Talking Points: John Orehek, CEO, Security Properties
As CEO of Seattle-based Security Properties, John Orehek manages a rental empire that includes 17,000 residential units nationwide worth $1 billion. Now he’s taking advantage of a weak real estate market to buy and build new properties with a focus on the West Coast.
EARLY YEARS: I grew up in Cleveland, Ohio, in a central-city neighborhood dominated by Slovenians, my ethnic identity. You had the Slovenian church, the Slovenian elementary school and several blocks dominated by Slovenians, most of whom moved in as immigrants after World War II. My father was a tool-and-die draftsman who designed tools that were used to build automobile parts.
REAL ESTATE: There were eight kids in our family. We lived in the upstairs floor of a duplex, and there was usually an immigrant family living on the lower floor. As my father bought additional duplexes, he would have one of the kids live on the top floor and rent out the lower unit. Whenever my father would buy a new house, everyone would help fix it up. My uncles would get the challenging jobs like the plumbing and the electrical work. We kids would strip off the wallpaper and do the sanding. We all tried to elevate our skills so we didn’t have to do the tough jobs.
EDUCATION: I went to law school [at Case Western Reserve], but I was always more interested in business, so I took courses like tax law, property law and business planning. I went to work for Arthur Andersen, where I helped small-business clients restructure their family businesses. I learned a lot about structuring deals while working with a lot of different interests. I didn’t see a lot of growth in Cleveland, so I asked Arthur Andersen to transfer me to Seattle. [Orehek joined Security Properties in 1982.]
SECURITY PROPERTIES: When the company started building affordable housing in the 1970s, many doctors and lawyers invested in us to shelter their taxes. But when the tax law changed in 1986, most of our investors became institutions like banks. Recently, high-tech firms like Google have been investing in the deals to take advantage of the tax credits.
NEW DEVELOPMENTS: We plan to build in West Coast cities like Portland, San Francisco, Denver, Phoenix, Salt Lake City and Las Vegas, which is particularly interesting because it is so distressed. We are also doing projects [outside the West] in Texas and Missouri. In Chicago,
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