The Bold Sales Move That Built a Commercial Real Estate Career

Patty McGuigan (00:00)
I called a costume company and I said, can you have someone…

dress up as a gorilla and take in some balloons and some paperwork for me. And they said, sure. was $100. I met him in the driveway and gave him the paperwork and went back to the office. And pretty soon the phone rang. And Burke said, Patty, I think I need to see you. And I said, oh, Burke, I’ve been trying to reach you. He said, yeah, there’s a gorilla in my lobby. I said, right, I’ll be right over.

Scott Bursey (01:58)
I’m your host Scott Bursey. Our guest today is Patty McGuigan who is a veteran commercial real estate expert and the author of Scrap’s Build a Pile. With a career spanning over four decades in Silicon Valley, she has navigated the complexities of commercial retail office and large multifamily projects from concept to completion. Patty is widely recognized for her Patty 2.0 journey, rebuilding her life in the Bay Area.

and becoming a leading force in developing investment grade properties. Buckle up, this episode is going to be epic. Patty, welcome to the show.

Patty McGuigan (02:35)
I’m delighted to be here.

Scott Bursey (02:37)
It is awesome having you here and for our listeners who may not be familiar with your journey, please give us the front row seat and how your career ignited and where you’re pouring your fuel now.

Patty McGuigan (02:48)
Okay, I love it. ⁓ Having been Patty 1.0 was a trad wife, but when I had gotten a divorce and I suddenly had to raise two children, ⁓ I ended up moving from, I graduated from UCLA, from Los Angeles up to the Bay Area, because I just loved it. And I got a job selling office products and from office products where they spent.

lots of time training me to sales and I loved it. I went into commercial real estate. I had really fallen in love with the buy sell make an account. And I, with my Irish luck, it was right there at the beginning of the digital revolution. So it was exciting and different and unique. And I was the only woman in the office. There were 25 men in me. It drove them kind of crazy, but didn’t bother me a bit. And that’s the basis of this book. This is the story of four decades.

And I think it’s fun to read because it’s a history of how this all craziness started. Buildings going up daily. People switching jobs but not changing the parking lot. They went from one end of the building to around the corner where another one was running. ⁓ So it was very exciting. It was a fertile area. was just youth, brilliance, and need all met together right there in Santa Clara.

And we had lots of apricot fields and we did have the best apricots in the world. And fruit and whatever and those suddenly became ⁓ buildings that were built. We are not the architectural capital of the world because engineers were deciding it and they just needed it up. Four walls, a roof, some air conditioning and they were in business. ⁓ So that’s how I started and it was really, it was so dynamic and it was perfect for me. It was perfect.

The first year, I wasn’t sure which area I was gonna work in. All of the ones that Scott tested told me about. I did 62 deals my first year, and I did crack $100,000. I thought I had died and gone to heaven. This was what I wanted to do. Plus, I was meeting really fun people, helping them is a teacher, you’re trying to get someone from A to B, and I got their building from A to B, and they told me what they wanted, and by God, I got it for them.

Scott Bursey (04:49)
You

Patty McGuigan (05:53)
And ⁓ so it mushroomed into a marvelous career that I still, I was telling Scott, you grow them, they switch companies, you do another company, you find them. And now, so many of them, ⁓ the investors, the ones that built the building are in the point where they just would really rather retire. So now I’m turning around and selling those buildings that we built and filled and filled and filled. ⁓

And that’s an exciting process too with this new one. I always say in 10 years I’ll be writing my next book which is, you know, from this pile that we built, now we have AI. That’s, know, which is, and I have to remind you that the first, the digital revolution was every bit as scary as we are with AI. We all thought, you know, my god.

computer on our desk, that doesn’t make sense, they’re going to walk around with a telephone, that’s never going to happen. know, a facsimile machine, was a copy machine over the phone, wow, that was new and different. So every part of the business world was touched by the digital revolution. And certainly today, AI is going to touch every part of our business world as well. I still think that I’ll have a job. There’s only one Patty McGuigan.

No AI is ever going to perfect me. Okay? So that’s kind of how I started. I think this, I’m the author of it, obviously, I think. It’s a story of the digital revolution. It’s a story of a woman who went into a male-dominated industry, still is today, and managed to, I think I cracked the ceiling, I really did. was a top performer. I still do an enormous amount of deals.

and I know everybody in town. this point, I mean, you work 40 years in an area, you get to know a few people. My grandson says, grandma knows everybody, you know, and I do. There were years where I had a million square feet to lease, and different projects to lease up. You went from one to the other to the other. ⁓ And the third thing is the book is funny, because my personality and my energy allowed me to do this in a unique way.

I had to do this differently from the way the boys or the men in the office were doing it. I hadn’t gone to the schools, I didn’t play golf, I couldn’t go on the scuba weekends because I had two children, you know. So I had to be a salesman and that’s what I was. And what I did was use the talents that I had and then I would team up with people that…

had the talents that I didn’t have and together we both made money. So if you cover the roulette wheel all 36 squares you’re bound to make some money and that’s kind of what I did. So that’s the scraps. I love this because as I go through all the way you know some of the scraps turned into just gorgeous you know fabrics you know I mean with Harmonic I think I did 14 deals and leased them over 500,000 square feet.

And he was an Englishman, his CFO was a Scotsman, and I was an Irishman. We were an unbeatable couple, the three of us, let me tell you. Talk about having a good time and building a wonderful company. That was great.

Scott Bursey (09:11)
That is just remarkable and that is outstanding. Patty, I love the title of the book, Scraps Build a Pile. It’s such a perfect metaphor for ground up development. Take us back to the early days. What was the very first scrap of knowledge or experience you picked up that ended up being the foundation of your success?

Patty McGuigan (09:33)
So what I did is I carved out an area, and incidentally, the scraps build a pile, the speaker partners, and this is from Todd’s speaker. was saying, Todd, how did you get started? And he says, I a little building. And then I bought it, and then I leased another one, and I sold the little one, and I bought two little buildings. And he said, and I kept doing that. And he said, then I had four little buildings, and then I had eight of them. And he says, you know, you keep doing that.

scraps build a pile. And I said to Todd, do you mind if I use that for my book? Because that’s exactly what I did when I started. I cold called. ⁓ I chose an area that I called my farm.

It was right by the office. And I was fortunate there were 36 little buildings and there was everything from large corporations to sole proprietorship. So I could learn about all the different kinds of businesses that were in there.

And some of them were released and some of them were sold. So I found how that format worked. And I didn’t have to drive great distances. They were all 3,000 to 4,000 square feet. So it was easy. That was kind of my bedrock of what, and Nicole Company, which at that time was a major developer, was in one of those. And so they could see me like a bumblebee going around moving this, doing that, selling this and that. And so they hired me. Drew hired me to.

to do four five of his buildings. so, you know, so that’s how it all started. And I do tell a story. I was doing all, my manager said, I said to well, what do I do next? And he says, I said, I’ve cold called everybody, I’ve made, you know, 20 deals, I’ve been in the business for five months. And he says, well, who did you manage? I said, well, I did six of them with a McKenna’s company in this project on Montague. And he says, well, you go to him and you ask him if you can.

represent him on the project and then you get half of every deal that’s done. said, that sounds great. So I hadn’t realized that, was learners ago. And so I called him, that’s what Steve said to do, to call him. And I called him and I called him and he didn’t return my call. So, remind you, I hadn’t been in the business a year, four, five, six months.

I called a costume company and I said, can you have someone…

dress up as a gorilla and take in some balloons and some paperwork for me. And they said, sure. was $100. I met him in the driveway and gave him the paperwork and went back to the office. And pretty soon the phone rang. And Burke said, Patty, I think I need to see you. And I said, oh, Burke, I’ve been trying to reach you. He said, yeah, there’s a gorilla in my lobby. I said, right, I’ll be right over.

So I sat down with him and I said, know, the first time I’ve gotten to meet you personally, I had been working with some people with him. But I said, I’ve leased six of those spaces and ⁓ I’d like to be your agent to get the rest of the 24 done. I said, I know the product, I know how to show it, and I know how to sell it. it’s a great fit for us. And he says, well, I don’t know about that because it was a good project, it was going to lease. He says, but I do have this project on Zanker that

that I need help with. It’s a two story in the midst of all these warehouses. It was really going to be hard to sell because Silicon Valley was very democratic with a small D. Everybody worked on the first floor. Nobody had any offices. So I said, well, I said, I’ll tell you what I’ll do. I said, I’ll take that building with the Monaco building and I’ll get rid of both of those for you. I’ll lease them both. I said, but if you’re only going to give me one, give me the Monaco one. I know how that one works.

And he sat there quietly and my father had always told me, after you’ve asked a question, keep quiet. So I just sat there quietly and waited for him and it seemed like hours it wasn’t. And he says, okay, I’ll give you them both. So I walked back to the office and I said to Steve, I said, yep, got that one done. I said, here’s 150,000 square feet of exclusives that I got. He says, that’s good, Patty, that’s very good. He says, how did you do it?

He’s, how’d this happen? And I said, well, you told me to call him. So I called him and I went over and met him and told him what I could do and that’s what. I never did tell anyone in the office that I had sent a gorilla over there. Because I thought, you know, someone’s gonna have a fit about that. So, and it was a couple of years later and when Burke finally retired, he’d always kept a little plastic gorilla on his desk and we still all laughed about it. And it became a legend in the company. but that’s.

That’s exactly what I did. it was, you know, I made this business fun. I really did. And I still do. I still make it fun. Follow your passion. I love meeting the people. I like seeing their products. I made this fun. And I like working with it. I sent thank you notes to every developer that I ever did a deal with. I sent thank you notes to the employees. I really did keep in touch with hundreds of people.

You know, and again, you know, and that was before email. That was before email. You can imagine what my mail bill was. And so that’s how I built it. One of the other tricks I did, I used to do advent calendars. You know, the little pieces of candy you open up. I must have sent 400 advent calendars out. Why? Because the client would take it home, the kids would eat the candy, and the kids would say, dad, how did you get this? This is really fun.

Scott Bursey (15:14)
Thank

Patty McGuigan (16:17)
And so every day they got to hear, you, yeah, Patty McGuigan gave it to me. I mean, tell me that’s not a great tool to get your name embedded in their brain. And that worked. So mean, December was a difficult month with the advent calendars and the Christmas cards and everything else. was a, you know, I felt like Mrs. Claus on steroids. But again, it was a fabulous marketing tool for me. So that’s how I got to know everybody.

Scott Bursey (16:46)
that is truly amazing, Patty. And to be quite honest with you, that’s pure investor feel. Now we’re very curious about this. What’s one key market trend that has given you the edge over your entire career?

Patty McGuigan (16:54)
Yeah.

The trends, you know, I always have great faith. It’s high octane here. It’s a place where I’m blessed with my, I mean, I always talk about Wichita. Someday Wichita’s gonna blow up or something. But I don’t know, Wichita would probably think the Atatum Blum had landed if I went there. You know, here, with the vast number of people and brains and activity and…

It fuels itself here. I don’t think it’s an accident that AI happened here. It could have happened anywhere in the world. It could have happened in Tokyo or New York or MIT or Germany, but it happened here. everyone here just walks around. For better or for worse, failure we’re not afraid of. We’re just not afraid of it. ⁓

I had, you know, I will explore new ideas with tenants and clients. I said, some of this is way out and you don’t have to do it, you’re not comfortable. But I’ll you an example. Yesterday I met with a fellow, a very large Chinese company, and he bought this building because he wanted a building in Palo Alto. mean, Palo Alto does have a magic about it. And it was going to be a hard call for me.

He wanted to know why his building wasn’t getting twice as much rent as it were getting and we only have four vacancies in the 104,000. It’s not bad. So I said, well, I’ve got some creative ideas for you. I said, do you want to sell the building? Because he bought it for his one of his companies and they’re not occupying the whole thing. But I could turn that into residential in a New York minute. I said, because it’s all this area is all going housing. I said, or we can lower the rent, which of course that wasn’t going to work.

And he says, well, I just need more money. And he’s like, I just don’t understand why they get more in downtown Palo Alto. I said, Jen, if you move this building to downtown Palo Alto, I’ll triple your rent for you. And he just burst out laughing because the gold is in the dirt. And so I finally said, just said to him, said, Jen, if I got you a $75 million offer, would you sell this? And he said, no. I said, got it. I hear you loud and clear.

We’re going to repaint the hallways and whatever. it’s hard when you’ve bought a building. The truth is, if a B building is in an A area, we can make it an A building. If an A building is in a B area, no lipstick and powder is ever going to change that. It’s just not. One of my wonderful developers, Chop says,

You make the money on the buy. The sell is just executing the deal well. we didn’t buy an A building, and so there’s no way it’s an A building. And I just did have to ask him the hard question. And it’s hard to tell someone that they’re not quite as handsome as they think they are. And they’re never going to be on the NBA. They’re just 5 foot 7. They’re not going to make it.

But he took it in good spirits, you know. I doubt that there would have been many developers that would say, would have been as forthright and honest as I was yesterday. Now he knows me well. He’s worked with me for four or five years and he laughs. But that didn’t make it any easier when you were telling him wasn’t going to make it into the NBA. So I think just being really honest and keeping in touch with them.

seeing what their needs are, because their needs change, partnerships change. We’ve gone from very entrepreneurial to corporate. That’s been a big adjustment for me, a huge adjustment. I mean, I just never color inside the lines. I just, you know, so, ⁓ I can see when they just back up like this that I’ve got to behave myself more, you know.

So, which I can do. I can behave myself. I went to an all-girls school, so I know what I can do. it’s a big, big change. We’re really grown up now in terms of our size and the demands, and Wall Street knows about us now. Wall Street didn’t know anything about us for 20 years. That was pretty nice. There were no CFOs. ⁓ Can you imagine?

if the president and the facilities manager like the building they sign the lease so does that answer your question?

Scott Bursey (21:52)
absolutely. Patty, you have built your career on winning, on playing to win. And that is a winning recipe. What do you feel right now looking at the current climate? It’s the biggest opportunity right now for the pros.

Patty McGuigan (22:10)
I mean, I think there’s always opportunity. There’s always, you know, I always think of myself as, you know, when the market is good, you’re like an optristician developing, you know, delivering bouncing little boys and girls to parents and they’re thrilled. When the market’s in you know, in the tank, you’re more like the oncologist delivering the morphine, you know, saying, these are our escape valves. All of them are bad. Which one do you want to use?

And so I think you can always figure it out. It’s harder and you have to be more creative than, but there’s a route. Here, you know, I live in a bowling, ⁓ you know, huge highs. It’s never even. I always think Wichita is even, you know, it’s never even here. It’s Feast of Famine, you know, where it just goes up and down tremendously, you know, I mean.

This AI binge is really, really, really interesting. But it was the same one. We probably had 12 different portable phones as they figured out which ones were the best one. mean, Apple is a wonderful example of steady as you go, figure out what’s the best product. And I’ve leave space to Apple. I lived down the street from where he lived. ⁓

I always laugh if he were alive, I’d just go knock on a door and say, if you want a dummy, I’m the one that you should choose. If you can get me to understand your technology, can get anybody to understand your technology. when I started, Intel and HP were the two. Intel’s getting a resurgence because you always need chips.

one way or the other and so they’re hanging in there but HP has been divided and subdivided and it’s not the same way anymore you know but and then Apple went through its changes the story of that I can remember when Sobrano built that building and went to Metropols and Life to finance it and they said well it’s a single user building that’s tough and he says and you know these products Apple who’s ever heard of Apple and you know it’s just too much risk

you know, mean isn’t that amazing when you look back at it? That Apple would be too much risk? So he flew back there. Sobrato’s a great salesman. He flew back to Chicago and he got his financing, but he had to overcome, you know, the fact that it was a technology company, that it was new, that all of those things.

Scott Bursey (24:51)
Patty, with all your experience, know our listeners are gonna wanna hear this from you. What’s the biggest risk associated with ground up commercial projects in your view?

Patty McGuigan (25:02)
The hardest thing is the timing, because we don’t control the timing. The variety of threads that all have to get together at the same time. the price of, you know, you’ve got to buy the land right. If you don’t buy the land right, you’re never going to get it right. It’s got to be the right location at the right price. And there’s risk involved with that. And it’s hard to say where the trends are going to go.

But then ⁓ it takes three to five years to get a building. And what is that market gonna be like? What’s the financial market gonna be like to finance it? Can you get this about me? At one point in the 90s, we couldn’t get air conditioning. There weren’t enough air conditioning units. And John Ariaga had gone out and bought them all and had warehouses for them. So he owned the market.

You wanted a building, you had to go to John because he could make it, he could air condition, none of the rest of them could. So the timing is the critical thing. It’s the high risk. It’s what you’re paying for now that’ll be ready in three to five years. You know, that’s, that’s frigging scary. That really is no question about it. That’s why I have infinite fascination with developers. mean, they really,

They’re like drug addicts. If the bankers give them money, they’ll build. you know, they just, you cannot change the market. You can’t.

Scott Bursey (26:35)
Patty, that was pure gold, but we can’t let you go yet. Walk us through Patty 2.0.

Patty McGuigan (26:44)
Well, as I say, you never can have too many clients. You start out and you talk to someone and they’re a suspect and you talk to them some more and turn them into a potential and then you have to make them feel honestly, have to make them feel pretty uneasy. You don’t have any growth plans here? You mean you’re maxed out in this building? I mean, if you got a big deal, you couldn’t even

you know, so you make them really uncomfortable and you say, I’ll tell you what, I can move you down the street, building is twice as much, we’ll get you some free rent or phase you into it and then these plans and this building that you’re not going to be shut down by not having enough space. you know, I think the hardest thing in real estate, you learn all you want, you’ve got to find someone that needs the space, you’ve to find someone that needs the building that wants to buy the…

That is the key thing. think the element of sales is so much overlooked in real estate while people are gathering data and weighing it all out and measuring it. It’s sales. And the sale depends on understanding the risk that’s involved, the people that will take the risk, and how they, you know, everybody will weigh it differently. They’ll all weigh it differently. I think that’s…

It’s just critical. You can see real estate agents hanging on to clients that are never going to make a decision. Or talking to the person that even if he loves it, he doesn’t make the decision. Engineers will fall in love with something and the CEO says, I don’t have anything in my budget for that. No, we can’t do it. And this poor broker has spent hours because the engineers will see him, know, and the CEO wouldn’t see him. I mean, think it’s very hard to cut bait.

for a salesman and saying this isn’t going to go anywhere. Go knock on the other next door, go find something. I think that’s really, this basis of this is finding a need, whether they want to buy a building or sell their building or they’ve got to have somebody that needs it. And that’s sales.

Scott Bursey (28:57)
That

is absolute rocket fuel right there. Thank you for that, Patty, but we can’t let you leave just yet. What golden nuggets over all of your years of expertise could you leave with our pros here today?

Patty McGuigan (29:02)
Yeah

I think it is, you know, don’t allow burnout, balance your time, understand you’re running your own business. You’ve always got to be forward. You’ve got to be looking at your business. Don’t wait for anyone to knock on your door and say, listen, can you help me? I think you have to be, I don’t mind people calling me aggressive. Lots of people don’t like it. I’d like to think I’m assertive, but I mean, I’m pretty aggressive.

You know, I think that’s what you need to do. You have to keep your life pretty well balanced. This isn’t a business that you make it in one year, discover the gold mine, and then you sail off. You do it year after year after year, building your reputation. Your reputation brings you your repeat business. I think that’s what it is. It is.

Scott Bursey (30:06)
Consistency, absolutely. That’s a massive injection of value right there. Patty, this has been awesome. And for our listeners that wanted to follow your journey or collaborate with you, what’s the best way for them to reach you?

Patty McGuigan (30:11)
Yeah.

They can reach me. Well, my book is on Amazon. And if they want to talk to me about that, my email is [email protected] You can call me in the Palo Alto office, 650-714-6830. I will talk to anyone and I’ll help them. And I’m going to take a second or two because I have seven.

uh… students this year that I’m mentoring so I haven’t taught school in fifty years but I’m back to that so right now I’m going to introduce Jack Lye who’s one of these seven and who also happens to be one of my grandsons when Scott called me said now is Jack Lye going to be on the show today and it had come up in the email wrong but I said as long as he’s here he’s right here he’s a sophomore in college and all of these people all of them are so funny and it’s injected so much

positive young energy into our office when we’ve all got these different, you know, I’ve got three and somebody else has two and somebody else has two. It’s really been fun for us this summer, you know? And they’re enthusiastic about learning about real estate, but I always come back to, you gotta have somebody that needs it. You can’t just live on the data or understanding that how a lease works or you gotta have somebody that needs it.

Scott Bursey (31:39)
Thank you for that. Nice to meet you, Jack. And thank you both for being on the show today. We appreciate you.

Patty McGuigan (31:43)
Nice to meet you too.

Okay. Thank you. He’s the face of the.

Scott Bursey (31:51)
And to our listeners, we appreciate you.

If you got value from today’s episode, please subscribe. We’ve got a lineup of exceptional guests, just like Patty and Jack, who are making huge moves in the market and wanting to learn more about real estate. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.