“There’s as much risk in doing nothing as in doing something.”
— Trammell Crow, real estate mogul
Lately I am hearing from a few discouraged Real Estate Brokers and Developers..who need a strong dose of the Trammell Crow story. I posted some of his story before, but his story is worth a closer read.
The Real Estate Leaders, the Great Ones who are no longer with us still remain great teachers to all of us in the Real Estate field. Trammell Crow was a legendary developer in Commercial Real Estate, who lived and battled through many real estate cycles. Cycles that would make us shudder, but it never stopped him or his partners . Clearly his life story as it is for all of us had its fair share of ups and downs.
Mr. Crow, who began his legendary business career as the teller behind the window H-to-M at the Mercantile National Bank in Dallas and rose to become one of America’s largest real estate developers and landlords.
Forbes in 1971 and The Wall Street Journal in 1986 called Mr. Crow the largest landlord in the United States. The Journal said the company he founded was then the nation’s biggest developer.
Mr. Crow once had interests in nearly 300 million square feet of developed real estate, comprising 8,000 properties in more than 100 cities.
His projects, always done with partners, included the Dallas Market Center, the Peachtree Center in Atlanta and the Embarcadero Center in San Francisco, and reached from Kansas City to Hong Kong to Brussels.
When Fortune magazine named him to the United States Business Hall of Fame in 1987, it called him “one of the most innovative developers in history.”
The traditional way of developing real estate was to use other people’s money to build a building, depreciate it, sell it and then deploy the profit to start the process all over again with another building. But Mr. Crow’s formula was to hold on.
“You can get rich selling real estate,” he often said, “but you can only get wealthy by owning it.”
William Bragg Ewald in his book “Trammel Crow: A Legacy of Real Estate Innovation” (2005) wrote that many landlords try to avoid tenants for fear they might ask for something, but that Mr. Crow aggressively pursued fixing tenants’ problems.
He signed customers to the shortest lease possible, saying this apparent sacrifice of long-term security allowed him to charge ever-higher rents.
Clinging to properties meant he needed deep-pocketed partners. He first recruited stalwarts of the Dallas establishment like the civic leader John Stemmons. As he expanded nationally, he enlisted backers like David Rockefeller and Winthrop Rockefeller.
Undoubtedly his most important innovation, which he pioneered in 1948 on his first project, a Dallas warehouse, was to build buildings for which he had no tenants lined up in advance. He became, in his own words, “a confirmed gambler, a speculative builder.”
Trammell Crow, whose unusual first name was taken from a family surname, was born in Dallas on June 10, 1914. At 10, he began taking paying odd jobs until his father, a bookkeeper, forbade it. As the Depression deepened, the family needed the young man’s income, from jobs like plucking chickens and unloading boxcars.
After graduating from high school in 1932, he worked as a bank teller and studied accounting at night. He passed his C.P.A. exam in 1938 and joined Ernst & Ernst as an auditor. After serving in the Navy during World War II, he returned to Dallas in 1946.
Mr. Crow managed his wife’s family’s grain elevator business in Dallas. He began winding it down while looking for better opportunities.
Rayovac, the battery maker, leased space in a warehouse. When it decided to move to larger quarters, Mr. Crow put together his first real estate deal. He got loans from an insurance company and a local bank to build a warehouse on land he had bought from Mr. Stemmons. He leased half the building to Rayovac and soon found a renter for the rest.
His business strategy was set. Mr. Crow and partners went on to build 50 warehouses in Dallas — and much else.
There were nonetheless plenty of the ups and downs that characterize the industry.
In the 1970s, high interest rates, mounting debt and a glut of office space combined to hurt the company so badly that it sold off many properties. But it never stopped building new projects. By the 1980s, it claimed to be the biggest real estate developer in the country.
Mr. Crow stepped down as chief executive in 1977 but remained involved in deals.
The Trammell Crow Company went public in 1997, and its shares began to trade on the New York Stock Exchange. In 2006, the company was sold to the CB Richard Ellis Group.
Trammell Crow passed away at the age of 94. He was a true Real Estate Legend who survived and thrived through many downturns in Real Estate….his ability to persevere should be a lesson to all of us.
We should always remember there will be good times and bad times. The 1970s downturn nearly bankrupted Trammell Crow .
But it didn’t take out any of his risk-taking nature. “I once heard it said that the cat that is burned on an oven range will never touch a hot one again,” he said in a 1980 interview. “True enough, but that cat won’t go near cold ovens either. The same is true for business. Failures that transform a businessman into a super-cautious individual can cripple.”
Let’s remember his lessons and go out and get it done! The faith you have in yourself is THE most important lesson to remember. If YOU don’t believe in YOU…Who Will?