Profession/Title: Vice President of Office Development

Company: Red Development

Date of Interview: 09/26/2017

My first informational interview was conducted with Paul Rowsey, the vice president of office development at Red Development. Mr. Rowsey also introduced me to Jesses Laird, one of the architects at HKS working on The Union project, a 800,000 sq. ft. multi-use property downtown next to the American Airlines Center. From this interview, I was hoping to gain a deeper understanding of the specific duties of developers and the types of developers that are involved with larger, commercial projects.

I learned that Mr. Rowsey was specifically in charge of leasing, marketing, and the legal work involved with properties. In college, he studied history, but became attracted to the marketing aspect of real estate in which he was able to “sell a dream”. Through his words, I realized that developers must be able to communicate effectively because they must negotiate deals and find tenants. Mr. Rowsey even mentioned that relationship and trust are more important than anything when it comes to building connections that will ultimately benefit the project. In addition, I also learned about the levels of risk associated with both developers and other occupations involved in new developments. The debt provider, or bank, assumes the least risk because either way, the lender must return the investment. They provide about 60% of the funding for projects. Mezzanine financing, a hybrid debt and equity lending that allows borrowers to convert to ownership after senior lenders are paid, is also involved. Equity partners, attorneys that have a right to share in profits, also provide around 20% of the capital. Lastly, the developer works to bring together everyone involved so that the project runs smoothly and efficiently.

After conversing in a conference room at HKS, we put on hard hats and headed to the construction site of The Union. It was extremely fascinating to actually observe the physical construction of a new property. The cranes in the air, the workers on ladders, the many machines. It was then that I fully comprehended the massive effort that real estate development entails: hundreds and hundreds of people aboard one project, and it still took over 2 years to begin the construction process. I realized that I had previously underestimated the massive amount of labor and collaboration property developing requires. It was actually very intriguing to see so many bodies unify in order to execute a $300 million project. Furthermore, seeing a project on paper come to life in its physical form was like watching movie scenes acted out in real life. It brought a new dimension to my understanding of real estate and sparked in me a new zeal to make my visions come to life.

Taking the framework elevator up to the soon-to-be 12th floor of The Union, I overlooked a view of downtown Dallas with the Reunion Tower and Margaret Hunt bridge in sight. This was a prime example of how so many factors affect development decisions, such as location, architectural design, and financial feasibility. Mr. Rowsey explained that the special thing about The Union is that it’s one of the first multi-use properties in Dallas that features an apartment complex, office space, restaurants, and a supermarket. These features are bound to attract many tenants because of its efficient and unique design. In addition, its prime location next to the American Airlines Center will surely draw consumers after basketball games and other events. Moreover, I also learned that when negotiating with tenants, many developers must keep in mind the area surrounding the property as well. For example, The Union has a great view overlooking the Margaret Hunt bridge and the Perot Museum. However, as time goes on, other developers will likely build properties around The Union, overtaking this view. Tenants will consider this factor beforehand, and it may even affect the deal negotiation of the property.

Ultimately, it was a pleasure meeting both Mr. Rowsey and Mrs. Laird. I gained tremendous insight from both of them and will continue to carry this knowledge with me in the future. I discovered that developers have to be more than committed; they have to be crazy about their projects in order to succeed. This is important because only with passion will one be able to overcome hardships along the way. As long as I stay ambitious and persevere, I am optimistic that I will find success in real estate.

Paul Rowsey