By Meghan Hall
The Swig Company, based in San Francisco, has been steadily growing throughout the pandemic and recently announced a number of new promotions as the firm continues to expand. Perhaps most significantly, the firm named Connor Kidd Swig’s president, a new position created as Jim Carbone prepares to step down as CEO. The Registry spoke with Kidd and Carbone about Swig, its future and the firm’s outlook on commercial real estate.
Connor, please tell The Registry a little bit about yourself. What initially drew you to commercial real estate? And Swig?
Connor: I’m originally from Norman, Oklahoma and I first came out to the West Coast to attend Stanford as an undergrad and never left. I joined The Swig Company after completing my MBA at Stanford in 2008 but I had already gathered some experience in the real estate industry after graduating. Prior to joining The Swig Company, I held positions with AMB (now Prologis), North Star Realty Finance and Hunter Properties.
How do you think your previous experiences have prepared you for this role?
Connor: Those roles gave me a good grounding in real estate capital markets as well as various aspects of operations but I’ve also been fortunate to experience several roles during my time at The Swig Company, which is a vertically integrated company with a long history of investment, development and management expertise. When I joined the firm, I was part of the investing team so I was able to learn more about the capital markets and building a portfolio of urban office assets in gateway cities like New York, Los Angeles and the Bay Area. In 2019 Jim asked me to lead the asset management team. Neither of us knew it at the time but it was a bit of a baptism of fire, overseeing asset management during a pandemic but I feel that, and my earlier experience in capital markets, has prepared me well.
The role of president at Swig was just recently created. Can you please tell The Registry a little bit about what led to the creation of the role?
Jim: One of the most important lessons you learn in business is that every company, regardless of its size or industry, benefits from having a succession plan and so that was one of my key goals when I became CEO almost five years ago. I’m fortunate that the board trusted me to come up with that plan. The creation of this role of President is part of it. One of the most rewarding aspects of my more than 40-year career is the opportunities I’ve had along the way to mentor and develop talent in the real estate industry. I’ll be able to work closely with Connor in his role as President over the next few years to prepare him for the day when he takes over the reins.
What responsibilities will the role entail, and how will this role further Swig’s growth as a company?
Connor: I’ll be very involved in the day-to-day operation of the company, and that will free up some of Jim’s time as CEO to focus more on strategy and planning.
Jim: Yes, the company was well positioned going into the pandemic (even though we didn’t know it was coming) because we were in the midst of a long cycle and anticipated that some type of slowdown or cyclical change may occur. So, we were defensively positioned. That has helped us through the pandemic and, though we think there’s still some water to pass under the bridge in this cycle, we are very much focused on leveraging opportunities to grow the company so that’s where much of my attention will be, as well as continuing to interact with the board.
The past two years have been interesting ones for the commercial real estate industry. How do you see the sector evolving over the next year as the pandemic –unfortunately—continues? Why? Additionally, what has been Swig’s business strategy to ensure success throughout these recent market fluctuations?
Connor: As Jim said, we were well positioned defensively – low leverage, but at attractive sub-3 percent rates on longer term financing; about 93 percent leased through the portfolio and we actually increased our Weighted Average Lease Term to over five years during the pandemic. So, all that provides a solid platform from which to grow.
Jim: We’re also heartened that the rebound in jobs as a result of the pandemic hasn’t taken as long as it did after the 2008 financial crisis, for example. We’ve also seen a flight to quality among office tenants this time around. The Grace Building, one of our New York assets, saw more than 200,000 square feet of leasing during the pandemic and is now full well into next year so we’ve spent a lot of energy positioning our Class A assets to take advantage of that trend.
What are you looking forward to most in your new role? Why?
Connor: I’m most looking forward to deepening my knowledge of, and expertise in, the industry. Jim is a great mentor.
Is there anything that Swig is currently working on right now that you would like to highlight? If so, why?
Connor: We’re actively looking to expand and will buy outright or partner with investors who approach the market in the same way we do. We want to grow the portfolio, particularly in our sweet spot: urban office assets in that 100,000 to 200,000 square foot range. We recently hired Stephanie Ting as Director of Investments so she’ll be leading the push into expanding our transactional activity and that may also include adding at least one new market here on the West Coast. One of our transactional advantages is that we have a pretty straightforward and streamlined process so we can move quickly when we see the right deal. I think that’s important in the current environment.
Jim: We’ve also been very active in making our existing portfolio more sustainable, energy efficient and focused on health and wellness. In addition to LEED certification all our buildings now carry WELL Health-Safety ratings and we’re pursuing WELL building certification for some assets, like 633 Folsom.
