Roger Staubach, a man best-known for donning the trademark silver and blue of the National Football League’sCowboys, is thinking about a different kind of silver in 2011. This year will mark the 25th anniversary of the retail real estate firm that Chris Maguire created back in 1986 with Staubach’s assistance.
Staubach played in the NFL during an era when professional football was a part-time job—even for a quarterback that played for two Super Bowl-winning squads and was eventually enshrined in both the Pro Football and College Football Halls of Fame.
As a 27-year-old rookie fresh out of the Naval Academy—and not yet a starter in the league—Staubach landed an offseason job with the Dallas-based Henry S. Miller Co., a large independentand property management firm. A diverse enterprise, the firm had departments for the sale of residential and commercial property and also provided services such as property management, and office, industrial and retail leasing.
Staubach initially joined the firm in the search of a sales position. His goal was to learn real estate brokerage and earn a decent commission during the offseason. He worked in the firm’s insurance group for a year before gaining his real estate license and learning the ropes in the sales department.
“I really just took a liking to real estate from the start when working for Mr. Miller,” Staubach says. “He was a great man and he built a great company and I told him I wanted to be like him. That included wanting to create a business and build my own company.”
But along the way, Staubach had a novel idea. At the time, brokerages exclusively worked for landlords. When tenants were looking for space, brokerage firms would only show them the spaces of their clients. “I remember saying, ‘If we’re representing tenants, shouldn’t we show them the whole market and not just our buildings?’”
Using that mindset, Staubach became integral in getting Xerox Corp. to sign a bigin the Dallas market—in a building that Miller’s firm did not have as part of its portfolio. After that, Staubach ran with the idea of building a brokerage that specialized exclusively in tenant representation. “The idea just kind of stuck in my gut after that,” Staubach says.
Staubach wasn’t the only one thinking in those terms. In 1954, Julien J. Studley began building a New York-based tenant representation firm that had since become a national power. But overall, there were few brokers serving exclusively as tenant reps. Staubach landed Commercial Metals and Steak & Ale as early clients and pitched the idea to firms that did not have large in-house real estate departments.
Then came a big year in Staubach’s life: 1977. On the playing field Staubach led the Cowboys to a championship season that culminated in a victory at Super Bowl XII in January 1978. Off the field, Staubach left the Henry S. Miller Co. and launched The Staubach Co.—the start of a long and lucrative career in the commercial real estate industry.
At first the Staubach Co. served the office and industrial sectors. But as the company grew, Staubach became interested in branching into other areas.
In 1983, Chris Maguire, who today is CEO and chairman of SRS Real Estate Partners, got his start in the commercial real estate business, working primarily in retail real estate. He worked for two firms and soon after his meeting Staubach the two began talking about a partnership.
In 1986, Staubach Retail Services was formed. Over the next 20 years firm grew to nearly 20 offices from coast to coast. A decade later, as a result of client demand, Maguire formed an affiliated company, Cypress Equities, to focus on retail development.
The Staubach Co.—and the affiliated startups—grew through the years. The venture culminated in 2008 when Jones Lang LaSalle purchased the firm for $613 million. Staubach Retail Services was not part of the deal. Staubach Retail morphed into SRS Real Estate Partners. It remains active and growing.
Maguire and Staubach sat down together to mark the 25th anniversary of the foundation of Staubach Retail and spoke with Retail Traffic Editor-in-Chief David Bodamer about their careers, the company’s evolution and its future.
And edited transcript follows.
Retail Traffic: Can you talk about how you got into the commercial real estate business?
Staubach: I was a 27-year-old rookie coming out of the Naval Academy with a wife, three young girls and an engineering degree. I needed an offseason job and I interviewed with three different companies. I landed with the Henry S. Miller Co., where I wanted to get into sales. I wanted to learn the business and be in a job based on a commission.
It was the perfect set up for my situation. I could work when I wanted, which was the offseason. I didn’t have a salaried position and then have to get up and leave work at 4 PM every day for offseason workouts.
They stuck me in the insurance group my first year. But eventually I got my license and learned about sales. I really just took a liking to real estate.
When I was there, I worked with a guy named Jack O’Callahan. He said Xerox’s office products division was going to move to Dallas and asked if could I help them. I went to a guy who headed our office leasing group and he said, “Sure, we’ll show him our buildings.” And I said, “If we’re representing the tenant, shouldn’t we show them the whole market?”
We eventually did a deal for them—and we didn’t put them in our buildings. The whole experience stuck in my gut. I spoke with corporate leaders about representing them. It wasn’t a service that a lot of people were in. So that’s what we focused on and it has emerged into a big service business.
In 1977, I started the Staubach Co. When I retired, it really started to grow. We had a specific game plan—mostly tenant representation starting with office, then a little industrial. We weren’t involved in any retail at the start.
RT: How did Staubach Retail begin?
Staubach: After a couple of years of capitalizing the company, we had the thought to sell ownership stakes. We went to our offices and said, “You can have ownership, but you have to take care of profits and losses. Nothing changes other than that you have some ownership. You will take some risk, but you get the rewards.”
We opened a number of offices. And some of the people we brought in knew that we should get into retail. There were some similar customers. And our experience in industrial had a big effect on us deciding to get into retail.
I talked to a couple of people, and then ran into this guy, Chris Maguire, who was representing Chili’s and some other retail clients. I told him that I’d like to get into retail and just represent the tenants. And I asked him to come in and grow the new business.
Maguire: The biggest attraction for me was working with Roger. I had no idea what the company did, but I was a Cowboys fan all my life. I jumped at the opportunity to work with him and learn from him in a platform that was pretty unique.
When I started in retail, people thought I was crazy. The common thinking was that you had to be on the landlord side and list shopping centers. Nobody was focused on retail tenant representation. For brokers that did tenant representation, they also had landlord listings too.
But Roger was clear. The business plan he instituted was tenant representation only. We spent the next seven to eight years just representing retailers. It was a tough road at times. Retailers have a very different philosophy on real estate than corporate clients. For them it’s a very important function. In the 1980s, they had huge [real estate] departments and outsourced nothing. We went in and pitched our business and said we could be their advocates and they looked at us and asked, “Okay. But do you have any sites for us to look at? Can you build something for us?”
So it was a learning process. But we stuck to our guns and believed that we could build a tenant representation business.
RT: How did the business evolve and grow?
Staubach: We found we had to do dispositions. At one point we thought it might be a conflict of interests to get into that business. But for tenants, an exit strategy for a space might include preventing a competitor [from being able] to take it. So in terms of serving our customers, it became an important service for us to be involved in.
Maguire: We also got intomanagement. Roger had a big business with that with the Staubach Co. for the office and industrial side already. So it was natural to add that service for our retailer clients.
We stayed away from landlord services for a long time. It was such a conflict on the office side especially. On the retail side, it was a much easier thing to do, a natural progression, to provide leasing services for owners of real estate.
As the 1990s progressed, we gradually got more into project leasing. We do still have some offices that exclusively focus on tenant representation. And overall this is still a very large part of our business.
But with the way the business was changing, we needed to expand our platform of services. So now we do lease administration, leasing, renewals, management, etc. The only thing we don’t do today is facilities management and we don’t anticipate providing that.
RT: Can you talk about the merger?
Staubach: Eventually, we got to a point where our customers wanted more services and a global reach. That’s when we talked to Jones Lang LaSalle. They were most interested in our office and industrial business. So when we did the merger, retail went off on a separate course. Our structure was such that it would have been difficult to bring retail into Jones Lang’s existing retail structure and the timing just wasn’t right for SRS Retail.
RT: Can you talk about the outlook for retail real estate? Generally, it seems like the business is rebounding faster than many expected. What are you seeing?
Maguire: It definitely was bad for a while. I had never seen retailers before make decisions to not only flat out stop expansion, but also shelve deals that were in pipeline. They were actively trying to figure out how to not open stores that previously were part of their plans.
Some retailers saw it coming, at least a little, even if nobody knew how bad things were going to get. The guys at Walmart started to cut back in early 2008. But when the market corrected, everybody just shut everything down.
Yet today, just two-and-a-half years after the low point, we have some retailers growing like they were in 2006 and I think will continue to grow.
Overall, a big difference with previous cycles is that there has been no new development in the past few years. This year we’re beginning to see limited new development that is user-driven. That makes sense.
What we won’t see are the kinds of developments that we saw over the last decade—projects that were not leased up or based on growth projections that failed to materialize. Moreover, for retailers that are expanding, there is a lot of second or third generation space to fill. In the past, retailers expanding would predominantly be looking at site plans, spaces under construction or new unused spaces. That presents both a challenge and an opportunity for us. It gives us a chance to leverage our office network and help retailers figure out how to grow.
RT: What have you enjoyed most about your careers? What lessons would you share?
Staubach: The thing that I have enjoyed the most is being able to get the right people and the right places working together. That was a strength that I had.
And I think I’ve been able to bring things into the industry as well. At the top of the list would be trust. You’ve got to have that trust internally. Team players are those that you can trust, and they are also ones you can reward.
Maguire: I’d say that if not the most important thing, something that is near the top of the list is the culture of the company we created. That’s always been important to me. We’ve encouraged a balance. It’s not about who can work the most hours. It’s also about family. Roger instituted that and it has been passed down to SRS.
You spend more time with your colleagues than your family. So it is important to enjoy being with those people.
One of the testaments to that is that we still have people with SRS that were here on Day 1. Others joined us straight out of college and are still here 18 to 20 years later.
So you have to enjoy that side. It’s mentoring. It’s watching people succeed. It’s been fun to build this kind of company.