Q&A: Bob Hamrick, broker of CityCenter and CEO of Coldwell Banker Premier Realty

By Buck Wargo

Friday, Sept. 11, 2009 | 3 a.m.

Not many people know their career path in high school and jump right into it.

But Bob Hamrick did. As a 17-year-old senior, he prepared for his real estate career and got his license as soon as he turned 18.

Hamrick, 47, CEO of Coldwell Banker Premier Realty and senior vice president and broker of CityCenter, took a circuitous route to Las Vegas.

Born in Morocco, Hamrick’s family moved to England because his father was transferred in the Civil Service. After his father’s death, Hamrick and his two brothers, Lance and Don, and mother Rosa moved to the United States, where he got his first taste of real estate in Georgia before eventually moving to Las Vegas.

IBLV: Why did you pursue a career out of high school rather than go to college?

Hamrick: I observed both of my brothers go to college for two years in Georgia, and they enjoyed it, but they didn’t end up following their college (studies). They got in the car business (instead). I felt like I was ready to get in the real world. I really didn’t want to go to college and didn’t know what I wanted to do, but I figured it would be in sales. I didn’t want it to be in car sales. Real estate made sense.

What made you interested in real estate?

Real estate to me is something everyone needs and everyone aspires to own. I believed it had long-term opportunity — that people were always going to be interested in real estate.

What is it with sales and your family? Is there a sales gene there?

Must be because both of my brothers have been extremely successful in sales. A lot of (the business of) sales is working with people, and my mother was a big influence in how to deal with people. She was very diplomatic and treated everyone extremely well, and I think that has a lot to do with being successful in the real estate business.

What is the main difference between a real estate agent and a car salesman?

Perhaps some would say just the product. I know in the car business the sale happens a little bit faster. There are some people who give a bad name to the car industry, just as some (real estate agents) do for our business. I know both of my brothers do a great job in their business.

Where did you start your career?

I first started with the Americana Group before it was a franchise. I learned a tremendous amount, and, truly, my real estate mentor was Mark Miscevic, who was one of the owners.

How old were you when you made your first sale?

I was 18 when I graduated from high school. You have to be 18 to have your license. I had my first sale soon after getting started in the business. Mark Miscevic was the trainer in our company, so I had a lot of exposure to him. He actually played a role in my very first sale. He referred me to the buyer. She bought a very small home in North Las Vegas; I believe the price was $16,000 or $17,000. I split the commission with Mark, 50-50.

What happened after that?

I had about two years of exposure to the real estate business on the sales side, but I quickly gravitated toward the leadership side. I was interested in helping others be successful in their business. That’s the direction that I took very early on — becoming an assistant manager and then a managing broker of an office, ultimately leaving that company after 15 years and joining Coldwell Banker (in 1995). I made a lateral move from one company to the other. I believed there was a better fit, a better future for me and my wife, Molly. When we made that move to Coldwell Banker, she made the move as an agent, and I as the managing broker of the then-Rainbow (Boulevard) office.

How did you meet Molly?

We met in the business. I was conducting a career night where we invited people to come in and learn about the real estate business, and she was one of the attendees. We didn’t spend any time together at that point, but we circled back around a couple of years later and ultimately got married and have three daughters.

How did your career progress?

I worked for a gentleman who owned the Las Vegas franchise of Coldwell Banker as well as Salt Lake City and Denver. Three years into working for him, he chose to divest himself of the Las Vegas market and wanted to sell the business. Both Molly and I chose to acquire it from him. I went from running one office on the sales side to overseeing an entire organization.

What kind of volume did you have when you bought it?

It was right around $7 million gross commission income. We took it from $7 million to $35 million.

What was it like to have your own firm?

For me, there were periods when it was extremely overwhelming. My real estate leadership history had been mostly front of house, where I was involved in recruiting, coaching, working with agents and helping them be successful and not spending a lot of time on expenses and bills and all the rest. That’s where, ultimately, Molly became a tremendous help, and that’s where the team of Bob and Molly Hamrick came into play.

How has it been working with your wife?

Interestingly, by comparison, (Molly) worked for me when I was the manager, and she was an agent in the office (at Americana Group), and very seldom did our paths cross. She’s a self-starter and didn’t need any help from me. From a personal standpoint, I didn’t want there to appear to be any favoritism, so I usually went in the opposite direction. We didn’t interact very much in the real estate business. Consistently, we took on two such different roles with our own real estate company: She overseeing the expenses, locations, facilities, etc., and me overseeing the recruiting, coaching, etc., that our paths didn’t cross that much. We were always in the same building. The bottom line is she had a great trust level for what I was doing and I for her. The answer is we do very well working together.

Many couples find it difficult to work together and then go home and deal with it there also. What about you two?

I would agree, but that’s not our relationship. When I am working at the office, we seldom cross paths. When we go home, we really do intentionally try to cut it off and not really talk about business and just spend time with our family and try and enjoy ourselves.

How many agents did you have when you acquired Coldwell Banker?

We were less than 200 and grew it to about 325 agents, which we have now.

How has your company dealt with the boom and bust?

It has been a great challenge. The rebound came as a result of something needing to happen: prices declining. That price decline caused the surge to happen. There was a period before that where everything stopped and that, for us, was in 2007. Fortunately, the opportunity we had with CityCenter was just kicking in at that time. So I was extremely busy with my CityCenter responsibilities. It helped a lot to try and bring the two together to make ends meet on both sides.

What do you mean it needed to happen?

My overall belief is that when the cost of real estate exceeds the average income so much, there is a disconnect, and that disconnect was becoming more and more clear in Las Vegas. Either income was going to have to grow, which was not likely, or prices were going to have to come down, and that’s what happened. I don’t think anyone expected them to come down as much as they have.

The bottom line is that we are at a point now where the barn doors are wide open and people are buying a lot of real estate. There are a lot of first-time homebuyers and investors. The interesting thing I am observing is the first-time homebuyer is the type of person who was not affected by the downturn — perhaps the Gen Y buyer, if you want to call him that — the one who was up and coming and didn’t own real estate before, so he wasn’t affected by this downturn.

(Young people) didn’t really have a whole lot of money saved, so their investments didn’t get affected. There is a whole section of the populace that has not been affected negatively by the downturn in the Las Vegas market or the overall economy. Those are the people getting in, and they are actually getting a windfall, in my view, from the downturn.

Where do you see the market heading in the next year or two?

I would love to say that we are going to see a significant amount of appreciation, but I don’t see the logic behind that statement. I believe we will continue to have good sales volume, yet there is not a whole lot showing us that we will see significant appreciation. The job count is not expected to be real high, and everything seems to follow jobs. The fact that CityCenter is going to be employing 10,000 to 12,000 is a positive, yet we know we are suffering from 12 percent or so unemployment. (CityCenter alone) does not absorb 12 percent. I don’t see how we can quickly offset the amount of unemployed. Until that happens and until the foreclosure market starts drying up, I don’t see how prices can increase. Yet it is a phenomenal time to get into real estate and to own real estate.

Will foreclosures ramp up?

It depends on whom you talk to. If you talk to people in the (foreclosure) business, they say they have more coming, and the unfortunate reality that we haven’t factored in is continuation of that through unemployment. And that is hard to determine. But in a market like ours that has adjusted in price so much, holding onto your real estate is not critical in one’s life. So when someone paid $500,000 for a property and it’s worth $500,000, they are going to do whatever they can to hold onto their home. But when it goes down to $200,000 and they lose their job, it’s probably one of the first things they will allow themselves to lose.

Will homeowners underwater walk away even though they can afford the mortgage?

Absolutely. I know people are living with that moral dilemma. “I know I signed this, and I know I am responsible for making payments on this $500,000 loan, but let’s get real. It’s worth $200,000, and let’s get real again. It’s going to take forever or a long period of time to be worth this $500,000 again.” And so we are seeing it every day.

(It has been addressed) that people just can’t go out and buy another home and then let loose of their existing one, but that happened for a long period of time. And it has happened where couples that did not use both of their incomes to qualify, some of them are going to buy another home. It’s about good people finding themselves in bad situations and having to solve their challenges.

What kind of hit do they take by walking away?

It varies by each lender and certainly it will have an effect on one’s credit. They are making that decision that “I would rather rent a home for X number of dollars a month.” To some extent, they are renters in their existing home if they don’t have the upside they anticipated. It varies. If it’s a short sale, it’s affected less than a foreclosure, but certainly between three and five years.

Real estate experts and lawyers are saying that people who lose their homes to foreclosure are going to be targeted for that money in the future. Do you see that happening?

Some are saying that will be a cottage industry, where lenders will be selling the rights to go after previous homeowners for shortages, and companies will start buying that and pursuing it, which is a sad thought. In other words, once somebody has gotten themselves back on their feet, the potential is that (lenders) might come after them for that shortfall.

So it will take time for Las Vegas real estate to bounce back?

What I am observing now is that everything is getting recalibrated. And the quicker people can adjust to that calibration, the better their lives are going to be. It costs less to buy a car. It costs less to buy real estate. It costs less to stay in a nice hotel. So many things have been recalibrated to where the person who needed to make $300,000 doesn’t have to make $300,000 anymore because so much has come down. That seems to be what’s happening, and people are adjusting.

We made adjustments within our company to respond to the challenges of high sales volume and very low profit margin. It is a business, and you have to be able to make those necessary adjustments. I expect the type of sales volumes that we are seeing now are probably going to continue, and property values will not see significant appreciation for the next few years.

How did you get involved in CityCenter?

The opportunity kind of just happened. I recall reading the newspaper when the announcement came out. Mr. (Jim) Murren (MGM Mirage CEO) was being featured in the article describing what CityCenter was going to be. It was the first announcement. I recall where I was, in my Green Valley office, getting ready to start a sales meeting when I saw the magnitude of the project and new ideas that were going to be implemented and the architecture. It made me to want to participate and be involved. I did whatever I could to get in front of the decision-makers and, frankly, by coincidence, someone who used to work for me was now working at MGM Mirage on this project. I threw my hat in the ring and started participating in assisting them with some questions they had, and it led to this opportunity.

Did you call that day?

It wasn’t that day, but it was soon afterward. In the real estate business, we tend to prepare a lot for certain presentations that we are going to make to persuade a seller to do business with us. It is a listing presentation. I refer to this as my longest listing presentation in history because it was about a two-year courting period and providing a lot of effort in advance before getting the nod to represent them.

Did you know they would need someone like you?

Whenever you are building residential real estate to sell it, you are going to need some expertise to help you with it. Who it was going to be was a different story.

What do you do as broker?

My responsibility to the official license is to sell the real estate. They needed a broker to do that. In addition, what I brought to the table was a knowledge of the Las Vegas real estate market, a knowledge of the real estate agents in the market to be able to network with them and have them help us sell CityCenter and help us identify our internal sales force and help in training that sales force and the long-term oversight of all the different areas that needed to be addressed from a sales standpoint.

What was it like in the beginning compared to now?

There have been many different phases. The startup phase, before people knew what CityCenter was going to be, was obviously exciting. When we released the product to the public and began selling, that, too, was very exciting to have the groundswell of interest in CityCenter. Obviously as the economy changed and as things changed in the world, it remained exciting because our goal is how do we continue to sell through a challenging market. I am pleased to say that we have been able to do that, and I know some of the changes that will be taking place in the near future will cause us to continue to work through and sell through a challenging market.

What are the changes you are referring to?

They haven’t been fully vetted yet. It has to do with the article in which Mr. Murren was quoted as saying we are looking at our sales prices and looking to make adjustments to cause existing buyers to be comfortable in moving forward with the purchase and also to entice other buyers to purchase.

Will that make a difference in getting people to close?

It is a fair concern. Any businessperson who was looking to purchase an investment and made a commitment in 2007 — well, a lot has happened between 2007 and 2009. So it is good that both Dubai World and MGM Mirage are cognizant of that and recognize that and are looking to do the right things to cause people to move forward.

Will small price drops make a difference?

It has to be (proportionate) with what has taken place in the marketplace and also recognize the uniqueness of CityCenter. I am confident it will be a number that will take all of the necessary things into consideration.

How can CityCenter afford to cut prices with billions of dollars invested?

I am not at the level to be able to answer that specifically, but I believe it is a necessity. There are a lot of different organizations that are making decisions to do things that are not necessarily profit-oriented, but they’re minimizing-loss oriented.

How will CityCenter help people close financing?

It remains to be seen. Financing is definitely a challenge in the overall marketplace, more specifically to luxury real estate. It is not something that I can share what the solution is at this point, but we hope to able to provide some assistance to buyers in that process.

When will closings start?

They will begin at the end of the year and through the first quarter of 2010.

What do you expect by the end of 2010?

We are optimistic that what we are going to be doing is going to be enough to cause our existing buyers to commit to moving forward, and this effort will also increase buyer interest. Combine that with what the engine of CityCenter is going to create, from people coming through the property once it is open, we are very optimistic that is going to increase interest. So many of the late adopters to a development want to see it — what it is going to look like and what their views are going to be. When we are in a position, very soon, to show them rather than tell them what CityCenter is going to be, it will become very obvious how unique it is.

So once it is open, that should generate a lot of interest?

I am confident it is going to assist us. I have been in some of these units, and the views are phenomenal. Even when this whole development is vacant, there is an energy that you feel from the construction. Then, when you add the most important factor — the people — it is going to create even more energy, and it is going to be a place people want to buy.

What about the timing for opening now compared to when the market was hot?

Timing is everything. There was a time when it appeared our timing was absolutely perfect and then as the financial market continued to deteriorate, it was clear our timing was not perfect. But the reality is you can’t look back. There have been too many positive decisions that MGM Mirage has made that have worked out well.

Where are most of buyers from?

With the increase of people visiting Las Vegas, it has increased our buyer pool on the international side. I would say it is almost been 50-50 (domestic) purchasers and international buyers of late.

What about overall?

Overall, about 15 percent to 20 percent of our purchasers have been international buyers. It has been spread out. Canada has been a phenomenal opportunity for us as a connecting country. The Calgary market has been a big market for Las Vegas.

What about domestically?

Combine California and Nevada purchasers and you make up the lion’s share of the domestic sales.

What about Realtors who were paid partial commissions when clients signed contracts. How are they affected by any potential reduction in prices?

That has not been fully vetted yet. The reality is a large percentage, the majority of the commissions, have already been paid to real estate agents. Our contract says once we have paid commissions out, we will not go after them to get dollars back.

How much was paid?

In some situations, it has been 100 percent and in other situations 75 percent and in a very few numbers, it’s been 50 percent.

Do you have the right to cut back unpaid commissions if prices drop?

There are a lot of options, but we haven’t fully vetted out what is going to be the end result on the balance.

What about the loss of the Harmon as one of the residential components after structural issues were discovered?

Harmon was a great product. It is unfortunate we were unable to continue the residential portion. It is going to be a great hotel. We are looking forward to the opening of that product. There were certain buyers excited about what Harmon was going to be as a residential offering. Many of those buyers, though, wanted to remain a part of CityCenter, and they purchased in Veer Towers and they also purchased in Mandarin Oriental.

How much time do you spend with CityCenter compared to other business?

Originally, when I first began representing CityCenter, it took up 100 percent of my time. But fortunately lately, I have been able to balance my schedule, and it is getting much closer to 50-50 over the past year.

When will your role be done?

There is going to remain a need to sell units. I hope to remain a part of this. It is a dynamic project. I learned a lot by being here. Contractually, there is an end to the contract, but the bottom line is I hope to remain part of this as we move forward.

Do you envision another project like this anytime soon for you to work on?

It is going to be difficult. It was part of the original picture. There may be additional projects that MGM Mirage will build or other developers will build. It doesn’t appear realistic for the near future that anything like that will happen because properties are being sold for less than they can be built. It’s not financially feasible. I do believe there will be a time — and I don’t know when that will be — that this development will begin again and a residential element to hotels will continue to make sense as long as you can get the numbers right.

What will people say in 10 years about CityCenter?

Ten years from now they are going to be saying this remains extremely fresh and extremely new, and it looks like it was just built because of the uniqueness of CityCenter, not only to Las Vegas, but to the entire world. CityCenter is going to stand out not just on the day of opening but years and years into the future. That was part of the original mandate and expectation that the world-class architects were creating a product that was going to remain fresh far into the future.