Brick by brick and town to town, the AMCAL group of companies does the hard work of building affordable and market-rate housing throughout California and Texas.
During its 40 years, the firm has developed more than 80 communities with 7,500 units and an equally impressive reputation for creating quality housing for families, seniors, and, more recently, college students.
Not bad for a company that Percival Vaz and his wife, Lux, began in their garage.
Armed with an entrepreneurial spirit, Vaz, the firm’s founder and CEO, emigrated to California from India in the mid-1960s to study electronics, earning bachelor’s and master’s degrees from the University of California at Los Angeles, with the idea of returning to his home country to open an electronics assembly plant.
However, his interests soon turned elsewhere. While searching for a home to buy, Vaz saw how housing prices were quickly appreciating and recognized that real estate offered an interesting opportunity. He teamed with a home builder to develop several single-family homes in Southern California, serving as a gofer and learning real estate development.
“I was fascinated by the business because it gave me exposure to design, marketing, finance, operations, construction,” says Vaz. “I was like a sponge, wanting to learn about everything. I was a voracious reader. I took lots of courses and seminars. I talked with a lot of people in the real estate development business and tried to accelerate my learning as quickly as possible.”
The multiple disciplines involved in real estate development were a welcome change from the job Vaz had at the time as a microelectronics project engineer. Although he was earning good money designing microcircuits for cardiac pacemakers and other products, his contribution to each project was limited, and he wanted to do more. “It was too specialized and didn’t give me exposure to life in general,” says the soft-spoken executive. “I was a highly specialized cog in a very, very big company.”
Vaz grew up in a family that operated a customs clearing and freight company, and he’d always wanted to own his own business. After getting a taste for real estate, he got a contractor’s license and struck out on his own to develop a 10-unit apartment complex in Hollywood. He launched the business in 1978 out of his home.
“The first couple of years was all in the garage,” recalls Vaz. “We set up two desks. My wife worked at one, and I worked at the other.”
The couple had a growing family, so they juggled watching their young kids while taking business calls. Their company would eventually become AMCAL, bringing together “America” and “California” in the name.
From its humble beginnings, the firm has grown to be a major provider of housing. Its success has helped make Vaz multifamily executive magazine’s 2018 Executive of the Year. (MFE is a sister publication to affordable housing finance.)
Throughout its early years, the firm remained small, working on modest projects. Its first pivotal moment came in the mid-1990s when AMCAL did its first joint venture with a public institution, the California Public Employees’ Retirement System (commonly known as CalPERS), on a market-rate development in Oak Park, Calif. The partnership pushed AMCAL to bolster its internal systems and introduce more checks and balances, moves that helped the company grow and improve.
AMCAL then took another leap forward around 1997 when it came across a site in Santa Barbara, Calif., where it normally would have built a condominium or a market-rate apartment project. However, local officials asked Vaz if he would build needed affordable housing instead. With the county’s support, the 118-unit Positano Apartments became the firm’s first affordable housing deal.
Vaz discovered he liked the affordable housing space for several reasons, including its mission. It also allowed the company to reduce some of the risks that came with market-rate housing and be more entrepreneurial.
Today, AMCAL is one of the nation’s leading developers of affordable housing. The firm’s notable recent developments include transforming the abandoned Linda Vista Community Hospital in the Boyle Heights neighborhood of Los Angeles into 120 affordable apartments for seniors. The $38.2 million effort, which was done as two separate projects, returns the historic property to a good use and boosts the entire area after years when the hospital sat empty.
Matthew Karatz, managing partner at MDK Angelo Holdings, had a close-up view of the Linda Vista and other AMCAL projects while overseeing the city’s housing-related departments as deputy mayor from 2011 to 2013.
“For all of Los Angeles’ prosperity, we have challenges,” Karatz says. “Today, it’s home affordability and homelessness even while the economy thrives.” AMCAL’s work to repurpose the old hospital added essential affordable housing and was a good use of existing infrastructure, he says.Karatz calls Vaz a “developer’s developer.”
“I can judge a good developer pretty easily,” says Karatz, whose own background is in real estate. “A good developer can envision and create opportunities most others can’t. Some of it’s financially driven. Some, market driven. Some, tactically driven. Some, public-policy driven. A developer has to have a complete set of tools to envision the finished product many, many years in advance … . In my opinion, Percy is the 1% of the 1% of those who really know what they’re doing.”
Vaz continues to chart the firm’s path. AMCAL entered the Texas market as AMTEX Development in 2012 and has completed two affordable communities in Houston and Fort Worth, with a third about to be completed in Denison and nearly 900 more affordable units under construction. It also entered the market-rate sector with a 228-unit project in Rockwall.
Vaz also led the firm into the student housing business around the same time. AMCAL Equities has completed four student housing communities with 752 units (2,614 beds) and has 500 units (1,839 beds) in the pipeline, including a big, 1,039-bed project near San Jose State University that’s set to be completed in 2020.
The company’s next big step is entering the Washington state market this year by developing an affordable seniors housing property in Arlington, a community north of Seattle.
“Percy has very good vision. The fact that his company is building affordable, market, and student housing—three different business lines—provides a good opportunity during different market cycles and economic changes,” says Michael Fowler, president of Affordable Housing Partners, a subsidiary of Berkshire Hathaway, who has known Vaz for 20 years. “It’s a very diversified company.”
Vaz and Fowler met when the latter was president of Sun America Affordable Housing Partners, which invested in 21 of AMCAL’s low-income housing tax credit developments.
“I think everybody respects the quality of what [AMCAL] produces,” Fowler says. “The whole organization can be very proud of what they’ve accomplished.”
Strong Sense of Family
Although the company is no longer a mom-and-pop operation, Percival and Lux Vaz, who’ve been married 47 years, remain at the helm. Lux is vice president of accounting, administration, and human resources. Vaz credits her with being a good “anticollision device,” cautioning him to slow down when he’s moving too quickly or heading in the wrong direction.
The couple has four daughters and three grandchildren. One daughter, Nicole, is director of project accounting at AMCAL. President Arjun Nagarkatti, who has been with the firm about 30 years, has been another key figure in the company’s growth.
“I’ve worked with Percy from early on in his career—watching him dig deep to understand the industry, make connections, and learn the ropes, then watched him as all his hard work and persistence bore fruit along the way and succeeded tremendously—sometimes against all odds,” says Nagarkatti. “Percy’s the kind of entrepreneur who embodies the very essence of hard work.”
In addition to bricks and mortar, AMCAL delivers social services to affordable housing residents by working with different partners. Its efforts have included working with nonprofit LifeSTEPS to establish the Partnership for HOPE program, which has raised more than $600,000 in college scholarships, emergency assistance, and youth enrichment activities support over the past seven years for eligible AMCAL residents.
“That’s very rewarding to not just me and my wife and my daughter but many people in the company,” Vaz says. “They like that part of the business, to give back.”
This story originally appeared in AHF sister publication Multifamily Executive.