In the News 2005
Having Too Much Fun to Retire
December 23, 2005
It's not equivalent to a Vietnam combat cruise,
but real estate development in Southern California is what continues
to excite Thomas Sudberry, an ex-Navy aviator turned company
president who has been involved in retail, industrial and urban
community development for more than 35 years.
"When a project is finished and everything
is there, that excites me ... I haven't gotten over that," Sudberry said,
adding that he likes the process of meeting with landowners and
planning out new developments.
Originally from west Texas, it was the Navy that brought him to San Diego in 1968. After serving on the USS Constellation in two Vietnam combat cruises, he chose to remain in California, receiving an MBA at Stanford University before heading back to San Diego in 1972.
"Once I saw the water I had no desire to go back," he said. His start as a leasing agent for Coldwell Banker provided an opportunity to deal with retail shopping centers, as well as work on joint ventures with investment groups from Mexico City and Hong Kong.
"It gave me an opportunity to understand the development business," he said. Leaving Coldwell in 1979, he started Sudberry Properties with an investor client in Mexico City, who wanted to start a development company in San Diego. Together they developed the Milestone Business Center in Escondido. However, in 1982, when the Mexican banks were nationalized, the investor client was unable to continue with the San Diego operations because getting money from Mexico to San Diego became difficult. The client withdrew and gave Sudberry an option to buy the business center.
From there he began purchasing land parcels, and despite having to scramble, what he learned still rings true: "You always have to treat people right. If you do that, business comes back to you," he said.
Up until 1986, he did deals alone and with partners. But when he teamed with Jeff Bradley, an ex-pilot with whom he served in Vietnam, he found a partner he could stick with. To this day Sudberry and Bradley, executive vice president, are still partners.
Although there are opportunities for ground-up development nationwide, the company has remained focused on parcels in Southern California and will remain based in San Diego. This is not only because of the opportunities in the region, but also both men's desire to spend time at home with family rather than traveling. Working and living in San Diego also makes Sudberry more sensitive to the needs of those in the community, which is essential to consider when purchasing a parcel for development.
"The key for use -- and any developer -- is to find a need in the community," he said. Once informed on what the community's needs, are it's a matter of finding out how to best fulfill those needs, he said. But being informed doesn't mean there won't be resistance to a new development.
Take, for example, a past commercial project located on La Jolla Boulevard. The company, after some resistance, made changes to the project based on the comments of the community. As a result, the community groups approved the project. Another project he is proud of is the EastLake Village Marketplace, which includes a Target, Office Depot and Lowe's on nearly 35 acres.
"We're pleased that a center with large tenants could be done in a pleasing way," he said. That has a lot to do with the architects they work with and the involvement with the community, he said.
Not a fan of continuing suburban sprawl, Sudberry has not involved the company in the for-sale housing market, and instead supports more infill and mixed-use development.
"I'm a fan of the city of villages plan, which creates projects near mass transit," he said.
Mainly he focuses on retail development, which in general remains strong. However, a strong development market means eventually it will become difficult to acquire vacant parcels for projects.
"There will be less retail built in San Diego over the next 10 years (compared to the past decade)," he predicts, adding industrial building has already slowed. "But the demand for industrial is still strong so long as you have land, and get the land at a cost tenants can afford."
The main culprit slowing down industrial building and other construction is increasing materials prices. In anticipation of possible increases, the company predicts the maximum costs it is willing to take on before executing a lease with a tenant.
"If our projections are wrong and costs come in higher, there's a chance we won't do the project," he said, adding this has never happened. Looking to the future, he anticipates material increases will level out during next year based on what he's heard from contractors, which should benefit the company's new high-end specialty center development, Village Walk at EastLake. It's centers like Village Walk that continue to excite him.
His son Colton, who runs the retail division, and son-in-law Marco Sessa, who is in charge of mixed-used development in Mission Valley, will eventually take over -- but not soon.
"I'm having too much fun to quit," he said.
By ERIK PISOR
The Daily Transcript