The man likely responsible for developing more multifamily housing than anyone else in the country is retiring. Ron Terwilliger, who estimates that he has built nearly 250,000 units of housing during his 30-year-plus career, will step down as chairman of Dallas-based Trammell Crow Residential (TCR), effective Dec. 31, 2009. Terwilliger will remain advisory director of the Trammell Crow Residential Management Board and has a financial interest in many of the company’s holdings. Harlan Crow will become chairman of TCR, while Charles Brindell will continue as president and CEO—a title Terwilliger held until last October.
“Ron’s leadership and stewardship of our business enterprise over these past years has yielded remarkable results for our financial partners, our partners and associates and the communities in which we work and live,” Crow and Brindell said in a letter dated July 21.
Terwilliger wanted to step down as chairman last October, but the financial markets then collapsed. “I would have retired a year ago, but I decided, along with the partners, that it was smart for me to continue as chairman of TCR during this year to provide proper transition for everybody, including the financial community,” Terwilliger says.
During his 25 years at the helm of the firm, Terwilliger estimates that TCR developed more apartments than any other firm in the country. For instance, in 2009, 2008, and 2007, TCR ranked No. 1 on Multifamily Executive's Top 50 list of builders, starting 8,194, 10,936, and 8,037 units respectively those years.
But lately, Terwilliger became interested in other pursuits. “Over the last decade, my interest has been shifting from a very dedicated focus on TCR and rental apartments to nonprofits and trying to help those that are less fortunate than I have been,” he says.
Terwilliger donated $5 million to the Urban Land Institute to establish the J. Ronald Terwilliger Center for Workforce Housing; $100 million to Habitat for Humanity International; and $5 million to Enterprise Community Partners to generate more than $130 million worth of affordable housing throughout the country. In his retirement, Terwilliger will focus on being chair of the Terwilliger Center at ULI, Global Campaign Chairman at Habitat, an executive committee chairman at Enterprise, and a board member of The "I Have A Dream" Foundation.
“He has been a towering figure with Habitat for Humanity and the leadership of ULI,” says Doug Bibby, president of the National Multi Housing Council in Washington, D.C. “He’s been slowly transitioning his way into these other very important pursuits and this is the culmination of that.”
TCR's Legacy
As TCR grew under Terwilliger, it not only developed hundreds of thousands of apartments. It also grew leaders. That’s not surprising, given Terwilliger’s educational and career background. He graduated from the Naval Academy in 1963, spent five years as an officer, and graduated from Harvard Business School in 1970. He started in the business world at Sea Pines in Hilton Head, S.C., in 1970 and then moved to Dallas-based Henry C. Beck Co. in 1975. He made the move to Trammell Crow in 1978 and took over as CEO of TCR in 1983.
During that time, he developed an all-star lineup of developers that went on to start their own firms, including Atlanta-based Wood Partners’ Leonard Wood; former Atlanta-based Gables’ CEO Chris Wheeler; Alexandria, Va.-based Avalon Bay Communities’ chairman and CEO Bryce Blair; and Phoenix, Ariz.-based Alliance Residential President Bruce Ward.
“What says the most about Ron and the leadership of TCR is the imprint Ron and the firm have made on our industry is looking across the landscape of leaders who have led multifamily firms or are leading multifamily firms,” Bibby says. “It says a lot about that firm and his leadership that so many quality people went through there and are out leading their companies today. To me, that really speaks volumes.”
Blair thinks the culture started by the Crow family and fostered by Terwilliger had a lot to do with this. “The Trammell Crow culture embraced a decentralized, entrepreneurial culture,” says Blair, who worked at the company from 1985 to 1993. “That’s not easy. If you can be successful in that culture, it allows you to learn some skills that allow you to create other companies. It’s that ability to lead and manage in decentralized entrepreneurial culture that Ron embraced.”
Brindell, another one of those leaders that came up through the pipeline, is now running TCR. “I think Charlie is doing a great job of steering us through a difficult time,” Terwilliger says. “For a merchant-builder like TCR that typically has revenues from construction and development fees—and then profits from any value created in developing a project—these are lean times.”
Working through a recession
As the economy has soured and credit has tightened throughout the country, TCR’s development pipeline will be “negligible” in 2009 and 2010, according to Terwilliger. And it sold its apartment management division, which could be producing revenue in these lean times, to Christy Freeland and Terry Danner in October 2005. That entity eventually became Riverstone Residential, part of CAS Riverstone Partners. “The way we ran [management], it was not producing any income,” Terwilliger adds. “I think some people are more successful than we were in generating a profit from management.”
As the company’s income from merchant-building has dried up, Terwilliger admits that the company has had second thoughts about that decision. “When we had management during 1991, 1992, and 1993 [the last major real estate downturn], it did provide positive cash flow,” he says. “I wouldn’t be surprised if Charlie and the partners didn’t reevaluate that because we have 3,500 apartments in various forms of construction and lease-up or ownership.”
Regardless of what future path TCR takes, Blair thinks Terwilliger set the stage for TCR to prosper long into the future. “One of the things that Ron was always good at was managing risk,” says the AvalonBay CEO. “They have found ways to evolve through market challenges. That’s part of the TCR culture—to evolve and respond to opportunities and challenges.”
