28 Sep 2022, 1:45 pm
Kevin Shannon (Photos by Kevin Scalon)
UPDATED Sept. 8, 2022, 12:45 p.m.: Whether it’s Amazon’s headquarters in Seattle, Meta’s campus in the Bay Area or a 30-story office and data center in Downtown L.A., Kevin Shannon has sold it all.
The Newmark broker’s 33-person team has brokered nearly $7.5 billion worth of real estate deals this year alone. And while dealmakers tend to specialize in one or two asset classes, Shannon doesn’t discriminate. He’ll close the $730 million sale of a Seattle office tower to Boston Properties one month and a $520 million deal for a multi-state industrial portfolio leased to Amazon the next.
“I’m a busy beaver,” Shannon said. “We cover a lot of territory.”
That wasn’t always the case. After graduating from the University of Southern California — as almost every real estate professional in L.A. seems to have — in 1981, Shannon scored a job as a broker with Colliers Seeley, representing office and industrial tenants in L.A. County’s South Bay region.
Burned out by years of hustling as a leasing agent, Shannon pivoted to investment sales, arranging three deals for commercial properties in Carson, Long Beach and Torrance — no easy feat in the midst of the early-1990s recession.
“Those three sales weren’t large or anything, but they were significant because they occurred when nothing was selling,” he said, rattling off the precise square footage of properties he sold three decades ago.
Within five years, he’d started Colliers Seeley’s investment sales division. By 2006 he was at CBRE, running investment sales for the West Coast, and nearly a decade later joined Newmark, where he took on the full range of commercial classes.
The Real Deal caught up with Shannon shortly after he got back from his vacation home in Hermosa Beach to discuss his career, his expensive taste in wine, his marquee deals and what keeps him up at night.
This interview has been edited and condensed for clarity.
Birthday: June 11
Hometown: Pasadena, California
Lives: Palos Verdes, California
Family: Married, four children
Where did you grow up?
I was born in Pasadena. I moved every two years — I went to four different grade schools and three different high schools. For about two years in high school, I was in Texas. My dad moved to [Ernst & Young predecessor] Arthur Young in Houston for a promotion.
But then he got bit by a fire ant while he was out hunting and went into a coma. We moved back to L.A. after he realized how allergic he was. It wasn’t great growing up, moving around so much, but it taught me a lot, the ability to meet new people.
How did you get your start in the business?
I took an introductory real estate class at USC with [professor and veteran real estate consultant] Rocky Tarantello. I fell in love with it, and I ended up taking 20 units of real estate. When I got out of college, I applied for both principal and broker jobs. We were in a recession period, so the only people hiring were brokers. I ended up starting as a broker, and lo and behold, I’m still a broker. I’ve been fortunate.
I started out as a leasing broker in Torrance in the South Bay of L.A., which included LAX Airport, El Segundo and Long Beach. In 1996, though, I decided to give up leasing. I was doing well, but I decided I wanted to switch full-time to investment sales.
What prompted that decision?
Being a multi-tenant leasing guy in the South Bay, it wasn’t fulfilling enough. There was this one project in Torrance at the time called the Del Amo Executive Plaza, and [automotive company] TRW pulled out of 156,000 square feet. I think I literally did 132 small, little leases to fill it back up. I got a little burned out … so I transitioned to full-time sales.
What deal do you consider to be your big break?
In 1991, the sales market had stopped. We were in a recession and nothing was selling. I ended up selling three deals that year — One Civic Plaza in Carson, a 127,000-square-foot office building; the 81,000-square-foot South Bay Business Center in Long Beach for Union Pacific Railroad; and the Voyager Court in Torrance, a 64,000-square-foot flex building.
One Civic Plaza in Carson was actually a workout deal. There were liens, and the debt was high. I was still a leasing agent, but I think those were the only three sales in the South Bay during that time period.
I ended up getting a lot of calls from appraisers because I’d done those sales, and that’s where my appetite got whetted.
I actually went to my boss and told him I was going to go to Coldwell Banker. He asked why, and I said because I want to be an investment broker and Colliers Seeley didn’t have an investment firm. He came back later that week and said, “I’m going to have you start our investment division.”
Was it tough to make a name for yourself?
Yes. I was not known as an investment broker. The good news was that nobody really had a good track record of sales during that time period, because there were hardly any sales going on. I had a fighting chance.
If you’re coming into the business today, and you’re trying to compete against Steve Silk at Eastdil Secured or Darla Longo at CBRE, or me, it’s hard. Our track record is so long. But when I broke into investment sales, there weren’t a lot of successful track records because of the economy.
You said in 2016 that your favorite deal to work on was the $1.2 billion sale of Amazon’s headquarters in Seattle. Is that still the case?
Yeah, I mean it was December 20, 2012, and it was the biggest deal in the country that year for all food groups. It really did a lot of things for my career.
What else is on the highlight reel?
The $520 million sale [of an Amazon-leased warehouse portfolio] to Mirae Asset Global Investments was great. It was a challenging time, and Mirae was a great buyer; they did what they said and came through and honored their deal. Getting that done at a time when interest rates were rising was very satisfying.
The sale of the Google campus in Seattle was a spectacular outcome for Vulcan, which is the family office of [Microsoft co-founder] Paul Allen.
Being part of the Meta sale with Tishman Speyer and Steve Golubchik at Newmark was great. That was a great sale.
Setting the record is always gratifying. As rents continue to move up, new products should set records.
Last year was insane for some asset classes, like industrial and multifamily. What are you seeing now as interest rates rise?
I always hate when I get a call and an asset hasn’t performed well and they want to sell it. It’s always disappointing. There are always cycles, and we’re in a down cycle now. Some clients aren’t doing as well as you’d hope, and others in the life sciences and industrial and multifamily arenas aren’t making as much money as they could have at the peak of the market.
But if your industrial property doubled in value in the last three years and it’s off 15 to 20 percent, whatever it is now, that’s still a nice profit. On the office side, that’s not always the case. Some of these deals are not profitable, and those are harder for me.
What’s your biggest regret?
Gosh. I worked at Colliers Seeley and it was primarily an industrial firm, office leasing wasn’t its strength. Maybe it would have been easier if I started at a firm that emphasized office leasing and sales. My ramp-up time would have been faster. But it all turned out for the best.
You spend your summers in Hermosa Beach — where else do you like to go?
I love [the resort] Paws Up in Montana. It’s a place where you can take your dogs and you’re doing different things as a family every day. The food is wonderful, the scenery is gorgeous. It’s fun to fly fish, go on ATVs and go water skiing as a family. It’s glamping, but it’s great to have everyone there, and the kids can’t get distracted.
So you have pets.
Two goldendoodles. Nacho and Olive.
What other hobbies do you have?
I do like to snow ski as well, but for whatever reason, my kids aren’t as fond of skiing as my wife and I are. Every time we’d go, they’d race each other down the hill and almost kill each other. They were so competitive skiing that it probably wasn’t as fun as it should have been. They have more fun going to Montana.
What’s your biggest indulgence?
I love going to Napa Valley and going wine tasting. I like red, almost any Pétrus.
You also do some charity work.
My favorite charities are the Missionary Sisters of the Eucharist, which is an order of nuns that my aunt founded in Guatemala. Then I’ve been on the board of the Catholic Big Brothers Big Sisters for over 25 years — [JLL broker] Craig Meyer was the president and got me on that. Then, the USC Caruso Catholic Center, I just became the vice chair. I’m a passionate Trojan and passionate about Catholicism, so it’s a combination of both.
Who are you supporting in the L.A. mayoral election?
I am a big proponent of Rick Caruso. I know him through my work with the USC Caruso Catholic Center, and I know he will get stuff done. He’s a doer, and I would never bet against him. I know the polls aren’t favoring him right now, but you never count Rick Caruso out. He would be terrific, and L.A. needs him. He’s not worried about what people think about him, he’s just going to do it and get it done.
How did you meet your wife?
At the Peninsula hotel after a listing presentation. I was with six of my colleagues from Colliers Seeley and she was with five of her friends, and we had one friend in common with both groups, so we ended up talking to each other.
Do your kids want to go into real estate?
My son is interested in it, but his dream job is to be the general manager of the Los Angeles Lakers. My eldest daughter thinks residential real estate is interesting; I think she’s watched too much “Selling Sunset.” But she studied for her real estate license over the summer. Then my youngest daughters, it’s too early, I don’t know yet.
What would your line on your tombstone be?
I would say, great husband, great father, great community member.
What keeps you up at night?
You know, when the market is good, you don’t worry about much. You worry about losing presentations, thinking about if there’s something I should have said differently, is there an angle that I missed. When the market is in a tougher spot, like it is now, I worry about getting my clients’ deals done. Some deals are not easy today. Everything’s harder, including industrial and multifamily. Some of the multi-tenant office deals right now are pretty challenging. I worry about being able to perform, whether the capital markets will allow me to perform.
Correction: This article was updated with an accurate sales total for Kevin Shannon’s Newmark team.
The post The Closing: Kevin Shannon appeared first on The Real Deal South Florida.