A Salute to CRE's Veterans

Keller Williams Commercial's Jim Young spent eight years in the Army, enlisting on his 17th birthday. The West Point grad served (as a first lieutenant) as an armor tank platoon leader, a tank company executive officer, and as a battalion air load officer. "One thing I learned at my tank battalion was to seek out the best performing officers and non-commissioned officers and ask their advice on how to accomplish my mission. In commercial real estate, I have done similar by seeking out experience from industry legends and arming myself with CCIM training," he tells us.

Here's Jim at his West Point graduation in 1994 with his family (including Lt Col Dan Young, his dad, who served more than 20 years as a tank officer, pilot and military intelligence officer.) Jim tells when he's faced with a new project, he analyzes the most important critical tasks to mission success. “In the military, we had a saying: 'be technically and tactically proficient.' In CRE sales, that same thought process applies to knowing your client, their criteria and the market,” he tells us. Jim tells us there was a lot of fun and learning opps for him: he went to airborne school/air assault, had breakfast with the Supreme Court Justices for West Point law class and met Gen Norman Schwarzkopf.

Pence Properties' Bert Pence, who served from 1965-67 as an artillery forward observer with an infantry company in Vietnam (as an Army first lieutenant) as well as on the demilitarized zone in Korea before that. “I experienced a lot of combat, and many moments essentially changed my life from destroying the enemy, to seeing firsthand the devastation of war and the effect on everyone from my fellow soldiers to the native population,” Bert tells us. “But, I tried to always, somehow, see the positive side and maintain a sense of humor whenever possible.” For his actions in the intense Battle of Phu Xuan the day after Thanksgiving in 1966, Bert was awarded the Bronze Star for valor and heroism. He had a life-changing moment after a B-52 strike. Another soldier reading the Army Times found an ad for an assistant to the president of a Dallas-based company. Bert was intrigued by the idea of living in the South, answered the ad, and landed in Texas in 1967 and has been here ever since.

New deliveries to Austin's multifamily sector have been less condensed than everyone feared, but they're still starting to have an impact, AMLI VP Marcy Phillips announced at Bisnow's Austin Multifamily Summit last week. After a few years of solid rent growth, her portfolio's year-over-year rents are flat now. She says development slowed largely because of the City—she's working on a Southwest Austin project that has such complex coding (and an unpredictable process from the City) that it's taken years to try to get it permitted. Above, we snapped our design/development panel: panelists Lord Aeck Sargent principal Mark Lange, CohnReznick office managing partner Chris Thomas, Marcy, and dwg partner Eric Schultz.

CWS Capital Partners prez Gary Carmell (pictured here with Capital One's Jason Qunell) says his Austin portfolio got a 24% rental rate increase in the last three years, which has dropped to 5.8% from Oct '13 to Oct '14. Meanwhile, his occupancy is down 1% YOY. He's expecting things to slow a bit more next year to 3%-4% rent growth next year. That said, Gary (whose firm is the largest Class-A multifamily owner in Texas, including 18 properties totaling 4,300 units in Austin) is cautiously optimistic about Austin overall and says it'll be bigger and more dynamic in five to 10 years.

JLL managing director Scott Lamontagne says Austin's overall multifamily market has posted 3.7% YOY rent growth. But same-store rates have only gone up 1.9%, so most of the movement is from renovations and new deliveries. That's largely because some areas had no new product for years, so any new deliveries are boosting average rent.

Eric (pictured with co-panelists Mark and Brass Enterprises managing director Mark Zolty) stresses that Austin's permitting and coding is a big mess that needs a comprehensive overall. That's why Code Next is important, even though he's sure it'll be difficult and controversial. To combat the recent slowdown in getting development done, he recommends getting really innovative at the front end, rather than going in with a standard project and reacting to the City's comments.

Mark (an Atlanta guy with Texas roots—he's a Rice Owl) says he's excited to see coding get clearer, but he also likes that Austin preserves its culture and doesn't try to be anyone else. He says the hot new amenity these days might surprise you: 10-foot ceilings. Developers are choosing to do fewer units to get that roomier ceiling height. He's also seeing units get smaller as amenities like living and dining rooms are pushed out to shared spaces.