New player emerges on Aspen’s real estate scene
February 12, 2010
ASPEN – There’s a memorable line in the movie “Butch Cassidy and the Sundance Kid” where title actors Paul Newman and Robert Redford realize they are in for a challenge. Bolivian troops hound the bank robbers relentlessly, keeping them on the run. The robbers ask themselves in amazement, “Who are those guys?”
The same could be asked about entrepreneur Marcos Rodriguez. He’s burst onto the media and real estate scene in Aspen over the last year, first buying up radio and television stations, then acquiring five small real estate firms.
At a time when the real estate industry in Aspen is contracting, with some smaller firms disbanding and real estate agents joining larger brokerages, Rodriguez is building a real estate empire using a slightly different model.
So, exactly who is this guy?
Rodriguez, 51, was born in Cuba four months before Fidel Castro seized power. As Castro clamped down on private enterprise, he nationalized the radio stations, including Rodriguez’s father’s station in the city of Holguin.
“That started the process of us arriving in Miami in August 1962, just 60 days before the missile crisis, which slammed the door on large-scale emigration,” Rodriguez said.
He was four years old at the time. His dad was 35, with a wife and two young sons, no job, no English skills and $10 in his pocket. The family members only had two sets of clothes apiece.
“However, he brought with him the American dream,” Rodriguez said.
The family ended up in Texas, where his dad worked for a radio station that he eventually bought. Marcos took over the operation as an adult, then started amassing a broadcasting empire. He eventually employed 265 people at radio and TV stations in Texas, Florida and Nevada.
He sold off radio and TV stations in the late 1990s and retired at age 40 with his wife and two young sons, first to Switzerland. He missed America, however, and when he returned he was attracted to Aspen. His family had visited before and found it a welcoming place.
They moved to town in 2001 and by 2003, Rodriguez discovered “that retirement isn’t for me.”
“We were at the dinner table, and one of the boys looks up and says to me, ‘Dad, what do you do?’ That was like, ‘oh, wow,'” Rodriguez said with a laugh.
He decided after that moment to raise his boys with an appreciation of business and entrepreneurial spirit, and began seeking his niche in the Roaring Fork Valley.
He started an Internet Service Provider called Everwave that guarantees service from local technicians 24/7 and markets itself to people who cannot afford down time – lawyers, bankers, stockbrokers, high-end hotels and the like. Then he started building a broadcasting business, acquiring KUUR, KSNO and TV Aspen Channel 19 along with the website AspenGlenwood.com.
When Rodriguez started adding up his potential advertising revenue, however, he determined media wasn’t the most lucrative business he could pursue. He readjusted his sights. The price per square foot of some Aspen real estate had always amazed him; average sales prices for Aspen homes still top $1,100 per square foot, despite the recession.
“It’s the biggest industry in the valley in terms of raw dollars,” Rodriguez said of real estate. “If I want to be a businessman in the valley, I might as well be in the biggest industry.”
He wasted no time acting on his plan. Rodriguez acquired five small real estate firms in Aspen in cash deals between September 2009 and January 2010. His first step was acquiring Aspen Homes Realty in September. He started Aspen Preferred Properties in November and Aspen Business Brokers in December. He acquired a long-established firm, Aspen Real Estate Co., also in December, and added Wendy Lucas and Co. in January.
But his interest in real estate firms isn’t solely about the money. Rodriguez considers himself a marketing man at heart. He sees an opportunity to approach real estate sales in a new way.
“In marketing you get excited about new ideas,” Rodriguez said. “I thought this might be an industry that’s really ripe for change and ripe for innovation.
“So much of real estate marketing right now is trapped in the 20th century,” he added. “Almost all brokerages seem to be advertising similarly. I’m racking my brain almost daily, ‘How can we reinvent this?'”
He envisions a melding of his real estate and media empires to market real estate. The challenge for many real estate agents is the high cost of marketing their properties, mainly through print media.
Rodriguez believes he can create more enticing marketing via broadcast media, and do it in a way that doesn’t break the brokers. “If we combine media with the brokers, we change the entire cost dynamics,” he said.
His plan is for his radio stations, TV station and website to advance his five brokerages tremendous amounts of advertising so that the real estate agents don’t immediately have to pay for their ads. One branch of Rodriguez’s empire carries the load for the other branch and, in theory, the favor is eventually repaid. Rodriguez is the big winner. He collects real estate commissions and advertising revenues.
He is so confident in the theory that he is seeking a patent on the process. But Rodriguez also acknowledges there is always risk; Babe Ruth hit a lot of home runs, he noted, but he also struck out a lot.
Another centerpiece of Rodriguez’s business model is creating a “house of brands” rather than a “branded house.” Real estate firms often concentrate real estate agents under a common name, which they try to brand as the best in the business.
The five firms owned by Rodriguez will remain independent under his umbrella, each with its own managing broker. They will retain their separate offices and names rather than combine as “Rodriguez Real Estate” or the like.
“Each brokerage has a little bit of specialization or a forte or a compatibility to a certain owner or a certain property,” he said. “So strategically we find ourselves quite nimble and quite competitive from having a house of brands rather than a branded house.”
Rodriguez said he hopes his approach changes the Aspen real estate industry. When asked if he thinks he is viewed as a threat in the real estate industry, Rodriguez replied, “You know I have no idea. I haven’t felt any hostilities, really. I’m probably just too small for anybody to worry about.”
Right now there seems to be more curiosity than hostility or anything else about Rodriguez. Random chats with real estate agents indicate they are aware he is snatching up brokerages, but they aren’t familiar with his business model. There is largely a “show me” attitude in the industry.
What is clear is that some of the leading brokers in Aspen believe the changes that swept the industry last year aren’t finished yet. They anticipate more contraction in 2010 than an expansion like Rodriguez is pursuing.
Real estate sales volume managed to top $1 billion in Pitkin County again in 2009, but it was 21.5 percent below the sales level of 2008, which trailed the years in the middle of the decade by a large margin.
Brent Waldron, managing partner in Aspen for Chaffin Light Real Estate, said the number of showings this winter is double to triple what they were for similar properties last year. Shoppers are sincere but cautious, a trend he sees continuing through the year until the national economy strengthens.
“I don’t see a huge surge in 2010,” he said.
Bob Starodoj, president and CEO of Mason and Morse Real Estate, said in an interview last month the roller coaster ride for the real estate industry during the middle of the decade through now has been “the most volatile I’ve ever experienced” in his 40 years as an agent in Aspen.
The recession has affected even the largest firms. Mason and Morse downsized in some ways, such as closing its Basalt office, and cut what expenses it could in 2009. The moves have paid off now that the market is bouncing back a bit. “We’re on the mend here,” Starodoj said.
Chaffin Light’s plan to remodel a new office space in Aspen and relocate there is now on hold, Waldron said.
Industry-wide, the effects of the slump were apparent. Many firms reduced support staff. The number of firms that produced glossy property guides went from 10 or 15 earlier this decade down to a handful this winter.
“The fat days are over for a while,” Waldron said. “People will expand very cautiously.”
Waldron was a casualty of one of the biggest changes in the Aspen real estate industry in 2009. He was once a partner in Coates, Reid and Waldron, a former powerhouse firm that was closed by its corporate owner last year. Waldron joined Chaffin Light; his former high-profile colleagues Brian Hazen and Robert Ritchie joined Mason and Morse.
In the other major move of 2009, Morris and Fyrwald obtained the Sotheby’s International Realty franchise when Aspen Land and Homes closed. Morris and Fyrwald added 25 brokers over the course of the year, but also undertook some consolidation. It parted ways with an affiliate in Carbondale and is in the process of closing its office at Willits. It is consolidating its midvalley presence at its 5,000 square-foot office at Aspen Glen.
Those might not be the last big moves in the recession-plagued period.
“I think you’re going to see some more contracting,” Starodoj said.
Waldron agreed, saying further consolidation appears inevitable as the smaller firms lose their ability to ride out the recession.
“A lot of people [at smaller firms] are holding on, anticipating a quick recovery,” Waldron said. Once they realize that isn’t coming, they will likely sign on with larger firms or put their real estate license in the closet and rely on another job.
Craig Morris, a partner in Morris and Fyrwald, said he is already seeing signs of some real estate agents leaving the business, at least temporarily.
“I’ve definitely seen more realtors wearing their [Aspen Skiing Co.] uniforms and waiting tables at night than ever before,” Morris said.
Waldron noted that in good times, buyers feel they can list their property with anyone and it will sell. In tougher times, like now, buyers are seeking out the larger firms because their property has greater exposure when there are 60 or more real estate agents at a firm than just a handful.
Sales data shows Morris and Fyrwald, Chaffin and Light, and Mason and Morse are the three biggest firms. B.J. Adams and Co., Joshua and Co., Aspen Associates and SDS are in a second tier in terms of sales volume, then there are numerous smaller firms.
Waldron said his office’s business plan is to get better rather than bigger. The firm hasn’t added real estate agents during the recession. Instead it is building a staff that emphasizes full-time, career-oriented, high-productivity workers. A solid stable of brokers is necessary to carry a firm through a recession, he said.
Morris also sees the consolidation trend continuing this year, although his firm demonstrated twice in the last decade it is possible to grow even at a tough time. Morris and Fyrwald was founded in October 2000. A national economic slump affected the local real estate market less than one year later, and the 9/11 attacks in 2001 sunk the economy for a while. The fledgling firm weathered those tough times through hard work and Fyrwald’s wide network of friends and contacts, Morris said. It was poised to take advantage of the boom years from 2004 through 2007.
Rodriguez is banking on another powerhouse firm emerging from another tough economic time. He welcomes the underdog role.
“I don’t mean to be critical of any of the other guys because they’ve built great companies and they’ve made a lot of money,” Rodriguez said. “There’s always a compelling attraction to being different and positioning yourself against the good guys.”