Why Ontario for This OC-Based Firm?

IRVINE, CA—Stillwater Investment Group recently acquired a 34,500-square-foot office building in Ontario, CA's prime business corridor. Stillwater plans to take advantage of limited new development and the diminishing blocks of space above 20,000-square-feet in the Ontario market, noting that the acquisition timing is good based on a strong resurgence of office leasing and investment activity occurring in that part of the market. Globest.com spoke with John Drachman, president of Stillwater, exclusively about this market, its challenges and goals for the firm. Those interested in learning more about the Ontario market will want to attend RealShare Inland Empire on Jan. 29 in Ontario to get important insight into this burgeoning Southern California market.

GlobeSt.com: Why does Ontario stand out as a target market for your firm?

Drachman: I've had success in Ontario working on other properties, so I've seen firsthand the recent gains in the recovering Ontario office market. With no new office-product construction planned in the Inland Empire for a considerable amount of time, we'll be able to take advantage of the decreasing availability of space. I think you'll see that as investment sales pick up in this area, it will further add to stabilization of strong office corridors such as Ontario. Plus, this asset provided the opportunity to begin building Stillwater's portfolio.

GlobeSt.com: You started Stillwater in 2014. What was your goal in forming the company? Why now?

Drachman: The goal is to create a preferred joint-venture partner for various equity sources looking to take advantage of value-add commercial real estate opportunities in Southern California, specifically initially focused on office and industrial properties. Given my professional background and where the market and general economy are today, I feel it's the opportune time to start my firm. I started in the business over 10 years ago with Grubb & Ellis as a commercial real estate broker specializing in office and industrial properties. I eventually left Grubb & Ellis to obtain my MBA and MRED degrees from the University of Southern California. After graduating from USC, I joined Greenlaw Partners and spent almost five years there focused on acquiring and asset managing a variety of commercial real estate projects throughout California and Arizona.

GlobeSt.com: What is the biggest challenge to starting a company in today's market/economy?

Drachman: Finding the right initial opportunities to acquire projects in today's competitive real estate environment.

GlobeSt.com: What asset classes stand out as the strongest opportunity, especially for Stillwater, and why?

Drachman: There are still plenty of opportunities in Southern California to acquire value-add office projects given the fact it has been the slowest product type to recover during this cycle. I've also focused a majority of my career working and developing an expertise in and relationships within the office sector, so it makes sense for me to focus on it as I grow my company.

GlobeSt.com: Can you add more on your 2015 investment goals?

Drachman: We plan to acquire additional value-add real estate opportunities throughout Southern California. An improving economy, along with improving fundamentals, will provide many sources for future acquisitions. From a company perspective, the goal is to acquire over $50 million worth of commercial real estate assets in 2015.