Richard Ziman: Industrial Strength

The walls and shelves of Rexford Industrial Realty Chairman Richard “Dick” Ziman’s office are a testament to his personal and professional accomplishments. Photographs and family mementos share space with awards from the Los Angeles Business Council, honors from the City of Hope Cancer Clinic, and brochures for UCLA’s Ziman Center for Real Estate. Yet in […]

Richard Ziman: Industrial Strength
March 20, 2014

The walls and shelves of Rexford Industrial Realty Chairman Richard “Dick” Ziman’s office are a testament to his personal and professional accomplishments.

Photographs and family mementos share space with awards from the Los Angeles Business Council, honors from the City of Hope Cancer Clinic, and brochures for UCLA’s Ziman Center for Real Estate. Yet in spite of the loftily impressive decor, Ziman is in fact an affable, approachable man.

“You see all these trophies, all these things with my name on it?” he says, stating the obvious as he offers me a seat facing his desk. “I must have fifty of them. These are just the ones I haven’t taken home.” His explanation is rooted more in logistics than conceit. Though he takes pride in his achievements, Ziman would rather talk about the goals and challenges still ahead. “Work is a means to an end, not the end itself,” he explains. “You must have good working habits and discipline to stay at the cutting edge.”

Born and raised in Williamsport, Penn., Ziman’s impulse to strive for a better life was instilled early on. “I’m a child of an immigrant father,” he recounts. “My grandfather died of typhoid in the old country, and my grandmother, to her dying day, couldn’t read or write English because she couldn’t go to school in this country; she had to work.”

Ziman aspired to become a dentist and enrolled the University of Southern California to pursue his dream. However, by his second day, Ziman decided dentistry was not for him. He shifted his focus to history and earned his J.D. in 1969.

“There is no successful real estate entrepreneur that I know of today that hasn’t had a failure or two.”

“Realty” Sets In

A law degree from USC notwithstanding, Ziman initially had trouble finding work. The Vietnam War was in full swing, and already he had lost several of his friends. The first question employers would ask was, ‘What’s your draft status?’ and even if an applicant had a favorable answer, they were often hesitant to hire. He finally found a position at the law firm Loeb and Loeb in downtown Los Angeles. He practiced law for 12 years (9 of them as a partner) and discovered he had a knack for handling real estate deals. By 1979 he’d built one of the largest real estate law practices in the country. He decided to try his hand at investing.

This whimsical bronze music box, a gift from Sam Zell in 2013, opens by playing the George Santayana quote, "He who fails to learn from history is condemned to repeat it," then proceeds to wish the listener a happy, healthy, and prosperous New Year. The "toy" then launches into a tango about the dangers of pushing off debts and the credit squeeze.

This whimsical bronze music box, a gift from Sam Zell in 2013, opens by playing the George Santayana quote, “He who fails to learn from history is condemned to repeat it,” then proceeds to wish the listener a happy, healthy, and prosperous New Year. The “toy” then launches into a tango about the dangers of pushing off debts and the credit squeeze.

It was a rough start. “It could not have been a worse time to enter the market. I was borrowing at 3.5% over prime, which reached its record high in 1980 at 21.5%,” Ziman recalls. “It was a disaster.” Under the flag of Pacific Management Group he began focusing his investments on office buildings, accumulating more than 5 million square feet of office space by 1989. It was at this point Ziman made his most famous move.

In 1989 Ziman liquidated Pacific’s entire portfolio, and not a moment too soon. Within a year the market took a turn for the worse and nine months of recession followed. Ziman’s timing was hardly luck. He had learned the hard way a decade earlier what happens when interest rates react to market changes, and he saw the massive overbuilding in office space paired with a constricting economy as a sign that it was time to get out while he could.

“Learn from the failures,” he advises. “Because there is no successful real estate entrepreneur that I know of today that hasn’t had a failure or two.” Selling a portfolio that size had its own challenges. Growing health concerns over asbestos meant the value of about 35% of his portfolio was at risk. Removal was expensive, so instead he found interested buyers.

Ziman was keen to capitalize on his success, so he and co-founder Victor Coleman formed Arden Realty, Inc. in 1990. They switched their focus from office investment to mobile home parks, then back to office again in 1993 when he learned that Southern California led the country in small business formations. By the mid-1990s Arden had 4 million square feet of office space in 24 buildings in its portfolio, and Lehman Brothers was approaching them about taking Arden public on the New York Stock Exchange. They launched their IPO in 1996, raising $435 million. Arden went on to become the largest owner of office space in Southern California with 20 million square feet in over 125 office buildings.

In 2006, concerned about the excessive mortgage lending he saw fueling an already overheated real estate market at a time when the future of the economy was uncertain, Ziman decided it was again time to move and merged Arden with an affiliate of General Electric in a $5 billion transaction that remains the largest real estate transaction in the history of Southern California.

Just as he had rolled his success in the early 1990s into jumpstarting Arden, again he took the opportunity to build something new. Ziman co-founded AVP Advisors, LLC, with Barry Chase, raising $400 million from five domestic pension funds to create a real estate fund of funds investing with emerging real estate managers throughout the United States in almost every real estate discipline.

Currently, Ziman serves as Chairman of Rexford Industrial Realty, formed in 2002 and managed with his partners, co-CEOs Howard Schwimmer and Michael Frankel. Rexford focuses on industrial real estate in Southern California’s infill market; its leadership is committed to growing the company to 10 times the size it was when it launched its IPO in July of 2013 under the NYSE symbol REXR.

“Success is measured by making a difference in the social and cultural fabric and community of our lives. There’s plenty of programs around that can show that they’re making a difference, and those are the ones we want to be funding.”

Office of a Different Sort

As you might expect from a man who started his career in law, politics is an integral part of Ziman’s life. As a freshman at USC, he and a friend snuck into their first Democratic National Convention at the LA Sports Arena to see John F. Kennedy’s nomination; since then he has attended six more conventions.

He is connected to both local and national politics and was a Trustee of the Democratic National Party. Ziman did serious fundraising for former Governor Gray Davis, mayoral candidate Bob Hertzberg (then Speaker of the Assembly), and former Mayor Antonio Villaraigosa on a local level. Ziman’s connection to Mayor Eric Garcetti goes back to his USC days, when he and Garcetti’s father, Gil, campaigned at the same time, both successfully, with Ziman running for class president and Garcetti for student body president.

His politics have brought him close to President Clinton as well as several presidential candidates. He was with Al Gore and John Kerry on election night for their respective presidential runs, and was one of their largest fundraisers in Southern California for each of their campaigns.

Firm Commitment

Although Dick Ziman is best known for his myriad business and professional accomplishments, his commitment to numerous charitable endeavors is where he feels he has truly made the greatest difference.

As a generous supporter and donor, Ziman has continued his family’s tradition of giving back. He has worked with the City of Hope National Medical Center and its Beckman Research Institute for 35 years, serving three terms as volunteer chairman of the board. He has established and endowed, among others, the Richard S. Ziman Center for Real Estate at UCLA, the City of Hope Oncology Outpatient Cancer Clinic, the 96-bed Goldenberg-Ziman Alzheimer facility at the Jewish Home for the Aging, and served as chairman of many other organizations and charitable endeavors. He is a co-trustee of The Rosalinde and Arthur Gilbert Foundation, which is one of Southern California’s largest, providing $8 million in grants each year, mostly to education and healthcare-related programs. He supports many local arts, culture, and other organizations as well. “Helping others move into the mainstream of our culture and economy is of paramount importance in bridging the gap between the haves and the have-nots,” he observes. This is coming from the man who has managed everything from trailer parks, to the Howard Hughes Center, to the 22-story “Class A” Westwood Center.

Making a difference has become Ziman’s guiding principle by which he measures success. If he can’t measure the success of a program he’s involved in, he loses interest. “Success is measured by making a difference in the social and cultural fabric and community of our lives. There’s plenty of programs around that can show that they’re making a difference, and those are the ones we want to be funding.”

Ziman sees it as imperative that each of us do as much as we are capable of to improve the lives of those around us. “I have and will continue to make as much of a difference as I possibly can, given the capacities that I have.” That’s a pretty big statement coming from a man like Dick Ziman.

 

 

Richard Ziman

Richard Ziman

Chairman

Age
71

Residence
Brentwood

Education
B.A. History, JD-Law, three Honorary Doctorates, UCLA Gold Medal

Family
Wife, May; four children; two grandchildren

Mentors
Father, Sir Arthur Gilbert, Frank Feder, S. Jon Kreedman

Favorites

Travel Destinations
London, Paris, Hong Kong

Local Attractions
LACMA, Malibu, the Getty

Place To Do Business Over a Drink
Bel Air Hotel

Last Books Read
“Inferno,” “Eleven Rings,” “The Oligarchs”

Architects
Frank Gehry, Renzo Piano, Gensler

Rexford Industrial (REXR)

Founded
2002

Location
West Los Angeles

Employees
38

2014 Revenue
$66.4mm

Market Cap
$887mm

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