By Rodney Campbell
Twenty-five years after George Larsen and Don Baker started Larsen Baker as “two broke brokers,” the company is the largest commercial property owner in Tucson. Co-owner Margaret Larsen, who has been there since the beginning and made that colorful observation about the company’s early prospects, credits Larsen Baker’s success to a slow-growth approach that stressed small partnerships and the advantages of knowing the local real estate market.
“We built the business steadily – one property, one tenant, one relationship at a time,” said Larsen, who co-owns the business with her husband, George, and three company executives. “Don Baker and George never strayed very far from Tucson, the city they loved.”
Today Larsen Baker entities own and manage more than 2.7 million square feet of commercial properties and serve 350 tenants across Southern Arizona. They use their extensive local knowledge to gain an advantage over their competitors.
“There are certainly larger national firms developing commercial real estate in Tucson, but we usually know first which new tenants are looking at Tucson,” she said. “We take that local knowledge and use it to determine what might be the best location to meet that tenant’s need – or to find an opportunity to turn a retail center into an office or vice versa.”
One of the company’s biggest challenges came during the 2008-2011 Great Recession. Commercial real estate suffered numerous body blows during that challenging period.
According to international real estate firm Cushman & Wakefield, office vacancy rates across the U.S. peaked at 17.1% and retail vacancy rates reached 10.1% in 2010. Tucson was as hard hit as anywhere and Larsen Baker had to be creative to keep its tenants.
“Those were tough times for our tenants. They would often ask us for rent relief,” Larsen said. “We worked with our tenants. We shared their hardships. We think it made for some very loyal future tenants.”
Larsen Baker suffered an unimaginable tragedy in 2016 when co-founder Don Baker and his wife, Dawn, died in an airplane accident while returning from a conference in Deer Valley, Utah. It was a terrible blow personally and professionally to the Larsens and the company.
“It was devastating to us,” Margaret Larsen said. “Don Baker was the partner who understood the operations of the company. He managed the staff. He was brilliant, hard-working and dedicated.”
Baker’s death made Larsen Baker retool its business. Part of that involved promoting Melissa Lal to company president.
“Melissa is bright, insightful and ambitious,” Larsen said. “She is young and brings a new perspective to identifying development opportunities.”
Lal started her Larsen Baker career as an administrative assistant in 2007. She had a degree in American literature from the University of Arizona but did not think she wanted to pursue a career as a high school teacher.
A friend told her Larsen Baker needed an assistant. Lal had never heard of the company.
“I asked my mom if it was a bad idea to take an $11-an-hour secretary job,” said Lal, who now has her CCIM designation, which stands for Certified Commercial Investment Member. “She told me, ‘Cream rises, Melissa.’ And she’s been telling me that every day since. I was fortunate to start my career with a company that saw my potential as a leader, promoted me, appreciated my commitment to the company, and saw my talents as a dealmaker.”
The company has succeeded during its 25 years, thanks to long-term relationships with tenants and with their real-estate investor partners. Larsen Baker’s track record of making smart investments, being a safe bet for lenders, treating tenants as partners and supporting local charities has made it a trusted brand in Tucson.
The company has adjusted after numerous challenges over the past decade and is primed for long-term sustainability.
“We are celebrating our 25th anniversary this year – but in a lot of ways we’re celebrating our first anniversary as Larsen Baker 2.0,” Lal said. “Larsen Baker 2.0 is all about continuing and honoring the reputation that George, Margaret and Don have created in this community as ‘value-added’ dealmakers who try to always do right by their tenants, investor partners and employees. That will not change.”