The Man Who Knows the Dirt!
Rich Samit could be called Mr. Land Sales in this region. Not just because he does a lot of them, but because he practically created the niche. In the 12 years since he co-founded McLean-based Fraser Forbes with John Protopappas, their 30-person staff has generated $2.5 billion of land sales revenue, $420 million in 2005 alone.
We took the picture above recently in Rich’s office. As his hand gestures reveal, he’s always in motion—a girlfriend, four young kids, and a sports fanatic who does tennis, basketball, golf, and, last month, skiing in Steamboat.
Representing buyers and sellers of raw land, as well as redevelopment properties where new structures will be built, Rich figures his firm’s brokered enough acreage to support over 30,000 residential lots and 5 million buildable square feet of commercial space. A native of Great Neck, Long Island, and poli sci major at the University of Connecticut (‘88), he began in land sales as soon as he graduated. He says he made up his mind to start a firm by age 30, and he did so right under the wire, in 1995. And it was in DC because he had followed his older brother here, who founded the chain “Hour Eyes” and, more recently, "My Eye Dr."
Entrepreneurship runs in your family?
Our father was a CPA who ran his own firm and also looked after the books for my mother’s social work practice. I had tracked the D.C. real estate market while I was a senior in college and liked what I saw. I got my first job in land sales as a junior associate at Mount Vernon Commercial in Tyson’s.
Land sales brokers seem rare. Why is that?
It often takes several years to close a deal, and many real estate professionals need to close them quickly. We are willing to spec our time up front, be patient, and wait for the payoff.
How do you persuade sellers that they need a broker? Aren’t buyers knocking down everyone’s door where there’s attractive land?
When someone sells a great work of art, they hire an art auction house like Sotheby’s so their Picasso will be shown to collectors everywhere, which allows the competitive market forces to dictate price, as opposed to selling it to the first buyer who walks in the door. Yet selling to the first buyer is what often happens with land deals, because of a lack of awareness that a company like ours exists.
Where do you see land sales headed?
We’ve had a 10-year bull market that has had a big correction the last 18 months. A much smaller percentage of buyers are active today compared to 18 months ago. We think the market has bottomed out. We’re seeing positive signs of buyers stepping back in. It will take some time though and we expect values to be flat for 2007 and then to start trending up again.
You have a reputation for not taking “no” from a seller.
We like to get exclusives with sellers, but if they turn us away, we try to come back with a buyer anyway. That’s what happened with Potomac Yard a couple years ago. It was an old rail yard but nothing much more than dirt. Crescent Resources, the real estate arm of Duke Energy, was about to sell it for $60 million. We thought we could do better for them. Their local guys said no, so we got on a plane and flew to Charlotte to talk to their bosses. They gave us a week to show our stuff. We raced against the clock and within days brought in Pulte Homes and Centex Homes with a considerably higher offer of $105 million dollars, which was accepted. The project was planned for 2,000 residential units and over two million square feet of commercial space.
In 2004, when we approached the Crown Family about selling Crown Farm in Gaithersburg. The family didn’t hire us. Dozens of other buyers were chasing that property. So we just regrouped and put together a very strong team, KB Homes and Centex Homes, which was successful in purchasing the farm for $180 million.
How did you elbow in?
The deal had to close quickly, before many of the engineering entitlements were fully vested. We were very confident with our team.
How did guys named Samit and Protopappas come up with a firm named Fraser Forbes?
John's wife owned a one person consulting firm, which had those family names. John and I thought it sounded catchy, so we bought the name for a buck. :)