Shift: Watt Takes Five
By Michael Aushenker
Los Angeles Business Journal July 25, 2022
From her spacious office space in Santa Monica, Courtney Trujillo, president of SR Watt Co., oversees a 1.1-million-square-foot portfolio of neighborhood retail, multifamily and office properties in California and Oregon.
“For me, it’s about these opportunities right now to create and execute a strategy,” Trujillo said. “I’ve been in this business for 30 years. It’s a very exciting time to be in this industry.”
SR Watt is one of five new entities formed out of the reorganization of Watt Cos., a 75-year-old family-run real estate firm.
As of the third quarter, the privately held company’s assets will be divided among five groups of Watt family shareholders to manage the allocated assets as well as create new business development opportunities.
“We are so proud of the team at Watt Companies that has built upon the legacy of our founder and my grandfather Ray Watt,” Nadine Watt, Watt’s president and chief executive, said in a statement.
Trujillo said the decision to split the company into five was made by the prime shareholders. The firm was split in a way that addresses the goal of shareholders and enables the company to “create a new legacy for the future,” according to the company.
Each of the new entities will operate a portion of the Watt Companies portfolio, which includes shopping centers, office, industrial and multifamily properties.
“Every company is getting a mix of retail, industrial, mobile home parks, office and multifamily,” Trujillo said. “It’s a split across all of the product types and all of the properties.”
Watt Plaza, two office towers covering 900,000 square feet in Century City, has been split by three parties.
In addition to SR Watt Co., the newly formed corporations include Watt Capital Developers, led by Scott Watt; Watt Capital Partners, run by Nadine Watt; AJ Watt Enterprises Inc., headed by Audra Arbini; and Williams & Watt Inc., helmed by Sadie Williams. Trujillo is not a member of the Watt family.
Trujillo’s SR Watt will operate and manage retail and industrial properties as well as seek out value-add strategies and other real estate opportunities in multifamily and retail in core West Coast markets.
The new entity’s portfolio encompasses 363,000 square feet of retail space, 466 units of multifamily and 140,000 square feet of office space.
One of the firm’s first value-add projects will be the redevelopment of an underutilized office site to a long-term ground lease with In-N-Out Burger for a 3,280-square-foot restaurant in San Clemente.
“This has been one that started while under Watt Properties (a division of Watt Cos.),” Trujillo said. “We’re really excited to be the first In-N-Out in San Clemente. We had an office building that was at the end of its life cycle. The opportunity came for us to look at a new ground-lease opportunity.”
Two office buildings were razed at the site, with new construction on the way from In-N-Out with a completion date of late September. SR Watt is also renovating the office building
that houses its headquarters at 2716 Ocean Park in Santa Monica.
Some of the improvements will include a modernization of the offices and adding electric chargers to the parking lot. The goal is to attract new tenants.
“We have more of the garden style where you don’t have to take an elevator,” Trujillo said. “We’ve done a couple of new leases post-pandemic with businesses that are growing and expanding.”
Trujillo also oversees a 20,000-square-foot single-tenant building in Carson and a 38,000-square-foot multi-tenant building in Pasadena. Both are 100% occupied and experienced no disruption during the pandemic.
In the multifamily area, SR Watt is renovating 90 units in Downey.
“We did a $2.5 million renovation to that property where we added amenities that weren’t there,” Trujillo said. “We’ve added a fitness center, an outdoor barbecue area, a game area and a seating area with a firepit. We wanted to create that outdoor living experience. We also made some renovations to the inside of the apartments as each unit is turned over.”
All of these projects will add shine to the Watt brand, Trujillo said.
“This is our opportunity to continue the good work of the Watt family business and build upon a foundation that is synonymous with quality real estate. We plan to add value to these assets as well as look to build the portfolio, furthering the legacy created by the Watt family,” said Trujillo, who has been with the group since 2011.
Prior to forming SR Watt, Trujillo served as vice president for Watt Properties, where she managed a diverse portfolio of retail, office and industrial properties. Most notable during her career at Watt is the execution and expansion of the company’s multifamily holdings from 150 to more than 1,500 units, including value-add and core properties.
Trujillo’s experience also includes work with firms such as Burnham Pacific Properties, Center Trust Properties, Summit Commercial and Red Mountain Retail Group.
During her career, she executed the strategic plan of assembling portfolios of grocery-anchored centers through acquisition to disposition; completed several retail redevelopment projects; and oversaw the construction and leasing of the Virginia Center Commons in Ashland, Virginia, a 1-million-square-foot regional shopping mall.
While at Watt Cos., Trujillo began to see a gradual change in business strategy.
“There was a shift that the company had seven years ago and decided to expand on multifamily,” Trujillo said. “We did a lot of disposition work on our existing retail portfolio and spent a lot of time on multifamily.”
Watt bought multifamily assets in Las Vegas and Phoenix. In 2018, the company expanded to the Portland and Seattle area.
Looking ahead, SR Watt will seek to acquire multifamily properties, continuing the former strategy of Watt Properties.
“We believe the multifamily sector aligns with the company’s core values of creating inspiring places and providing a quality living experience,” said Trujillo.
Trujillo views the activity at the organization in a holistic manner.
“It was a process based on the alignment of the newly organized companies,” Trujillo said. “There’s a lot of transition, executing on the real estate, shifting it to SR Watt and carrying on forward.”
She is also finding new dynamics at play running her new entity.
“The buck stops with you,” she said. “We used to have a large team and now I’m collaborating with colleagues in the industry. That has been a change.”