Majestic Realty Co.: Making the Deal and Making a Difference
By: Ron Derven, contributing editor, Development magazine
Majestic President and Chairman Edward P. Roski Jr. in front of the company’s recently completed 1.2 million-square-foot Wal-Mart e-commerce fulfillment center in Chino, California.
This year’s award winner credits its six-plus decades of success in commercial real estate to being strategically patient, precise and persistent.
WITH ITS HEADQUARTERS strategically located near the largest gateway port in the U.S., Majestic Realty Co. credits its six-plus decades of success in commercial real estate to consistently delivering value, being strategically diversified in both geography and product type and, most importantly, being patient, precise and persistent. What started in 1948 with “a dream, good business sense and integrity,” according to Majestic, is now recognized as the largest privately held industrial developer in the nation. Today, Majestic owns more than 78 million square feet of commercial real estate, predominately in master-planned business parks. The company strives to ensure that its products exceed tenants’ expectations while also respecting and supporting the communities in which Majestic operates.
For these reasons, as well as the outstanding quality of its products and services, active support of the real estate industry through NAIOP, financial stability and adaptability to market conditions, NAIOP has named Majestic Realty Co. its 2015 Developer of the Year.
“We have an amazing team of true professionals at Majestic that make it their business to understand the complexities of today’s marketplace,” says Edward P. Roski Jr., the firm’s president and chairman.
Keeping Your Promises
Roski says Majestic adheres to what many would refer to as “old-school values and principles” instilled in the firm by his father and company founder, Edward P. Roski Sr. “My father had a good head for business, was a hard worker and always kept his promises. His integrity and work ethic are at the core of Majestic Realty today.
“Relationships are critical to us,” Roski explains, “and some of them go back 45 or 50 years. We are constantly looking to build relationships: in the communities where we work, with our customers and with other professionals in real estate. We never do a deal and move on. We get involved in a community and plan on staying there for the next 50 years. We are vested in the community because we live and work there. When you intend to stay for a long time, always keep your promises because people remember.”
Moving Beyond Industrial
Majestic Realty has had banner years in 2014 and 2015. By being proactive in a wide variety of developments and land acquisitions, the company managed to complete 17 buildings totaling more than 9 million square feet — perhaps the company’s most productive years in history.
Staying in front of the real estate needs of world-class companies, Majestic has tackled a wide range of tenant requirements, including omnichannel solutions and fulfillment center dynamics as well as the impacts of the shipping alliances and larger ocean carriers that are turning out to be supply chain game changers.
The first building at Hofer Ranch, part of the Majestic Airport Center in Ontario, California, is a 750,000-square foot structure occupied by Uline, Inc.
While the company is widely recognized for building master-planned business parks for the industrial-warehouse sector, where most of its volume has been focused, Majestic has also earned national recognition in recent years for its office, retail, hospitality, entertainment and sports developments.
Sports are big in Roski’s life. As co-owner of the Los Angeles Kings and a minority stakeholder in the NBA’s Los Angeles Lakers, Roski played a major role in developing the teams’ downtown arena, the Staples Center and, ultimately, in the development of the highly acclaimed L.A. Live entertainment district. In addition, Majestic’s entertainment, office and retail portfolio has expanded to include the Silverton Hotel Resort & Casino in Las Vegas, the Pacific Palms Conference Resort in Southern California and numerous Class A office parks and regional lifestyle shopping centers.
Finding Opportunities Everywhere
Fueling Majestic’s dominant industrial presence and large portfolio are strategic markets such as Los Angeles, Las Vegas, Denver, Dallas, Fort Worth, Atlanta and Bethlehem, Pennsylvania — all areas where the company has regional offices. Other key operating hubs include Phoenix, Salt Lake City, Laredo, Texas, and Portland, Oregon.
Before opening a new office or entering a new market, the company conducts extensive research, sometimes for years, says Roski. As part of the investigative process, company reps “canvas” the market and speak with as many locals as possible. When Majestic does enter a new market, it’s a good barometer of growth on the horizon.
Last year, the company purchased land near Portland because a number of its California clients sought to open facilities there, Roski explains. Majestic is also interested in the Seattle market and recently bought land in Wisconsin as well as 2,000 acres in Laredo, along the Mexican border.
“Laredo is one of the largest port cities, yet there’s no water,” he says.
“Mexico is doing its best to get more active in the world economy,” Roski adds. “There are now five or six major automobile manufacturers in Monterrey. We have already developed a couple of buildings there, one of which was for Mattel. Mexico is turning a corner.”
Thriving on Challenges
Roski acknowledges that Majestic’s greatest assets are the commitment and passion of his team. These extremely passionate professionals thrive on solving the toughest business challenges and finding the right time and conditions to enter key markets.
No one, it seems, is more passionate about taking on a big challenge than Majestic’s president and chairman. The greater the challenge, the more he enjoys it.
A case in point: Majestic’s move into Bethlehem several years ago.
For years Bethlehem Steel — once the second largest steel producer and biggest shipbuilder in the U.S. — was a powerful symbol of America’s manufacturing prowess. But after the company declared bankruptcy in 2001, the mill’s demise caused a devastating ripple effect. It wasn’t only plant employees who lost out, Roski says. As the local and regional economies withered, so did the area’s tax base.
“It was as though someone simply turned out the lights,” Roski recalls.
Where others saw a decaying steel mill and a city in dire straits, Majestic saw huge potential and had the patience, precision and persistence to solve the seemingly insurmountable challenges of developing a brownfield site. Today, the Bethlehem site, with close proximity to major highways and cities (70 miles from Philadelphia, 85 miles from New York) along with robust infrastructure, including rail service, ample utilities and a strong labor pool, is creating robust demand, new jobs, tax revenues and more.
“In a complicated and time-consuming transaction, we purchased 400-plus acres of land that made up the Bethlehem Steel site and worked closely with local, state and federal officials because part of the property had environmental challenges,” Roski adds.
Majestic demolished the mill, cleaned the site and constructed an 800,000-square-foot combination warehouse and distribution center for Crayola. Then it signed a deal for a 1.2 million-square-foot build-to-suit fulfillment center for Wal-Mart’s e-commerce business. In all, Majestic plans to develop 8 million square feet of industrial space at the site.
Majestic's Silverton Hotel Resort & Casino in Las Vegas includes a highly successful Bass Pro Shop.
“We started creating jobs again,” says Roski. “Maybe another company would have come into Bethlehem, but we had the foresight to do it. It took us a few years, but you have to be persistent. Now it’s bringing in jobs and taxes that Bethlehem needs and provides a key distribution location for our tenants. This is the kind of project that gives me great satisfaction.”
Unlike many developers, Majestic retains ownership in nearly all of the properties it develops and, despite ever-changing market conditions, has maintained a flawless financial record throughout its 66-year history. From construction to leasing, every aspect of Majestic’s business is designed for long-term ownership, stability and growth. Majestic knows its facilities better than anyone and delivers flexible and timely responses to its tenants’ requirements.
The company’s well-earned reputation attracts top clients, including many of the Fortune 500. Nationwide, Majestic has garnered more than 500 clients, of which some 20 occupy more than 500,000 square feet of space each. Top tenants include Wal-Mart, NFI, Target, General Electric, Williams-Sonoma, Mattel, Kohl’s, Procter & Gamble, Staples and Caterpillar. Long-term client relationships, which account for Majestic’s financial stability, often span multiple projects and multiple locations as client needs expand and change. Projects are developed and managed through four wholly owned companies: Commerce Construction Co., Majestic Management Co., Majestic Realty Retail and C.C.C. Rental L.P.
A Loyal Team
Many top executives at Majestic have been with the company for more than 25 years and are recognized leaders, advocates, partners and consultants to businesses across the country.
“We have been very fortunate with people in our company,” Roski adds. “We all share a vision, we’re all rowing the boat in the same direction, looking at the longer term. A lot of people in the company are partners in the deals we do, so that also makes a difference.”
Several members of the Majestic team are heavily involved in NAIOP, both at the chapter and corporate levels.
Building Green and Civic Participation
Majestic is equally committed to green building and environmentally responsible design. As a member of the U.S. Green Building Council, the company was recognized by the U.S. Environmental Protection Agency in 2009 with an Environmental Justice Achievement Award.
The company is also immersed in industry and public policy at various levels of government. One of Majestic’s executives was appointed to serve on the U.S. Department of Transportation’s National Freight Advisory Committee, which advises the Secretary of Transportation on America’s strategic freight plan.
“Because our business involves freight and transportation,” Roski explains, “we felt it was important for us to be involved at the national level. There are local and national challenges to transportation. We thought we should have a seat at the table and offer feedback on ideas that work and won’t work.”
Over the years, Majestic’s leaders and staff have also committed both time and resources to countless civic organizations, charities and worthy causes. The company’s philanthropic and community outreach ultimately led to the formation of two foundations.
The Majestic team played a major role in the development of Los Angeles' Staples Center (in background) and initiated the L.A. Live project (in foreground).
The first, Majestic Realty Foundation, was launched in 2002. It is active in many markets where the company develops and owns real estate, including Southern California. The Los Angeles Youth Leadership Council (LAYLC), the foundation’s flagship program, is a leadership and team-building collaborative that has impacted the lives of thousands of high school students. LAYLC empowers students from the city’s most challenging neighborhoods to develop and apply leadership skills through monthly meetings, at an annual camp, during college tours and at forums with high-profile guest speakers. Students also receive training in public speaking, economic literacy and job readiness.
Roski, who served as a Marine Corps officer before joining Majestic in 1966, was wounded during a tour of duty in Vietnam and decorated for bravery with two Purple Heart medals. In 2007, he and two Majestic colleagues — Kent Valley, a former Marine captain, and John Semcken, a former Navy Top Gun fighter pilot — established the Land of the Free Foundation, which recognizes their fellow veterans and raises funds for programs that support U.S. military personnel and their families.
The Land of the Free Foundation has contributed approximately $7 million to those veterans’ programs, while the Majestic Realty Foundation has contributed another $9 million to a variety of health, education and child development charities across the U.S. In addition, Roski and his team have contributed millions of dollars to a wide range of nonprofit organizations through personal contributions over the decades.
A Changing Industry
Roski has seen considerable changes in the real estate industry since 1966, from the introduction of large-scale warehouse and distribution facilities to the impacts of expanded rail and air service, big data, shipping alliances and more. He and his team are ready for what’s next.
“It is a good business to be in, and I am often surprised and even awed by the way it has evolved. But the industry needs to be more engaged in the infrastructure and public policy solutions as jobs and the economy are key priorities. Our work in Bethlehem is incredibly satisfying to us. When we are finished, we will probably bring in hundreds of permanent jobs to the area, jobs that, like our buildings, will be there long after we are gone.”
NAIOP: “Out in Front for Our Industry”
Majestic Realty Co. executives are heavily involved in NAIOP, both in California and around the country. President and Chairman Edward P. Roski Jr. says of NAIOP and Majestic’s commitment to the organization:
“NAIOP has the ability to get professionals together on a local level to share knowledge and work on challenges. It has evolved in stature with its national
programs and as the organization that has been out in front for our industry. NAIOP has done a good job explaining how real estate and economic development provide jobs and other services to communities. We are all proud to be a part of NAIOP and long-term contributors to the organization.”
Majestic executives’ involvement in NAIOP includes the following:
- A longtime board member of NAIOP So-Cal, the Southern California chapter, Senior Vice President Fran Inman has served as co-chairman of the chapter’s task force on goods movement and transportation since 2004, a role she continues with today. In addition, Inman has served on the chapter’s Legislative Action Committee since 2002.
- Vice President and Director of Development Al Sorrels served as president of NAIOP North Texas in 2013. He has been a longtime chapter board member and has served as the chapter’s membership chair. He also has been a longtime National Forums member.
- Vice President Trent Wylde served as president of NAIOP Inland Empire in 2007. He also served as a board member between 1998 and 2012, and has held various other posts, including legislative co-chairman.
- Senior Vice President Ed Konjoyan began serving on the NAIOP Inland Empire Board of Directors in 2005. He co-chaired the chapter’s Legislative Committee from 2007 to 2010, and served as president of the chapter in 2011. Under his leadership, NAIOP Inland Empire was awarded NAIOP 2009 and 2012 Chapter Merit Awards for Legislative and Government Affairs. He continues to serve as a member of the chapter’s Advisory Board, assisting with regulatory and policy issues.
- Senior Vice President Rod Martin has been a longstanding board member of NAIOP Southern Nevada. He is a past president of the chapter and a two-time Principal Member of the Year. Martin also is a past board member of NAIOP Corporate.
- Ownership Representative Kyle Valley has served on the NAIOP Inland Empire Developing Leaders board since 2012.
Honors and Sponsorships
- Received NAIOP Georgia’s 2014 Industrial Deal of the Year award and its 2010 Industrial Developer of the Year award.
- Honored with NAIOP Colorado’s 2011 Industrial Development of the Year award for Majestic Commercenter in Aurora-Denver.
- Named NAIOP Southern Nevada’s Industry Trendsetter of the Year in 2002.
- A long-standing Gold Sponsor of the Inland Empire, Southern Nevada, Southern California and North Texas chapters, as well as a 2015 Platinum Industry Partner of NAIOP Corporate.