Onetime No. 2 agency brought down by debt, severe market downturnSAN RAFAEL -- Orion Partners, once the North Bay's second largest commercial real estate brokerage with a string of market-topping deals in its 15-year history, is in receivership to pay more than $500,000 in bank debt, its headquarters has been taken back by the landlord and former agents have gone to court for unpaid commissions.
On March 8, 16 agents from the San Rafael and Santa Rosa offices joined Santa Clara-based Cornish & Carey Commercial in Larkspur and Santa Rosa offices. Orion's San Rafael office closed around the same time, and Cornish & Carey now occupies the Santa Rosa office.
While market activity slowed, Orion amassed debt and missed payments, according to Marin County court records. The global credit crunch and rapidly contracting businesses evaporated sales deals and virtually shut off the spigot on leases until late last year, resulting in what a number of commercial real estate agents have said was the worst income year in their careers.
Marin County Superior Court judge James Ritchie on April 15 ordered receiver Rajiv Parikh to take possession of Orion's assets, largely revenue from listings and transactions, to pay off a $550,000 Wells Fargo Bank line of credit, $25,000 term loan from the bank and a $6,400 Wells Fargo business credit card balance, according to documents.
Due on the credit line, opened in June of last year and due in mid-October, were nearly $475,000 in principal and almost $14,000 in interest.
Orion defaulted on the term loan, opened in August 2008, with a balance of $13,346 in principal, $179 in interest and $39 in late fees as of early April, according to Wells Fargo's court complaint.
Besphil & Co., the owner of 899 Northgate Drive, where Orion occupied fifth-floor offices, sued the brokerage in Marin County Superior Court on March 3 for $23,193 in past-due rent and $7,624. The court allowed Besphil to take back the space March 23.
Orion's financial troubles had been building for some time, according to several industry professionals closely involved with the company. A severe slowdown in market activity in the past two years, particularly last year, compounded a situation in which agents interested in getting a share of company profits as well as transaction commissions weren't getting either.
"They were promised a share of the profits," said Basil Plastiras, a San Rafael real estate attorney and broker who formed Orion with Bill and Susan McCubbin in 1996. "That's why we called it Orion Partners."
Mr. McCubbin, president and chief executive officer of Orion, declined to comment for this story, other than to say that Wells Fargo was in control of the company now.
[caption id="attachment_21956" align="alignleft" width="130" caption="Bill McCubbin"][/caption]
In 2004, Mr. McCubbin, president and chief executive officer, was quoted as saying the goal of Orion Partners was to be agent-owned and share profits. The brokerage started when Mr. McCubbin's role as manager of Grubb & Ellis' San Rafael office ended. Ten Grubb & Ellis agents followed him to start a new brokerage to compete with Keegan & Coppin, which was then and continues to be the North Bay's largest commercial real estate brokerage.