Strategies

Fall 2009
S A R E S • R E G I S G r o u p N e w s l e t t e r
Strategies
Smooth Lease-up
In San Francisco
Aggressive marketing
led to an early
lease-up of Strata at
Mission Bay in San
Francisco. The new
community is among
12 totaling 3,649
units recently added
to SRG’s Multifamily
Property Management
Division portfolio.
See stories on pages
8 and 9.
In this Issue
35'
Page 2 SRG Plans Orange County’s
first speculative “green” industrial
project. The three buildings totaling
120,000 square feet are unique in
the market for their 30-foot clear
heights and true dock-high loading
positions not found in competing
buildings.
Page 3 Guest columnist Ronald
Zuzack, Global COO of BlackRock
Real Estate Equity, discusses risk
strategies as “the probability of a
market bottom is within sight –
perhaps in the next six months,
and investors should be gearing up
to take advantage of the recovery.”
Page 10 SRG expands its
commitment to sustainability at
the Corporate level and in all its
ground-up commercial and multifamily
developments. “This is something
that’s critical and something
we wholeheartedly endorse,” said
Managing Director John Hagestad.
SRG, Investors Advised By J.P. Morgan Buy
390,000-Sq.-Ft. Redlands Industrial Building
SARES•REGIS Group and institutional investors advised by J.P. Morgan Asset
Management (“J.P. Morgan”) acquired a 390,000-square-foot industrial building in
Redlands, Calif., the first purchase made by a new strategic alliance targeting highquality
Southern California industrial buildings with the opportunity for added value
through leasing and management.
“This building fits nicely with our acquisition criteria of buying quality buildings with
vacancies or short-term leases,” said Peter Rooney, president of the Commercial
Investment Division of the diversified Irvine, Calif., real estate company.
SARES•REGIS Group and the investors advised by J.P. Morgan purchased the property
for $11.5 million, which is significantly less than replacement cost for the building
that was completed in 2007, Rooney said. The building’s tenant, Sleep Innovations,
a maker of memory-foam mattresses and pillows, leases and occupies about half of
the building.
The building is located at 9425 Nevada St. in a substantially built-out, master-planned
industrial park with buildings owned by a number of prominent institutional real
Continued on page 2
SARES•REGIS Group is one of the leading developers and managers of commercial and residential real
estate in the western United States. SARES•REGIS Group has a combined portfolio of property and feebased
assets under management valued at more than $4 billion, including 15 million square feet of
commercial and industrial space and 16,656 rental apartments. Since its inception the company has
acquired or developed approximately 44 million square feet of commercial properties and 19,000
multifamily and residential housing units. For more information, go to www.sares-regis.com.
www.sares-regis.com

SRG Strategies . Fall 2009
35'
35'
2
SARES•REGIS Group Plans OC’s First
Speculative ‘Green’ Industrial Project
SARES•REGIS Group plans to break ground this year
on three Class-A industrial buildings, totaling 120,000 square
feet in Anaheim, Calif. The buildings are registered with the
United States Green Building Council and will be the first
speculative green industrial buildings in Orange County.
The project continues SARES•REGIS Group’s commitment to
develop energy-efficient real estate projects and will be built
to meet environmentally sustainable specifications needed
for certification by the USGBC.
There are several architectural features in this project in addition
to its cost-saving location that should assure its success,
company officials said. Additionally, it is in a market with the
lowest industrial vacancy rate and the largest industrial base.
But what will put the project in a class by itself is it will be
constructed to earn the USGBC’s rating for Leadership in
Energy and Environmental Design.
“Green and sustainable commercial buildings are what
companies want. Green buildings cost less to operate, and
companies want to be recognized as socially responsible
by their employees and customers,” said John Hagestad,
Managing Director of SARES•REGIS Group.
JPMorgan, SRG Buy Redlands Building
continued from page 1
estate investors. Jeff Cole and Ed Hernandez of Cushman &
Wakefield represented the buyer and the seller.
J.P. Morgan Asset Management is a global asset management
leader providing world-class investment solutions to institutions,
individuals and financial intermediaries. The firm is
responsible for approximately $1.1 trillion in assets under
management (based on assets under management for the
Asset Management division of JPMorgan Chase & Co. as of
June 30 2009), including approximately $42.7 billion in real
estate and infrastructure assets managed by J.P. Morgan Asset
Management – Global Real Assets. With a 39-year history of
successful investing and a staff of approximately 375 professionals,
J.P. Morgan Asset Management – Global Real Assets
identifies, analyzes, negotiates, acquires, develops, redevelops,
renovates, operates, maintains, finances and sells assets on
behalf of its clients. J.P. Morgan Asset Management’s broad
investment capabilities and framework for analyzing opportunities
in today's complex real estate and infrastructure
markets provide critical insights for its institutional clients in
both the public and private markets.
Rendering of Canyon Point, a three-building, 120,000-square-foot
project in Anaheim to be built to USGBC LEED specifications.
Completion is planned by mid-2010. The 6.3-acre site is on
the southeast corner of Miraloma Avenue and Miller Street.
It is in Anaheim’s “Canyon” district, a 2,600-acre redevelopment
area where the city “has spent millions on infrastructure
improvements. The city’s redevelopment agency has
put all the pieces in place to encourage and support new
development,” Hagestad said.
Additionally, the site is in the heart of the high-demand
North Orange County industrial submarket, which has a
low vacancy rate of 4.97 percent.
The project will consist of one 60,000-square-foot building
and two 30,000-square-foot buildings each with about
2,000 square feet of mezzanine and improved office space.
The larger building will have a private truck court with six
dock-high bays and one grade-level door. The smaller buildings
will have three dock-high bays and will share a secured
truck court. All truck courts will be paved with concrete
instead of asphalt, reducing the heat-island effect.
The buildings will have 30-foot clear height, heat- and lightreflecting
“cool roofs” and T-5 interior fluorescent lighting
on sensors, dramatically reducing electricity demand.
Continued on page 16
New JPMorgan/SARES•REGIS Group strategic alliance claims first
acquisition, a 390,000-sq.-ft. industrial building in Redlands, Calif.,
for $11.5 million.

Guest Column
Risk Strategy For Returning
Real Estate Opportunities –
How Much And When?n
Ronald E. Zuzack
Global Chief Operating Officer
BlackRock Real Estate Equity
The summer of 2007 signaled the start of the most
painful and dramatic series of changes the real estate market has
experienced in the last 50 years, easily surpassing the significant
downturn of the late 1980s and early ’90s.
Property values have fallen up to 40% and the consensus is we
have not reached bottom. Bank credit has all but evaporated,
securitization of debt is a distant memory and, most important of
all, investors (those supplying equity capital) have lost confidence
in the asset class. Their confidence is not likely to be restored until
it is clearly demonstrated that risk can be effectively managed
and controlled. This is a critically important concept because as
we approach the bottom of a cycle investors should be thinking
about taking more risk, not less, as fortunes are made coming
out of a downturn taking advantage of distressed situations and
depressed values.
The commercial real estate market was supposed to be different
this time. Lessons learned from the past made for smarter
investors. Securitization of debt and equity made the market
more transparent. Additionally, with more real-time information,
the threat of overbuilding was no longer a major issue and real
estate returns were declining below historical levels. But on a
relative basis they were still attractive, which led conventional
thinking down the path that a structural and not a cyclical
change was taking place.
So what happened? This may sound like common sense and an
oversimplification, but the fact is that risk was mispriced and too
much risk was taken at the wrong time, namely at the top of
the cycle. Taking risk should not necessarily be confused with
negative outcomes. It is much more important to understand
the implication of the levels of risk assumed in real estate
investing relative to cyclical positioning.
There are two basic facts about Real Estate that have always
been valid:
1. Real estate investing is a cyclical business
2. The real estate asset class is illiquid
If one buys into this premise, then it seems prudent to construct
a risk model that allows for assuming more risk at the beginning
of a cycle and dialing back risk levels as the cycle nears maturity.
Getting caught with portfolio over-exposure (whether geographic,
lifecycle, leverage or a property type) in an illiquid asset class when
the market freezes is a recipe for disaster. There is no way out and
the investor is stuck with positions that can only be liquidated at
substantial losses.
Ronald E. Zuzack
Volume 13 . Number 1
Building a risk model or “risk budget”
has been used to describe a
procedure for setting targets for the
risk characteristics or components of
a portfolio and for monitoring the
portfolio over time to detect significant
deviations from those targets.
Central to any risk budgeting and
monitoring system for real estate
investing is establishing ranges or
limits of exposure relative to a
benchmark or model portfolio. The
model portfolio is merely a reflection
of the investor’s risk appetite or
tolerance level.
The key then is to have the investment discipline to adjust the
actual exposures within the agreed upon ranges relative to where
the investor perceives he is in the cycle. For example, a core
investor might establish a leverage range of 0% to 50%. As the
market cycle begins its recovery it seems more appropriate to
assume a leverage position at the higher end of the range. As
the cycle approaches maturity, consideration should be given to
deleveraging the assets as valuations decline for those investors
that mark to market will be magnified.
For those investors not constrained by mark-tomarket
issues it may make sense to secure longer duration
financing enabling them to ride out the inevitable market decline.
Another example is a forward commitment strategy, whereby an
irrevocable promise is made to purchase a property at a set date
in the future at a fixed price.
The investor is betting that when closing occurs the market value
will be equal to or greater than the purchase price. This strategy
works nearly perfectly at the early stages of a market recovery as
values are rising and there is less risk in assuming a higher proportion
of forward commitments at the start of a market cycle.
As the market cycle matures the exposure should be reduced as
the probability of the market value being less than the contract
prices increases at the future closing date.
In conclusion, it appears the probability of a market bottom is
within sight – perhaps in the next six months – and investors
should be gearing up to take advantage of the recovery. The
key is to adopt an investment philosophy that employs a robust
risk management discipline and not become over-exuberant
and assume excessive risk at the peak of the next cycle.
Ronald E. Zuzack is responsible for the day-to-day operations of a
US $26 billion AUM platform in the Americas, the UK, Continental
Europe, Australia and Asia. The firm manages a variety of separate
accounts, closed- and open-end funds with a focus on core, valueadded
and opportunistic investment strategies. He is Chairman
of the Operating Committee and a member of the Executive,
Investment and Leadership Committees for the Real Estate Group.
3

SRG Strategies . Fall 2009
Leasing Activities Under Way On
Two SRG Apartment Communities
Leasing activities are under way on two apartment
projects being built in Anaheim and Pasadena by SARES•REGIS
Group.
Both projects, The Crossing in Anaheim and Westgate Pasadena,
are being built to environmental standards of the United States
Green Building Council and combine to make SRG the largest
privately held developer of green apartments in Southern
California.
In the first month of pre-leasing at Westgate, reservations
have been made on 27 of the 110 units in the development’s
first two phases. The project will be completed in early 2011.
“We expect both developments to be very attractive to
people seeking a greener lifestyle and who want to be near
job centers, major freeways and rail transportation,” said
Michael Bissell, President of SRG’s Multifamily Property
Management Division.
Westgate Pasadena is on 11.7 acres and planned for 820
units. Westgate is two blocks from the Del Mar Station of the
Metro Gold Line, which runs 98 trains daily to Union Station
with connections to Long Beach, Mid-Wilshire, Warner Center
and Los Angeles International Airport.
Residents of The Crossing will have a three-minute walk to the
Anaheim Canyon Station, the fifth in the 11-station Metrolink
line from Riverside to San Juan Capistrano. Connecting transit
at the station includes OCTA buses to key Orange County
employment centers.
The Crossing also is at the confluence of the 55, 91 and 57
freeways.
Westgate and The Crossing are smoke-free communities and
feature an array of luxurious touches and convenient features.
The residences offer high ceilings, hardwood-style
floors, decorator two-tone paint colors, central air and heating
and pre-wiring for multiple phone and data lines. High-speed
internet and digital and cable television are available. The
units also feature in-home washers and dryers, spacious bed-
Continued on next page
The Crossing in Anaheim is a true transit-oriented apartment community with 312 units and luxury amenities.
4

Volume 13 . Number 1
In the first month of pre-leasing, 25% of the apartments in Westgate Pasadena’s first two phases have been reserved.
rooms and walk-in closets with mirrored doors and storage
areas. Private patios and balconies and direct garage access
are available in selected homes.
Gourmet kitchens are equipped with gas cooktops and ovens,
microwaves, dishwashers, refrigerators with icemakers, granite
countertops, hardwood cabinets
“We expect both
developments
to be very
attractive to
people seeking
a greener
lifestyle…”
and pantries.
Community amenities at each
development include a heated
resort-style pool and spa, poolside
cabanas, barbecue area, outdoor
fireplace and courtyards with seating
areas. The clubhouse includes
a catering kitchen, fitness center,
theater and screening room,
business and conference center
and a game room.
SARES•REGIS Group’s Multifamily
–Michael Bissell Property Management Division
has adopted an eco-management
program aimed at reducing energy and water consumption,
increasing recycling and use of non-toxic cleaning products.
The division manages 59 apartment communities in California,
Arizona and Colorado.
Lease-Up, Completion To Coincide
Construction and lease-up of The Grove’s 258 new apartments in
Ontario should be completed concurrently by the end of the year.
Despite a difficult economy with rising Inland Empire unemployment,
60% of the SARES•REGIS-Group-developed and -managed
project was leased up since mid-February without concessions.
The Grove’s first residents began moving in May 1.
5

SRG Strategies . Fall 2009
Panasonic leased SRG’s second industrial building in Tijuana.
SRG Signs Two Top-Tier Tenants
To Leases In Tijuana, Colton
SARES•REGIS Group has signed two blue-chip tenants
to leases in two buildings totaling 263,000 square feet.
Panasonic leased a 230,000-square-foot industrial building
developed by SRG in Tijuana. The consumer electronics giant
is using the recently completed building for the warehousing
and distribution of flat-screen televisions it assembles in
Mexico for the U.S. market.
The second transaction was the five-year lease of a 33,000-
square-foot office building in Colton to Castle & Cooke. Castle
& Cooke is a diversified company that recently acquired
Inland Cold Storage, the lessee of two cold-storage buildings
on the six-building campus originally developed by regional
grocer Stater Bros. as its headquarters.
Larry Lukanish, Vice President in SRG’s Commercial Investment
Division, said Panasonic signed a short-term lease in the stateof-the-art
warehouse which has 34 dock-high doors, a 28-foot
clear height and an additional yard for trailer storage. The
building is located approximately 2.5 miles from the Otay
Mesa Border Crossing in the Airport Submarket of Tijuana.
“We are very excited to have completed this lease with
Panasonic during a very challenging leasing environment,”
Lukanish said.
It is the second building SRG has developed in Tijuana. The
first was in the El Florido Industrial Park. The 175,000-squarefoot
warehouse-and-distribution facility was completed in
2007 and leased by Mattel for a five-year term. Rich Kwasny,
a broker at CB Richard Ellis’ downtown San Diego office who
represented SRG in the transaction, says Tijuana’s industrial
base is approximately 53 million square feet.
Lukanish says the acquisition of Inland Cold Storage is part of
a strategy by Castle & Cooke, which owns the Dole Pineapple
Company, to expand its refrigerated warehouse capabilities
to accommodate its growth in the fruit business.
Castle & Cooke is owned by David Murdock, who is on
Forbes’ list of the 400 Richest Americans. He also is an ardent
health-food proponent. Murdock’s company owns the
Hawaiian island of Lana’i, two premier Hawaiian resorts,
mining and building material companies and a number of
commercial and residential real estate developments chiefly
in California, Hawaii, Florida and North Carolina.
The total consideration for the lease for the building in
the 21700 Barton Road business park is approximately $1
million, Lukanish said. Colton’s ownership of local electric
utility services and its proximity to key freeways and interstate
transportation routes were attractions for Castle &
Cooke, he said. Joe McKay of Lee & Associates’ Ontario
office represented SRG and Castle & Cooke.
Four Companies Renew Industrial
Leases For 960,774 Sq. Ft. Of Space
SARES•REGIS Group signed four tenants to lease
renewals on 960,774 square feet of warehouse and distribution
space that the company manages for institutional
investors.
Representing SRG was Mike Wood, Director of Leasing in the
company’s Commercial Management Services Division.
Crown Crafts Infant Products Inc., an importer of infant
and toddler bedding, soft goods and accessories, signed a
five-year renewal on a 157,400-square-foot building at 711
W. Walnut in Compton. The lease is valued at $4.5 million.
Crown Crafts was represented by Wood of SRG.
National Retail Systems Inc., a leading provider of global
logistics services to manufacturers, pharmaceutical companies
and U.S. retailers, renewed its lease for 50 months
of a 100,000-square-foot building at 425 W. Carob in
Compton. The lease is valued at $2.5 million. The tenant
was represented by Tres Reid of CB Richard Ellis’ Torrance
office.
Nissan signed an early renewal for the 380,000-square-foot
building it’s occupied since 1976, extending this latest
agreement for nine years. Lease terms were undisclosed.
The car maker uses the facility at 941 W. Artesia in Compton
as an auto parts warehouse and distribution center for the
western United States. John Schumacher in CB Richard Ellis’
Torrance office represented Nissan.
A major national third-party logistics company extended
its lease for five years on a 323,374-square-foot building
at 2700 Imperial Highway in Lynwood. Lease terms were
undisclosed. Steve Sprenger in Grubb & Ellis’ Anaheim
office represented the tenant.
6

Volume 13 . Number 1
Altaire townhomes in Palo Alto are priced from $679,000
and offer up to four bedrooms.
Altaire Hits The Mark With Buyers
Seeking Style, Features, Location
Contemporary architecture, energy-saving
features and a sought-after Palo Alto location are combining for
the success of Altaire townhomes by Regis Homes of Northern
California, which has sold 26 of the 103 homes – a pace of four
sales a month – since the development’s grand opening early
this year.
Designed by the award-winning Steinberg Group, the twoand
three-story townhomes include the most contemporary
architecture paired with the latest interior finishes. Priced from
$679,000 with state-of-the-art architecture and innovative floor
plans, including homes with up to four bedrooms and three
and a half baths and spacious patios, Altaire will provide new
homeowners an ideal urban living arrangement. Along with its
modern design, Altaire offers cutting-edge technology to satisfy
residents’ needs. With all units connected to fiber-optic cable
lines, residents can utilize the high-speed Internet and digital
phone connection upon move-in.
Altaire includes the latest architectural and interior innovations.
Altaire is designed to meet the strict standards of the Department
of Energy’s Energy Star program for buildings and be Green
Point Rated by Build it Green, a nonprofit dedicated to promoting
healthy, energy- and resource-efficient building practices.
Included are Energy Star appliances and Anderson highperformance
dual-pane windows, all which help the buildings
exceed California’s Title 24 Energy Code by 15%. Indoor air
quality includes CRI Green Label Plus carpeting and formaldehyde-free
insulation. Sensitive to its exterior environment,
Altaire offers beautiful landscape architecture with droughttolerant
plants, and a water conserving irrigation controller
alongside a home and community-recycling infrastructure.
Altaire provides access to a complete community experience
because of its ideal location in Palo Alto. The newly constructed
town homes provide a low-maintenance lifestyle that allows
families to enjoy their surrounding environment. With the close
proximity of high-ranking schools, major shopping centers and
Palo Alto’s vibrant downtown, the development also offers
access to the 12-acre Taube-Koret Campus for Jewish Life being
completed this fall.
For more information on Altaire visit www.altairepaloalto.com.
7

SRG Strategies . Fall 2009
Brookwood Villas (left) is a 314-unit development in Corona, Calif. The Encore is a 174-unit development in Sherman Oaks, Calif.
Twelve Apartment Communities Totaling
3,649 Units Join SRG’s Management Portfolio
SARES•REGIS Group’s Multifamily Property
Management Division has added 12 apartment communities
with 3,649 units to its management portfolio. The division
now manages 59 properties totaling 16,850 units in
California, Colorado and Arizona.
The properties range from new Class-A, mixed-use and
transit-oriented urban developments to mature garden-style
communities. Three of the properties were developed by
SARES•REGIS Group. They include two Southern California
projects registered with the United States Green Building
Council and built to LEED standards.
“Property owners are choosing SARES•REGIS Group because
of the superior expertise and professionalism of our people
in the field and at regional levels and the strength of our
accounting operations. We also have exceedingly strong
training programs,” said Michael Bissell, division President.
But there are other important elements responsible for the
recent surge of new management assignments, Bissell said.
The company has earned top-tier rankings in independent
benchmarking surveys and blind resident-satisfaction polls
(see related story on page 12). Additionally, SARES•REGIS
Group has implemented a “rent optimizer program” that
maximizes revenues in a way that is similar to sophisticated
pricing models used by the hotel and airline industry, he said.
“In a strong market, the program tells you how and when
to push rents up faster. In a down market, you don’t lose
tenants and revenues as fast as your competitors,” Bissell
said.
The following is a list of SARES•REGIS Group’s recent management
assignments:
Strata at Mission Bay is a new 192-unit apartment community
in San Francisco that SRG leased up 45 days ahead of
schedule.
The Metro is a Class-A mid-rise apartment community of
415 units in Denver, Colo.
Winridge Apartments in Aurora, Colo., is a development
of 364 garden apartments.
The Hills of Corona (Calif.,) is a Class-B, 248-unit property.
Bella Villagio in San Jose, Calif., is a Class-A, 231-unit
property that was acquired by SRGNC with Cigna.
Bridgwater is a 291-unit, Class-B development owned by Dick
Eddy in the Denver, Colo., suburb of Greenwood Village.
The Encore is a 174-unit, B-property in Sherman Oaks, Calif.
The Fountains is a 370-unit, B-property in Moorpark, Calif.
Brookwood Villas is a 314-unit, B-property in Corona, Calif.
Three apartment communities are among the division’s new
assignments that were developed in Southern California
by SARES•REGIS Group. They are:
Westgate in Pasadena, a transit-oriented development that
is planned for a total of 820 apartments on completion.
The project is being built to the United States Green
Building Council’s LEED standards.
The Crossing in Anaheim, a 312-unit transit-oriented
development that also is being built to LEED standards.
The Grove in Ontario, with 258 apartments.
8

Volume 13 . Number 1
Tough Economy?
No Problem; SRG Leases
Up Bay Area Apartments
Ahead Of Schedule
On paper, the new, mid-rise luxury
apartment community of Strata at
Mission Bay – less than a mile from AT&T
Park where the San Francisco Giants play
baseball – looked like a home run.
The project was close to downtown and
had views of the Bay Bridge. When
Strata was in the planning and early construction
stages, the developer believed
leasing up its 192 units at peak rents
would not be a particular challenge.
By Strata’s grand opening in March,
however, the economy was faltering.
Brokerage firm Marcus & Millichap
reported area rents had plunged as much
as 15% since the height of the market.
Despite the tough economy with rents
sliding 2.7% in the second quarter and
a competing 260-unit project opening
nearby, SRG’s Multifamily Property
Management Division leased up the
project in August, 45 days ahead of
schedule.
SRG’s lease-up team described the
strategy for Strata as a three-pronged
approach that included a highly focused
and diligently implemented marketing
plan along with an experienced management
team and leasing staff.
SRGNC And CIGNA Acquire Luxury
Apartment Community In San Jose
Sares Regis Group of Northern California, L.P., and CIGNA
Realty Investors acquired Bella Villagio Apartments, a 231-unit luxury apartment
community in San Jose, Calif. The acquisition brings the number of Bay Area
apartment communities purchased by SRGNC to 18, representing approximately
3,400 multifamily units at a cost of more than $440 million.
“We are pleased to once again invest with SRGNC, with whom we have had
much success in the past, in the acquisition of Bella Villagio,” said Robert Fair,
Acquisition Director for CREI. “We believe this represents an excellent opportunity
to acquire a newer Class A multifamily property at a significant discount
to replacement cost and with potential upside based on the quality of the
location, the benefit of professional property management and the anticipation
of an improving economy over the next several years.”
“As a result of the downturn in the economy and housing markets, SRGNC
has been aggressively pursuing both distressed assets and motivated sellers
who control quality assets,” said Kenneth Gladstein, Senior Vice President of
Investments for SRGNC. “Bella Villagio represents an ideal example of the
latter – a five-year-old institutional-quality asset that was acquired for close to
50% of what it would cost to build today. In addition, it represented a classic
opportunity to acquire an under-managed property in a supply-constrained
submarket.”
Also attractive to SRGNC was the ability to assume the existing FNMA loan.
“Being able to obtain 85% leverage at below 6% for over seven years was
clearly accretive to the deal,” said Gladstein. “In addition, having over three
years of interest-only payments helps to provide both attractive cash yields
on our equity and a cushion should the economy remain soft longer than
we anticipate.”
Bella Villagio was built in 2004 and is just south of downtown San Jose with
access to the light rail system and all major Silicon Valley highways. The
property has Mediterranean architectural details, average 985 square foot
units, secured underground parking, a modern fitness room, heated swimming
pool, two spas and a yoga studio.
Most importantly, it was SRG’s keen
grasp of market demand which was
needed to perfectly position the asset.
This is critical in a lease-up because time
is of the essence.
Bella Villagio, an “under-managed property in a supply-constrained submarket.”
9

SRG Strategies . Fall 2009
SRG’s employees at the company’s headquarters show their
support for heightened commitment to sustainability.
On St. Paddy’s Day, SRG Says: ‘We’re A Greener Company’
After years of hewing diligently to efficiency practices
in the development and management of its commercial and
residential real estate projects, it was fitting that the SARES•REGIS
Group chose March 17, St. Patrick’s Day, to announce it was
elevating its commitment to green and sustainable practices
on all its projects and in its Corporate operations, too.
The move was well received throughout the company and
especially welcomed by SRG’s recently formed task force on
sustainability practices, which has been instituting measures
that include everything from recycling and reducing use of
water and power to eliminating use of Styrofoam, encouraging
employee carpools, public transit and use of alternative-fuel
vehicles.
In a few short months, for example, the company already has
slashed its landscape water use by 30% and now is recycling
75% of all corporate office waste.
“It has been exciting to see our changes implemented so
quickly and smoothly. The combination of bottom-up and
top-down driven efforts have unified the company in this
undertaking,” says Jennifer Simpson, Chair of “SRG Green”
and Acquisitions Coordinator in SRG’s Multifamily Acquisitions
& Investments Division. Simpson also has been accredited by
the United States Green Building Council as a Leadership and
Energy and Environmental Design Accredited Professional
(LEED AP).
John Hagestad, Jeff Stack and Bill Thormahlen – SRG’s three
Managing Directors – made the announcement at back-toback
presentations for the 135 employees at Corporate
Headquarters. Everyone, including the three owners, was
decked out for the event in bright green tee-shirts with “Think
Green, SARES•REGIS Group” silkscreened across the front.
After making the point that SRG has a long history of developing
and managing real estate in an efficient manner, the
company’s owners made it clear that SRG was moving to a
new and heightened level in its public commitment by boosting
all sustainable business practices.
“This is something that’s critical and something we wholeheartedly
endorse,” Hagestad said, adding later he hoped the
steps being taken at SRG will influence company employees
when they’re not at work. “If nothing else, they’ll become
more aware. Maybe they’ll think twice about using a foam cup
or how much energy they burn at home. That’s important.”
The SRG Green Committee consists of representatives from
each of the company’s divisions and meets monthly to review
proposals, many of which are suggested by employees, aimed
at reducing SRG’s carbon footprint while enhancing employee
health and morale.
So far, the committee has produced a number of green guidelines
for employees to follow as well as recommendations that
are on the way. They include:
Encouraging daylighting, working by ambient sunlight.
Chemical-free pest control and cleaning products.
Source reduction of junk mail; switching to electronic
magazines.
Double-sided printing.
Turning off electronics when not in use, including the use
of power strips.
Encouraging bicycling, carpooling, public transport.
Comprehensive recycling program, including certified
disposal of e-waste, batteries and fluorescents.
Utilizing Microsoft SharePoint to go paperless.
Distributing an employee newsletter electronically with tips
for office sustainability.
Tracking utility use and cost savings.
Purchasing supplies that are made with a post-consumer
component or responsible forestry.
And, most importantly, employee education.
10

Volume 13 . Number 1
SARES•REGIS Group Showcases Its
Past, Current Sustainability Efforts
In an effort to highlight a history of sustainable real
estate practices as well as showcase current sustainable developments
and other in-house green measures, SARES•REGIS
Group has created two green newsletters: “SRG Green,”
which can be found on the company’s website, and “SRG
Green Living,” available through the Multifamily Property
Management Division’s site, srgliving.com.
“We are proud of what we’ve done and where we are going in
terms of sustainable real estate practices and at the Corporate
level,” says SRG Managing Director John Hagestad. “These
newsletters help us express our deep commitment to saving
energy and cutting waste wherever possible.“
The first issue of “SRG Green” contains short articles on steps
being taken to protect the environment by every division of
the company. To access “SRG Green,” go to SRG’s website,
sares-regis.com, and click on About SRG. There are stories
on sustainable commercial and apartment developments,
a history of the impressive energy-saving achievements of
SRG’s Commercial Property Management Division and what
the apartment management division is doing. There’s even
a story of SRG’s drive toward paperless accounting.
Additionally, “SRG Green Living” can be found on srgliving.com,
our consumer-oriented site by our Multifamily Property
Management Division. This newsletter is aimed primarily at
our tenants. It is packed with information on how they can
save energy and reduce waste.
SRG Green Living (right) online newsletter gives apartment
residents guidance on resource-saving measures.
SRG Green (below) touts the company’s achievements
in commercial and multifamily sustainable real estate
practices as well as cutting Corporate waste.
June 2009
News and tips
for eco-friendly
apartment living.
SRG Sets Eco-Apartment
Management Policy
The Multifamily Property Management Division of SARES•REGIS Group
is committed to reducing the stress on the environment from the approximately
16,000 units in 56 apartment communities it manages in California, Arizona
and Colorado… see page 2
We’re Working To Provide You With
A Healthier, More Efficient Home
In an effort to provide healthier and more energy-efficient surroundings for
our residents, SARES•REGIS Group is planning and implementing improved
green and sustainable practices throughout our portfolio… see page 3
It’s Our Responsibility To Recycle;
Here Are Tips On How You Can Help
Most of our residents, like us, want to protect the environment and are
interested in doing all they can to reduce waste by recycling paper, glass and
plastic… see page 4
In A Drought, It’s Our Obligation
To Change Our Old Habits And
Learn To Save Water
The persistent drought condition of the seven Western states in the
Colorado River Basin is one of the most severe in 400 years, says the
U.S. Geological Survey. California’s governor this year declared a water
emergency as the state is experiencing its third year of drought. So, when
it comes to our personal water use, each of us has an obligation to use
water sparingly and change our wasteful ways… see page 5
Take Your Green Habits
From Home To Work
For people concerned about saving water, energy and recycling, there are
three ways to be responsible: Good, Better, Best. And they also take their
good habits from home to work. If you are first to suggest some changes
at your workplace, don’t be surprised when many like-minded colleagues
express eagerness to help get the ball rolling. Here are some ideas for a
greener workplace… see page 6
“These newsletters
help us express our
deep commitment
to saving energy
and cutting waste
wherever possible.”
–John Hagestad
11

SRG Strategies . Fall 2009
SRG Is No. 1 In Resident
Satisfaction In Separate Surveys
SARES•REGIS Group earned No. 1 rankings from two
independent apartment survey firms for leasing professionalism
and resident satisfaction.
SRG’s Multifamily Property Management Division finished first
in the just-released third-quarter Ellis Benchmarking Report,
which surveys and ranks leasing activities on a quarterly basis.
The independent survey includes a number of prominent
national management companies. The division placed second
in the first and second quarters and consistently was ranked
in the top five.
Additionally, SRG earned a No. 1 ranking in a resident satisfaction
survey by Kingsley Associates of Atlanta. The company
engaged Kingsley to survey 40 of its properties totaling 8,724
units and had a 40% resident response rate, the highest in
Kingsley’s history, said Mike Bissell, division President.
“It was the first time we participated in the Kingsley survey
on a company-wide basis and we outperformed their index
in every major category. Kingsley was pleasantly surprised at
how well we rated and shocked at the high rate of response,”
he said.
Cool roofs at Commerce Office Park in Commerce, Calif., help SRG’s
Commercial Property Management Division achieve a strong record
of reduced CO 2 emissions.
Commercial Property Management
Division Saves 1-Million Tons Of CO 2
An analysis shows that from 2002 through 2008
energy-saving measures taken by SARES•REGIS Group’s
Commercial Property Management Division has prevented
the emission of 1,023,912 tons of carbon dioxide gas into
the atmosphere.
These savings were achieved by the retrofitting of Energy
Star-rated ElastaHyde acrylic roof coating on 4.1 million
square feet of roofs on office and industrial buildings managed
by the division. Additionally, the division has installed
25,356 low-voltage light fixtures and 3,983 tons of energyefficient
HVAC systems.
The reduced CO 2 is equivalent to:
4,851 railcars’ worth of coal
Annual C0 2 emissions from home energy: 84,520 homes
C0 2 emissions from 2.1 million barrels of oil consumed
C0 2 emissions from 105,434,427 gallons of gasoline
consumed
Annual greenhouse gas emissions from 170,124 cars
Real Estate Roundtable Website
Calls SRG A ‘Green’ Leader In West
Real Estate Roundtable has published a case history of
SARES•REGIS Group on its new “RealSustainable.org” website
under the headline: “Leading In The West, SARES•REGIS
Group Demonstrates That Apartments Can Be Green, Too”.
In addition to the company’s commitment to green multifamily
projects, the case history outlines SRG’s achievements in
sustainable commercial development and management.
Additionally, the case history touches on steps being taken
to cut energy use and waste throughout SRG’s Corporate
operations.
12

Volume 13 . Number 1
SARES•REGIS Group helps at-risk young adults train in construction
trades through a group run by the Sisters of St. Joseph. Dan Hull
(second from left), SRG Vice President of Construction, with the
project’s management team.
SRG Arranges Construction
Apprenticeships For Local
Low-Income Housing Program
SARES•REGIS Group is playing a key role in providing
training in construction trades to troubled young adults
and helping to build new homes for three low-income
families in Santa Ana, Calif.
The program is a partnership of the city’s redevelopment
agency and two non-profit groups: the Orange County
Community Housing Corporation and Taller San Jose, which
is Spanish for St. Joseph’s Workshop.
Last year SRG volunteered to assist Taller San Jose, a program
operated by the Sisters of St. Joseph of Orange, Calif., to
teach unskilled and unemployed students valuable hands-on
construction skills that will enable them to earn their living
in the homebuilding industry.
“When the students finish their training, they’ll have the
needed skills to easily qualify for jobs in their trade. Without
these skills, they’d have no chance,” says Dan Hull, an SRG
Vice President of Construction.
It’s a great opportunity for young adults who have been in
trouble and lack much in the way of marketable skills to get
a leg up. It gives them hope and a real future.
SRG lined up a number of its key subcontractors in every
facet of construction. They provided the one-on-one instruction.
Under the guidance of SRG and supervision by Taller
San Jose, the students built three homes that are being sold
to low-income participants in a housing lottery. The homes,
ranging from 1,800 square feet to 2,500 square feet, were
built on Logan Street, which was settled in the 1880s.
The expertise of SRG and its subcontractors isn’t just about
building the houses. It’s for the purpose of making sure the
job gets done correctly, Hull said. And the students learn
home building – the right way and from the ground up.
Under the program, students are paid an hourly wage while
they attend day and night classes. In many cases, SRG’s
subcontractors provided the building materials.
“These companies share our commitment to help the community
and many have worked with us on other charitable
construction projects, including rebuilding homes in New
Orleans following Hurricane Katrina,” Hull said.
SRG has worked with Taller San Jose in the past, giving their
students on-the-job experience on some of our apartment
projects.
The difference this time is that Taller San Jose has broadened
its scope of services to look for opportunities to build its
own projects. As with previous projects, this is an excellent
complement to what students are learning in the classroom,
Hull said.
13

SRG Strategies . Fall 2009
SRG Joins Emergency Housing Effort
To Shelter Families Caught In Crisis
SARES•REGIS Group is among three real estate
companies working with Families Forward, an Irvine, Calif.,
non-profit group, to provide emergency housing to families
in crisis.
The companies, which include Avalon Bay Communities Inc.
and The Irvine Company, make a number of vacant apartments
they own and manage available to Families Forward’s
new program, Rapid Re-Housing, established in June of this
year.
“These are families with children who have either lost their
homes or apartments. But, even if parents have new jobs, no
one will rent to them because their credit has been ruined
or they don’t have the thousands of dollars for rent and full
deposit,” said Cathlyn Traughber, Program Coordinator.
She said rising unemployment and plunging home values
have increased demand for emergency, subsidized housing
and other services provided by Families Forward.
“Honestly, without this program they would be living in their
cars or with friends,” Traughber said.
In only three months, the effort has placed 13 families into
Class A apartments. Their deposits are deferred and rent is
subsidized for one year. The program requires that there are
children in the family and the families can be headed by
single mothers or fathers.
“The apartment communities have been phenomenal, just
phenomenal, to get this going and working,” she said, but
added that the program is so new it only can help one quarter
of the qualified families that apply. So far, the group has shied
away from publicity, believing the program would be flooded
with even more applicants, she said.
“We have families whose income has fallen from more than
$100,000 a year to $30,000 and are really struggling. For
them and others, this is just a lifesaver,” she said.
The program received $500,000 in federal stimulus money
through the department of Housing And Urban Development.
Two other local grants, for which the program has applied,
are hoped to produce $400,000.
Traughber, a licensed marriage and family counselor who
created the program, said 10 more families will be housed in
the next 60 days and 10 more starting in January.
Families Forward was founded in 1984 in a collaboration of
community leaders, the city of Irvine and The Irvine Company.
In addition to Rapid Re-Housing, Families Forward offers other
homeless prevention services, career coaching, a food pantry
and life-skills counseling.
Cystinosis Successfully Reversed
Using Stem Cell Transplantation
A new study by Scripps Research Institute scientists
offers good news for families of children afflicted with the
rare genetic disorder, cystinosis.
In research funded by the
Cystinosis Research Foundation
in Irvine that holds out hope
for one day developing a
potential therapy to treat the
fatal disorder, the study shows
that the genetic defect in mice
can be corrected with stem
cell transplantation.
“The results really surprised
and encouraged us,” says
Dr. Stephanie Cherqui principal investigator Stephanie
Cherqui, who as a doctoral
student in France in 1998 helped discover the gene involved
in cystinosis. “Because the defect is present in every cell of
the body, we did not expect a bone marrow stem cell
transplant to be so widespread and effective.”
In the study, which was published in the September 17,
2009, print edition of the journal Blood, the Scripps Research
team used bone marrow stem cell transplantation to address
symptoms of cystinosis in a mouse model. The procedure
virtually halted the cystine accumulation responsible for the
disease and the cascade of cell death that follows.
Cystine is a byproduct of the break down of cellular components
the body no longer needs in the cell’s “housekeeping”
organelles, called lysosomes. Normally, cystine is shunted
out of cells, but in cystinosis a gene defect of the lysosomal
cystine transporter causes it to build up, forming crystals
that are especially damaging to the kidneys and eyes.
The only available drug to treat cystinosis, cysteamine, while
slowing the progression of kidney degradation, does not
prevent it, and end-stage kidney failure is inevitable.
“Cysteamine must be given every six hours, so children
have to be woken up each night to take this drug, which
has unpleasant side effects, and many others to treat various
symptoms," Cherqui says. "So although there is treatment,
it is difficult treatment that does not cure the disease.”
In the new study, the researchers found that transplanted
bone marrow stem cells carrying the normal lysosomal
cystine transporter gene abundantly engrafted into every
tissue of the experimental mice. This led to an average drop
in cystine levels of about 80 percent in every organ. In
addition to preventing kidney dysfunction, there was less
deposition of cystine crystals in the cornea, less bone
demineralization, and an improvement in motor function.
14

Volume 13 . Number 1
Mitch Albom (left) with Natalie Stack. Dr. Ranjan Dohil (from
left), Nancy and Jeff Stack and Dr. Stephanie Cherqui. Separate
studies by Drs. Dohil and Cherqui are being funded by the
Cystinosis Research Foundation.
Natalie’s Wish Raises $2.3 Million; Cure Plans Outlined For Disease
Mitch Albom, author of the best-selling memoir
“Tuesdays With Morrie,” along with a $1-million challenge
grant helped raise $2.3 million for Natalie’s Wish, the
fundraiser for the Cystinosis Research Foundation. All CRF
donations go to research on cystinosis, a rare, metabolic
and fatal disease. Foundation officials expect a cure will be
developed within five years.
Despite the recessionary economy, 320 people attended the
eighth-annual fundraiser May 8 at the Balboa Bay Club in
Newport Beach, Calif., including families of 12 children with
cystinosis who came from all over the country. Three family
foundations donated $373,000, and an anonymous donor
gave $1 million that was offered in the form of a challenge
grant.
There are about 2,000 cystinosis sufferers, mostly children,
worldwide. In patients with cystinosis the amino acid cystine
accumulates in the tissue due to the inability of the body to
transport cystine out of the cell. Over time, cystine damages
various organs including the kidneys, liver, muscles, white
blood cells, eyes and central nervous system. Other complications
include muscle wasting and difficulty swallowing.
As the cystine accumulates in the cells, all the body’s organs
slowly deteriorate.
Since its formation in 2003, the CRF has funded and committed
more than $9 million in cystinosis research and fellowships
in six countries and has made great strides to solve the
mystery of the genetic disorder. Almost all patients succumb
by 40 years old. The CRF is the world’s largest non-profit
provider of funds for cystinosis research.
Nancy Stack, President and Co-Founder of the CRF, said that
if CRF-funded researchers’ aims on gene and bone-marrow
stem-cell therapy are met this year, “The next step in the plan
will be to test the efficacy of their discoveries using primates,
bringing us one step closer to human clinical trials that will
test for a cure for cystinosis.”
Natalie Stack, 18, a daughter of Nancy and Jeff Stack, a
Managing Director of SARES•REGIS Group, was diagnosed
with cystinosis as an infant.
Albom, an award-winning sports newspaper columnist and
television and radio commentator, was the featured speaker.
He turned the conversations with his late university professor
Morrie Schwartz into the all-time best-selling memoir,
“Tuesdays With Morrie,” which sold 11 million copies. Book
proceeds paid for Schwartz’s medical care.
Anaheim Chamber Honors SRG
For New, Sustainable Project
On the strength of a new transit-oriented, luxury
apartment development in Anaheim, the Anaheim Chamber
of Commerce has honored SARES•REGIS Group as “Green
Business of the Year – Construction.”
The Anaheim business chamber was impressed with SRG’s
sustainable development and construction program for The
Crossing, a 312-unit apartment development, being built
to pass United States Building Council standards for LEED
certification.
The recognition came as part of the chamber’s 2009
Anaheim Business Awards Program. SRG is the leading,
privately owned developer of sustainable apartments in
Southern California.
15

SRG Strategies . Fall 2009
Announcements
Michael P. Bissell, President of SARES•REGIS Group’s Multifamily Property Management Division,
was appointed to the California Apartment Association’s 2009 Board of Directors. The CAA is the nation’s
largest statewide trade association for owners and managers of rental property. Bissell joined SRG in 2007.
His 30-year career includes asset management, property acquisition and disposition, development,
merchandising, marketing and sales on residential and commercial portfolios throughout the United
States, Germany and Sweden.
Jennifer Nessett, Vice President and Regional Manager in SRG’s Multifamily Property Management
Division, was elected president of the Apartment Association of Metro Denver. Since 2002, Nessett has served
on the board of the association, which represents the interests of the apartment industry to state and local
government. She joined SRG in 2004.
Jennifer Simpson, Acquisitions Coordinator in SRG’s Multifamily Acquisitions & Investments Division,
has been certified by the United States Green Building Council as a Leadership and Energy and Environmental
Design Accredited Professional. She is active on the Construction Quality and Sustainable Building Committee
for the Orange County Chapter of the Building Industry Association and the USGBC’s Orange County
Emerging Green Builders Committee.
Orange County’s First Speculative ‘Green’ Industrial Project, continued from page 2
Other green features will include: high-efficiency exhaust fans
with energy conservation controls; high-performance glazing
to minimize heat gain; deep overhangs at glazed entry areas;
recycled water system for landscape irrigation; drought-tolerant
landscape design and materials; pervious asphalt and
storm-water reclamation to aquifer via Maxwell drains, percolation
ponds and swales; roof drain water impoundment for
percolation to aquifer; passive switching controls for outdoor
lighting; low VOC paint; low Nox output during grading and
recycled steel trusses.
The SARES•REGIS Group Regional Offices
Corporate Office
John S. Hagestad, Managing Director
Geoffrey L. Stack, Managing Director
William J. Thormahlen, Managing Director
Peter Rooney, President, Commercial
Investment Division
Vince Ciavarella, President, Commercial
Property Services Division
Michael Bissell, President, Multifamily
Property Management Division
Bill Albert, President, Multifamily
Development & Construction Division
Bill Montgomery, President, Multifamily
Acquisitions & Investments Division
18802 Bardeen Avenue
Irvine, CA 92612
(949) 756-5959 www.sares-regis.com
Regis Homes & Regis Contractors
18825 Bardeen Avenue
Irvine, CA 92612
(949) 756-5959
Ventura/Los Angeles
Russ Goodman, Regional President
500 Esplanade Dr., #470
Oxnard, CA 93031
(805) 485-3193
Phoenix–Residential
Eric LaMora, Vice President
Regional Manager
4626 E. Shea Blvd., Suite C-200
Phoenix, AZ 85028
(602) 790-1576
Denver–Residential
Jennifer Nessett, Vice President
Regional Manager
900 E. Louisiana Ave., Suite 101
Denver, CO 80210
(303) 715-9600
Sares Regis Group of Northern
California, L.P.
Regis Homes of Northern
California, Inc.
Robert W. Wagner, Principal
Mark R. Kroll, Principal
Jeffrey A. Birdwell, President,
Commercial Division
901 Mariners Island Blvd., Seventh Floor
San Mateo, CA 94404
(650) 378-2800
www.srgnc.com www.regishomes.com
Regis Homes of Sacramento, LLC
Bill Heartman, President
1800 3rd Street, Suite 250
Sacramento, CA 95814
(916) 442-7299
16