KW Commercial agents Gabriel Guerrero and Justin Chu made recent headlines with a staggering $402M commercial transaction in downtown Los Angeles, one of the largest multifamily transactions in Southern California in the last decade. The sale consisted of five high-rises with 1,037 residential units. Through adaptive reuse, the buildings were converted from obsolete offices into loft-style apartments.
The pair represented both the buyer and seller, working tenaciously on the record-breaking deal for 16 months. Here, they share insights into how they made it happen.
Lessons in Synergy
Chu got his real estate license in 2011 and worked several years in residential before Guerrero, a 22-year mainstay and force in the commercial world, took him under his wing and taught him portfolio sales. Guerrero offers, “I always gravitate toward hard workers, people with an ‘eye of the tiger’ mentality. Justin was humble and wanted a mentor so he could learn. I don’t build big teams; I like quality over quantity. Justin was the linchpin of all that. We’ve been working perfectly in unison for several years now.” Guerrero leads an eight-person commercial team, and Chu serves as the director associate.
With various challenges such as COVID, rent moratoriums, and Los Angeles city codes underway, the pair worked in concert to secure this competitive bid. Guerrero and Chu went to work, putting together and presenting above-and-beyond pro forma financials, casting a vision for how the buildings could perform.
The seller chose the team because of Guerrero’s vast and hard-won commercial experience and Chu’s relentless pursuit of the deal. Guerrero’s strong relationships and University of Southern California background helped them secure the attention of one of the top buyers in the country.
The properties will be kept as rental units, adding to the infrastructure of the downtown LA market, and the buyers will enhance them over time.
The Keys to Success
Guerrero and Chu put a lot of emphasis on teachability and mentorship. They say that agents often come into commercial real estate with a desire to reinvent the wheel and do it their way. But Guerrero cautions, “There’s nothing wrong with that. It’s just that I’ve been in the business for a long time and I’ve seen the successes and the failures of other agents. All I wanted to do was teach Justin. He didn’t have a big ego and wanted to learn how to replicate what I was doing and in turn teach others. Because we respect each other and want to see each other succeed, there’s absolutely no ego involved. We just go after deals and work on them tenaciously, and that’s a great synergy to have with somebody that you’re working hand in hand with.”
Chu adds, “Gabe has six kids, so his time is very valuable. Often, I would call him and he’d give me quick answers about how he would handle an issue or problem. Or we would get on conference calls and I would just take notes on how he spoke, answered questions, and responded to objections.”
One thing they make sure agents understand is that failure is a critical component of success. Chu adds, “It takes a certain individual who can maintain fearless intent in the face of a hundred no’s. Failure is part of it, we just fail forward.” Now Chu is pouring into others the way Guerrero poured into him. “I’m sharing with others what I’ve learned so we can extend our reach and expand exponentially. The momentum we have with our team has us poised for more deals of this size and magnitude.”
In addition to mentorship, the team finds value in KW Commercial’s widespread reach – the duo is able to transact in all 50 states. “Our market is North America. We do not limit ourselves geographically. The trend in commercial real estate is deal teams. Our team is the most diverse and talented we’ve ever assembled. Justin and I bring them in and we work boiler-room style, everyone working together in the same direction.”
