December 9, 2004
By JANET PARKER
Firm: Equity Office Properties
Position: Senior vice president
He holds the rank of a senior vice president. And that's a title of clout when the corporation is the largest real estate investment trust in the United States. At his post, Patrick Callahan carries the Equity Office Properties flag of its Seattle-centered region.
Equity Office, the country's largest owner and manager of office buildings, has amassed a heavyweight portfolio exceeding 700 properties in top metropolitan markets. Of that, Callahan's responsibilities reach to 98 buildings encompassing 17 million square feet, primarily in the downtown markets of Seattle, Bellevue and Portland.
Callahan carries a breadth of experience many newcomers would like to pick. He has ridden a bronco industry over his career, with ups, downs and twists that have left many in the dirt. Passing on a tidbit to those just mounting their careers, Callahan speaks of the personal virtues of patience and tenacity. "When you go through your first bad market, it can feel like it's never going to recover," Callahan says. "You need to realize the economy does rebound, and there's always reason to have an optimistic view."
Optimistic is a good description of Callahan's opinion of the greater Puget Sound, which has been experiencing a bounce on the heels of a significant bad market.
"The biggest story in 2004," says the EOP exec, "has been the dramatic recovery in Bellevue and the overall Eastside office market. Essentially, vacancy moved down over the last two years from roughly 30 percent to about 10 percent. The market there recovered even more quickly than Equity Office had anticipated," Callahan says.
In 2004, under Callahan's watch, Equity Office brought Symetra Financial to downtown Bellevue a huge shot in the arm to the city. "Symetra chose downtown Bellevue for a variety of reasons: the amenities and transportation infrastructure, and the fact they could assemble the amount of space they required," says Callahan.
When the ink was dry, the newly-formed insurance and investments company had leased 289,360 square feet in two Equity Office-owned buildings single-handedly dropping the vacancy rate in downtown Bellevue by about 6.3 percentage points.
And what about downtown Seattle? Callahan is quick to shy from predictions, but he says he can see a "very bright future" for the Emerald City. "But, our ability to claim that future is dependent upon solving transportation problems and work-force housing," says Callahan, echoing agendas of two organizations he is a member of the Urban Land Institute and the Downtown Seattle Association.
Callahan says Seattle must increase its use of public transportation, such as light rail, and rebuild Alaskan Way. And, it must expand the base of affordable housing in downtown and the surrounding areas to service the work force. "These aren't just Seattle's problems," says Callahan, "they're serious issues occurring nationally, and we have to find ways to change the trends and increase the vitality of Seattle."
Market growth is an operative term in Callahan's business. A massive amount of capital is chasing real estate investments throughout the United States, and Equity Office is in the hunt to find assets to satisfy the appetites of its investors.
"As properties that fit our profile come up for sale, we bid on them," says Callahan, citing two properties recently acquired along Kruse Way in the Portland market. "However, a big part of our responsibility to our investors is to maximize our existing portfolios."
For all the problems and challenges inherent to the business of commercial real estate, Callahan says many positives have evolved over his career.
"One of the biggest changes is the transparency of information. It's much greater now than 10 to 15 years ago," says Callahan. "On the Internet, information is widely available on vacancy rates and deals being done. It's disciplined the markets to where it's less and less likely to see new construction taking place until warranted because the market conditions are more clear."
Callahan says he would have been surprised in his college days if he had known where he'd end up. Originally a student of urban studies at Miami University, he anticipated a political career in his native city of Cincinnati. But during the course of his studies he says, "I discovered the real estate components of cities and decided that's what I wanted to do."
Is there anything he feels he's missed, someplace left to go, something left to do? Not really, he says. His work at Equity Office is his passion. With his wife, Karen, and four children, Callahan says he enjoys his family life in Seattle.
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