"I like to keep everything in little pieces," Donald Koll says. "Little companies. Even the biggest company, our property management company, has some little pieces to it." He says that even though he is often traveling in Mexico, he keeps track of his real estate kingdom by delegating authority.
"We have great people and each one runs their little show and reports on how they do," says Koll. "So, it's easy figure out who's winning and who's losing. And if a guy's losing too much, then you gotta have a chat with him and figure out what's going on."
While some real estate specialists questioned whether Koll might be too optimistic about the future of global real estate markets, others hail him as an innovator and trendsetter.
"Visionaries, as Jonathan Swift said, are people who can see things invisible--and Don Koll is proof of that," says Sanford Goodkin, a real estate consultant in San Diego.
Because fewer institutions hold more and more of the world's real estate, Koll could have perfect timing, positioning his companies to reap a healthy windfall of profits, Goodkin says:
"If you are a corporation with real estate needs either here or in Asia and the first name that comes to your mind is Koll because you've seen it so damn much, and it's an American name, a name of integrity, well, it's clever what they are doing."
Clever real estate dealings have been in the Koll family for generations.
In 1889, Koll's grandfather, August, founded A.J. Koll, a lumber business in Los Angeles. Koll's father, Milton, took over the business, and Koll's brothers and cousins all worked in their own real estate related-business, sometimes building apartments or other projects.
"I might have gotten this business by osmosis," jokes Koll.
Milton Koll died just before his son's first year at Stanford University, and the lumber company was later liquidated. After Koll graduated with a degree in economics, he joined the Air Force to fly jets. When he was 22, Koll married Dorothy Brittingham, whose great-grandfather was a governor of Chihuahua, Mexico.
At 25, Koll came to Orange County where he joined a cousin in building houses, including a custom home in Newport Beach for actor John Wayne. In 1962, after working four years for his cousin, Koll struck out on his own, and with just $1,000 formed the Koll Co., a general contractor. One of his first projects was for Knott's Berry Farm amusement park, where he built the log ride and the replica of Independence Hall.
Calling Koll "a great friend of mine and an aggressive, friendly competitor for 40 years," Bren praised Koll's recent projects, especially his large resorts in Mexico, and predicted his one-stop shopping plans will be successful.
Koll, who is a director of the Irvine Co., got a big break in 1967 when Bren sold him 100 acres near John Wayne Airport, where he built his firm's first big development success, the Airport Business Park.
In 1972, along with joint venture partner Aetna, Koll bought another 125 acres along MacArthur Boulevard, which Koll developed into a large office tower project.
Koll, known for his love of the deal, has built his firm with other people's money--usually joint venture partners with deep pockets.
Koll not only prospered during the early 1980s, but also survived the real estate downturn by finding partners to put up cash for projects. Koll would provide the real estate expertise and the two typically would split the profits.
"He knows how to manipulate money," says Alfred Gobar, a real estate consultant who has known Koll for more than 30 years. "He's pretty adept at using other people's money. And not always to the partner's advantage, like Columbia Savings & Loan."
Once one of the nation's most profitable thrifts, Columbia sustained major losses on its office tower projects with Koll when the real estate market soured. It later failed largely because of its huge investments in junk bonds.
"We typically have a joint venture partner that puts up the money and takes the liability," Koll says. "In that case our financial partner went broke. It didn't have anything to do with us."
Another deal--plans to buy 15,000 acres and 30 buildings for $532 million from Union Pacific Corp.--fell apart in the early 1990s when Koll couldn't come up with the promised cash because a financial partner backed out.
Although Forbes magazine in 1987 said Koll was worth about $300 million, he disputes that figure, saying the magazine included the gross value of his land holdings but not the mortgages. But he won't reveal how much he has, or what percentage of his net worth is in his companies. (He has also since fallen off the Forbes 400 list.)
He owns 100% of the Koll Co., the holding company. He also owns 48% of the operation known as Koll, once known as Koll Management Services Inc., the property management firm. Freeman Spogli & Co., a Los Angeles investment banking firm owns another 48%, and employees own the rest.