2 min read June 2023 — In an interview with Invest:, Cawley Partners CEO Bill Cawley talked about the company’s diversification into multifamily and industrial real estate, the impacts of current economic conditions and technological innovations, particularly the availability of market data, which has been impactful to the day-to-day running of the company.
What have been some of the biggest highlights or achievements for the company in the last year?
In the past 18 months, we greatly diversified the company. We had initially been strictly focused on office real estate, but we have now begun to take on multifamily and industrial projects. We have strong relationships with our investors, and we want to provide different asset types for them to invest in. I think there is stress in every asset class right now because of the current economy but the favored asset classes have been multifamily and industrial. They seem to have been impacted the least by market volatility in the past few years and we decided it made sense for us to get into those asset classes. We found great people to lead us into those segments, so we believe we are in good hands and remain active.
What is your analysis of the current real estate industry?
I would say we are in a period of unknowns. In a good market, there is clarity, market direction and consensus. In this environment, it is easy to make decisions. But right now, there are several different opinions on what is going on and what course the economy will take in the short and medium term. It is a time to be cautious. I think it is important to stay active, especially if there will be some repricing or distressed assets coming to the market. If we have the capital available in advance, we can take advantage of those opportunities as they arise.
How do you expect to navigate this economic period?
We’ve been through this before but it’s never the same. I remember going through the first two down cycles thinking I would know what to do during the next but they are all different. We pumped too much money into the economy and created inflation. We need to get it under control, and go through the pain of monetary tightening. What is good about Dallas is people are still making decisions and we have more people moving here, so there is still good absorption. I think patience and experience during these times are critical.
What technological innovations have made the most impact on your day to day?
The availability of information like market data comes to mind. Our business is very collaborative and what we are trying to do is predict what the market wants. It seems to me like tastes, wants and needs are continuing to change dramatically so it is useful to have information on hand to get ahead of that. What people want in an office building for instance has continued to change a lot, especially through the pandemic. Now more than ever tenants want a quality experience.
Is current real estate demand sustainable?
I think Texas and Florida will fare better than most states because of the number of people moving there. As corporations think about using space differently, their footprints have definitely shrunk. This of course means the size of the deals has shrunk about 80% of the time. However, what companies are sacrificing in square footage, they are making up for in quality. They want a more high-tech, high-end office space that offers a better experience but in less space. Post-pandemic, companies have realized that some functions no longer need to be in the office every day and they want to reduce square footage while providing an overall improved experience for employees.
What is your view on the state of the supply chain?
I think it is getting better, although appliances are still an issue and steel is also very expensive. The flip side is that a lot of retailers that built up inventory to maintain their commitment to timely deliveries now have too much. The supply chain needs to figure out what people want and provide it, while moving away from things that are no longer of interest to unclog the supply chain. I think the slowing economy will help.
How would you assess the talent pool in North Texas as all industries combat labor shortages?
I think the talent pool is second to none. One of my focuses is helping college kids find jobs because I am aware of how difficult the job-hunting experience is, especially for recent graduates. About 30% of my time is dedicated to helping young people out of college find work. It is hard right now because most real estate companies are sitting tight and want to reduce staff rather than increasing it. The availability of quality workforce is good in Texas because of the people moving here. Although it may be hard to get a job in real estate or other industries that are very susceptible to economic uncertainty, in general it is not hard to get a job, jobs remain plentiful in Texas.
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