Three partners, (from left) F. Bruce Harlamert, Samuel E. Park and Peter N. Kutrubes, have launched a new real estate advisory and consulting firm, Boston-based Sam Park & Co., which combines the roles of traditional real estate advisors, engineering firms, urban planners and equity sources.
Samuel E. Park’s colleagues thought he was crazy. How could he launch a new real estate company when the market was scraping the bottom?
Park, on the other hand, thought the timing was perfect – proof that there are still major players looking to invest in the market.
“We figured that there’s a range of development deals that are too risky, too unknown for the institutional players and too large for the smaller players,” Park said of himself and his fellow founding partners. “We want to bridge that gap.”
The resulting firm, Boston-based Sam Park & Co. – one that combines creative approaches to development and provides seed capital and market intelligence – has broken into a new frontier in commercial real estate. Park says that his mission is unique in Massachusetts and New England.
The new company, launched earlier this year, is developing at a time when commercial real estate is changing. Globalization, growing capital markets and the development of real estate investment trusts are changing the cash flow from rigid, real assets to liquid assets and investments.
“The whole paradigm has changed,” said Upendra Mishra, spokesman for the company. “Before, one of the main ways to evaluate property was to find out: Is the rent going up in the next five years? Now, it’s not as important.”
‘Unique Niche’
Park said the future of enhancing portfolio value is through a different approach, by finding the hidden value of a property. Old junkyards, granite sites and landlocked parcels all have a future in Park’s eyes. It just takes the combined approaches of engineers, urban planners and real estate advisors to find it.
“The commercial real estate market has changed significantly during the last few years where rent increase is no longer the means to add value to a property; capital markets are unwilling to take speculative risks and the cost of the entitlement process is prohibitively expensive,” Park said. “We have carved out a very unique niche in the real estate development business … in an environment where the cost to analyze the feasibility of a project is prohibitive, we are enabling property owners to see a path through the predevelopment and development processes.”
It’s a premise he sold to his two partners, F. Bruce Harlamert and Peter N. Kutrubes. Park lured Harlamert away from Spaulding & Slye Colliers, where he worked as a commercial real estate broker. Harlamert also has worked as a broker for Nordblom Co. and Leggatt McCall/Grubb & Ellis. Park also convinced Kutrubes to leave his post of manager of traffic operations at MassHighway.
Harlamert and Kutrubes are now principals of Sam Park & Co.
Park, the president and chief executive officer, has worked in the field for years. Locally, he served as vice president of Boston-based Hall Properties and as a principal and senior vice president of Rizzo Assoc. in Framingham.
The new company doesn’t broker. Instead, it looks for challenging development opportunities, creates creative solutions and provides seed capital to jump-start a project. One of the firm’s best examples is a junkyard in Waltham.
“No one would touch the junkyard or the [adjacent] granite hill with the costs and no access,” Park said of the site, one of the company’s first projects.
Park and his partners looked a little closer and found that the old dump was, in fact, a clean site for development – one that just happened to be located along Route 128. The problem of the nearby granite site also had a solution – the company, citing a granite shortage in New England, made plans to mine the parcel.
It was the type of development that institutional players couldn’t pursue because there was no guarantee early on in the process, and one that the smaller players couldn’t afford because of the feasibility analysis, according to Park.
In another example, Sam Park & Co. looked at a landlocked 200-acre parcel along Interstate 495 South. The partners worked with the state to realign a road to create a front door to 500,000 square feet of retail or commercial space.
“[Park] has played a major role in resolving difficult infrastructure and zoning matters that would have defeated lesser talents,” said Jay Doherty, president of Boston-based developer Cabot, Cabot & Forbes of New England. For example, he noted, Park helped redevelop the Jordan Marsh warehouse in Newton into first-class office space.
Right now, Park’s company is working to reinvent a 30-year-old, 400,000-square-foot distribution facility. The company is also working with Polaroid and local municipalities on master plans.
“What we do best is creativity, finding seed capital and enabling a development to get off the ground,” Harlamert said.
