Credit: Jason Nuttle
Trammell Crow Residential Management Board
Ron Terwilliger, former CEO of Trammell Crow Residential, retired a few years back after a nearly 40-year run in the industry. But he stays active as advisory director of the Trammell Crow Residential Management Board and by speaking publicly about his success. He'll share his insights as a keynote speaker at the Apartment Finance Today Conference, April 2 and 3, in Las Vegas. For now, he offers his predictions for the upcoming economic cycle and explains why he's spending his retirement giving back.
How can multifamily weather the storm in an
You really need to understand those factors that affect supply,
specifically what the right amount of building is.
We'll probably overbuild rentals again, because
we're building at what we think is the right
pace until the economy falls and demand drops. But what I always
argue is to be in the business with the understanding that
there's going to be another cycle; overbuilding
will show up and rents will drop. Risk management for Trammell Crow
was always key. We tried to avoid overleveraging because you need a
significant equity cushion through a downturn.
What are your predictions for the upcoming economic
The thing that's different this time around is
that jobs are not as strong, but offsetting that, most likely, is
the difficulty of getting a mortgage. You've got
an awful lot of positive things in the near term for the apartment
business: strengthening rents, limited new supply, good
demographics. People who have the margin and might have chosen to
buy are choosing to rent longer. So, overall,
it's a terrific time to be in the apartment
business. How long this will last, I don't know,
but it looks like it will be a good run in upcoming years.
What's the market to go after
I think it's a bifurcated market right now. When
I started, back in the early '80s, we were
building mostly garden-style apartments. But as the country got
more and more congested in the past three decades, young people
with good jobs became much more interested in city living, so our
industry has seen a movement back to the urban core. I also see a
tremendous and increasing need for affordable housing. At a
minimum, we need 3 million new apartments over the decade, and,
simplistically, I think half of them need to be affordable.
How has your work with Habitat for Humanity influenced
It's more that my career influenced my focus on
nonprofits. Between my development career and exposure with
Habitat, I 've begun to understand better the
difficulty people have had in getting a house they can afford in a
safe neighborhood. When I retired, I decided to devote my time to
affordable housing. Individuals who have benefited from their
career need to help those who have been less fortunate.