Mary Schlegel, Fort Worth Business Press
While most commercial real estate companies sat quietly on the sidelines twiddling their thumbs and waiting for the economy to recover, Woodcrest Capital jumped into the deep end of the pool nabbing deals. One of the biggest in 2010 was the acquisition of the Gainesville Outlet Mall. The 40% occupied 320,000 square-foot outlet mall on I-35 in Gainesville was just one of the distressed assets the firm acquired as an investment tool, said Woodcrest Founder and President Jim Ryffel.
“We purchased over 500,000 square feet of retail space in 2010,” Ryffel said. “We went into 2010 and 2011 planning to acquire real estate. Real estate prices were down and interest rates were historically low.” Now that commercial real estate has reached one of its lowest points, Ryffel said the goal was to find those low prices and make a move.
“I don’t know what there is to think about. Any real estate guy should be buying as many assets as they can; instead the industry, as a whole, was whining. While they were doing that, we were acquiring assets. While some speculated that it was a terrible time to be in the market, we thought it was really quite the opposite. It was one of the best times.”
“When the experts say it’s time to buy, it’s always too late,” Ryffel said. Woodcrest was founded in 1981 with the primary business focused on acquisition and development of retail shopping centers across Texas. The firm buys, remodels, and builds shopping centers.
“We try to build shopping centers in upscale locations that are architecturally unique with a lot of depth, color and architectural appeal. Those are the ones that catch your eye when you drive down the street. You say, “Wow that is a cool center” and realize it is unlike any of its neighboring centers. We use a lot of fountains, a lot of bronze statues, and a lot of decorative architecture,” Ryffel said.
What makes that Woodcrest business model work, Ryffel said, is its great relationship with area lending institutions. Maintaining those positive working relationships with local lenders allows the company to make these opportunistic acquisitions when they arise.
Ryffel said the business has always remained solid, even when others were going through difficult times. “We didn’t really lose any business or drop off in 2010. To the contrary, it was the best year in the history of our business. In the measurable matrix, we had the best cash flow and best asset growth because we focused on the acquisition of new properties. That’s important. When others see lemons, we try to find a way to make lemonade in the opportunities available when others are feeling difficult times,” he said. “Our business strategy at Woodcrest is not to listen to experts, that’s why they are called experts, not entrepreneurs,” Ryffel said.
“Additionally, having a very relationship-and-service oriented tenant mix in the company’s portfolio across a multitude of properties is important. Better yet, the neighborhood lifestyle centers typically run at about 85 to 90% occupied. Woodcrest’s average customer is a service tenant like a restaurant or a spa. Maybe a nail or hair salon, but they’re a community oriented retail tenant,” he said.
“We don’t do the big boxes. Most of our tenants are community-oriented retail or service tenants because a lady is going to go to the salon regardless of the economy. She’s going to get her hair done and then go get a pizza to take home to the family,” he said.
Another advantage Woodcrest has over the competition is the well-maintained facilities the firm operates. And, that’s definitely on purpose. “We want to be the nicest center on the street,” Ryffel said. “We want to be the center with the most eye and curb appeal. It is where the tenants want to go because it gets the most drive-by curb appeal.”
With most of the centers operated in North Texas and West Texas, Ryffel said he thinks it’s the perfect market because all of his properties are with an hour’s drive or flight from his home offices near his alma mater, Texas Christian University.
TCU was where he found his inspiration to begin his real estate career. Specifically, involvement with TCU’s Neeley School of Business and its educational investment fund.
“Some of the great business programs at TCU taught investing and made me think about finance, which is such an integral part of our business.” He started investing in real estate while he was still a TCU student. Shortly after graduating, he started the company. “We bought our first large shopping center over 25 years ago and we still own it. We, generally, own our centers long term. We’re not traders. We buy to own. And, what is unique about our business is that all of the centers in DFW are owned, managed, leased, maintained and finished all in-house. We’re vertically integrated in the process of owning real estate. When someone leases from us, they’re dealing with our company not only in the process of leasing, but in the management, too.”
Woocrest has been growing its company internally, too. In the past year, the headquarters office has doubled in size as well as the workforce. “As a company, we are proud to be creating jobs in Texas,” Ryffel said.
Ryffel said a challenging economy doesn’t mean it’s time to downsize the employee base, but is a time to grow. Since starting his career, he said he’s learned many things, but the biggest is the importance of relationships. “They play a key part in our business and are simply mission-critical. From relationships with bankers, to the community and tenants, they’re all important,” he said.