Property manager: John Cushman, chairman of Cushman & Wakefield, has been busy jetting back and forth across the country, boosting L.A. and his firm. (People).

THE first thing John Cushman III wants to make clear is that at 61 he is neither retired nor close to it. Having become chairman of Cushman & Wakefield Inc., the firm founded by his grandfather in 1917, when the real estate services giant merged with his Cushman Realty Corp. last year, he has yet to slow his work or travel schedule. During the tune of the interview, Cushman had just returned from New York where he, Eli Broad, Anschutz Entertainment Group President Tim Leiweke, Central City Association Carol Schatz and Councilwoman Jan Perry completed a road show of sorts, touting the strengths of downtown Los Angeles to would-be East Coast financial types. Cushman has been a major player in downtown real estate since coming to Los Angeles in late 1967 to work with Atlantic Richfield Corp. on the development and marketing of its 2.6-million-square-foot Arco Plaza, which was completed in 1971. He formed Cushman Realty in 1978.

Question: Why did your group feel the need to pitch Los Angeles to New York investors?

Answer: It's hard for other people to understand what L.A. is. Most can't make the distinction from where the riots were to downtown to Burbank. You've got to be pretty sophisticated to know the difference between Tri-Cities and Santa Monica. Try to explain to somebody the difference between downtown, Mid-Wilshire and Miracle Mile, Beverly Hills, Century City and Santa Monica -- they don't get it. The five-county area is 16.9 million people and you have to realize how big of an economic engine the five-county area is.

New York is the eye of the hurricane and that's where stuff happens. You have the lenders, the commercial bankers, the investment bankers, the opportunity finds and the consultants.

The purpose was to tell the story. It's not a well-known story... There should be massive interest by anybody in real estate.

Q: So how did you approach that?

A: Tim talked about Staples Center and the billion-dollar development around it. Eli talked about the ethnic and cultural diversity and the impact of that to downtown, the Grand Avenue program with specific focus on the Cathedral and the Disney Concert Hall. I talked about the macroeconomics of downtown.

In 2001, of the 50 primary central business districts, only two had positive absorption -- downtown L.A. and Washington D.C. In New York, rents are going down and the bubble in San Francisco was unbelievable -- the markets dropped like a rock. Our fundamentals are still intact. There should be a massive interest in downtown by anybody in real estate.

Q: What were some of the more common questions asked?

A: One guy asked, "If you have all that stuff happening, and all this residential being developed, what are you doing about schools?" Well, we got one up the street (Belmont Learning Center) but it's not functioning. We didn't get into that.

Q: With all the money being invested in downtown office and residential property, why is it taking so long to secure a deal for a supermarket in the area?

A: I can't tell you that. I'm not a residential guy. But I promise you, there is stuff going on. There are very important sources of capital -- institutional, private, opportunity funds, offshore included -- that are looking at downtown as we speak.

Q: Was the convention business and the prospective downtown hotel discussed?

A: Tim Leiweke talked about the need for a 1,200-room convention center hotel. It's the chicken or the egg as far as I'm concerned. If you don't have the hotel, you can't get the conventions, and you need the conventions so we can get the revenue to pay for the bonds to make it work. You're never going to have a convention center working the way it could work until you get the hotel infrastructure to support it. You've got a missing link.

Q: How will downtown's performance differ from the rest of the region?

A: We had massive building between 1990 and 1992. All these buildings would cost between $300 and $400 a foot to build today. This building (the million-square-foot Figueroa at Wilshire Tower) sold for $226 a foot. Anytime you can buy a product below replacement cost -- and its rents in some cases can't support that replacement cost -- you've got greater upside. There are buildings on the Westside that are $425 to almost $500 a foot. You need a whole different rent structure to support that than you'd need downtown.

Q: What's going to happen to Arco Plaza, and what will it take to return it to its former status?

A: Who knows? Someone's going to have to spend a lot of money. There are both capital expenditure and vacancy issues. It's not an investment grade deal, it's a development deal. The location is infinitely better than when it was built. It's timeless architecture. It looks great.

Q: What do you think of Robert Maguire's plan to take his company public?

A: This has been a long time in coming. It's a plenty complicated package. It involves some of the highest quality assets in the world with great tenants and it's well leased. If I were Maguire, I would want to do it as soon as I could.

Q: Wouldn't he be better off waiting until equity markets improve?

A: What do you gain by waiting? REITs have performed as well as any sector. The interest rate environment is as low as we've seen it, investors get good tenants, a good roll over risk distribution with credit tenants and cash flow

Q: How involved are you in the day-to-day operations of Cushman & Wakefield?

A: Totally. I have been on the road much more than I've been in LA. Whether it's 401(k) strategy or deferred compensation or strategies anywhere in the world, I'm involved. Here's an e-mail from Texas about a major transaction in Chicago, here's one about a transaction in Alaska, this one's on Gary Winnick's building, which I can't comment on, I've got an issue in Dubai...

I'm having more fun than I could ever tell you, and I'm working much harder.

Q: How has last year's merger worked out?

A: With a company as big as Cushman & Wakefield, you're constantly involved in recalibrating. If you had no merger, you'd be tinkering with it. But the integration has been fantastic.

Q: What kind of recalibration?

A: Calendar 2001 and 2002 were terrible years. You're going to recalibrate everything -- performance expectations, budgeting, people... You're constantly looking at your leadership -- how you can do more with less.

Q: There have been personnel changes at Cushman's Woodland Hills office, and it has been reported that it may be closed. Is that true?

A: That's not a decision I'd be involved with but I don't think so.

Q: If you're involved in day-to-day operations, why aren't you part of the decision-making process for Woodland Hills?

A: I support how this thing is being run. It's about having the right people in the right place. We're in 51 countries around the world. We have everything from currency risk to political risk.

Q: Do you expect further consolidation in the industry?

A: You won't recognize this business in three years. There will be casualties. Some firms will be gone and you won't recognize the others. The public brokerages are in a business that's been unkind to them. The public marketplace does not like the public real estate sector.

RELATED ARTICLE: INTERVIEW

John C. Cushman III 

Title: Chairman

Organization: Cushman & Wakefield Inc.

Born: Montclair, N.J., 1941

Education: Bachelors' in Economics, Colgate University 1963, Advanced Management Program, Harvard University, 1977

Career Turning Point: Working with Atlantic Richfield Vice President Paul Snyder after leaving Cushman & Wakefield in 1978 to start Cushman Realty Corp.

Most Admired Person: His father

Personal: Married, four children, three grandchildren 

Hobbies: Skiing, horseback riding, golf