When BentleyForbes, a juggernaut in commercial real estate investment circles, hired David Cobb as president and CEO in June it sent a message to the industry that the entrepreneurial Los Angeles-based company will continue to aggressively grow its portfolio.
Cobb most recently served as chief investment officer of Commercial Net Lease Realty, where he was responsible for the overall investment strategy for the retail real estate investment trust (REIT) and oversaw the acquisitions and dispositions units. At BentleyForbes, he will spearhead growth of the firm's $1 billion real estate portfolio, primarily through the acquisition of single-tenant and multi-tenant Class-A office properties. The firm has targeted $750 million in new acquisitions this year and hopes to amass a $10 billion portfolio over the next five to seven years. NREI recently sat down with Cobb to discuss his new role leading a private company, founded and chaired by Frederick Wehba.
NREI: In September, you hired Wachovia Securities as your investment banker to pursue joint-venture partners. Why now?
Cobb: BentleyForbes is a private company owned by the Wehba family. The company has grown its real estate portfolio all with family money. BentleyForbes has never had outside equity investors. To really grow the company to the extent that we'd like to over the next five or 10 years, we think it's advisable to bring in some external equity capital.
NREI: What kind of short-term goals have you outlined for the company?
Cobb: We clearly want to continue the rapid growth of the company — that is, acquire more institutional-grade office properties primarily as a buy-and-hold owner. We also are working hard to build a Class-A infrastructure. It's great to build a company and be go-go on the acquisition front, but you can't have the infrastructure of the company fall apart on you down the road. We also will probably do some transactions in the next six months that would involve some dispositions of assets and redeployment of that capital into the core holdings of the company.
NREI: You talk a lot about the importance of building a “Class-A” infrastructure. What does that mean exactly and why is it so important?
Cobb: We've hired seven new people over the past three months in areas like accounting, asset management, acquisitions, due diligence. BentleyForbes now has complete financial reporting capability similar to an audit report from a public company. This is a company that has been in the entrepreneurial stage and now understands that you need financial statements and footnotes in presentations to investors. That's a huge infrastructure step for a private company.
NREI: You seek to grow the real estate portfolio from $1 billion to $10 billion over the next five to seven years. How do you envision you'll reach that goal?
Cobb: How quickly we grow depends upon whether we do the one-off, $25 million deals, or if we're able to buy a few portfolios once or twice a year. We are pursuing a couple of portfolios right now that are worth hundreds of millions of dollars that we may or may not win. Hopefully once a year we can land a big portfolio that really will help boost growth materially.
NREI: Why did you decide to leave Commercial Net Lease Realty after 2.5 years?
Cobb: I was never unhappy there. It's a great company, and I own stock in it. A unique set of family factors led us to the Los Angeles marketplace. Additionally, in my previous job we had done quite a bit of business with Fred [Wehba] and BentleyForbes. Fred was looking for a new CEO from the outside world. Those two factors happened to come together at the same time.