DBSI, Kastera Homes confirm layoffs

DBSI, the national real estate investment firm headquartered in Boise, laid off a number of employees in the Treasure Valley on June 17, the company confirmed last week.

Ken Harden, senior director of marketing, confirmed support staff layoffs in marketing, IT and human resources at the company’s Boise and Meridian offices. He said the employees were part of the company’s Spectrus Real Estate and DDRS subsidiaries, which were recently re-branded under the DBSI name. People knowledgeable of the layoffs said between 40 and 50 workers were let go, though Harden said he couldn’t confirm any numbers.
Kastera Homes, an affiliate of DBSI, also laid off eight people, about half of the company’s staff, though the custom home builder is continuing construction on several built jobs and is preparing to work on several spec homes, said one employee, Barbara Youngstrom.
“Given how the economy is right now, there were too many people for the amount of work right now,” Youngstrom said. “As things pick up we’d love to hire the same people again.”
Harden said the DBSI support staff reductions are the result of a 50 percent downturn in the net lease and tenant-in-common real estate markets, two of DBSI’s specialties, in 2008. Net lease means that tenants are required to pay for property expenses apart from rent. Tenant-in-common refers to property whose separate units are owned by multiple entities.
Harden said the 29-year-old company plans to “rebalance” its national workforce by adding workers in the revenue-generating areas of sales and real estate development over the next two to six months. He said DBSI plans more than $1 billion in real estate purchases over the next year.
He also noted that DBSI has plans to aggressively move into the broader multi-tenant market, which provides a more diverse tenant base and guaranteed cash flow. Harden noted that the company recently launched a new program called Net Lease PLUS, which allows use of a single master lease to manage multi-tenant facilities like office buildings and retail centers.
He said the company anticipates $200 to $400 million in sales this year from the Net Lease PLUS program.
 “We’re basically streamlining to get lean and mean for this particular down market while increasing our revenue capability,” he said. “We’ve been through many of these cycles before.”
DBSI currently manages more than 18.6 million square feet of commercial real estate assets, valued at over $2.65 billion, in 34 states. It has also a development division that builds residential and commercial real estate.
Harden said the company’s plan is to rehire support staff when the market rebounds. Employees with the company for longer than six months will receive severance packages, though Harden said he couldn’t reveal any details.
“These are very good people, very talented people,” he said. “We’ll be effectively looking to hire them back as soon as we can. This is an excellent opportunity (for other companies) in the industry to pick up some high-performing players.”
Harden also noted that the layoffs at Kastera Homes are the result of the downturn in the Treasure Valley housing market, though he said DBSI is still committed to the local market.