Like a seasoned player on the real estate stage, Clyde Holland never misses his exit cue.
He is just as effective at making a grand entrance.
Holland has burst onto the West Coast apartment scene with gusto of late, as chief executive officer and chairman of Vancouver-based Holland Partner Group. Founded in 2001, the multifamily development and management company has more than $1.1 billion worth of apartment projects either under construction or planned to start this year in high-demand urban rental markets from Los Angeles to Seattle.
(Holland Partner Group has no connection to the Vancouver restaurant business with a similar name, The Holland Inc., which owns and operates Burgerville.)
“I’ve always thrived in situations where people asked me to step up,” said Holland, 52, who operates the apartment acquisition, management and development firm from offices at 1111 Main St.
That self-proclaimed fortitude was put to the test in 2008, as the nation teetered on the brink of a financial meltdown that threatened to dry up the free-flowing construction lending that had been the life blood of the decade’s unprecedented real estate boom.
Holland and his top executives hunkered down just after mega investment bank Lehman Brothers declared bankruptcy in September 2008. Recognizing the crisis at hand, Holland mapped out a plan to respond to the calamity and preserve operations.
The seasoned real estate executive had already anticipated a downturn and begun to steer his 7-year-old company to safety, shelving all new development projects in 2005. Holland and his executives next cut company expenses to the bone and implemented a cash incentive program to extend rental leases of the 9,000 apartment units the business owned at that time.
When Lehman faltered, “we realized this wasn’t a dress rehearsal. It was the real thing,” said Holland, who has now managed to time his company’s comeback to the rental market’s rapid return.
Setting the stage
Those who knew Holland early in his career as an accountant might be surprised by how quickly he mastered the nuances of property investing. Working the numbers for a series of employers had helped him learn about the real estate business, said Holland, who said he chose to locate in Clark County for its rural charm and the absence of a state income tax.
His company employs 85 people in Vancouver and operates regional offices in Seattle, Denver and Northern California.
Holland wasn’t planning a career in real estate when he worked his way through college as a truck driver hauling produce in California’s Santa Rosa Valley. He graduated in 1983 with a business degree in accounting from Pacific Union College in Angwin, Calif., a private Seventh-Day Adventist-affiliated school.
“I really didn’t know what I wanted to do,” Holland said. “I chose accounting because I figured if I could track the dollar and how it affected the bottom line, I’d be worth the most to companies.”
In 1986, Holland joined Trammell Crow Co., then one of nation’s largest apartment development companies, as an accountant. By 1992, he had worked his way up the ladder to the title of division partner.
That background, combined with his track record and experience, has helped Holland woo lenders and investors who are funding his company’s massive expansion today. The analytical skills he employed at Trammell Crow still play a big role in his work today, said Holland, who early on developed concise reporting methods to clearly spell out the profitability of a project.
It’s an investor’s main priority, Holland said.
“An equity partner wants to know it’s valuable,” he said. “And banks want to know it’s safe with a return on investment.”
Holland said Holland Partner Group is now well-positioned to meet today’s demand for apartment rentals, caused by the slump in single-family home sales.
Average vacancy rates in the Portland-Vancouver metro area were at 3.6 percent in 2011, down from a peak of 5.6 percent in 2009, according to The Barry Apartment Report, a regional publication.
According to Holland, the living option is being seriously considered by people of all different income levels, especially on the West Coast.
Like Holland, many investors are focused on young twenty- to thirty-something-year-olds, said Phillip Barry, author of The Barry Apartment Report and a broker who specializes in apartment building transactions with Joseph Bernard Investment Real Estate in Portland. Barry predicts pent-up demand could fuel a two- to three-year period of profitable apartment construction for developers building for young adults.
People in their 20s and 30s also are more likely to seek urban settings where they can walk or bike to nearby mass transportation, Barry said.
“All the trends we’re seeing indicate the echo boomers (also called the Millennial Generation, born roughly from 1981 to 2000) are consistently moving to these locations,” Barry said.
Although Holland has not yet started any Clark County projects, his company and its financing partners — which include a mixture of everything from wealthy individuals to public and private equity firms — broke ground or acquired approximately $400 million worth of projects in 2011. The work includes the $25 million, 100-unit 717 Dexter in Seattle's upscale South Lake Union neighborhood. The project incorporates townhouse units, studios, one- and two-bedroom apartments in an urban-hip design.
The development’s location, on Seattle’s South Lake Union Trolley line, is an example of how Holland is no longer just balancing the books. He also is thinking hard about which apartment complexes will pencil out over the long run. That was one of the reasons behind his exodus from Trammell Crow in 2000. Leaving allowed him to narrow his focus to a smaller niche of appealing, market-rate apartment developments.
“We’re focused on only the very best core urban infill projects on direct (mass) transit lines,” Holland said.
His research indicates fuel prices will continue to rise, increasing demand for the new projects his company will manage, adding to more than 30,000 units it already has under management.
Holland sees the projects as a sure-fire way to generate profit for his company’s supporters.
“Present it in a way that they can see it,” he said. “If you want exceptional returns, do your homework.”
Editor's note: This story has been modified to reflect a correction. The development cost is approximately $25 million for the company's Seattle project, 717 Dexter. Holland Partner Group acquired or launched about $400 million worth of apartment developments in 2011.