J. Clayton Hering, president of Norris, Beggs & Simpson, pushes his company through a historic real estate downturn.
PHOTO BY KATHARINE KIMBALL
It’s a sunny, early fall morning at the offices of Portland commercial realtor Norris, Beggs & Simpson, and J. Clayton Hering, the company’s president since 1989, is feeling upbeat. Dressed casually in a multicolor striped shirt, he’s headed this afternoon to Tennessee for live country music and a Ducks-versus-Volunteers college football game.
Never mind that real estate remains in the throes of its worst downturn since the 1930s, with economists forecasting continuing difficulty even as the overall economy modestly recovers. National net worth, of which real estate counts for nearly a third, has fallen by $12 trillion since its peak in 2007. Just blocks from the NBS offices beside the Morrison Bridge, the Park Avenue West office tower has remained a giant hole in the ground for over a year, its stalled construction a symbol of the market looking to climb back to the surface.
“We’ve come through it before and we’ll do it again,” says Hering, a Portland-area native nearing his 70th birthday. “Good companies prepare themselves for the upside. You tighten your belt, you get efficient, and you make moves when the economy turns. Also, there is opportunity that comes about in down markets. When things are going well, people don’t look under the hood of the car much.”
|Norris, Beggs & Simpson|
|President: J. Clayton Hering|
|2009 Transaction value: $266 million (brokerage), $174.5 million (finance)|
|Square footage under management: 6.7 million square feet, valued at $891 million|
Key to Hering’s success is how his personal values play out in his business decisions. There is no separating Hering the intractable Vietnam veteran from Hering the thoughtful Ivy League-educated businessman, or Hering the arts supporter from Hering the salesman. “The reason I’ve been here 29 years is very much Clayton,” says Jan Robertson, NBS’ chief financial officer. “He reminds all us managers that we’re here to make the community better and to make the workplace better for our employees. He always says, ‘Don’t stifle people.’ It’s not what you think of when you think of an ex-Marine.”
With measures from executive pay cuts to furloughs, Hering has laid off only two employees.Many of his staff have been with him at NBS for decades. “They all have families, responsibilities, hopes, aspirations,” says Hering, who has been with NBS since 1972. “You’ve got to deal with lowering your overhead, which we’ve done. But to me as a leader you must lead the pain and share the gain.” Hering also knows when the market tics upward, NBS will have people ready to capitalize. “We’ve got to encourage people to stay on the street, and we’ve got to stay optimistic.”
NBS also remains proactive in tough times. In the recessionary early ’80s, the company established brokerage, property management and finance wings in each of its offices. In the ’90s, Hering led a separation of NBS’ Northwest offices from those in California. In 2003 as the Dow Jones skyrocketed, the company established a private equity fund. In 2010, NBS Multifamily Management was launched to address the emerging middle-class apartment market and the wave of unsold condos turning to rentals. Each move and era had its own circumstances, but collectively it shows the company becoming more diverse and autonomous, constantly seeking new avenues to do business.
“I’ve been through a lot of economic cycles in 38 years,” Hering says. “I grossly misjudged this. I didn’t think we were overbuilt like in the last recession, but I didn’t anticipate how the capital markets would dry up. We were in the bottom. So we said, ‘Where can we build revenue?’”
In liberal Portland, Hering succeeds by tempering strong views about taxes (he wants them cut) and jobs (he thinks elected officials don’t focus enough on them) with diplomacy and humility. “He’s the best kind of salesman,” says Elaine Calder, president of the Oregon Symphony. “He doesn’t try to sell you what you don’t want. He listens to what you want.”
As Calder knows, these same principles apply to Hering’s arts support, even when it’s not to his personal taste. The symphony has counted him as a board member for more than 12 years, including two as president, even as he admits to preferring the Grand Ole Opry to Bach and Beethoven. “I’m a country and western fan, but I believe very strongly that arts and culture is critical to quality of life,” says Hering, who in 2009 won both the Portland Business Alliance William S. Naito Outstanding Service Award and the Commercial Association of Realtors Humanitarian of the Year. “It gives you the opportunity to step off whatever platform you’re working on all day, maybe getting your brains beat in. I believe it’s what feeds the soul.”
Perhaps it takes a leader with an Ivy League brain and a Marine’s courage to lead a real estate company to prosperity in the early 2010s. But like the country songs he loves, Hering is eager to turn anguish into aw-shucks poetry.