91ÊÓƵ

Gerding Edlen is starting to see light at the other end of the recession’s tunnel.

One indication is that the local development firm last week announced a handful of promotions within its management team. Kelly Saito, formerly chief operating officer, is now president.

Day-to-day duties won’t change for Saito, who has been with the firm for 15 years. But CEO Mark Edlen said it was important to acknowledge Saito’s contributions, and let him know the role he will play in the company’s future.

The 91ÊÓƵ took a few minutes to talk with Saito about the move.

91ÊÓƵ: How long have you known about this management shift?

Kelly Saito: It’s been something we’ve been working towards quite a while. Certainly over the course of the last two or three years when business has been difficult, it’s been a particular focus: What do we need to do to survive these tough times while still positioning ourselves to really thrive again in the future when things turn around?

91ÊÓƵ: Describe how your job is going to change with this promotion. What will be different for you?

Saito: I previously was the chief operating officer, so my responsibilities were primarily overseeing the operations of the company. For the large part they’re not dissimilar. I will remain primarily responsible for the day-to-day operations of the company, but I think what’s changed over the last few years is the breadth of the company’s business lines. They’ve diversified and broadened, so whereas in the past the responsibility might have been heavily concentrated in just building projects, it now encompasses building projects, and running an operations company, an assets management company and consulting company.

91ÊÓƵ: Like what you are doing in Beaverton as the city’s master developer, all the way to managing the multifamily properties you own?

Saito: Exactly. There’s a much bigger focus on ongoing property operations and maximizing ongoing asset value. That’s become a big part of our business. It’s what a lot of our resources are focused towards right now.

91ÊÓƵ: What do you bring to this table for this new position?

Saito: I have been with the company since its inception basically, so I am certainly familiar with where we’ve been, what we are good at, what we aren’t good at and what we need to improve on. I have been working with all of the people here for as long as they’ve been with us, and a lot of them have been with us since the beginning. So I think there’s that continuity. I think that this change will free Mark (Edlen) up to focus more on business development, strategic development and those much-bigger-picture issues that help the company really thrive and grow in the future, while I take the broader operational responsibilities off of his shoulders.

91ÊÓƵ: Is there anything that you are going to need to work on or learn with the new position?

Saito: Sure. It’s a lot more responsibility, which for me has been somewhat evolving over the last few years. If you go back to the early part of the company’s history, I was responsible for projects. I was responsible for getting projects built and for handling budgets. Over time that’s evolved into being responsible for people and developing people. Now it’s evolving to not only doing those things but developing and sustaining an enterprise.

91ÊÓƵ: Anytime you make these sorts of management shifts, the company changes and hopefully evolves. Where is the firm heading? What’s the plan moving forward?

Saito: We are focused in four primary areas. There’s the development company, which has two sides to the operation. One is developing private, for-profit projects – buildings, whether apartment or office buildings, that we lease or sell with the purpose to make returns with investors’ money. We’ve always done that and we do it now with more focus in terms of product type and geographic area. The other side of the development business is fee-based work – projects we do for companies like Central City Concern or Pacific University. That will continue to be a part of our business we plan to grow and is a part of our business we’ve specifically put resources towards to make sure that happens.

We’ve also put a lot of focus into developing the operational and management side with the intent that we want to have our work be reflected in longer term asset value. It’s one thing to build a great project and sell it and realize its value to an investor. But at the same time we can do that and operate it on an ongoing basis and eke out continual value for people that own those buildings.

And the final one is sustainability and continuing our leadership in the area of sustainability. We have devoted resources into a separate company, Gerding Edlen Sustainable Solutions, as part of trying to broaden the reach of those resources and devote them to the specific mission of promoting sustainability across a much broader range then just what you see in our projects.

91ÊÓƵ: What has changed in the industry locally throughout the recession?

Saito: The recession was particularly brutal on anyone involved in real estate. It has really taken its toll on many people in the industry and not just developers. There are many good people and good companies that have not been able to survive through the last few years, and there were certainly days when that was a question for us as well, and we had to work very hard to make it through that.

So, I think, I hope and I expect that all of us that have been fortunate enough to survive that and come out the other end with opportunities will learn from our past mistakes. That has yet to be proven but certainly as it pertains to us, diversification, tighter focus on the specific types of projects we are trying to do and locations we are trying to work in, and having a tighter focus on how we capitalize on projects, have all been areas we’ve worked on. I think in the past we chased opportunity, and we did it successfully, but it certainly led to a fair amount of exposure at the end of the last cycle. We kind of have a bigger-picture focus now on how we raise money and the types of projects that money is being devoted towards and where those projects are at.

91ÊÓƵ: Has it been interesting to see the shift in how capital is acquired?

Saito: Certainly, track record and your reputation – and your reputation is often only as good as your last deal – are important to gaining capital. We’ve been very fortunate that despite having a few missteps, we’ve always been in a position to do the right thing so to speak and to continue to have those relationships despite those missteps.

91ÊÓƵ: It seems like Gerding Edlen has been looking toward new markets. Which areas have you been looking at and why?

Saito: I think it’s both opportunity and diversification. On one hand, there’s opportunity in other places, as well as diversification as a protective strategy to broaden where our asset base and business base is.

We’ve always been very active in Southern California and we remain to be so now. We’ve started doing work in Northern California in the Bay Area as well. We continue to love Seattle and look for opportunities there.

We are interested in Denver, Chicago, Boston and New York. Over the last two years we’ve expanded our focus and effort to build business in the western states, and we are in the process of expanding that reach into the mountain states and hopefully towards the East Coast.

91ÊÓƵ: Developers are pretty positive about downtown Los Angeles right now. Is that something you are looking to stay involved in?

Saito: We were early believers in the renaissance of downtown L.A. We did a lot at the very front end and we are happy to see that evolve and continue to this day. We love downtown L.A. and continue to look for opportunities down there. Downtown made its comeback; it was real and it survived the downturn. People and businesses are still moving down there.

91ÊÓƵ: You don’t always think of stadiums anchoring your downtown. It’s happening in L.A., with the potential new football stadium. What are your thoughts on that?

Saito: Generally speaking, I’m not a big believer in stadiums as big redevelopment generators, especially not football stadiums, considering there (are) only 16 games a year and only half of them are at home. In L.A., if the stadium thing happens it will be great, but I think it will keep its momentum regardless.