November 2008 Volume 1, Issue 2 Barry Freeman RVM …rvmassociates.com/themirror110408.pdf · 2016. 10. 4. · issue, you learned How RVM Got its Start and how Doug Huberman found

Monica Lee Copeland Managing Editor

What does it mean to build a smarter environment? This question is posed

by Patrick Chraghchian several times a day. He seeks answers in both micro and macro terms. How do you design for synergy between building user groups? What design elements and materials conserve the most resources for the individual project and for the community-at-large? In April 2008 issue, you learned How RVM Got its Start and how Doug Huberman found the inspiration to build his Pasadena-based commercial real estate firm. Now, we introduce you to one of his business partners in RVM Development.

But let’s back up for a moment. RVM is comprised of three business units: RVM Investments, RVM Property Management and RVM Development.

What’s Inside...Curves.............................2Classic Sleep Care..................3Converting Fear to Opportunity: Bail Out...........4Investor Close-Up: Keith Pomeroy......................6 Restaurant Row..............13-15 POP Champagne & Dessert..12RVM Reports........................17Red Brick Tour Photos..........22Greetings from Doug..........26

November 2008 Volume 1, Issue 2

RVM Development’s Patrick C: Designing & Building Smarter Environments

The investment unit raises money for new acquisitions and provides income and distributions to our investors. RVM Property Management oversees company assets as well as properties owned by outside groups while reducing expense base and improving retention. RVM

When Cash is King: AcquireDoug Huberman, Founder & CEO RVM Associates

The economy is a mess, unemployment is climbing, the stock market has turned into a mindless roller coaster ride and it is without

a Publication of RVM Associates

Worry gives

a small thing

a big shadow.

a Swedish Proverb

Investors and Partners of NoteMarc AbramowitzStan & Suzanne CaplanPatrick ChraghchianNed ComerBarry FreemanDr. Albert FriedmanDr. Richard GilmoreHerbert & Sharon GlaserRuss HanlinElizabeth Levitt Hirsh Robbin ItkinJoel LeeboveGreg & Stephanie McLemoreJake & Nancy MetzlerHoward & Kathe PilchKeith PomeroyRoger & Mary RichardsMichael RosenblumAndrew SobelSteven StathatosLinda SternMarla TobeyRichard WynneLarry & Karoll Zabner

a doubt the best time in decades to buy value-added commercial real estate projects. RVM just closed two excellent value-added transactions (Fort Lauderdale, Florida and Glendale, Arizona). We are in escrow to buy a major shopping center in Hawaii and, and with a little persuasion, hope to be opening escrow shortly on a major property in Arizona.

(continued on page 10)


RVM Development Partners (left to right: Patrick Chraghchian, Jake Metzler, Steve Stathatos,

Doug Huberman, Joel Leebove)

Monica Lee Copeland Managing EditorNatalie Phillips, Designer


Curves: No Men, No Mirrors, No Make-Up

“Curves was an established business and it was already in the Verde Valley Plaza. We decided to keep it there because it is a very handy location. It has easy access from two of the main roads that intersect right out in front of the plaza”Trina FaustOwner, Curves

Gabriel Sherrill Freelance Journalist

Back in 1992 when Gary Heavin and his wife Diane opened the first Curves, they could not have dreamed that it would become the amazing success story that it is today. Designed for women, the fitness concept employs hydraulic resistance to create a 30-minute workout that combines both sustained cardiovascular activity and strength training. With 10,000 locations in 60 countries, more than 4 million women worldwide have enjoyed the Curves experience. Recently, I had the pleasure of sitting down with Trina Faust, one of those women and one of the owners of the Curves location in the Verde Valley Plaza, Cottonwood, Arizona, a property owned by RVM.

Sherrill: Why did you decide to get involved with Curves?

FauSt: Insanity! [laughing] Actually we thought it was a good investment.

S: What is it about Curves that you saw as a good investment? Is there something particular to their philosophy or their way of doing business that appealed to you?

F: Yes, I am very pleased to be involved with Curves. Their aim is to help women improve their health and to provide an atmosphere where women can feel comfortable and welcomed. I very much appreciate that as a woman myself, and wanted to enhance that whole philosophy for other women to

feel welcomed into a club where they can get fit and healthy without feeling intimidated.

S: So does that sense of intimidation come from there being men around? and is that tied to the hassle of being hit on while at the gym?

F: That’s right. They can come in their t-shirts and shorts; they don’t feel like they have to have any special gear. It’s women only. A phrase we like to use is ‘no men, no mirrors, no make-up.’ So you can feel comfortable here, and that’s a good thing.

S: is Curves for women of all ages? What are you seeing at your location?

F: Yes. Our youngest member is 12 and our oldest member just turned 89. It’s tremendous.

S: Wow! ignorant as it may be, i was under the impression that Curves only had middle-aged women and up working out there. But you really are seeing within your membership that it’s for women of all ages?

F: I would say the average Curves member is between 40 and 60. That would be the bulk of our membership, but we really do have members of all ages.

S: and why did you pick Cottonwood, arizona? are you from there? and was there anything about the location in the Verde Valley Plaza that made it more attractive?

F: Yeah, this is where we live. Curves was an established business and it was already in the Verde Valley Plaza. We decided to keep it there because it is a very handy location. It has easy access


Tenants

Joyce Petry (member) and Elizabeth Swapp (member turned staff member)

Page 2


Classic Sleep Care: Sometimes Counting Sheep Isn’t Enough


in Focus

Page 3

Gabriel Sherrill Freelance Journalist

Sleep apnea, a sleep disorder characterized by interruptions in breathing during sleep, affects 24% of middle-aged adults. Robert Fallon, one of the founders of Classic SleepCare, is one of those people. Located in the Heritage Building, a property managed by RVM, in Agoura Hills, CA, Classic SleepCare is a durable medical equipment (DME) company that provides patients with CPAP machines and specializes in follow up care. I chatted with Mr. Fallon and found out what his company was all about.

Sherrill: For those unfamiliar with them, what is a CPaP machine?

Fallon: It is basically an air blower with a mask that sits on your nightstand. It sends air through and keeps your airway open, which may be blocked by fatty tissue or your tongue stopping you from breathing many times throughout the night. The CPAP helps you get into your stage 4 sleep, your REM sleep, your healthy sleep and helps get you a good night’s sleep.

S: What does that follow-up care consist of?

F: We have respiratory therapists who assist patients in using their equipment and in answering any questions that they have. We do follow up 72-hours after you’ve been set up on your CPAP machine, 30 days after, and every 90 days as long as you’re on CPAP therapy.

S: Sleep medicine is a rapidly growing field. How has that growth affected you?

F: We see more and more doctors paying attention and referring their patients out for sleep studies because all the new research indicates that if left untreated, sleep apnea can ultimately lead to heart disease and heart failure. If you’re diabetic it can mess with your blood sugar. If you have high blood pressure, it keeps your blood pressure high. There are a whole lot of things that are affected if you have sleep apnea and you are not getting enough oxygen to your brain when you sleep at night.

S: are there differentiations in the machines you offer?

F: There are. Some have different bells and whistles, like smart cards that download various user information like how long you slept, how many events you have throughout the night where you stop breathing, and for how long, but they’re all basically just air blowers.

S: and the masks? i’m assuming the big difference here is comfort?

F: Correct. There are some called full-faced, which go over your nose and your mouth. There are some that are nasal masks, which just go over the nose. There are nasal pillows that just go into your nostrils. Each one is different.

S: Switching gears for a second, is there any reason that you picked your particular location?

F: Other than it being a beautiful building that was one of the nicer ones that we’ve seen and the location was right, not really. I drove around looking at buildings and this one jumped out at me.

S: and what’s your relationship with rVM like? CPAP machine

“...all the new research indicates that if left untreated, sleep apnea can ultimately lead to heart disease and heart failure. ”Robert FallonFounder, SleepCare

Robert Fallon


crisis morph into a cascading crisis in liquidity, spreading from Wall St. to Main St. right into our own backyards.

The failures of Lehman Bros. and Bear Stearns, largely due to risky mortgages, triggered a near collapse of AIG, who had written nearly $400 billion in credit-default swap agreements. These “swaps” began as a kind of unregulated insurance policy for investors looking to minimize risk, but they turned into a huge market for speculators, who essentially bet on potential defaults by bond issuers. To paraphrase NPR pundits Alex Blumberg and Adam Davidson, if bad mortgages got the financial system sick, credit-default swaps spiked an epidemic. Because some of the same people were both buying and selling CDS, they built a chain of interlocking risk, a house of cards, in which one failure can break the house. And according to the Washington Post, there is as much as $365 billion in CDS contracts against a default by Lehman alone.i

The collapsing structure that began with Lehman and AIG sent panic through the Money Market Mutual Funds, which are among the key lenders of commercial paper, a kind of short-term business loan that helps fund everything from corporate payrolls to manufacturing inventory. If those companies could fail, who was really safe? Frightened banks essentially cut off corporate credit lines, taking nearly $100 billion out of the commercial paper market and into treasury bills and government securities. As a result, many solvent companies are without funding, and there are fewer loans for commercial projects. Perception, in finance, being everything, fear froze the market as surely as optimism once fueled it.

The Real Real Estate Economics

Tuan Nguyen CFORVM Associates

the BaCK DroP

If economics were fashion, panic would

be the new fall color. You can’t listen to the news or enter a conversation without landing in the dire subject of financial crisis. The whole world seems to be holding its breath. And not without reason. Collapsing banks and frozen credit markets are the stuff of fiscal nightmares. But while there are real things to fear right now, there are also opportunities. Pessimism is as foolhardy a strategy as the unbridled optimism that caused this chaos.

In the last issue we addressed some of the voodoo aspects of the housing market in Why Commercial Real Estate Makes Sense, which hypnotized lenders and investors alike. Just how many people fell under that heady spell, and were hurt by it, became apparent as we watched the subprime mortgage

“This is an excellent time for strong value investments.”


Converting Fear to Opportunity: Thoughts on the Bailout and How it Affects Commercial Real Estate

Page 4

Good news for commercial real estate investors.



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“...commercial and multifamily mortgages have continued to perform well despite the credit crunch. “Most of these investors tend to hold them to term, so they are less affected by capital markets disruption.”Jamie Woodwell MBA’s VP of Commercial Real Estate Research

the GooD neWS For inVeStorS

The recent bailout, if it has the intended psychological effect, should start the economy on a slow road to healing. But we’ll have a few years ahead where the patient still limps. And that, believe it or not, is good news for investors. Unlike single-family residential, commercial real estate value is based largely on the revenue it can generate. And certain businesses will always do well, even in a recession. Therefore, this is an excellent time for strong value investments. According to the Mortgage Bankers Association, commercial and multifamily mortgages have continued to perform well despite the credit crunch. Says Jamie Woodwell, MBA’s VP of Commercial Real Estate Research, “Most of these investors tend to hold them to term, so they are less affected by capital markets disruption.”ii In fact, this could be the best time to acquire commercial real estate in the

last twenty years…if you play by RVM rules.

But go ahead and yawn now. There’s no top hat or rabbit in this strategy, not even a handkerchief. It’s no more exciting than eat healthy, exercise, and floss your teeth. But it is the secret to thriving in these times (and that is the real magic).

BuY loW, Sell hiGh…anD StaY CalM.

“Buy low, sell high.” It’s almost a bumper sticker, a truism that every investor can quote in his sleep, but few actually follow. Why? Because to truly buy low and sell high means to go against all your instincts and stick with the supposedly sinking boat. It means staying calm, hanging on, and riding out the storm. Letting your brain override your emotions. When the economy stinks, your emotions say do nothing—or they scream “Sell! Sell! Dump

Page 5

November 2008 Volume 1, Issue 2 Page 6

Investor Close-Up: Keith PomeroyMichelle L. Johnson Staff Writer

Who iS Keith?

Keith Pomeroy started his own real estate investment company in the late 1970’s after earning sociology and law degrees at Wayne State University. Initially investing in apartments, Pomeroy moved onto office buildings, shopping centers, hotels, industrial parks and nursing homes. He’s done it all, acquiring and originating $1.5 billion in real estate properties. General Motors was a prominent tenant. Keith says, “I was one of the larger landlords to GM in the state of Michigan.” Pomeroy projects tend to be in prime geographic locations and are high quality Class A or Class B properties.

One of Pomeroy’s keys to success is that he is very selective with properties. He says, “Based on the risk, we determine what yield will be required. Generally, we try to manage properties more effectively than previous owners. We also try to find unique ways to enhance value.” This is one of the reasons Keith invests with RVM.

SinGinG hiS PraiSeS

A prime reason Keith Pomeroy is ’s first featured investor is that Doug Huberman freely sings Pomeroy’s praises. According to Huberman, Pomeroy, whether the news is good or bad, walks his walk and talks his talk: “Keith is as solid as a rock, straight forward, honest. If he says he’s going to do something, he does it. If he can’t or doesn’t want to do it, he doesn’t hesitate. He simply says ‘No.’ Working with him is a joy because you don’t waste a lot of time and effort trying to figure out if what he says is actually what he means.”

the BeGinninGS

Keith is a savvy investor. A 35-year veteran of real estate development, Pomeroy met Huberman through Dan Levitan while Doug was still with CNA Enterprises, a commercial real estate investment and advisory firm headed by Arnon Adar. Sharing mutual interests, Pomeroy and Huberman talked about eventually investing together. As Doug developed RVM Associates with Old Pasadena Plaza I and Old Pasadena Plaza II at its core, Keith was onboard as an initial investor. Pomeroy saw Doug and RVM successfully refurbish the properties and turn them into

office and retail complexes, increasing their value. After RVM managed the project and brought in new tenants, it was sold. High yields were returned to Pomeroy and other investors. From the success of that initial investment, Pomeroy has continued to invest with RVM, most recently in projects in Sedona, Arizona and Louisville, Kentucky.

“[Pomeroy has] done it all, acquiring and originating $1.5 billion in real estate properties.”


turninG ProFit into BeautY & hoPe

In addition to being a savvy investor, private art collector and a champion of several charities. He is a founding board member of the Museum of Contemporary Art Detroit, and serves on the California and Michigan boards of Childhelp®, a national organization that assists and supports abused children. Childhelp® founders Sara O’Meara and Yvonne Fedderson have been nominated for the Nobel Peace Prize 4 years in a row for their work saving the world’s

Left to right: Sara O’Meara, Keith Pomeroy, Yvonne Fedderson

“Keith is as solid as a rock, straight forward, honest. If he says he’s going to do something, he does it.”Doug HubermanFounder & CEORVM Associates

children.

Huberman says, “You can’t find anyone better than Keith. He makes a difference in his community. He turns around the lives of abused kids. Keith is the kind of man most men should emulate, and it’s always nice to do business with someone who cares about more than just money.”


“We have a good relationship with RVM. ...They are readily accessible and helpful.”Trina FaustOwner, Curves

Curves cont. (continued from page 3)

from two of the main roads that intersect right out in front of the plaza, so it makes it very convenient for people to see that we are there and to come in and utilize the facility.

Sherrill: is there anything about rVM in particular that you like? What is your relationship with them like?

FauSt: We have a good relationship with RVM. They were very informative when we talked to their representative, and any time we have questions they are readily accessible and helpful.

S: What about your future at that location? Would you guys look to stay there when your lease is up? i know there are some planned renovations over at the Plaza.

F: If things continue on as they are, I would think that we would stay with RVM. The price has been nice, and the location, as I said earlier, is a very nice one. At his point, we have no plans to leave.

S: Back to Curves. Since you bought

Page 8

the Cottonwood location, what kind of growth has your franchise experienced?

F: We’ve it owned it for 7 months and we’ve grown 30%. We feel that’s a pretty good growth rate in these slow economic times.

S: especially in 7 months. Wow!

F: Yeah! We’re pretty excited. We feel really blessed.

S: Do see a specific reason why that growth has occurred? obviously there is new ownership, but are there any other factors?

F: We’ve put out some advertising. We’ve sent out letters. Word of mouth is getting out now. Prior to our ownership, enthusiasm within the facility itself had waned, but at this point it has improved. When you have happy members, they tell their friends, and you have new members. We’re making it fun.

S: that’s important. Because when working out becomes work people tend not to do it.

F: That’s true.

S: and how about yourself, do you work out there too?

F: Yes I do, faithfully. And the members make sure I work out.

S: ah! they get on your case a little bit.

F: [Laughingly] If I’m being lazy they say, ‘hey get on the circuit.’

S: Wrapping up here, do you guys have any initiatives, or are doing anything in the community to spark enthusiasm about Curves, good health, or fitness in general?

F: Curves really does help out with that. Currently, for the month of

Curves Staff members Jackie Maaske and Kathy Ruechel



Hot Dates/Hot R ates for Groups thru March 2009

Page 9

F: They’ve been very nice. Everybody over there, especially Nicole and Nikki have been very gracious and very nice to us.

S: What sets you guys apart from other companies out there?

Fallon: The difference between us and the other DME companies like Apria, Lincare, Rotech, is that this is all we do. We are not looking to sell

wheelchairs, or scooters, or hospital beds, or oxygen. This is our only line of business and we believe that by focusing on this one area of patient care, and doing it better than anybody else, physicians will continue to refer to you and patients will continue to be loyal to you. The thing that separates us is real patient care.

Sherrill: is there anything else you

Sleep Care cont. (continued from page 3)

October we are doing a breast cancer awareness month wherein we are giving out a free self-exam breast kit when you sign up. Right when we bought Curves, Curves did a food drive where we were able to donate 2,500 lbs. of food to a local food bank, and that was from members’ donations and from a promotion where we waived a portion of the sign up fee on new memberships when they brought

in a certain amount of groceries. So stuff like that helps the community, and for women’s health it helps to generate interest and a feeling of well-being.

Sherrill: that’s great. Finally, is there anything else you would like your current members, future members, or those in the community to know your location in particular, or about Curves in general?

Curves cont. (continued from page 8) FauSt: In general, I would say that if they’ve ever thought about joining Curves they should come in and give it a try. I think they will find a very satisfying, encouraging place to work out, and that we really do care about their health. We we’re not just there just to get another member or another membership fee coming through the door. We really do care about the people themselves and we want them to be healthy.

want people to know about Classic SleepCare?

F: We are a resource for patients with sleep apnea. The number one thing is that if anyone out there is currently unhappy with the level of service from his or her DME company, then give us a call. We have licensed respiratory therapists doing our follow-up care. Patients can ask us any questions and will assist in any way, and we will replenish their supplies as needed.


Development finds ground-up, mixed-use and historical renovation projects

to design and build and is led by five mavericks strategically chosen for their specific expertise.

Former Air Force Top Gun and economics professor, Doug Huberman lends the partnership his head for acquisitions, property management and investor relations. Joel Leebove is

a shark at finance having syndicated and managed the operations of 25 real estate partnerships, mostly revolving around hotels and motels, valued at over $250 million. If you live in Pasadena, you’re familiar with Stats, the only stop for floor to ceiling decorations. Partner Steven Stathatos provides legal representation for family-owned developer and retailer, Stats Group, and brings his retail and legal acumen to the table for RVM. A past Chief Technology Officer for Packard Bell and Computer Challenge Organization, Jake Metzler is an authority on technology and cost control.

This brings us to Patrick Chraghchian who is seriously concerned about intelligent buildings. Patrick is our guru on design and construction. At the helm of American General Design and American General Constructors, full-service, wholly integrated firms that provide streamlined design-construct solutions, Patrick erects a fair share of RVM Development’s undertakings.

inCreaSinG BuilDinG anD enerGY eFFiCienCY

Patrick begins every venture wondering how he can increase energy and building efficiency. If he can use the building’s individual components more efficiently and spend less money then he’s reduced waste and costs for all players. Property Management can reduce energy and associated labor

costs. Building residents’ utility bills can drop 50-57 percent.i The larger community benefits through sustainable density that has a smaller environmental footprint than comparable buildings. Investors are pleased with short-term and ongoing cost savings, increasing profits. They’re also pleased we’ve created a more valuable asset. So where does Patrick begin when building smart?

Solar anD GrounD-uP ConStruCtion

Patrick starts by viewing solar energy as a source of on-site power. His team determines the best building orientation to promote the greatest use of solar energy. The right mix of sun, shade and wind can create significant energy and financial savings. “Solar design [daylighting] is the technology of heating, cooling, and lighting a building naturally with sunlight rather than with mechanical systems because the building itself is the system.”ii RVM is building two mixed-use buildings in Pasadena, 123 Los Robles and 496 Arroyo Parkway, which will use daylighting strategies.

Patrick’s teams use an integrated design-build approach optimizing whole-building energy performance and efficiency. They employ south-facing windows, overhangs and the use of thermal mass materials like brick and tile, as well as control of electric lighting systems. Chraghchian favors solar construction products that can be directly integrated into a building, like shingles, slates and metal roofing. According to the National Renewable Energy Laboratory, “Lighting is the largest single end use in commercial buildings, at 30% of the total energy used. From a national perspective, the potential for daylighting savings is significant.”iii

Our builder also seeks technologies that

Building Smart cont. (continued from front page)

Page 10


Patrick Chraghchian surveying RVM Development constructions.

“[We] use an integrated design-build approach optimizing whole-building energy performance and efficiency.”

November 2008 Volume 1, Issue 2 Page 11November 2008 Volume 1, Issue 2


Nicole Breuklander Vice President of Operations RVM Associates

Champagne. Chocolate. Cheese. Choice. All will be on hand when POP

Champagne and Dessert Bar opens on 33 Union Street in Old Town Pasadena in November. The brain child of Matt Earhart and Kristin Traylor, POP is a welcome addition to the culinary offerings of the neighborhood.

Earhart and Traylor were friends and co-workers who fell in love with champagne during trips to California’s wine country. One day, Matt said to Kristin, “Have you ever heard of a bar that specialized in just champagne?” She thought the idea sounded unique. When they considered that Matt’s sister, Emily Earhart, was a Ritz-Carlton trained pastry chef they decided desserts would be the perfect complement to champagnes. After securing investors and a prime spot near Pasadena’s famed Restaurant Row, POP was born.

It’s said that when Dom Perignon, credited with developing the méthode Champenoise of sparkling wine production, first tasted champagne he exclaimed, “Come quickly. I am drinking the stars!” RVM recently spent an afternoon with the couple who will bring those stars to Pasadena, Matt Earhart and Kristin Traylor.

rVM: how did old town Pasadena become the home of PoP Champagne & Dessert Bar?

earhart: I was born and raised in Pasadena and spent most of my life here. When we were developing the idea, I knew that Old Town was the center of weekend activities. There are lots of restaurants in the area—and not your average run of the mill restaurants—but we knew that POP would stand out. We picked this site because it was a good location with reasonable rents.

traYlor: Also Brenart’s is nearby. They lease from RVM, too. We hope to turn this part of Union Street into another Restaurant Row.

rVM: So what kinds of wines and desserts will PoP serve?

t: We’ll start with about 100 champagnes, sparkling wines, dessert wines and artisanal beers. However, what really makes POP distinctive is that we’ll offer 30 wines by the glass, which is almost unheard of. Eventually we hope to offer up to 300 wines, giving people a reason to continually come back to expand their knowledge and explore different tastes.

e: Most people associate champagne and sparkling wines with weddings and celebrations. They think it is only one thing. But at POP they’ll discover what we discovered: champagne has so many types, kinds and flavors—from the driest bruts to the sweet demi secs. And it’s not just for holidays or events.

t: We want people to see that champagne can be an everyday treat. And one that is not too expensive. Two glasses of house champagne and a shared dessert will be about $20 on our menu.

“We want people to see that champagne can be an everyday treat. And one that is not too expensive.”Kristin TraylorCo-Owner, POPs

Kristin Traylor and Matt Earhart, creators of POP Champagne & Dessert Bar

Restaurant in FocusPOP Champagne


Page 12

A Trip DownNovember 2008 Volume 1, Issue 2


pilgrim palate. I started at Café Bizou (Raymond and Holly) and tasted my way up N. Raymond. I also hung a right on Union to include Brenart (POP is on Union St. too). From a culinary perspective Restaurant Row is really an L. What did I discover? The world! Behind the brick

facades of Old Town are portals to France, China, Japan, England, Latin America, and the borderlands of culture that meet only in SoCal cuisine. Veteran chefs rub elbows with newcomers. Choices abound for romantic dinners and holiday parties. And a girl can get a serious case of happy mouth in a one block area. Gas up your car if you must, but I’ll tell you now, the blue bird of pleasure has come home to roost.

Deborah Brown Freelance Journalist

There is an old story about a man who goes looking for happiness, traveling the wide world round till, in the end, he finds it where he started: in his own backyard. So when RVM challenged me to “walk the Block”—that choice stretch of Raymond and Union we renovated and still manage—I was eager to see what Old Town Pasadena could offer the

Brenart reStaurant & Wine Bar, 53 e. union St.

Yi-Fan Chu is probably the newest restaurateur on the block. This talented and friendly young chef took over Brenart Café Gallery in June, transforming the casual hangout into a hip European restaurant and wine bar with black wicker barstools and a clean, architectural feel. He practically bubbles with enthusiasm discussing his innovative and seasonal menu, which now extends into the dinner hour and features fresh, handmade pastas, stocks, sauces, and infused oils. Even the ice cream is made on

site. The restaurant features live jazz on Saturdays, but the real music happens in the kitchen. I had the Dungeness crab cakes, which were rich on crab, light on batter, and came with chipotle

Restaurant Row aioli. I also tried the soup of the day: a purple cauliflower soup dressed with homemade fennel oil and chives. It was so silky, I wanted to bathe in it!

Chef Yi-Fan with writer Deb Brown

The Restaurant Row ‘L’: Union & Raymond

Page 13November 2008 Volume 1, Issue 2

A Trip Down

reservations lunch Dinner url & Phone

Bizou Recommended Tu-F 11:30-2:30 Daily 5-10 www.cafebizou.com Sun. 11:00-2:30 (626) 792-9923Chado Recommended Daily 11:30-7 Closed www.chadotea.com for Weekend (626) 431-2832Shaab Recommended Week 11:30-2 Week 5:30-9:45 none at present (626) 683-1150 Mojitos Recommended Tu-Sat. 11:30-2:30 Daily 5-10 www.mojitosrestaurant.com Sunday 11-3 Weekend live music (626) 796-2520Yujean Recommended Daily 11:30-2 Week 5-9:30 www.yujeankangs.com Weekend 5-10 (626) 585-0855 Vive Recommended Closed W-Th 4-9 www.vivelounge.com F-Sat. 4-9:30 (dinner) (626) 583-8483 F-Sat. 10-1am (lounge)Brenart Recommended Daily 11-3 Tu-Sat. 5-close www.chefyifan.com Weekends live jazz (626) 796-7460 PoP Recommended S-S 1-5 W-F 5-10 (1am Th-F) www.popchampagnebar.com for 6+ S-S 5-10 (1 am Sat.) (626) 795-1295


CaFé Bizou, 91 n. raYMonD aVe.

Delicate sautéed sandabs practically melt in your mouth as you assemble the perfect bite, a neat construction of creamy mashed potato, tender fish, bright asparagus and tart, buttery capers. Seared Sesame Ahi Tuna salad wears a citrus ponzu sauce that is light on the tongue. Since 1999, Café Bizou has brought its wonderful sauces and California French menu to Pasadena, offering the best in fresh ingredients and handmade food, from pasta to dessert, at reasonable prices. I met up with owners Philippe Gris

and Neil Rogers at lunchtime and got to check out Rogers’ sleek, efficient kitchen. The brick and wood interior of the restaurant itself is casual, comfortable, and large enough to handle parties of 45-60 people. And the food is beautiful to behold. It was hard to disturb the pretty plate of sandabs, but hunger and pleasure, fortunately, prevailed. Café Bizou has a second location in Sherman Oaks.

ChaDo tea rooM, 79 n. raYMonD aVe.

“Not for all the tea in China,” we say, as if that’s the apex of abundance. But Chado Tea Room offers teas from everywhere: China, Japan, India, Argentina, Africa, even the tiny Island of Mauritus. Their great wall of canisters sports almost 300 varieties of tea from more than 10 countries, all of their own blending. The tea list is a veritable encyclopedia of history and lore, and customers are invited to annotate their own copies for future reference. In fact, RVM’s

Doug Huberman has the distinction of having tasted every single tea in the house. His favorite, a fruity Gold Tisane, was renamed “Doug’s Proper Tea” at the wedding reception Chado gave for he and his wife, Monica. I tried it with their classic Afternoon Tea, a three-tiered serving of exquisite finger sandwiches, moist cake,

and a warm scone with Chado’s own Devonshire-style cream. It was almost intoxicating! Chado boasts two more SoCal locations, one in the Beverly Hills area and at the Japanese-American National Museum downtown. Lauded by NBC-TV as the “Best Tea Room in Southern California” and praised by Los Angeles and Sunset magazines, Chado is more than a

retailer. Owners Reena Shah, Devon Shah, and Tek Mehreteab have turned the company into the largest tea wholesale distributor in America, supplying their rich blends to hotels and restaurant groups. The Pasadena

tea room also serves soups, salads, deserts, and offers live guitar music three days a week.

ShaaB, 77 n. raYMonD aVe.

One of the things I love about Japanese cuisine is permission to play with food. Chopsticks, rolls, and dipping sauce make each meal a tactile, as well as culinary, adventure. So imagine my delight at Shaab, where people come from miles away to experience “Shabu shabu,” a technique where you “cook” your own meal by swishing the ingredients in a tureen of boiling broth, then dip each bite in sesame or ponzu sauce. Shabu shabu literally means “swish swish,” said co-owner Tommy Tamida as he placed platters of paper thin beef, vegetables and noodles before me and showed me the ropes. The result is light and delicious,

as each ingredient absorbs first broth, then seasoning

Page 14

Chado’s near 300 varieties of tea.

Café Bizou’s Chef Neil Rogers



sauce. Who knew cooked lettuce could taste so good? Shaab also serves sushi, sashimi, salads, and seafood entrees.

MojitoS reStaurant anD ruM Bar, 69 n. raYMonD aVe.

The best Mojito in Southern California is right in Pasadena. Made with fresh sugar cane juice, pressed right at the bar, fresh lime, fresh mint, and Bacardi Light Rum, it’s a drink worth naming a restaurant for. Last year, owners Carmen and Phil Castaneda thoroughly gutted and remodeled the old Xiomara,

transforming it into a Mojito mecca. A gorgeous granite bar is the staging ground for sybaritic sampling, from a rainbow of fruit flavored Mojitos to an extensive selection of domestic and international wines, and a rum list which boasts 44 rums from 13 countries. But Mojitos is more than its stellar bar. A South American sumptuousness speaks from the kitchen as well. Appetizers like achiote grilled prawns over white bean hummus. Entrees like Chilean Sea Bass with a crispy corn crust and poblano goat cheese mashed potatoes.

And, for dessert, the house specialty: soufflé chocolate bread pudding served warm with a coffee custard sauce. Be careful though; the meal could end in dueling spoons! Two private banquet rooms can be combined for parties up to 150, and they offer music on the weekends.

Yujean KanG, 67 n. raYMonD aVe.

“Opulence” is the word that that comes to mind at Yujean Kang: the saturation of red and black décor, dark woods, white linens,

and a menu that whispers unexpected

ingredients like kumquat, passion fruit sauce, silk squash, and tea smoked duck. Named Zagat’s “Top Chinese” restaurant for LA since 1992 and an 11-year recipient of Gourmet Magazine’s “Top Tables Award,” this venerable eatery has offered up gourmet delicacies

since 1990. Sampling their popular Chinese Polenta with Shrimp and Mushroom (LA Times Top 50), I was surprised by crispy polenta squares that gave way to creamy, warm centers and an aromatic blend of ginger and cilantro that begged slow contemplation. And don’t be intimidated by the accolades; you really can order a wonderful meal here without ever breaking the bank.

ViVe reStaurant lounGe, 61 n. raYMonD aVe.

Vive is not a nightclub, co-owner John Pena tells me, “it’s a lounge with dining.” And lounge is the operative word, as a proliferation of colorful booths and comfy couches invite customers to kick back and indulge in a drink or a meal. Opening daily at 5 pm, Vive offers light California

cuisine with a Latin-Asian

fusion. Just look at their appetizers: chipotle chicken empanadas, crab wontons with tomatillo sauce, and an Ahi tuna ceviche that makes your mouth pop with a sweet mix of tuna, grilled pineapple, avocado, celery and mint in a pickled ginger sauce. The dark floor, brick walls and high exposed ceilings give Vive a casual loft atmosphere, and DJs play to Top 40 tunes on Friday and Saturday nights. Salsa Sundays

include free salsa lessons from 5:00-6:00 pm.

Evening Dining at Yujean Kang’s.

Hanging out at Vive.

Page 15

Erik processing sugar cane for Mojito’s owner Carmen Castaneda

Restaurant RowNovember 2008 Volume 1, Issue 2


rVM: tell us more about your desserts.

earhart: We’ll have 10-15 desserts from the classic crème brulee to dishes that are more edgy and experimental. And even our classics will be very sophisticated. Our pasty chef, Emily, is a graduate of Pasadena’s California School of Culinary Arts Le Cordon Blue program. She’s excited about using seasonal ingredients and finding the best local produce at the farmers’ markets in Pasadena and South Pasadena. We’re also going to have small plates—meat and cheese plates, sandwiches, pate, cavier, fruit soups and salad.

rVM: With such a wide selection, how will diners select just the right drinks and desserts?

traYlor: There will be a sommelier on site, but our menu will concentrate on pairings as well as the style of champagne. We won’t overwhelm you with knowledge. We want to allow you to explore freely. On the menu, there will be descriptions not only of how the wine will taste, but how it will feel in your mouth and what will compliment it.

rVM: What champagne do you expect that Pasadena will be excited that you’re serving?

e: While our name is POP and POP’s maker, Pommery, has a special relationship with us, we aren’t officially affiliated with them. We went on a two week tour of the Champagne region of France. We visited 17 wineries, tasted more than 65 wines and Pommery really treated us well. They are excited about POP Champagne & Dessert Bar and practically insisted that we offer all of their wines and have a special POP night, but we’ll offer a wide variety of champagnes and wines. I’m sure lots of people will be excited by Armand de Brignac “Ace of Spades” champagne, which is extraordinarily limited, but we hope to have three to six bottles on hand.

t: We’ll also be offering the wines of Jacquesson. During our tour we established personal relationships with a lot of wineries including this one. It’s a small family farm. One brother makes the champagne and the other runs the financial aspects of the business. They create some really fine wines.

e: A house may make a dozen champagnes in a year, but they might only release two in the States. We want to make sure that we can offer some wines that aren’t offered elsewhere in the US. Because we established personal contacts with Jacquesson and

Page 16

Pop cont. (continued from page 15)

“Doug’s been great. When we had our beverage license hearing, he and the rest of [RVM’s] staff came to testify on our behalf.”Kristin TraylorCo-Owner, POPs

POP storefront

others, I think we’ll be able to do that.

t: We’ll also carry some very fine California sparkling wines, including Iron Horse out of Sonoma.

rVM: Please describe PoP’s atmosphere.

t: There will be music, a nice blend of ’20s and ’30s jazz and blues along with some crooners and mellow modern music. From time to time, we’ll have live jazz.

e: The lighting will be subdued but we want people to take note of the great architecture. People won’t believe this used to be an office building full of plaster. We scraped until we found the purple tile that was put in 100 years ago. The floors are the original floors, just restored and refinished. I think people are excited to see the bricks back in Pasadena.

rVM: So you really like this space?

t: Yes, and RVM has really worked with us to remodel it to fit our needs. They appreciate the work that we put into the space, essentially stripping it down and rebuilding it. As this is a mixed use building, they’ve been great at mediating between us and the other tenants. We all want to be good neighbors. For instance, there are offices above us, but we’ve installed insulation to dampen any noise where our business hours might overlap with theirs.

e: And Doug’s been great. When we had our hearing for our beverage license, he and the rest of his staff came out to testify on our behalf. And once we were approved, he took us all out to dinner.

RVM: How can people find out more about PoP?

e: They can sign up for our mailing list at our website, www.popchampagnebar.com.



RVM ReportsWade Trefethen Property Manager RVM Associates

WelCoMe to our neW tenantS

Daniel Wier & Associates 65 Raymond, Suite 235—Daniel Wier & Associates is a retained Executive Search firm that specializes in recruiting top and middle managers for a variety of industries with an exceptional success rate. Daniel Wier has over 20 years of recruiting experience and has successfully completed searches for presidents, CEO’s, COO’s, directors, and vice presidents in most line and staff functions.

Architectural Resources Group 65 N. Raymond Suite 220 Congratulations on the expansion of their offices.Mojitos 69 N. Raymond—is creating a better dining experience in their beautiful atrium area with new lighting. Check it out!

BrenArt Restaurant 53 E. Union—has a new Chef. Chef Yi-Fan Chu graduated from the California School of Culinary Arts in Pasadena and had Michelin star training in Germany for 2 years before coming back to America to pursue his career in the culinary industry. Stop by and try the delicious purple cauliflower soup.

introDuCinG neW StaFF

Jennifer Miller Jennifer is our new Administrative Assistant. Married for 9 years to her husband Kevin she is currently

studying to become a history teacher.

Christine Claes Christine works part time in our office while pursuing a degree in Zoology. When not working or going to school Christine takes care of her 10 animals. SPaCe aVailaBle

Contact me at (626)792-8220, if you are interested in the following spaces:

Residential Lease at 35 N. Raymond Ave—1,609 sq feet, 2 bedroom, 2.5 bath townhome with views of Memorial Park and the mountains from the large balcony. A roof deck, Viking appliances, high ceilings, on-site parking and large master bathroom tub make this unit, combined with the Old Town Pasadena zip code, very attractive.

Great Pasadena Retail Space—is available on 37 E. Union St. 2,800 sqare feet of ground floor space with high ceilings right next to POP Champagne Bar. With refinished, original hardwood floors in a historic building, this space is perfect for a retail or restaurant operation. Located just in front of the exit for a public parking garage, customers can park conveniently. Expandable basement space also available.

Pasadena Storage spaces—available in several buildings.

our haPPeninGS

Investor Holiday Party on Sunday, December 7—Investors please save the date. Shortly you’ll receive an electronic invitation followed by a mailed formal invitation for this must-do event.

Cassie & Dexter If you ever visited the RVM office you may have met two small pugs loved by CEO Doug Huberman. Due to these rascals, Doug discovered the beauty of historic Old Town. Cassie passed away

August 7th and Dexter shortly after on October 1st. They will surely be missed.


harness the sun for building heating and cooling. “Some of these new design packages and processes have reduced energy consumption in new commercial buildings by as much as 70% or more.”iv

Chraghchian would concur. RVM/AGD is LEED (Leadership in Energy Environmental Design) certified. LEED provides a mechanical checklist of things to do for systems integration and efficiency. In addition to green technologies, Patrick is out to ensure his projects remain competitive in the long run. With over 60 years of continuous professional experience, Patrick’s teams have implemented new construction, renovation, expansion and modernization projects totaling in excess of $500 million nationally and over $1 billion internationally.

BuilDinG SMart iMProVeS CoMPetition: the BoSton-Centennial exaMPle

Patrick cites the historic renovation of The Boston-Centennial Building at 35 N Raymond in Pasadena, as a good example of an RVM Development Project where smart building led to greater market competitiveness. RVM Development took a 100-year-old building with an imploded roof, preserved three-foot brick and terrazzo exteriors and built an entirely new structure within, above and below. Now, it is a mixed-use building with retail tenants, renovated lofts, new luxury town homes with views and roof decks, and a modern garage with hydraulic lift parking spaces.

resident and tenant Synergy: Patrick describes the elements of design in Boston Centennial as intellectual: metal paneling; commerical grade, glass glazing not typically found in residential; glass and concrete; and a combination of historic and modern attributes. With lofts beginning in the

$400,000’s and town homes ranging from $700,000 to over $1 million, these residents are affluent, urban and prefer live/work environments. They care about sustainability and conservation. The residential target was not an accident. According to RVM CEO, Doug Huberman, “there are no good or bad residents and no good or bad tenants, just residents and tenants that are appropriate for project demographics.”

The partnership team at RVM Development wanted to attract the right residents and tenants for the buildings long-term success and maximize tenant synergy. “That’s why Famima as a retail tenant was a coup for the building,” says Chraghchian. Famima, located at 25 N Raymond, is part of a chain of small, upscale convenience stores based on and owned by Japan’s successful FamilyMart. “We realized that the suitable residents for the building and for Old Town would prefer to shop where they live. These are busy people who want to save time, gas and the environment by leaving their cars in the garage.” Famima benefits from the nearby offices and residential buildings. When the Pasadena store opened it became the #1 store in the US during its first month.

renewable and recyclable Materials:One of Patrick’s first thoughts with mixed-use assignments is determining “What will take less out of the environment?” He uses many renewable and recyclable materials. Carpeting and cabinet materials as well as lighting and plumbing fixtures can all be reused. With Boston-Centennial, revitalizing historic or stylistic components added to the building’s intrinsic and economic value. The 18-feet high exposed brick lofts all maintain unique floor plans. This same brick stores up heat during

the day and keeps the building cool at night.

For commercial property tenants, Total Cost of Occupancy is the number they are concerned about. It is composed of two ingredients: base rent plus variable costs (sometimes referred to as triple nets). Utility bills are a large part of variable costs. If a building is designed with greater energy efficiency, property management can charge the same base rent, but the Total Cost of Occupancy is lower for the tenant because their variable costs are lower. This provides competitive edge for the smart builder/developer. There is another option as well. The developer can charge the same base and decide to pass on a fraction or none of the triple net savings due to improved energy efficiency to the tenant. In this event, the additional profits would benefit the investor.

let’s Do the numbers: Nicole Breuklander heads up RVM Property Management. More than anyone, she’s aware of the cost savings due to preserving Boston-Centennial’s 100 year-old, brick walls. “Typically, triple net costs for a building of this size would be $10-11 per square feet on top of the building’s base rent. In this building, we save substantially on heating and cooling the common areas, so we operate on less than $3.95 per square foot. We’re able to charge less for triple net up front, and as energy costs rise, our costs will go up more slowly.” This is what Patrick’s means by going further than green and LEED, and delivering the benefits of long-term competitiveness to investors. “If we build smart, our investors earn more, and we can keep building smart.”

BuilDinG For a healthier Planet

There are a number of smart construction materials and coatings

Building Smart cont. (continued from page 10)

Page 18



on the market now (plaster, mortar, architectural concrete) containing titanium dioxide, which can capture and absorb organic and inorganic air pollutants after being exposed to sunlight. The degraded air pollutants then can be washed away by rainwater or neutralized by alkaline calcium carbonate in the materials. For Patrick, this is another way that developers and city planners can eradicate the challenge of urban smog. Patrick received a civil engineering degree from the University of Southern California. At heart, he’s an engineer so his thought process always goes back to solving some of the macro issues affecting the way we all live together.

Whenever possible, Chraghchian wants to purchase from local material suppliers. “I like to have relationships with local distributors. If I use an out-of-state or foreign vendor, there’s the cost of shipping, gas and staffing as well as extra traffic on the roads and waterways.”

Another concern of Patrick’s is the erroneous way that some of the industry, local governments and residents view land. “Land is not being looked at as a resource. There is this misguided focus on reducing density, but reduced density just leads to more pavement, more roads and more underground utilities.” Local preferences for low density has a tremendous affect in Southern California where many people have to drive to work, to law and dental offices and even to the grocery store. Patrick says, “This is not great planning. This is waste. Wasted resources. Wasted land.”

Take a 300-home subdivision. The person at the end of the subdivision drives everywhere. With an 18-story building, the car stays in the garage,

Building Smart cont. (continued from page 18)

saving gas, car maintenance, reducing road work and decreasing accidents. The individual saves too, but the community saves also. The way we build has a dramatic effect on green space. With the subdivision, there are set backs of 10-15 feet on 4-5 small and mid-sized buildings. With higher density buildings, 60-70 acres can be saved, enough space for a park with lakes and trees. Manhattan’s Central Park is a wonderful example. It’s 843 acres of land reserved for recreation in the middle of a densely populated city. It’s the largest city park in the world.

BuilD SMart inFluenCeS

Chraghchian’s father, Hamlet Chraghchian, has originated over $500 million in development projects and manages over $30 million in new construction annually. As a child Patrick followed his dad to construction sites and was soon sitting behind a drafting table. However, Baron George-Eugène Haussmann, responsible for building modern Paris, France between 1852 and 1870, shaped his thoughts on urban planning. Haussman’s restructuring created the long straight, wide boulevards of Paris, as well as designated green space for large parks like bois de Boulogne, bois de Vincennes and smaller residential parks for each arrondissement (district). He built Gare de Nord (1865) and Gare de Lyon (1885), providing Parisians with a modern mass transit system that is still used today.

If Patrick has his way, RVM will leave a legacy of smart building. He’s determined to make efficiency and conservation the standard.

“Land is not being looked at as a resource. There is this misguided focus on reducing density, but reduced density just leads to more pavement, more roads and more underground utilities.” Patrick Chraghchian

Page 19

France’s Baron George-Eugène Haussmann and Patrick’s father,

Hamlet Chraghchian

i http://www.eere.energy.govii http://www.eere.energy.gov/buildings/ highperformance/technologies.htmliii http://www.nrel.gov/buildings/building_ solar.htmliv http://www.schlecht.com/Vancouver_ Office_Chosen


When Cash is King cont. (continued from front page)

Not since the Tax Reform Act of 1986 decimated America’s Saving and Loans have we seen the prices of stabilized assets fall despite steadily increasing net operating incomes. Even the prices of properties with countercyclical tenants that thrive during recessions have fallen significantly. While everyone knows the axiom “buy low, sell high” very few investors are willing to put those sage words into action. In fact, next to “eat right and exercise” they just might be the most neglected four words in the English language.

Nonetheless, it is unequivocally time to buy and we are not the only ones who think so. In the midst of the doom and gloom prognostications buffeting the airways, low key, long term investors are quietly buying tens of billions of dollars of quality stocks and real estate. These are not bottom fishers looking for scraps. Quite to the contrary, they are savvy, blue chip and long-term, value-added investors.

In an October 1st interview, Warren Buffet—perhaps the most successful long term investor in the history of the planet was asked, “If cash is king, why is Berkshire Hathaway buying billions of dollars of new assets almost weekly?” His answer

was simply, “Cash is only king if you put it to work… two years ago we sat on the sidelines… the values are now there and it is definitely time to put our money to work.” When the interviewer then summarized, “There is a time to accumulate cash and the time to spend it is now” Mr. Buffett’s answer was a simple, but emphatic “Yes.” His only caveat, focus on businesses run by management teams you trust and who have proven track records in their industries.

While financial and capital markets are changing radically, operational real estate fundamentals are by comparison a constant. It is true that consumers generally spend more in good times and less in bad. However, consumer preferences regarding physical property characteriscs do not change radically based on economic conditions. Experience with millions of square feet of neighborhood retail centers has taught RVM that the properties with excellent visibility, high traffic counts, appropriate signage, easy access (signalized left turn in and out), generous glass storefronts, high ceilings, tenant mixes appropriate for the surrounding demographics and limited competition thrive while those without these attributes struggle in all but the densest urban environments.

Why Buy? While we have not completed our due diligence and—as of press time—do not know if the project will close, our escrow in Hawaii strongly illustrates the opportunities available in today’s market. The property is the dominant neighborhood shopping center in a 12-mile radius. Located on a major highway, it has the highest traffic counts in the region. The property has two signalized, left-turn in/out access points. The major tenants (Longs Drugs, Pizza Hut, Jeans Wearhouse,

etc.) have sales per square foot that are off the charts… 3-4 times the national average. Competition is severely limited due to radical antigrowth zoning. Within 10 miles there is only one commercial land parcel larger than 4 acres…Only one. And, most importantly, this opportunity is a product type RVM knows well and has a proven track record of managing, leasing and renovating.

Why now? First, the price of the property has dropped $3 million because of general market conditions that have NOT impacted retail sales at the center. Quite to the contrary, tenant sales are up dramatically. The demographic norm for the area surrounding the property is large multigenerational families. There are six to eight residents per household with an average household income in the $50-$60,000 range. As a result, virtually all of their household income is spent on necessities. Add to the equation high gas prices, and sales are up significantly because less and less families are willing to make the 24-mile roundtrip to the nearest competitive shopping centers. Secondly, there are the near double-digit, first-year returns and significant upside. Twenty-five thousand square feet of the center is vacant and an additional forty thousand square feet is leased at rates well below market rate deals completed within the last 12 months. As a result, year-five returns are conservatively projected to be in excess of 15%. These are yields that were clearly unavailable prior to the financial market melt-down and are highly unlikely to be available again once markets stabilize.

Quite simply, the time to benefit from “Buy Low, Sell High” is now. Or, as Warren Buffet aptly stated in his recent interview, “Cash is only king if you put it to work.”

“Cash is only king if you put it to work… two years ago we sat on the sidelines… the values are now there and it is definitely time to put our money to work.”Warren BuffettBerkshire Hathaway


Bail Out cont. (continued from page 5)

Page 21

everything overboard!” Precisely the reaction that sparks a run on the bank or a slump in the stock market. Those same emotions tell you to buy when the economy is thriving. But that’s completely backwards; it’s buying high and selling low. It may make you feel safe, but it does nothing for your portfolio.

At RVM, we take “buy low, sell high” very seriously. We believe that half our profit is made by buying below market, the rest by adding value, and that once we have finished renovating and releasing a project, it is time to sell. Consider our sale of Old Pasadena Plaza, the four building mixed-use historic renovation project that spans a whole city block. We renovated, managed and repositioned the properties during the precarious boom and bust of the dot.com era. Then, in January 2008, with renovations complete and over 90% of the tenants re-leased at higher post renovation rates, we sold it, earning our investors a 198% return over the 5-year holding period.

Now, for the same reasons, RVM is focused on acquisitions. This is an ideal time to pick up long-term, cash-flowing properties for less. The aggressive pricing of property is over, and sellers no longer have unrealistic expectations. Not unlike a biannual sale at Nordstrom, this is when you get high quality at a discount. For instance, we are currently negotiating a deal in Hawaii that made sense last year at $33 million. But the seller, hoping to ride the rising balloon, turned us down. Now we’re in escrow on the same property at $30 million. The income is higher, tenant sales are higher, all the real estate fundamentals are stronger, and we’re getting it for $3 million less. Why? People are running scared, and there are fewer buyers. When times are good, and that property is worth $40 million, we’ll

take that extra $3 million in profit. That’s no sleight of hand, just Econ 101. So stay calm, trust your reason, and save your heart for love.

BuY SMart

Buying low is meaningless unless you also buy smart. While you shouldn’t pass up good investments out of fear, neither should you go on a shopping spree just because things are cheap. You still want solid real estate fundamentals. Smart investing requires a level head and a steady hand. Right now, that means keeping two key things in mind:

think Counter-Cyclical. Business opportunities come in two basic flavors: pro-cyclical, which follow the ups and downs of the market, and counter-cyclical, which go up when the economy drops. By focusing on mixed use development and multiple product types, a savvy investor can always maintain balance. And in a downturn market, counter-cyclical components provide extra ballast. For instance, this is not the time to invest in sexy, pro-cyclical packages like a tourist retail center in Costa Rica or high end mall in Vail. But those same areas still have smart counter-cyclical opportunities: businesses that trade in the goods and services people always need—drugstores, grocers, barbers—and those that draw extra crowds in harder times—discount stores, rent-to-own, even pizza parlors. Think about it: when things get tight, Whole Food shoppers go to Ralph’s, and Ralph’s shoppers go to Food for Less. You might not buy a flat screen TV, but you might rent one. And you can feed the entire family for just $18 in pizza and soft drinks. In a recession, inexpensive eateries and value retailers experience an increase in profitability.

RVM has made its reputation in stable, mixed use projects, and one of our key criteria is a diversity of

No Bail Out for RVM:It’s Time to Buy!

“Now as luxury good retailers pull in their horns and close locations, we are negotiating new deals with Big 5 and expanding Rent-a-Center.”

revenue sources. By ensuring our tenant mix includes pro- and counter-cyclical tendencies, we are subject to less volatility when things change. Now, as luxury good retailers pull in their horns and close locations, we are negotiating new deals with Big 5 and expanding Rent-a-Center. We are also acquiring projects with a larger proportion of counter-cyclical tenants, like the Jeans Warehouse in the Hawaiian project, Food City in Verde Valley, and a Peter Piper Pizza in Glendale, Arizona. Of course, each of these projects has its pro-cyclical tenants—Jamba Juice, Curves, Starbucks—but that just positions us for whatever the economy does next.

look for assumable loans. Focusing on commercial properties with existing loans also makes a lot of sense right now. As long as the real estate fundamentals are sound—easy access, drive-by visibility, a tenant mix that encourages multiple stops, stable sales—the only challenge is to raise



Red Brick Tour CapturedThank you investors, sponsors and guests for a great event!

Mrs. John Cullen

Joao & Tammy Huang-Anacieto

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Copeland-Huberman Condo Tuan Nguyen

The Zulch Family

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Grant Graves

Sunny, Wade Trefethen, Tenny, Peter (photographer)

Jake Metzler with Jeanetta Crittenden Howard & Kathe Pilch

Carole Sapp

Doug with Don SloanReporters

Fung-Blatt Family checking in

The Morgan Skelton Family


is distributed free to 11,705 RVM Investors, tenants, vendors, and residences and businesses adjacent to our

properties. Locations include Pasadena and Agoura, California, Phoenix and Sedona, Arizona, and Ft. Lauderdale, Florida.

If this appeals to your market, place an ad in our winter issue.

Call (626) 744-0593 or email: [email protected]

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Demographics available upon request. is published tri-annually.

Bob Coleman, VP PADI

Andre Holley with Monica Lee Copeland

Mark Rubin

Aroon & Surinder Chinai

Grace Ma-NguyenDr. & Mrs. Albert Friedman

Debby Loesch with Bernie & Donnamae

HubermanDoug en route to Café Bizou

Albert & Maxine Friedman, Sonia Sloan, Leon & Bettie Sclar Don & Sonia Sloan

Nicole Breuklander

Christine & Natalia


the equity and wait.

Be ConSerVatiVe

Even though bankers seem to be hiding their funds in financial mattresses right now, and most builder/developers are folding up their tents to wait out the storm, there are still loans to be had, if you play your cards right. Because ours are right on the table, RVM is still able to borrow for construction and acquisition. In fact, we are currently finalizing a construction loan for 123 Los Robles and have been able to close on two more acquired properties in the last 90 days—the one in Arizona and another in Florida. As lenders and investors both know, ours is, and has always been, a clean and conservative hand.

We have an excellent track record. Projects like Old Pasadena Plaza, Park Sedona Plaza, and 35 Raymond speak to RVM’s track record for creating value in a short frame of time. RVM’s average 5-year returns have been in excess of 110% since 2002. In addition, RVM is headed by economists with experience in real estate—myself and CEO Doug Huberman—not just builders with a dream.

We design in-house. Lenders are wary when design and build functions are separate entities; there are too many ways for a project to lose time and money. By having in-house design/build capabilities—where designer, engineer, and general contractor are in constant conversation—RVM mitigates the risk of a design that’s great on paper but not buildable. (Check out our cover story, Designing and Building Smarter Environments on page 1.) Less risk makes happy lenders.

We build to hold. Two plans are always safer than one, and by building with the intention of holding the asset, we create two winning scenarios:

Bail Out cont. (continued from page 21)

sell in a strong market or manage it profitably in a soft one. To that end, we dual underwrite and dual appraise all projects. The lender is never betting the farm on a single exit strategy.

We manage our own assets. We don’t sale assets off to other groups to manage; when you buy with RVM, you get RVM, from design and build to property management.

We only seek private investors. RVM projects are based on relationships not committees. Our investors are all private individuals, or couples, who we can actually sit and talk with, not financial institutions or companies, so we are not locked into Wall Street. As a result, we’re less affected by its ups and downs.

each investment stands alone. Every RVM project is its own individual limited liability company, an independent legal and economic unit. Nothing is bundled or commingled like other financial assets. That means that no asset can be adversely affected by the activity of another or by a change in the company as a whole.

We fund our due diligence. Every discovery period is paid for by RVM. Before investors even hear about any project, we have fronted the time and money to confirm that it is sound and viable. For instance, on the Hawaiian project, we have already spent more than $150,000 on market

research, physical and environmental inspections, financial due diligence, loan assumption fees, travel, and all the other line items required to vet a credible investment. One hundred percent of that risk is ours, and we typically go through that process two to three times for every project we bring to investors.

hanG onto StronG aSSetS

Again, don’t let your emotions override your business sense. Don’t let fear keep you out of projects that have strong fundamentals. And don’t sell strong, viable assets just because you’re scared. “Unless…, says CEO Doug Huberman, you really feel you must, in which case, please, please—sell them to us.”

To learn more about RVM Investments, please contact me.i http://www.washingtonpost.com/wp-dyn/ content/article/2008/10/10/ AR2008101003050.htmlii http://www.financialweek.com/apps/pbcs.dll/ article?AID=/20080923/ REG/809239979/1001/rss11

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a Publication of RVM Associates

Greetings From DougIt’s with great pleasure that I dispatch our second issue of ,

which should arrive at your doorsteps not a moment too soon. Everywhere you turn there’s pandemonium about the economy. People are selling off assets faster than they can blink and newspapers are cranking out one story after another urging folks to bail.

At RVM, we believe it’s unequivocally time to buy and we are not the only ones who think so. Warren Buffet is snapping up bank stocks left and right and we’re getting our hands on properties at basement prices. Take a look at my front page story When Cash is King: Acquire to learn what we are buying and why. My right hand guy and CFO, Tuan Nguyen, delves deep into the heart of the bail out issue. In his Real Real Estate Economics column, Tuan talks

about Converting Fear to Opportunity: Thoughts on the Bailout.

The mission of is to create a deeper dialogue with you, the investors, clients, tenants, vendors and neighbors of RVM. And with that in mind, we open up with Monica Lee Copeland’s report on Patrick Chraghchian and his raison d’être ‘building smart’ in Designing and Building Smarter Environments on the front page.

We’re proud to introduce you to RVM investor, Keith Pomeroy: his work, his charitable endeavors and what led him to RVM in Michelle Johnson’s Investor Close-up on page 6. Journalist Gabriel Sherrill and our own Nicole Breuklander shine the light on three tenants. Sherrill converses with Trina Faust about the growth of her Curves franchise in Cottonwood, Arizona then speaks with Robert Fallon, Founder of Agoura Hills-based Classic Sleep Care on page 2. Breuklander is bubbly over Kristin Traylor and Matt Earhart who

will open up POP Champagne. Read about their hip location on page 13. We urge everyone to visit.

Some of you may recognize the name Deborah Brown from her regular contributions to Time Magazine or from Grandparents as Parents a book that she co-authored with Sylvie De Toledo. We sent Deb on A Trip Down Restaurant Row (see center spread). Discover what her fork has to say about our culinary ‘L’.

Finally, I want to thank everyone that made it out to The Red Brick Tour on May 24, which was followed by a private investor dinner at Café Bizou. If you attended, your photo might be on page 23.

Enjoy your holiday season, and be sure to VOTE on November 4. I’ll have another note for you in February.

All my best,

Documents

November 2008 Volume 1, Issue 2 Barry Freeman RVM …rvmassociates.com/themirror110408.pdf · 2016. 10. 4. · issue, you learned How RVM Got its Start and how Doug Huberman found