Connect Orange County Experts Talk Navigating in “Unpredictable Times”
Leading Orange County experts gathered Wednesday at the VEA | Newport Beach Marriott in Newport Beach for the seventh annual Connect Orange County conference. The one-day event, which was an update on the various markets of commercial real estate in the OC, was kicked off with Brandon “Brandy” Birtcher of Birtcher Development, LLC receiving the Lifetime Achievement Award.
Birtcher is co-owner and CEO of Birtcher Development LLC, a leading U.S. industrial real estate development company founded in 1939, now in its fifth generation of family ownership. The company develops speculative big box warehouse facilities ranging from 100,000 square feet to 1.5 million square feet in the highest barrier to entry and highest-absorbing markets of the U.S.
From 2012-2016, Birtcher served as CEO of Goodman Birtcher North America, a joint venture that was capitalized with $2 billion of equity – 55% from the Goodman Group of Australia and 45% from the Canada Pension Plan Investment Board. Under his leadership, Goodman Birtcher developed a pipeline valued at $1.7 billion, containing 14 million square feet of logistics space across 13 sites in four states. Customers included Amazon, Georgia Pacific, Walmart and Kroger.
In his introduction of Birtcher, Connect Media CEO Daniel Ceniceros called him a friend and mentor, as the two spoke of lessons learned, in particular his experience in the military, his love for fishing, navigating life and restructuring–which he called essential in where he is now. However, underlying all of this was his deep faith, which he applies daily to his business, public and private life.
In an industry that is facing numerous challenges, Birtcher’s experience and his insight was just what those at the event needed to hear, as the majority of attendees all are trying to navigate in these difficult times. Or as one of the panelists said later in the day, “We are in very unpredictable times. This could be the new normal. Plan for the worse.” For Birtcher, who has been through numerous recessions in his career, he recounted the words his grandfather said to him on a fishing trip. Words which he called extremely important in these uncertain times. “In order to know who you are, you need to know who you aren’t.”
Difficult times, uncharted waters, the Fed, unprecedent trends in the market today, insurance premiums, debt financing, a diminishing talent pool, interest rates, money on the sideline, were some of the main drivers at the conference.
The first panel of the event, Industry Leaders: A View from the Top, included Kurt Strasmann of CBRE, who served as moderator; Aaron Hill, Bixby Land Company; Martin Pupil, Stream Realty; Tom Sherlock, Talonvest Capital and Jason Purvis of Granite Properties.
As expected, the office market still has a big target on its back. “Office is experiencing a monumental shift in office use,” said Jason Purvis of Granite Properties, noting that much of office space is functionally obsolete.
All agreed that we will continue to see a return to the office, but it will not be going back to 2019 levels. And while capital sources are being pushed but remain on the sidelines, the overall assessment has been 2023 has been a difficult year. But there are some bright spots – industrial and multifamily and some retail, continue to perform better than other parts of the market.
The second panel, which seemed apropos for the current market situation, was Financing Deals in an Uncertain Climate. This panel included William Ahern Esq., of Allen Matkins serving as the moderator, Gary Bechtel of Red Oak Capital Holdings, Antonio Hachem of Slatt Capital and Bali Kumar of PACE Loan Group.
When polled as to which market is doing well, all agreed multifamily and industrial were in the lead followed by self-storage in Orange County. Regarding the Fed, all acknowledge another hike will probably come in the coming months and that we are in some sort of a recession. In addition, it was clear there is an abundance of money out there, but it needs to be deployed.
The final panel, OC Power Players: Getting Deals Done Across Asset Classes, examined various market groups, asking the question, how are the major food groups faring and what creative deals are getting done? The panel was moderated by Julian Freeman of Cox, Castle & Nicholson and included Jim Palmer of Marcus & Millichap; Glenn Rudy of Newmark; Brian Rupp of Shopoff Realty Investments and Eric Paulsen of Kidder Mathews. Overall, the outlook echoed previous panels. However, one issue that isn’t talked about in these times is the challenge of the talent gap.
Pictured, at top: The Financing Deals in an Uncertain Climate panel. Below: Connect Media CEO Daniel Ceniceros and Lifetime Achievement Award honoree Brandon Birtcher.