RiverRock Adds Retail

SANTA ANA, CA-RiverRock Real Estate Group has been one of the fastest-growing property management and leasing firms in Southern California in the past three years since it was founded, yet the company has stayed out of the retail leasing and management business until recently. Now, after building a portfolio of more than six million sf of office and industrial space under management, the company has set its sights on building a portfolio of retail assignments.The reason that RiverRock is only now venturing into retail properties is simple, according to John Combs, the company’s founder and formerly the head of a national property management portfolio for Insignia/ESG before that firm was acquired by CB Richard Ellis in 2003. “Retail is a separate breed and a separate specialty, so RiverRock had to reach a point where it could afford to start a specialized group before we expanded into retail,” Combs explains.”Even though I ran retail at Insignia, including the mall group, that’s not my specialty,” Combs further explains. “We didn’t want to have office and industrial people trying to do retail. We wanted retail people with retail backgrounds.”To that end, Combs has hired longtime retail specialist Sally Vogel to head the RiverRock retail division. Vogel has held posts with Pan Pacific, the Mills Corp., Trizec Hahn, Alexander Haagen and the J.H. Snyder Co. Combs has also hired Jon Waldron, a retail specialist who worked for him at Insignia, to team with Vogel in building the new RiverRock division.Combs emphasizes that the new RiverRock division is not intended as a garden-variety property manager or leasing firm. It wants to tackle the most challenging jobs and will focus on developing its own specialty within the retail world as “a boutique management and leasing firm,” he says.”We want the centers that have some hair around them. We want theproperties that need repositioning or that need to have value added,” Combs says. As an example, he explains that RiverRock, in bidding on a management contract for a portfolio of older properties, asked the owners to “tell us which is their most troubled asset so that we can show them what we can do with it.”Vogel says the RiverRock approach will thus be “solution-oriented,” meaning the company will marshal whatever resources are required for a specific property. “The idea is that we will add whatever disciplines are needed to drive an asset’s value,” she says. “The solution might require us to add in construction, for example, so if we need to, we can add that as well.”Combs believes that considerable opportunities exist for a third-party boutique retail management and leasing firm because “there just aren’t a whole lot of them out there.” He points out that the large national brokerage shops have retail divisions, to be sure, and some third-party companies have formed long-term relationships with home builders to manage the grocery-anchored centers that the home builders typically include as part of their large residential developments. But Combs says that neither of those types of companies is the model for the new RiverRock retail division.RiverRock already has about 500,000 sf of retail space under management in Los Angeles, Ventura and Riverside counties, including Warner Marketplace, and it hopes to have about two million sf by the end of the year. But Combs says he’s more focused on expanding the new division carefully rather than quickly. “We want to have the program tweaked so that it’s the best out there, and you don’t do that by growing real fast,” he says.