Chris Rising is co-founder and president of Rising Realty Partners, a real estate operator and investor based in Downtown Los Angeles. Since relaunching in late 2011, the firm has played a big role in shaping DTLA’s development. Rising Realty is best known for buying the historic PacMutual building for $60 million, spending $25 million to renovate it and ultimately selling it for $200 million — a record Downtown sale at the time. Last year, the firm paired with Colony NorthStar in the purchase of One California Plaza for $460 million. Rising is currently working on a renovation of the 320,000-square-foot former Title Insurance Building at 433 South Spring Street.
After working as a lawyer, Rising shifted to a career in commercial real estate. In 2007, he founded the first incarnation of Rising Realty with his father, Nelson, who was a developer of the U.S. Bank Tower. The Risings said they’ve grown the company to $1.3 billion in assets under management across 4 million square feet, with 35 employees. The company specializes in office, mixed-use and industrial development and has focused on investments in California. But Chris said that the firm is also looking to do deals in Denver, Salt Lake City and Portland, Oregon.
In this interview, which has been edited and condensed for clarity, Rising sits down with TRD to discuss the evolving market for commercial office space and property management.
Lives in: Pasadena
Family: Married with two daughters and one son
How did you get into real estate? I went to Duke and played football on a scholarship. When I graduated and came back [to L.A.] in 1991, my first job was teaching and coaching high school football. My interest in the real estate business came as a young lawyer. I didn’t really enjoy being a lawyer. I was fortunate to have been hired by John Cushman when we were Cushman Realty Corporation, and I got to be kind of the chief of staff for John. In 2007, my father decided he didn’t want to be retired and wanted to partner up, so we started what we called Rising Realty 1.0. In May of 2008 he got a call from the board of Maguire Properties, who said, “We have just terminated Rob Maguire and want you, Nelson, to be the CEO.” He said, “I just did this deal with my son and another partner, so you have to bring them.” We ended up changing the name to MPG Office Properties. The company was severely overleveraged. We helped to deleverage the company … We got into a disagreement with the board on what we thought the future of the company should be.
What was your biggest career disappointment? My inability and my father’s inability to convince the board at Maguire that raising money was the right move. That board decided that the right play was to atrophy and to sell things off so the company no longer existed. It was an extraordinarily humbling experience. I didn’t leave willingly. The board fired me. My dad had to fire his own son. And he left, too.
What is the future of commercial office space? I question every day, “Are we going to need office space in five years?” I still believe we will, because we use video technology, and nothing replaces the 30 minutes to two hours I spend with the team face to face on a daily basis. The fact that you can do everything on a phone, and you have a CEO that runs two public companies — Jack Dorsey — who says, “I don’t even use a computer anymore,” is a radical change for why people build offices. Look at the movie “9 to 5,” when the Jane Fonda character comes in and there is a sea of typists. For a landlord, that was phenomenal. None of that exists anymore. When I started as a lawyer in 1996, I was still one-to-one with an assistant. Today most law firms work five-, six-, 10-to-one with an assistant. That is only going to get more effective. We will have A.I. in such a place where you won’t need anyone to run a schedule. You will just have your A.I. talk to another person’s A.I., and they will figure out what time works.
Where is the battleground today in the property management arena? Number one, that you are providing an experience, not just a physical location. Therefore it does matter what kind of retail you have. It does matter where you are located next to transportation. It does matter whether you are more of a 24-hour building as opposed to an eight-hour building. The second is the connectivity. If you cannot meet the technological needs of a tenant, you don’t even get on the tour. The third is that if you cannot demonstrate that your building is a healthy place for people to be, you won’t even get on a tour list. If you can’t show that you are a LEED Platinum or a LEED Gold kind of building, that you provide places for people to have access to natural light, that you know the quality of the air and the water, I don’t know how you can compete.
How do you see the future of WeWork and co-working spaces? WeWork has been extraordinarily influential in communicating to the commercial real estate owners that this generation of workers is not their parents’ and not their grandparents’ generation. I don’t see how their model is fundamentally different from Regus. It may be they have a better mousetrap, they have better amenities. I think WeWork will be around, but Regus has had a bankruptcy in its 30 or so years. Why did that happen? Because the arbitrage went against them. Could that happen to a WeWork? It certainly can. The competitors are coming, and WeWork has only done it in an up market. They will have to prove they can do it in a down market.
What kind of boss do you think of yourself as? The thing with leadership is it is not a once-a-month thing, it is not a once-a-year thing, it is on a daily basis. And I have good days and bad days; my team has good days and bad days. The key is to try to balance each other so we are always rowing in the same direction. I feel strongly that people treat each other with respect. This is not a place where you can yell at people. This is not a place where you can belittle people.