Landry Commercial Executives See Industrial Cap Rate Compression And A Future In CRE Multitasking

It has been several years since Landry Commercial President and founder Brant Landry left a fairly high-profile position working in tandem with Emmitt Smith and Sharon Morrison at ESRP to launch his own full-service boutique commercial real estate firm. 

With Dallas-Fort Worth real estate booming, he is finding his niche competing against the big guys, battling cap rate compression and expanding his team and portfolio.

Since the onset of his career, Landry has been (inaccurately) assumed to be the grandson of legendary Cowboys coach Tom Landry, particularly since Landry launched his career at former Dallas Cowboys quarterback Roger Staubach's former company, The Staubach Co., and then partnered with Smith, another Cowboys alumnus. 

Landry today is coach of his own enterprising commercial real estate team, and he believes he has found the perfect partner and quarterback in the recently hired Joe Whitmer, who serves Landry Commercial as managing director and partner.  

Whitmer moved over to the entrepreneurial firm after spending 12 years at Transwestern.

Landry Commercial and its affiliated platforms offer clients everything from real estate brokerage services to investments, acquisitions and construction services under one roof. 

The two executives sat down with Bisnow to discuss Landry Commercial's future and the state of the red-hot industrial and office markets. 

Bisnow: What was the catalyst that pushed the company to form in the first place?

Landry: In 2013, I launched a firm with Emmitt Smith and another partner, Sharon Morrison. Two years after growing that firm fairly rapidly, I sold my third ownership back to the company and launched Landry Commercial back in 2015. Part of the reason was to have an entrepreneurial platform that handled the whole real estate cycle from soup to nuts, so that would be everything from acquisitions, development, ownership-investments, brokerage, construction management and construction, really to have a full-service platform that our larger competitors would have, like CBRE and JLL, but be much more nimble.  

Bisnow: In terms of all of the CRE offerings you provide, which area are you most active in? 

Landry: I would say they are equalized. We are growing rapidly on all fronts. Each platform and service has created capacity for more and has great growth potential. I think again all of our service lines are growing rapidly; and what our clients are telling us is they like the idea of being able to have a smaller company that offers this full-service type of platform. We've heard even in the last couple of days from multiple clients and prospects saying, 'You guys are different.' That validates what we're doing.

Bisnow: Joe, you transferred over from a much larger firm, Transwestern. What made you decide to move to a more entrepreneurial environment at this point in your career?

Whitmer: You go back to 2008, and Brant and I started working together at Transwestern. I was able to see what he was able to put together as far as a team and an environment and the culture he brought with him. It was a great environment for us to work within, lots of team synergy.

Bisnow: What's happening in industrial that makes this a prime time for you to join Landry?

Whitmer: The Dallas-Fort Worth market in general continues to grow, so it's a great time to grow with it. One of our goals is to add quite a few brokers, and we are submarket-focused. So, we are going to go back to that, and there's just tons of opportunity in all of the markets here. 

Landry: It's unprecedented the industrial growth in one of the nation's largest distribution markets, partially just because of the residential growth and the rooftops that are coming in and then e-commerce growth. Those two combined is something we've never seen ever in the history of industrial real estate in North Texas. Frankly, I don't think anybody really knows what this looks like in the next five to 10 years. It's certainly not going to slow down. We might have a correction. But on the industrial side, I think it's going to continue to push and grow and it's a supply and demand issue — we just cannot add enough supply. 

Bisnow: Is cap rate compression now an issue?

Landry:  If you're not an institutional buyer — we are private equity buyers — it's extremely hard to buy industrial because of cap rate compression. We just can't compete. The only way is we have to develop it ourselves. 

Bisnow: You have done some acquisitions in the office space — how many?

Landry: Right now, we've bought three office buildings, close to $100M in assets. We have another one under contract. Our first fund, which is part of this investment platform, Reserve Capital Partners, will acquire about $300M worth of assets. And we already have interest in fund No. 2 from several investors, so we have a much larger fund raise, so I would envision sometime in 2020 we would go out and raise fund No. 2. 

Bisnow: Is the fund going to focus on just industrial?

Landry: No. We like the flexibility of assets that make money. We know industrial and we know office, so we don't have restrictions on anything in those two product types. We have the flexibility to acquire or develop. Industrial has been so hard to buy because there has been so much institutional money chasing industrial deals that the only way to do well in it is to develop. We have a piece of industrial land under contract right now where we would do a new development for industrial.

Bisnow: Joe, was the company's ability to offer everything under one roof one of the reasons you wanted to move over to Landry?

Whitmer: Absolutely. That was one of the selling points for me coming over here. Just being under one roof, all right here, being nimble. Being able to react quickly. And if I find a good investment play, I can bring it to Brant. We can sit down in his office and discuss it, so I think it's a huge advantage. Even though we are a smaller group, I think we have capabilities matching some of the biggest companies in town as far as what we can present and execute on to clients and prospects, so that was a big deal for me.