Ziman: We really haven't made any significant changes to our basic business strategy, although we are constantly refining it. Our core business continues to be the ownership, leasing and management of commercial office buildings. Because of the recession, we have re-doubled our efforts in leasing, both in absorption and in tenant retention. Retention is particularly important because it eliminates the loss of income from empty space and reduces or eliminates tenant improvements and brokerage commissions.

Portfolio: You mentioned tenant retention, which is a challenge for many office companies. How does Arden maintain its high tenant retention rate?

Ziman: Tenant retention is the top initiative at Arden. We have a comprehensive Tenant Outreach Program with designated directors of tenant services in each region. [We conduct] surveys, focus groups, service recognition events and a number of other programs that are all geared to understanding what our tenants need so that we can exceed their expectations whenever we can. From our perspective there is no such thing as being satisfied with the level of service we give our tenants.

Portfolio: Why does Arden focus exclusively on the California market? Do you have any plans to expand beyond that region?

Ziman: Arden owns almost 20 million square feet of office space in over 220 buildings in Southern California. Arden is the largest commercial office landlord in the region, yet we still represent only 6 or 7 percent of this enormous market– which has at least 50 submarkets depending on how you count. Aerospace and defense, entertainment, technology, bio-technology, education and managed health care are all significant, large, growing industries here.

We will always look for opportunities in other markets, but our decision to act on an opportunity is firmly based on whether it represents long-term value for our shareholders. Right now we know that value is here in Southern California.

Portfolio: You've been involved in the real estate industry for more than 30 years. How has the industry changed in that time, and how do you expect it to change in the future?

Ziman: When I first became involved with real estate in the late 1960s it was basically a cottage industry. Century City barely existed and Beverly Hills had only a handful of 10-story buildings. Over the course of the '70s, '80s and '90s, Southern California's real estate market matured, especially when you realize that over 100 million square feet of office space was added just between 1982 and 1991. Overall, the needs have grown as the entertainment industry has matured, aerospace and defense are expanding again, and managed health care, which didn't exist a few decades ago, is now centered here.

The space requirements of business, the service industries and the professions are much more sophisticated and will continue to evolve and grow. In short, Southern California is a place where people want to live and work, and even after looking at the least expansive projection of demographics, dramatic growth will continue in the future. Nevertheless, Arden's biggest challenge in 2003 will be tenant retention and occupancy.

Portfolio: In 2001 you helped establish the Richard S. Ziman Center for Real Estate at the Anderson Graduate School of Management at UCLA? How did that project come about?

Ziman: The Anderson Graduate School of Management is one of the top five in the country, and for several years I have lectured on various matters of real estate and running a public company. Before the Ziman Center was established, Anderson had individual classes in real estate but no overall program on the subject. I thought the time had come to create a dynamic real estate center.

As we all know, the impact of real estate extends far beyond bricks-and-mortar into almost every economic, political and social issue. The challenge was to create a center that brings together business and political leaders in the private and public sectors coupled with academia and research to resolve these issues. I think the Ziman Center will become the pre-eminent national resource in real estate and overall infrastructure strategies. The Ziman Center is a very high personal priority and has meshed well with the business of Arden Realty.

Portfolio: In addition to the Ziman Center, you are also active in a wide range of other volunteer and philanthropic interests. Is there one that stands out?

Ziman: Most significant to me is the City of Hope National Medical Center and its Beckman Research Institute, which is one of the pre-eminent treatment, diagnostic, clinical and research centers in the United States, focusing on cancer, AIDS, diabetes, blood diseases, immunology and other catastrophic diseases. It's an exciting institution whose motto is "health is a human right."

I first got involved in the 1970s when I became a member of the board of directors. I served as chairman from 1989 to 1995 and am now chair of the construction committee, overseeing, among other things, the construction of the $250 million acute care in-patient hospital facility.

Portfolio: What do you do to get away from work and relax? Do you and your family have any favorite vacation getaways?

Ziman: First and foremost of importance to me is my family. I have four kids, the youngest of whom is 8. Obviously, my business is also an important segment of my life, and I never take my eye off that. We went to Thailand as a family for two weeks last year, but even when I'm away I'm still in touch by phone and email with the business. It is just part of the job.

My two youngest children loved our trip to Kenya and Tanzania. I also enjoy deep sea and fly fishing, so I try to get away for the occasional fishing weekend. I have been fishing with the same group of friends for the past 25 years, and now sometimes we'll bring our older kids along on quick trips to Mexico or Canada. I especially enjoy going to Cabo San Lucas for a couple of days to fish and relax. It's vital for me to spend time with my family, recharge and return to Arden ready to go the next round.