OverviewPressLinks Back to Press page In Weak Economy, 3 Local Cos. Surge Publish Date: 11/27/2002 Santa Monica Mirror By: Reeve T. Schley, Mirror staff writer Once again suggesting that Santa Monica has been hit harder than the rest of Los Angeles by a flagging economy, only three private companies based in Santa Monica are among the Los Angeles Business Journal’s list of 100 fastest growing companies. Two of the companies, MJW investments and Morley Builders have benefited from a scorching real estate market, while the third, Dimensional Fund Advisors Inc., manages assets for institutional investors. Company spokesmen said that while high rates of growth are good, the main goal is to maximize profits. “What we really track is profits and profits per employee. We don’t really focus on growing revenue, and I think over the next two or three years we will continue to increase profits and profits per employee,” said Mark Benjamin, the president of Morley Builders. In general, faster growing companies gross somewhere between $5 and $40 million and are newly formed. (Morley Builders is an exception). Business insiders believe that newer companies are not attracted to Santa Monica, as it has the highest leasing rates in the county. “Smaller fast-growing companies just aren’t coming to Santa Monica. They may start coming in the next few years when the economy comes out of the current recession, but newly formed companies, don’t have the capital to plunk down $2.50 a square foot in Santa Monica, when they can get space for half the price somewhere else,” said Michael Crimmins, formerly of Cushman and Wakefield, and now the head of a private real estate firm. MJW investments, which was Los Angeles’ fastest growing private business last year, saw revenues jump from $7.5 million in 1999 to $32.8 million in 2001. “One of reasons we have grown so quickly is that we have been able to make good acquisitions while avoiding bad ones. Sometimes the best decision is not to buy something,” MJW president Mark Weinstein said. “In one of the buildings we have purchased recently the rents went from $500 a month to $900 a month. The key is to be able to buy right and not be greedy.” MJW has real estate and commercial building holdings throughout California and Los Angeles (including Korea-town and downtown) as well as holdings in Fresno, Sacramento, and throughout California. Its total value is near $200 million. Through the first three quarters of this year MJW reported revenues of $30.2 million. Though MJW doesn’t appear to be headed toward another year of high growth percentage-wise, Weinstein is not concerned. “We will see growth but not as much growth in the coming year. Smaller companies grow faster and we have grown very well. But it is pretty hard to keep on having 300 and 400 percent growth year after year, especially when there is less real estate out there,” Weinstein said. “What we are concentrating on now is profitability. I don’t want to grow just to grow, I want to be more profitable.” MJW has benefited from a four-year run of unprecedented growth in the Los Angeles construction business, which now appears to be slowing down. The Construction Industry Research Board said that the value of both industrial and commercial projects under construction in Los Angeles will drop by half from 2001 to 2002, hitting their lowest levels in the last ten years.