November 15, 1999

For Smith, patience and integrity have paid off

By MARC STILES
Journal Real Estate editor

On the wall of H. Martin Smith Jr.'s office hangs a framed $5 bill.

The bill, which came from Smith's professional mentor, Henry Broderick, is more than a memento of a football bet. It is symbolic of the integrity for which Broderick is remembered and for which Smith and his company are known today.

In 1975 Broderick and Smith, as they often did, bet on a college football game. Smith, who had attended the University of Washington, picked the Huskies against Cal. Washington won and the following Monday Smith ran into Broderick at lunch at the Harbor Club. Smith ribbed his former boss and told him had better pay up.

Smith

The next day Smith arrived at his office and was told that Broderick suddenly had died. Stunned by the news, he made his way to his desk and found the $5 bill. Attached to it was a neatly penned note, which reads: "A fool and his money are soon parted."

"HB," Smith said, always paid his debts. He was a straight shooter whose integrity shaped Smith and his business philosophy. It all goes back to excellence in property management, a fundamental that Broderick always emphasized as a way to build business.

"Henry said, 'Do a good job managing their property and you'll get their business,"' said Smith.

Today, the 25-year-old Martin Smith Real Estate Services has become a dynamo in Seattle real estate. The 140-employee company still performs plenty of property management functions, managing nearly 6.5 million square feet of office and industrial space.

But in recent years Smith's sons, Greg and Mickey, and their colleagues have -- with their father's guidance -- led the company to a new pinnacle. Martin Smith Real Estate Services has become one of the most active companies not only in the acquisition of property but also in the development of commercial real estate.

"Martin always said, 'The cream rises to the top,"' said Greg Smith, who runs through a list of some of this dad's philosophical tidbits that still guide the company. "Give it time. Have patience. Work hard. Enjoy what you're doing. And don't tell lies because you'll forget what you said.

"Yes, I'm his son," he added, "but I still don't know anyone that has more integrity and loyalty than Martin."

Smith's straight-up reputation saw his business through tough times that spelled the end for other real estate companies. Before the big crash in the late 1980s, Martin Smith had begun some development work. He invested a good sum of money into renovating the Broderick Building, 1601 Second Ave., but when the work was finished rents sagged. The project was not going to pencil out.

NAIOP awards also honor Opus and Pacific Place Opus Northwest was named Developer of the Year and Pine Street Development's Pacific Place was honored as the Real Estate Deal of the Year Friday. The Washington State Chapter of the National Association of Industrial and Office Properties also honored Martin Smith Real Estate Services' Seattle Trade and Technology Center as the Central Business District Office Development of the Year and The Boeing Co.'s Administrative Offices as Non-CBD Office Development of the Year. Benaroya Capital Co.'s Eagle warehouse was named Industrial Development of the Year. Willows Commerce Park Phases II and III, Buildings A, B and D, developed by Opus Northwest, won the High-Tech/Flex-Tech Development of the Year. King County Councilman Rob McKenna was selected as the Public Official of the Year. The awards were handed out at NAIOP's Night of the Stars banquet at the Paramount Theatre in Seattle.

Smith went to his lender, Seafirst Bank. Bankers told him not to panic. Just continue managing it as he would normally and things would work out. Eventually it did when the Alhadeff family bought the building.

The Smiths' good name bought the company time. But, Greg Smith said, there was more to the story than that. "Martin didn't run from what happened at the time. That meant a lot to the bank."

The company survived and today is building one new mixed-use building, the 20-story Millennium Tower, and has plans to build several other commercial developments as well as expand its holdings.

It's a long way from 1868 when Martin Smith's great grandfathers arrived in Seattle. One of them, Hans Martin Hansen, bought from Doc Maynard 300 acres on Alki Point. The other, Leonard "Purley" Smith, became Seattle's third mayor after opening the pioneer town's first jewelry story near where Millennium Tower is going up at Second Avenue and Columbia Street.

The Olson clan hung on at the windswept point that the initial settlers in the Denny party fled after one winter. The difference between the two groups can be found in their backgrounds, Smith explains. His blue eyes twinkle. He laughs and notes that his family's Norwegian stock made the difference.

Martin Smith inherited his forefathers' persistence and drive. Before going into business, he served in the Marine Corps in World War II. He was recalled to fight in Korea where he won the Bronze Star for leading the charge to retake a hill. He tells stories of splitting wood for $3.50 a cord and grading fish for a living.

He went to work for Broderick just before he was to graduate from the UW. "I was just about out of money and desire to stay in school," he recalled, adding that he still is one course shy of graduation with no plans to go back.

Initially, he thought he had made a great move by joining Broderick's company. Then he found out his monthly salary of $185 was considerably less than the $300 he had been able to cobble together from his athletic scholarships and other jobs.

"I wondered what I was doing," he said.

Smith held on. He was patient. He was, after all, learning from the well-respected Broderick. Eventually, Broderick's company was bought out by Coldwell Banker, which wanted to close the Seattle office and transfer Smith to San Francisco. He knew that would never work because of the starkly different ways he viewed business and the way Coldwell Banker did.

"There was nothing wrong with them," Smith said. "They were good people. It's just that our firm relied on property management to deliver business. They didn't."

Smith pauses and grins again. "I will say we ended up with all of Coldwell Banker's business -- most of it anyway."

Still, it wasn't an easy decision to strike out on his own. Two of his four children were in college and a third was about to enroll. He remembered how he and his wife lay awake three nights in a row pondering the future.

"We elected to go for it," he said.

Today, as Smith's company prepares to further expand its reach, it is guided by a mission statement etched on a piece of glass that hangs in front of a portrait of Martin Smith Jr.

It reads: "We pledge to protect and enhance the value of our clients' real estate assets with integrity, honor and commitment."

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