Land Titan Marks a Milestone
As firm turns 75, chief details how far industry has come

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Much has changed in Portland since Norris, Beggs & Simpson – Portland’s largest commercial real estate firm – was founded in 1932.

Many of the downtown office buildings it managed and sold in its early years are gone, replaced with much larger mixed-use complexes, some of which it is helping to market.

“There was a time when you couldn’t even finance a mixed-use project. Now they’re mainstream,” company President Clayton Hering said Monday while discussing the company’s 75-year anniversary with the Portland Tribune.

Today, the company is noted for brokering such landmark projects as the downtown ODS Building and for currently marketing three of the five Brewery Blocks.

One thing has not changed, however – the company’s commitment to the marketplace, regardless of the prevailing political winds. In the 1950s, co-founder George Beggs helped finance the Lloyd Center in Northeast Portland, despite opposition from the downtown establishment, which feared it would hurt their retail sales.

Hering is not afraid to rock the boat, either. Several times during the interview, he diverted from discussing his company’s history to question a politician or policy decision he disagreed with.

Speaking about a City Council member he declined to name but who obviously was Sam Adams, Hering lamented the opposition to big-box stores – such as Wal-Mart – without acknowledging that shoppers benefit from their lower prices.

Hering also lambasted Metro’s efforts to turn small-town Damascus into a big city, predicting that large employers will not move there because Clackamas County cannot afford to build a freeway there.

“That decision was social engineering,” he complained.

Make no mistake: Hering supports the broad policies that have made Portland and Oregon national leaders in the sustainability field.

He praises the state land-use planning laws that seek to preserve natural resources, commends the urban growth boundary for increasing density; and believes the mass transit system is making downtown an attractive place to live and work.

At the same time, Hering believes that too many government planners and decision-makers do not understand how business works. He is baffled that the city issued a May Day parade permit for 5 p.m., allowing the marchers to snarl rush-hour traffic.

“What kind of message does that send to employers and workers trying to get home? You want them downtown but you allow their commutes to be delayed, maybe for hours?” he asks.

The company’s belief in the innate wisdom and resilience of the marketplace has been the key to its longevity. Norris, Beggs & Simpson came into being at the height of the Depression because its founders had a deep faith in the underlying strength of economic forces.

Over the next three-quarters of a century, the founders and the subsequent owners made a series of strategic decisions to take advantage of financial trends and grow into one of the city’s largest, most diversified real estate companies.

The decisions included opening offices in both San Francisco and Seattle in the 1930s after being retained by the New England Mutual Life Insurance Co. of Boston to lease, manage and sell its real estate in those cities. Expansion in Southern California followed as the markets there heated up from the 1950s to the 1970s.

Hard times came, too

The company also has chosen to close offices in response to economic conditions, including pulling out of California in the 1980s when interest rates shot up to double-digit figures and development slowed.

Hering remembers the difficulty of restructuring the company in those days, especially because he was the one who pushed for the Southern California expansion in the first place.

“I wore a pin that looked like a ‘w’ with a line through it. When people asked me what it stood for, I told them my ass was on the line,” Hering said.

The company not only survived but flourished. Today, its seven partners are mostly third- and fourth-generation owners.

Hering joined the company in 1972 after earning a bachelor’s degree from Dartmouth College in 1963 and serving in the U.S. Marine Corps for three years, including service in Vietnam, where he rose to the rank of captain.

He was named vice president and regional manager of the Portland office in 1975, became a partner the next year and was named president in 1989. Under Hering’s leadership, Norris, Beggs & Simpson has expanded its operations to include an investment arm called NBS Real Estate Capital.

“If you’re going to be in a position to control your destiny, you have to control capital,” he said, noting that his company owns no assets and must raise its revenues from brokerage, management, leasing and other real estate-related fees every year.

Firms move faster, farther

The company also has moved aggressively onto the global stage, affiliating with two financial networks that wheel and deal around the world – NAI Global, which has 300 offices around the world, and Strategic Alliance Mortgage, which provides up-to-the-minute market information anywhere it is needed.

“The ability to acquire and process data quickly is vital in the global economy. The clients are much more sophisticated than they used to be, and you have to be able to move like a gazelle to keep up with them,” he said.

As the company marks its 75th year, Hering’s confidence in the local and global markets remains stronger than ever.

As proof, he points to the recent record-breaking real estate deals involving the Blackstone Group. In what was the largest leveraged buyout in U.S. history, Blackstone bought Equity Office for $39 billion in mid-February.

Blackstone then turned around and sold off many of its new holdings, including 46 buildings and three development sites in the Portland area to Shorenstein Properties for $1.13 billion.

“They didn’t even have the time to do the due diligence on some of these sales. If I was 20 or 25 years younger, I’d be very excited. Right now I’m just holding onto the reins and yelling, ‘Whoa,’ ” Hering said.

Portland Tribune - May 11, 2007 - Jim Redden

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