real estate development courses at UCLA Extension. Despite his accomplished career, he has no intention of resting on his laurels. On the day I spoke with him, he had recently returned from Hawaii where he's developing a condo project. “To me, this is just a great big game and a lot of fun,” Watt said. “It's like going to the plate with the bases loaded and being able to swing away.”