Don Wenner, Founder & CEO, DLP Capital
Don Wenner, founder and CEO of DLP Capital, spoke about the abundant opportunities in the Jacksonville market: the population is growing, housing fills up as soon as it is built, and the business and tax climate in Florida is the envy of the nation. DLP Capital has positioned itself well to take advantage of all these developments.
What have been the milestones for DLP Capital in Jacksonville over the last 12 months?
DLP Capital, which is our primary company, is headquartered in St. Augustine, Florida, which is considered part of the Jacksonville MSA – about 30 minutes south of Jacksonville. That’s where we have most of our corporate team. In the city of Jacksonville, the really exciting thing we’ve been doing over the last year is progressing with our redevelopment of downtown Jacksonville, called Gateway Jax. We own 29 city blocks of downtown Jacksonville. It will be the largest urban redevelopment in U.S. history. We’ve been going through a large master planning project. We’ve received incredible support from the city in our development, and we are getting ready to go into vertical construction of our first few buildings. This will include a 22-storey high rise, multi-family project. We finalized a lot of great retail tenants that I cannot yet share. A whole lot of work has been going on, prepping for construction and activation of this huge project.
Can you give an assessment of the real estate investment industry, not just in Jacksonville but in all of northeast Florida?
When it comes to northeast Florida, it’s an incredible place to invest, an incredible place to move a company to or to start a company. Of course, we all know the great pro-business, tax-friendly laws in Florida as a whole, but northeast Florida generally has a lower cost of living. We have a great port and a good airport. We also have one of the strongest job markets in the country, and there is a tremendous amount of population growth. St. Johns County has been the fastest-growing county in the nation by population growth for the last three years. It’s a booming place that is on people’s radars. When I moved here ten years ago, Jacksonville wasn’t even thought of as a place to go to; it was sort of the stepchild of Florida, and now that has certainly changed.
Jacksonville’s short-term challenge is acquiring housing for working families. We have the largest amount of new housing deliveries going on this year in the history of Jacksonville. The good news is that the growth trajectory of Jacksonville’s population growth means that the new housing units are going to be absorbed; there will be people moving in pretty quickly to occupy them and then we will be undersupplied dramatically in a short amount of time. The challenges around financing new developments, and the cost of new housing, are really restricting new construction starts. This year will be the greatest deficit in Jacksonville and nationally in the difference between how many housing units are delivered versus how many have started. There is little new housing going under construction, yet we have tremendous population growth. It’s a big problem but fortunately, there are a number of great developers in Jacksonville and we get the pleasure of partnering with them, lending to them, investing alongside them, and providing more housing. When you have access to capital, that’s a good starting point that will allow us to work hard and keep up with demand.
In what ways does DLP Capital differentiate itself from other real estate companies operating in Jacksonville and Northeast Florida?
There are companies similar in parts to what we do, but I would say, first, that we invest as a developer. We invest as an operator of housing communities. But we also invest as a partner to other developers, so people you would think of as a competitor, we often partner with them. The biggest way we invest is by lending capital to our ‘competitors.’ Because we invest in all different places, the people who are succeeding in the market because they know what we are doing aren’t exactly our competitors; they are our clients and partners. Another thing unique about us is our source of capital. Our capital does not come from institutions, it comes from individual families. High net worth families, 3,300 of them, invest with us including many hundreds who live in the Jacksonville area. That direct access to capital makes it a lot stickier and it tends to behave differently than institutional capital. That is why we have so much capital to invest today when many others don’t. We also run our organization in a disciplined and rigorous way. We have developed a system called the elite execution system. I wrote a couple of books on it called Building An Elite Organization and Building An Elite Career, focusing on how you scale high-growth, high-profit businesses. We’ve grown our revenue by 50% or more, every year for the last 18 years in a row. We’ve been one of the 5,000 fastest-growing companies in America for 12 years in a row. We say internally that we accomplish more every 90 days than our competition accomplishes all year, and we’ve grown by 10-15% a quarter every quarter for the last 18 years. Most organizations would be happy with 10-15% growth for the year. We’re on a good approach that allows us to succeed, but being private, we have no outside controls and no outside capital. This allows us to be more entrepreneurial and more nimble, allowing us to adjust to what’s going on in the market. We still have the skills and resources of a large institution but with the approach of a lean organization.
Considering that DLP works with a lot of solutions and services, which of these solutions and services do you expect to be the main drivers of growth moving forward?
For us, the engine is capital moving into our funds. The more capital we have, the more we get to deploy into the building of thriving communities. That is our purpose: to transform lives through the building of thriving communities. The way we will do that is as a lender, where we can lend to a lot of the great developers in the market. A lot of our capital goes into their projects and their deals. We also own DLP Bank, and we are currently in the process of acquiring another large bank. All that just gives us more balance sheets we can use to invest in the building of thriving communities in Jacksonville.
