Dealing in diversity

Friday, July 7, 2006

Click here to enlarge this photo Chris Rossi⁄The Gazette John Lin, 51, president and CEO of CapStar Commercial Realty in Rockville, founded the company from his basement. Today, CapStar has grown into a business dealing with millions of dollars in sales in the mid-Atlantic region and catering to Maryland’s diverse marketplace. Click here to enlarge this photo Chris Rossi⁄The Gazette John Lin, president and CEO of CapStar Commercial Realty, talks with property manager Shahmaz Tehraniazad in his office. Lin, a native of Taiwan, is active in the Asian-American business community and employs agents who speak several languages and dialects.

Lin is founder, president and CEO of one of those businesses, CapStar Commercial Realty in Rockville. His company is involved in millions of dollars’ worth of real estate transactions in the mid-Atlantic region annually, including the company’s leasing, purchasing and management operations.

A native of Taiwan, Lin followed two older sisters who had come to the United States, because, as he says, ‘‘at that time, there was the perception that the U.S. was a gold mine.” He earned degrees in accounting, worked for construction and development companies and then started his company in 1994.

Outside of the office, he’s been a member of the planning committee for Rockville Economic Development Inc.’s second annual Asian American Business Conference July 19 at the Universities at Shady Grove. To Lin, 51, one of the conference’s goals is promoting ‘‘the exchange of business and economic development information between diverse Asian communities.” He also stresses the importance of networking among government and business leaders, consultants and academics to benefit everyone in the business community.

The Business Gazette talked to Lin recently about his company and prospects for the future.

One of CapStar’s selling points is the diverse staff. [CapStar agents include speakers of Chinese languages Mandarin, Cantonese and Taiwanese, as well as Ethiopian, Farsi, Hebrew and Spanish.] Why is that important?

Because if you look at the demographics, this area is very diverse — there are so many people here who are foreign born. Especially when you talk about business owners, retail business owners, the majority of the business owners I deal with are foreign born.

John P. Lin Position: Founder, president and CEO of CapStar Commercial Realty, a Rockville commercial real estate company with more than 40 employees and agents. CapStar focuses on commercial property leasing, tenant representation, property management, investment sales, business acquisition, business valuation, risk management, market research and analysis. Education: Associate’s degree, accounting, Prince George’s Community College; bachelor’s degree, accounting, University of Maryland; master’s degree, administrative science, Johns Hopkins University, Montgomery County campus. Organizations⁄Programs: Maryland Association of Realtors; Washington Board of Trade; International Council of Shopping Centers; Washington Board of Trade; Greater Capital Area Association of Realtors; Rockville, Potomac and Olney chambers of commerce; Washington Business Broker Association; Asian Pacific Chamber of Commerce. Family: Wife, Chow Lee; son, James, 16; daughter, Victoria, 14. Residence: Gaithersburg. Hobbies: Tennis.

And you know, with some of these languages there are many dialects. I speak Mandarin ... and I can talk to a lot of people using that, but I have agents who can speak other dialects and other languages. I think that’s important. You have to have that to serve this area.

What’s your market area?

The entire state of Maryland, and Northern Virginia. And we want to expand to include Pennyslvania and Delaware and all of Virginia.

The majority of our deals [have been] in retail leasing. We started purchasing property last year. We actually want to maintain the leasing and business brokerage, and do more retail business, in leasing and acquisitions. Retail is very active. There’s always something going on there, so we want to increase that.

And you’re interested in doing a Main Street-type development?

Yes, I’m looking for a site now. I think that’s a good investment.

Even though places like the Kentlands have had some issues?

In Kentlands, the townhouses are doing well, making about 150 percent profit. But yes, the merchants, some of them are struggling. The problem I think is they’re not getting enough [foot] traffic because some businesses and restaurants are not visible to people unless you walk through there and a lot of people are not going to walk down the whole main street. It’s too far.

So what would you do differently?

I think you have to have a shorter main street ... somehow make it so people don’t have to walk so far to see the stores. Also you have to do something so that more people can park in front of the stores, restaurants, and not in the back, or far away.

What places are you looking for, for your Main Street development?

A lot of places in the area ... Clarksburg, Boyds. The thing is, I’m looking there, in that area, but the problem is people want too much money for the land there. I think sometimes people can be unrealistic. I’m not sure people will pay the kind of money they want for that area.

You said your dad was in business for himself for a while when you were growing up in Taiwan. How old were you when you got involved in business?

My first venture in high school was when I organized an ice skating club. Then in college I sold can openers, and I was also a floor trader for the stock market for a company while I was in college. However, I learned in my young age that I must have the necessary trade skills and knowledge before I get into any business.

Did you go into real estate right after you graduated from the University of Maryland?

I was in the restaurant business before I landed a job as accounting manager in a real estate company in Annapolis. I did analysis of what our inventory was, and what would be the best deals for us, in terms of space, income.

Then I worked for a development, construction company and learned more about the process of development. Then I worked for the HBW Group in Rockville [a construction, management and brokerage company]. There I was controller and learned the full aspects [of commercial real estate], including financing the deals. They’ve done a lot of big projects, like Cascade in Loudoun County, which is almost like a small city, hundreds of homes.

I was hired as the controller for HBW, and promoted to CFO⁄vice president of finance in the late ’80s. I planned to have my own business after a few years of employment at HBW. I hit the glass ceiling and there was no further advancement opportunity.

But actually when I left HBW I made a mistake. I had the chance to buy a piece of property for myself for $60,000 and I didn’t finish the purchase. A few years later it sold for $300,000. So that taught me a lesson ... [an] instance when I could have owned a property and could grow the investment five times more was a painful lesson which demonstrated what kind of wealth real estate can deliver.

Real estate is one of the most solid investments with the most tax advantages earning income three ways: rental income, appreciation of value and depreciation write-off. It has very little downturn risk compared with the stock market.

You started your company out of your own basement?

Yes, we had three agents and a secretary. My first deal was brokering the sale of a deli in Rockville town center ... it sold for $70[,000] , $80,000. My first big deal was leasing a property behind Lakeforest mall [in Gaithersburg] ... a 48,000-square-foot property. The client first came to me for 2,000 square feet and ended up with 48,000.

It had a gross rental value of over $5 million, which produced a six-digit commission income to my startup operation. Because of this transaction, I managed to pay all my office and family expenses for almost six months.

What’s your revenue now?

For 2005, we had $1.2 million in gross commissions and we’re looking for $1.5 million for 2006.

Why do you do what you do?

I have passion in what I do. I enjoy helping my agents to launch a career in real estate and become successful. I feel satisfied when both buyer and seller shake hands at the closing table. When I [sell] a business for my client I can sense the relief from the seller. I get excited when I see great investment opportunities and I have the power to share with my customers. Of course, [in this] career I never have to retire.