December 9, 2004
By JANET PARKER
Firm: Broadreach Capital Partners
Position: Managing director
By most standards, Eli Khouri has had a distinguished career. And it's not over yet.
Prior to his current position, Khouri was chief investment officer of Spieker Properties, a multi-billion-dollar real estate investment trust traded on the New York Stock Exchange. Following Spieker's merger into Equity
Office Properties in 2001, Khouri and his cohorts at Spieker founded what is now a $314 million discretionary real estate fund known as Broadreach Capital Partners LLC.
But, ask Khouri if as a college student he thought his life's work would include involvement in repositioning a $750 million industrial portfolio, or the acquisition and development of $5 billion in assets, or a $7.2 billion merger, and he quips, "I had no earthly idea."
Of his years at Stanford University, Khouri says, "I went there to study history and economics. Then I made a snap decision to move toward something with more rigor a build-upon discipline." In the end, it was a bachelor's degree in civil engineering the young man carried from the distinguished institution.
Diploma in hand, Khouri signed on as a project manager for a major West Coast contractor, where he cut his commercial real estate teeth on the pre-development and construction of high-rise offices. The next big step was Spieker Partners.
While Khouri's Palo Alto, Calif.-based Broadreach may be substantially different from Spieker, he says there was a major carry-over in culture. "We have a very unique corporate identity and a very flat organizational structure. While there are some conference rooms where we can go for more privacy, our headquarters is one big, open office. We can all hear and communicate with each other freely. It keeps us on the same page."
Khouri says of his working relationship with his partners (former players at Spieker), John Foster, Warren Spieker Jr. and Craig Vought: "We don't have a real formal structure. We may each head up different functions, but we share the total responsibility of the firm. We deliberately didn't compartmentalize too much because we all want to do parts of everything,"
At the edges of management and corporate culture, many of the similarities between Spieker and Broadreach blur. "At Spieker," Khouri reminisces, "we were running a company with almost 600 employees and $7 billion in real estate assets that we managed in-house. Now, we're strictly out doing deals, and we outsource areas like leasing."
Established in 2002, the young private equity firm has been cast on the concept of buying distressed, urban properties at deep discounts and betting on economic recovery. "That's certainly a significant component," says Khouri, "but we're not limited to that one dimension."
The co-founder sees his company as being a value-added investor acquiring inherent value with some risk, then creating more value through expertise in management. "Buying distressed properties falls into that category," offers Khouri, "but then so does buying land in need of entitlements and taking the property through the process."
Khouri enjoys process and problem solving. When speaking of his choice in education, he says, "The great thing about civil engineering is that it teaches you a very general problem solving approach that is applicable across the board in business."
While some may envision an engineer as strictly a left-brained, linear thinker, Khouri sees himself as possessing a balance of qualitative and quantitative thought. "My business is a mix of art and science, of being able to see the big-picture macro outlook as well as having a solid understanding of detail and the ability to pull the two together in good investment decisions."
If a career in commercial real estate had not come to pass, Khouri says he could see himself in medicine. "Probably as some type of surgeon," he speculates, drawing parallels between medicine and real estate. "It would demand a lot as a person while offering opportunities for continued learning and growth. And, it's something needed by others."
Not that Khouri sees himself as an altruist. "I think people choose careers believing they'll do well for themselves. And, the universe I'm in offers me that," he says. "The driving force behind it all is my family."
Khouri's German-born wife, Carli, and their two daughters are the center of his universe. "I do a good job because it allows me to take care of my family and because it's interesting and that's plenty of motivation for me."
Khouri said his life outside his career could be considered boring by some. While personally he admits to an affinity for outdoor activities, such as hiking and biking back country roads and woods, he says, "I like to spend my time with my family. On the weekends we find something that's going to be entertaining to my girls (ages 4 and 7), and that's what we do.
"Maybe someday I'll want to do something like climb a mountain, but for now there's nothing compelling that I haven't done that's more important than my focus on my family, marriage and work."
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