The commercial real estate career of Joseph M. Vargas, SIOR, spans more than three decades. That includes playing key roles at such brokerage firms as Cushman & Wakefield, Lee & Associates, Newmark Knight Frank and Colliers International. The two-time Olympic water polo player and silver medalist in 1984 is one of the most respected, experienced and recognizable senior commercial real estate leaders.
Recently, Vargas, who serves on the board of AIR CRE as co-chair of the arbitration committee, made a significant career change to the developer side of the business when he joined Wonderful Real Estate as president. The role shift aligns with Vargas’ life-long aspiration. “Even before I became a broker and enjoyed a wonderful, 30-year run completing lease, acquisition and development assignments, I dreamed of a role on the principal side of the commercial real estate business” said Vargas.
The position at Los Angeles-based Wonderful Real Estate, a division of The Wonderful Company, a privately-held $4-billion company owned by Stewart and Lynda Resnick, could be viewed as a career-defining move, but will also require Vargas to apply the skill and experience honed through decades of solution finding. Vargas notes, “The opportunity to lead an organization with an enviable portfolio of assets and an unrivaled development pipeline pushing 30 million square feet only comes along once in a lifetime.”
Vargas got into the real estate business after receiving advice from Warmington Homes’ Bob Warmington. “He guided me and gave me great personal and professional direction to get into industry,’ says Vargas, who notes his greatest mentors during his career include John C. Cushman III, Cushman & Wakefield’s Chairman of Global Transactions, Bill Lee, the patriarch of Lee & Associates, John Renard, Emeritus, President of the West Region, Cushman & Wakefield and Robert A. Ortiz, Cushman & Wakefield’s Executive Managing Director.
“They are each different, but there’s common threads that run through them all,” says Vargas. “They are all great professionals with a tremendous work ethic, a passion for the CRE business and are visionaries. I’ve worked with all of them for more than 20 years and it is their guidance that’s led to me having what I consider an excellent career. Without them I couldn’t have accomplished goals set for myself in the business.”
Vargas, who co-chairs AIR CRE’s arbitration committee with Jim Sullivan, notes it is a valuable service if a dispute arises between AIR CRE members. Experienced real estate brokers mediate or arbitrate between the parties, which can help avoid costly litigation and save time.
“It is an honor to work in that capacity,” says Vargas. “AIR CRE’s rules and structure serves as the moral compass for the brokerage community. We have 2,000 members and it is rare to have two full arbitrations in any given year. That speaks to the professionalism and ability of the committee to mediate agreements and solutions. It also underlines the ethics of the AIR CRE membership in the brokerage community.”
His new role at Wonderful Real Estate is focused on real estate development and property management for office and industrial properties in California. Vargas’ real estate development team is currently developing three business parks totaling 1,865 acres in California’s Central Valley. A number of the properties in these parks have already been purchased or leased by Fortune 500 companies and other high-quality anchor tenants such as American Tire Distributors, FedEx, Target, Ross Dress for Less, Formica and United Rentals.
The division also serves as property manager for more than 30 properties totaling more than four million square feet owned by The Wonderful Company and its affiliates. As the largest agricultural landowner in California, the company is an industrial occupier as well.
Vargas said, “We understand our clients’ real estate needs because we have similar needs, and we deliver solutions to meet each of those needs in order to keep up with their business growth. A key to Wonderful’s team approach is remaining small, but nimble.”
Wonderful Real Estate operates under a streamlined underwriting and deal-negotiation process with very few layers of bureaucracy. “Our “investment committee” is comprised of the company owner,” said Vargas. “We use in-house legal, finance, capital projects and property management resources to provide world-class service and responsiveness.” Additionally, the company utilizes its own capital resources and typically finances projects directly from The Wonderful Company’s balance sheet, further streamlining the execution process.
“Over the past five years, Wonderful Real Estate has invested more than $700 million in capital projects related to food and beverage processing and warehousing facilities for its own operating businesses, as well as industrial facilities for a broad range of third-party clients in the oil and gas and distribution and logistics industries” notes Vargas.
Wonderful Real Estate recently commenced construction on its latest one-million-square-foot industrial building located within Wonderful Industrial Park, a 1,625-acre, rail-served industrial development in Shafter, CA, roughly 15 miles north of Bakersfield. The speculative development building is slated for occupancy in March 2018.
Vargas said, “Strengthening market fundamentals, growth of e-commerce and awareness of the Central Valley industrial market gave us the confidence to go spec on a new one-million-square-foot industrial building. The combination of state-of-the-art features, in place infrastructure, abundant workforce and access to neighboring West and Southwest markets makes this the premier property for expanding industrial users.”
In addition to Wonderful Industrial Park, the company is also developing North Meadows Business Park, a 160-acre industrial park near Bakersfield’s Meadows Field Airport and CrossRoads Business Park, an 80-acre mixed-use park in Southwest Bakersfield.
Bringing Wonderful Real Estate’s development vision to reality will require Vargas’ team to apply an intense focus and “roll up the sleeves” approach. It is a perfect alignment with the more than 30 years of experience Vargas brings to the role and a wonderful match.