A. Lee Graham firstname.lastname@example.org
Mike Berry remembers the moment that Ross Perot Jr. changed his life. Answering the phone at his Woodbine Development Corp. office in the mid-1980s, Berry received an enticing offer from his former Vanderbilt University fraternity brother. “He said, ‘Why don’t you come to work for me on the airport project?’” said Berry. With his real estate career off to a promising start at oil tycoon Ray Hunt’s Woodbine enterprise, pursuing the ambitious airport plan seemed risky, yet too good to pass up. So Berry discussed the idea with his wife, Marilyn, before deciding to join Perot and help build what would become Fort Worth Alliance Airport and the surrounding AllianceTexas development, which continues to land tenants and aircraft with increasing frequency. “It turned out to be a really good decision,” says Berry, who joined The Perot Group in 1988 and never looked back. The same confidence that pushed Berry to industry prominence with The Perot Group, and later as president of Hillwood Properties, has earned him a new accolade. He is among the latest inductees into the North Texas Commercial Real Estate Hall of Fame, which is celebrating its 25th year. The 2013 Hall of Fame dinner and reunion is set for May 2 at Brook Hollow Golf Club in Dallas. Also being inducted is the Caroline Rose Hunt family, which developed The Mansion on Turtle Creek in Dallas and now runs Rosewood Corp. But Berry’s eyes are on the Fort Worth prize; namely, the 17,000-acre AllianceTexas development, which houses corporate campuses and office complexes, residential housing, schools and churches. It spans nearly 32 million square feet and has had an economic impact in North Texas of more than $40 million. That Hillwood leased more than 5 million square feet of corporate space in 2012 alone is no mean feat, but Berry shrugs off any credit; he considers himself part of a team. Twenty five years have passed since Berry joined what would become Hillwood Properties. The Fort Worth native attended Fort Worth Country Day School before graduating from Virginia Episcopal High School in 1976. He earned a bachelor’s degree in economics from Vanderbilt University in Nashville, Tenn., in 1980 and an MBA from Texas Christian University’s Neeley School of Business in 1982. These days, he’s busy with Hillwood, not to mention his roles as deputy chairman of the 35W Coalition, director of the Greater Fort Worth Real Estate Council and a member of the Fort Worth Chamber of Commerce executive committee. When not rushing to meetings or courting prospective AllianceTexas tenants, Berry enjoys golf, hunting and family time at Eagle Mountain Lake. He and his wife have four daughters: Kristen, 25; Kendall, 23; Samantha, 19; and Annette, 17.
Hillwood Properties has landed some major tenants and developed some big projects, but what does Mike Berry bring to the table? That’s not an easy question for me to answer. I don’t want to talk about myself. I’ve been with Hillwood for 25 years, and our company always operates as a team, and we do a lot of major projects and create a lot of jobs and bring in economic activity to the region. I’ve been very fortunate to be a member of that team.
There is no “I” in team? Yeah, I don’t believe in that.
The real estate market seems to be coming back, notably industrial space. What could this mean for Hillwood? Are you already seeing more prospective tenants? Yes, we’re always looking for new growth and new prospective tenants. We’ve had a lot of leasing activity recently. Like last year, we closed out 2012 with 5 million square feet of leasing activity and have done a considerable amount of additional acreage in the first quarter of this year, which we’ll actually be announcing the results of pretty soon. Other projects we are working on right now include plans to build a new speculative building.
Is spec coming back, despite its inherent risks? Spec is always risky, but you’re only going to see speculative development occur when the occupancy percentage crosses the market point of stabilization, and when demand drivers appear to be strengthening. Developers won’t build spec if they don’t feel like the demand is there. And banks won’t lend for spec development if they don’t believe demand drivers are there. There’s always a level of risk with spec, but if your occupancy rate rises up above 90 percent and you begin to see some demand … all that’s happening now. Vacancy rates are down, occupancy rates are up, and there still appears to be new demand in the market.
With more companies showing interest and snapping up space, is there a danger of running out of available space? Yes. We’re reaching a point where we’re almost to that position where our portfolio, particularly at Alliance, is getting close to full occupancy and we don’t have the ability now to accommodate a big user until we build some more space. That’s why we’re moving ahead with development.
You’ve cited a lack of inventory amid heightened demand. Does Hillwood plan more inventory, aside from that 1.2 million-square-foot spec building? We are looking at an office building. We already announced our spec office building at Alliance Town Center. And right now, we’re building additional retail space at Alliance Town Center and new multifamily – a new product called SageStone Village. And there’s retail at Heritage Market, 17,000 square feet of additional retail space. So we have either under construction or plan to start soon products in every category, so that’s multifamily, retail, office and industrial.
Landing the Amazon.com deal in Coppell was obviously huge news for area employment and development. How did that fall into your lap? We landed two, not just Coppell. [A second fulfillment center is planned for Haslet.] With Amazon, we had just completed a building for them in southern California, so we had an existing relationship with them and they came to Texas to expand here. They were presented with the opportunity to bid on these two buildings. They looked at other sites, not just Hillwood sites, and we were able to work out a deal to win both projects.