October 31, 1996

PINNACLE REALTY WANTS TO REACH THE PROPERTY MANAGEMENT PEAK

BY MATT BROWN
Journal staff reporter

Pinnacle Realty Management Company is one of the leading property management and brokerage firms in the Pacific Northwest. A third party fee manager, Pinnacle owns none of its own real estate.

Ward McLain, president of the Northwest Region, says this is important because it allows Pinnacle to focus entirely on the client.

"Other property managers who own real estate sometimes fall into a trap of worrying too much about their own investments instead of their clients," he said.

The need for third-party property management firms in the United States has faded somewhat in recent years because of the entrance of Real Estate Investment Trusts (REITs) who self-manage the properties they acquire. But Pinnacle has managed to thrive and grow.

"Our corporate culture is entrepreneurial and our managers are very quick on their feet," McLain said. Extreme flexibility is key to the firm's success, he said.

In 1979 Pinnacle's CEO John Goodman started G.F.S., a multi-family property management firm. By 1985 the company was managing nearly 5,000 units in the Puget Sound area. That same year, Stan Harrelson, now Pinnacle president, joined the company and aggressively pursued properties outside the region, branching out to other northwestern cities such as Portland, Richland, Kennewick and Pasco. Later the firm went into Phoenix, Las Vegas and California cities and by 1990 was handling 20,000 multi-family units throughout the west.

On requests from clients, G.F.S. expanded nationwide into such areas as Atlanta and Dallas and by 1994 had approximately 35,000 multi-family units under management. In 1995, G.F.S. acquired Sovereign National Management Company and renamed the whole company Pinnacle Realty Management.

Currently Pinnacle manages 70,000 multi-family units and nearly 12 million square feet of commercial space.

In 1983, CEO Goodman also started actively brokering in the Puget Sound area and by 1990 the company was involved in brokering $100 million dollars of real estate. Pinnacle is currently the second largest multi-family brokerage firm in the Northwest, according to Dupree + Scott Apartment Advisors.

The Northwest is the company's largest region by volume with nearly 20,000 multi-family units between Washington, Oregon, Idaho and Western Canada -- 14,000 of those in the Puget Sound area.

"Our goal is to reach 25,000 managed units by the end of 1997 with brokerage sales volume in excess of $120 million," McLain said.

Pinnacle's regional and corporate headquarters recently moved to the Court in the Square Building in Pioneer Square. The firm was located in Tukwila, but outgrew the space. "We felt we needed to move to downtown Seattle to be more visible and we deserved a more stimulating environment," McLain said.

Seattle Mayor Norm Rice spoke at Pinnacle's recent open house about its move to the downtown corridor. "It's a ripple effect," he said. "Seattle is a great and viable place to do business and when a company of Pinnacle's stature comes in, others come as well."

Pinnacle's property managers, located in Seattle, Portland, Tri-Cities, Boise and Vancouver, B.C., have an average of 10 years experience in the field and over six years with the company. Brokers average eight years of experience, with five of those years at Pinnacle. The company's property management and brokerage sides are distinctly separate.

Currently Pinnacle is involved with the 620-unit Signature Point project in Kent and is also management consultant to the Seattle Housing Authority for the revitalization of Holly Park. The Holly Park housing project is scheduled to be rebuilt as a mixed-income neighborhood with roughly 1,200 homes for sale and rent.

Other local clients of Pinnacle include: City of Tacoma, King/Snohomish County housing authorities, Quadrant, Deal Development, Wes Uhlman and Murray Franklyn.

In the Northwest 90 percent of the company's revenue comes from multi-family units, but Pinnacle plans to expand its commercial division and recently hired property manager Kelli Norris. Pinnacle intends to be managing an additional 450,000 square feet of office and retail property in the near future.

The future of Pinnacle looks bright, McLain said. "We are a pure service business and I foresee Pinnacle reaching new heights in the years to come."