Weekend Interview: Avison Young's Wade Bowlin On What He's Learned From 5 Economic Downturns And Why Houston Is Special

This series goes deep with some of the most compelling figures in commercial real estate: the deal-makers, the game-changers, the city-shapers and the larger-than-life personalities who keep CRE interesting.

After more than 30 years in commercial real estate, Wade Bowlin became the new leader of Avison Young’s Houston office last year through a partial acquisition of Madison Marquette.

Toronto-based Avison Young agreed to acquire the office and industrial property management, agency leasing and project management service lines of Washington, D.C.-based developer Madison Marquette in August of 2022, gaining 235 commercial real estate professionals in the deal. Bowlin started as principal and managing director in October. 

With a wife and four children, a phone that stays on 24/7, 30 acres in Sugar Land and a passion for golf, Bowlin stays busy, even on the weekends.

Bowlin spoke to Bisnow about the five economic downturn cycles he’s seen throughout the course of his career, the experience that helps him predict what’s ahead for the market, and how different his schedule, career and office environment are now from the 1980s and 1990s. 

This interview has been lightly edited for length and clarity.

Bisnow: You recently came to lead Avison Young’s Houston office through an acquisition with Madison Marquette. What has been the most challenging part of that transition?

Bowlin: You know, it really hasn't been very challenging. I think Madison Marquette was just going in a different direction than what our core business was. And Avison Young was right in line with what we had been doing here in Houston for the past 25 years. So it really has not been a difficult merger at all.

The people have been great. Avison Young is owned by over 700 different principals. It's a people-first company, so it's actually been really very easy.

Bisnow: What has been the most rewarding part of the transition?

Bowlin: I think the most rewarding part is that Avison Young had a good business and great people here in Houston, but it was lacking the things that we had coming from Madison Maquette. So being able to put together a completely full-service company has been very rewarding because it's allowing us to grow faster and larger than we would have been individually, or they were individually previously.

Bisnow: You’ve ridden out a few economic recessions or downturns throughout the course of your career. How would you compare the current commercial real estate market to past downturns?

Bowlin: I've been through five in my career, and this one has got a little bit different slant. I'm beginning to compare this one on the debt side, very similar to what we experienced in the ’80s. It's going to be interesting to see how that plays out.

In the ’80s, what happened when loans on buildings matured, the lenders took those buildings back, and it ended up bankrupting the savings and loans, and it almost got the banks as well. It was a very difficult time.

I don't think that'll happen quite to that extreme. But there are a lot of loans that are coming due that honestly, the owners are just going to say, ‘My value is not there anymore, I'm not going to invest any more money. Take it back.’ So we're going to see that. 

But by the same token, Houston is countercyclical to the rest of the nation just because Houston is so reliant on energy. And those guys are beginning to be very, very busy. So while the rest of the country may be in a real downturn, I see Houston still being countercyclical, and think we're going to come out of it OK. But the debt and lending side is going to have to work itself out.

Bisnow: How long do you expect this downturn to last and why?

Bowlin: I don't think we're in a downturn right now. As a matter of fact, I think we're coming out of it right now. All signs are positive, at least on office. Industrial, still strong, multifamily, still strong, hotels are strong. So I see us coming out of that.

But the debt side of it, lenders are going to have to get confidence in the office sector again, and that could take a year. So it's an interesting dichotomy that we're in right now. 

Bisnow: Houston has been ahead of the game nationally in terms of getting people back to the office. On the other hand, it has had one of the nation's highest rates of sublease space. As office owners work through multiple challenges right now — higher interest rates, renegotiating leases, less appetite for large permanent spaces thanks to remote work — how do you see the office market shaking out in Houston versus the rest of the country?

Bowlin: If you'd look in west Houston, for example, we've had the most absorption of any submarket in the country. So for the energy sector, it always starts on the engineering side, and the engineers are coming back. Now they may be taking less space, and I think we'll still have to sort that out. 

Houston and Austin are the largest cities with people back to work. I think that's going to continue to happen more and more. But there are clearly less office spaces needed for a lot of these companies. And so we're going to have to rightsize that, which is going to lead obviously to a longer rebound. 

But there's been so much activity out west. As the projects that these engineering firms are hiring people for work their way through the chain on the energy side, then it’s going to impact every submarket in Houston. Historically, the five cycles I've been through have always rebounded when it starts happening. So I see it being very positive for us moving forward.

Bisnow: You’ve worked with staff who have been with your firm for years, yet they joined after the pandemic began. What is different about training and mentoring people new to the industry now?

Bowlin: It's definitely harder, that's for sure. It was easy back in the ’80s and ’90s. Everybody was at work at 7 o'clock in the morning, and we all worked till 6:30 or 7 at night, five days a week, at a minimum. People don't work that way anymore.

Training is best done face-to-face, one-on-one still, but there's so many more tools now. So while it may not be quite the way a lot of us were brought up, it works pretty well.

So training is hard, but I will say this: On the leasing side especially, it's difficult because you learn through repetition and through doing deals. Prior to the pandemic, I worked on 60, 70 deals a year. And during the pandemic, we might work on three or four deals a year.

So people that come into this industry just don't have the opportunity to see as many things happen in a lease transaction as they would if they were doing 60, 70 deals a year. So the training, therefore, has to be longer.

Bisnow: What do you wish you would have known when starting out in this industry? 

Bowlin: What I wish I would have known, probably, is how many hours that you would have to invest in it. I can't tell you a time that I walk away on a vacation or at night. I'm available 24/7. It's an industry that you have to be dedicated to or you're not going to be successful.

Bisnow: What’s the biggest deal you’ve been part of in the past year? 

Bowlin: We closed a deal right at the end of the year. Maverick Natural Resources. We leased them just under 100K SF in this building (1000 Main).

Bisnow: What do you think is misunderstood about Houston’s CRE market? 

Bowlin:  The press, I think, has a lot of input. It seems like it's always doom and gloom, no matter what you read about things. The reality of it is right now we're kind of in the middle of a resurgence. If you really read the paper about it, you would think that we were in the worst downturn we've ever been in. So I think that the biggest thing is just the perception in the market.

Bisnow: What makes you glad to be in Houston? 

Bowlin: I love Houston just for the diversity of it. I came from Dallas. That's where I was born and raised. So to come to Houston, there's just so much culture, diversity. I love the climate. I love everything about Houston. It’s great!

Bisnow: Give us a bold CRE prediction for the rest of the year. 

Bowlin: Houston will lead the country in office absorption for this year.

Bisnow: What’s your most controversial CRE opinion, and why are you right about it?

Bowlin: I think we're gonna rebound much quicker than what people think. 

The other thing that happens in Houston, is when especially these energy companies take down space, they take it back in large chunks of space. It may not be as large chunks as it was in the previous cycle, but it's still huge blocks. So Houston, when it starts turning, we go bad quicker than any other city in the country. 

But when we start going positive, we rebound quicker than any. If you go back to when Enron collapsed, we had 2.4M SF of vacancy. It was the largest contiguous block of office vacancy in the United States. People predicted based on absorption we've had in the past, it would take 20 years to backfill that space. We backfilled it in 18 months. Now Chevron came in and leased the bulk of it, but that's what happens in Houston. Large companies come in and take down large blocks of space.

Bisnow: This is the weekend interview. So, what’s your favorite way to spend your weekend?

Bowlin: If I'm playing golf anywhere, that's always a good weekend for me.

CORRECTION, JUNE 26, 9:18 A.M. CT: This article has been updated to better reflect the financial transaction between Avison Young and Madison Marquette.