October 7, 2020

Episode – 10

Leave a Comment Below

Billy Glass – The Deal Flow Show - October 8, 2020 Reply

[…] Billy GlassEpisode #10 : Raising Over $300 Million for Real Estate Hospitality Projects […]

Brad Truesdell – The Deal Flow Show - October 14, 2020 Reply

[…] Billy GlassEpisode #10 : Raising Over $300 Million for Real Estate Hospitality Projects […]

Leave a Reply:

Billy Glass Talks On Raising Over $300 Million for Real Estate Hospitality Projects


Description:
Billy Glass is an Ex-NFL Player, Founder, and CEO of Gentry Mills Capital. He has been involved in the real estate business for over 30 years. Gentry Mills Capital is a real estate investment firm whose purpose is to seek out, package and provide quality commercial real estate investment opportunities to investors represented by investment professionals in the financial services industry. 

What you’ll learn from this episode:
– Raising capital through the retail brokerage channel
– Key advice on his longevity in the business
– How the hospitality industry is coping with COVID-19

Connect with Billy:
LinkedIn

Full Transcript:

JP Maroney:

Hello and welcome to another edition of the deal flow show. I’m JP Maroney, your host, along with my cohost for this and many episodes, mr. Paul Nicoline, regional director here at Harbor city capital on today’s episode, we’ve got a very special guest. His name is bill glass from Gentry mills capital. And you’ve got a background with this guy. I’m going to let you maybe do lead us off on some questions. And I’m excited about getting to know you and especially getting to know your family and, and the son that came on there at the end and said that we had enough ugly on the screen already, or we didn’t meet anyone else. But I think he was talking to me. We don’t know that exactly, but all right, so let’s jump into the questions and get to know, let our guests get to know Billy A. Little bit better. 

Paul Nicolini:

You know, Billy, we can start right in with telling us about Gentry mills capital. 

Billy Glass:

Sure. I mean, Gentry was capital was something I formed back in 1997, uh, as a consulting entity. Um, when I was sort of basically working as a wholesaler for other work for other people for many years. And I put together this company, Gentry mills capital, um, and it was 96 or 97 Becky. I can’t remember, but it was, I think it was 97 and we formed it to consult with people because I was fully licensed at that time. And we had to have something for outside business activities. We changed the name in 2006 to Jeffrey Mills capital when we went into the full time deal business and putting together our own offerings. And so that’s a little bit of background about for 

JP Maroney:

Paul May know this, but I’ve got curiosity questions. Cause I read here background NFL. I want to get into that in just a few minutes and talk about maybe even some of the parallels, but how did you actually get started in the capital markets? Can you talk a little bit about that?

Billy Glass:

Sure. I mean, uh, I, I went to Baylor university and I played for a couple of years, Cincinnati after I got out of, um, being a Baylor and playing football at Baylor. And I went to work directly for a man by the name of Hank Dickerson in here in Dallas and uh, gosh, 1981. And you know, at that time there were 13 large real estate firms in Dallas are sending company who I was very fortunate to get to go to work for Dan Henry S. Miller. And so mr. Dickerson taught me the real estate brokerage business. And while we were involved in that and I was learning in the real estate brokerage business, I became really close to Mr. Dickerson. And he taught me about partnership, putting together partnerships and, you know, I would pick a property so you didn’t go shove this buyer and that buyer and, and, uh, you know, as the market sort of got worse, he said, you know, that’s a great property nobody’s interested right now, but we should buy it. I said, that’s a great idea, mr. Dickerson. And so we started a decent lookout, we’ll put together the Texas partnership with Texas joint venture. Those were the old general partnerships. And so we started putting joint ventures together and he taught me how to do that. I became very interested in actually left business in the 1983 and started my own company to put together a joint ventures called BGI commercial real estate. And I put together 50 land syndications and sold those to a public company that I was really on raising capital and syndication business in the securities industry. So that’s how we started. 

Paul Nicolini:

And so what kind of investments are, are involved there underneath the Gentry mills capital?

Billy Glass:

We’ve really sort of focused on hospitality, although we have a wide range, real estate background and office and industrial and triple net lease warehouses. Um, but we’ve really focused since 1986 on hospitality, terminals capital. We really there’s a lot of things about hospitality that we really like, and that is that we can change the rates on our rooms, on our, what we’re selling. If you will, you know, as many times a day as we would, like, I mean, we can bring the rate up or down to capture business. If the market is soft, we can lower the rate and capture more business. You have a very tight market. We’re fortunate because we work with Hilton and Marriott and we get a lot of advice from them every day on what we should do with in our room rates. And obviously they’re interested ranking franchise fees and, uh, the better, the more they can increase our revenue, the higher their franchise fees are. And so it’s, it’s, um, it’s a great marriage, uh, what really works well for us?

Paul Nicolini:

You mentioned Hilton hotels. Um, how did you, how did you get involved with Hilton? And then also as a two part question, how do you acquire your hotels?

Billy Glass:

Well, the way we originally got involved with Hilton was that we, we basically had some partners that we had worked with in the previous life, in the hospitality industry. We had provided some capital to, even when I was working for another firm. And that was the old American literary American Liberty hospitality, um, a farm in Houston. And we started working with American Liberty hospitality and they have a long standing history with built and for operation. Um, uh, Nick Massad, their president, uh, I went to the Hilton college foster healthy they’re the university of Houston, uh, and a very big donor, uh, to that school of hospitality. And, uh, we stood our dirt first deal on the West side of Houston, which is 192 Filton, um, hotel. Um, and, um, we, we built that, that property right before another hurricane that was coming to that area, built it. Um, we had minimal damage, uh, and, uh, we had a great success story with that property, but that’s how we got involved with Hilton and, uh, you know, and through, and develop a relationship with the development. That’s the way we source our properties. We work with developers, um, many developers that we work with in the past, come to us and say, we have this project or that project and that project, our Marriott project, our high place project. And, um, uh, and so that’s basically how we w we built our relationship with the different plans. 

JP Maroney:

You you’re the sponsor in the deal. And then are you taking Carrie? Is that how you’ve built your business model or

Billy Glass:

At the beginning, when we were working with like Nick and some of the other developers we work with, we took a carrot and first in the program, uh, and then a lot of the, in several occasions, we’ve just gone into the property ourselves just directly. We bought the land and built the property from the ground up. And we were the, the franchisee 

JP Maroney:

That guy on the ground, in the NFL, a history there. Can you talk a little bit about just kind of give us a encapsulated view of that career and maybe a couple of highlights if you don’t mind. And then I have a followup question to that. 

Billy Glass:

Sure. Well, my career is very short. Um, I grew up, uh, in the NFL because my father played the tape and Browns and Detroit lions. He ended his career. He played for 11 years in the league and he ended his career in Cleveland. And so as a boy, I was in an NFL locker room and that was always my goal to be a player at some point, you know, if I could possibly do it. And so my goal was from a very young age, I was to play in the NFL. And so, uh, I did that. I was drafted in 1980, uh, 80, I suppose, 1980 and played in 81, 82 or 80 and 81. And that was my last year got hurt. But, uh, my dad calls my career a cup of tea. So, uh, you know, very short, I went up there and got, I made the team player, played for the full season and part of another season. And then, then I got, um, you know, got, got back to Dallas and went to work for mr. Dickerson in real estate.

JP Maroney:

The journey though, because even as short as the current amount is being, obviously you set a goal, you went after it, you achieved that goal. Um, no fault of your own. I’m assuming you got hurt. Uh, but the question is, do you see for yourself or what you’ve seen in the league over the years, parallels that have maybe taught you lessons or prepared you in any way for the deal making process, that and business building that you’ve now gone through as a professional career? 

Billy Glass:

I don’t think there’s any doubt. I mean, my, you know, the coaches that I played for, you know, taught me things that were incredible. Like, you know, we, we were coming up, we play and if we had the chance to play in the NFL, it’d be great, like a little bit of money, but not nothing like the money that they’re making a day. And my dad played, you know, he always had a job in the off season, as I told you, JP, my dad was a minister and he still isn’t minister. And so he did that. It’d the all seasons. He went to seminary. And then, and then, uh, you know, did his ministry work, built his ministry, a worker to 50 years? And so, you know, that in itself taught me a lot about hard work and, uh, my coaches grant tasks that Baylor would always tell me, you know, you find out that you are when adversity strikes. 

And so, you know, my career has been built on just, uh, uh, long term learning, uh, experiences, you know, building relationships over a long period of time telling him the truth and trying to be a purveyor of truth and not, you know, just, um, uh, to involve with the deal and the hype of the deal. Uh, and just trying to do the best job we possibly can for everybody involved the advisors that we work with in invest alongside of us, and then, you know, the fundamentals, the blocking and tackling, and we really pride ourselves on how we report. We report every quarter, but through this coded period, this period that we’ve had right now, we’ve been reporting weekly, uh, to all of our partners and the chicken, then the prize of what’s happening with each property. So, yeah, I think there’s a great deal of parallel JP, uh, in the fact that, you know, uh, you learn your craft over a long period of time, and it’s a great deal of fundamentals, and we’re constantly learning from the experiences that we’ve gone through and what we have, what are the things that are always coming up? 

We always know that there’s a new learning experience. It’s coming up in the real estate business right now. We’re going through something that’s incredible. [inaudible], COVID-19 rich who could underwrite, you know, such a thing as this. And I could never imagine a black Swan event like this, but here we are in the middle of it, the midst of it. And we’re getting to learn a lot. Again, 

JP Maroney:

I like your term. We’re getting to learn a lot. I call those learning experiences myself as well. Um, as you said, this is unprecedented, an unprecedented historic worldwide global impact. Um, you mentioned that your coaches, your coach at Baylor, talking about you find out who you are when you’re faced with adversity. Uh, obviously this is a big deal. The hospitality industry among a few others have taken it really on the chin. Um, but my guess is, and I want to get your input on this. My guess is there’s a, maybe a mixed feeling about this because there’s what you’re into and right now, and then there’s, what’s most likely going to follow over the next two or three or four years. Can you comment at all about how COVID has affected your deal flow or deal making process now, and where you see this going in the real estate industry, especially in the hospitality industry over the next few years, as we see this play out?

Billy Glass:

Well, we we’ve been really, um, impressed with the wonderful attitude of our lenders, how well they’ve worked with us and how, um, uh, really they’re great attitude and working with us, uh, as we negotiate, um, forbearance agreements, uh, we think that this is, we really are excited about it because I’ve lived through the grammar rub and tax reform act in 86, you know, the downturn in 91, the downturn in 2000 and in 2019 96, then we had another one in a horrible one, depression that people talk about the 2006 and seven, which was horrible. Um, and then of course, you know what we’re going through right now. Um, so we saying that there’s going to be a great opportunity because of what’s going on in, in the code with festival what’s happening in all facets of real estate. We think at some point in time, that attitude, the gracious attitude that we experienced with lenders going to have turned a little bit rougher, because if we don’t properties, don’t have the dollars to pay payments.

Ultimately after all the government stimulus ones out there, the banks are going to have to take back some of these properties. So we great source of acquisition will be through the banks. We also think there’ll be a lot of, uh, possible acquisitions through, um, the REITs, uh, some of his various owners of real estate that are gonna have to offload, you know, a great number of properties, not only hospitality properties, but, you know, we know that retail has gone through a tremendous change before COVID, uh, because of the general public, uh, deciding to shop online and not to go to the malls into the typical flip traffic, uh, storefront, retail, uh, shops. And they typically, um, join too. And so there’s, there’s been great change, but I think COVID is just going to exacerbate all that and move it forward and close office. We know there’s a lot of talk that office will not be used in the same way that there’s going to be no need for a central business district office.

We don’t know if we’re totally, you think that there will be a lower a lowering of, uh, a demand for that, but we just don’t know to what extent I find myself in this situation, that experience when people ask me these questions, but just the fact, I really don’t know because that’s the truthful answer. I don’t know what the ultimate outcome is going to be, but we do know that an all those different times that I’ve talked about, there has been a great opportunity to acquire real estate. And so that’s what we’re preparing ourselves for right now, 

Paul Nicolini:

Billy let’s look back for a minute. You’ve raised a great deal of money on the last 15 to 20 years through the broker dealer communities. Um, and that would be utilizing the reg D and the private placements, private placement offerings. Can you give us what you’ve learned from that experience? 

Billy Glass:

Yeah. I just think that, I mean, that was the chorus Bali. I mean, thanks for the opportunity to, to, to answer that question. I mean, I think the biggest thing we’ve done is that we’ve built our relationships with different broker dealers. Uh, I think it’s built on a basis of just good, honest business dealings with the principles of the broker dealer firms. They know that we’re going to tell them exactly what’s going on with the property and report the exact truth, not ever hide the ball and tell them what’s going on with each property. And we’ve had a great experience. We’ve done about 31 different offerings. We’ve had 11 go fully cycle. We’re getting ready to have three more go full cycle. We have two more offerings that are going to come out in the next month. So we’ll be at 33 total offerings with about 14 that are gone full cycle since 2006. So that’s not a great number of offerings, but it represents about 200. And when we’re done, it will be around $300 million of a total amount of cash raised and about a billion dollars in real estate, that report. 

Paul Nicolini:

Um, and I do want to go back to that your latest offering. Cause I know we spoke about that the other day, but how do you manage your relationship with the reps that you currently doing business with?

Billy Glass:

One of the ways that we manage that relationship is like, you know, the fundamentals of reporting. We are constantly every week, we have a report that comes out on Wednesday night and we just went to that weekly format just because when Sankey advisors and their clients and to be communicated with. And so we just try to update, we take some basic fundamental information, um, right. Two of the things that we show every week are the occupancy of our properties. And we show the trailing weeks and months of occupancy so they can see the growth pattern. And then we show travel because travel obviously very much affects the hospitality industry. So we share the TSA numbers or turnstile numbers from the administration during transportation traits and safety administration that we all go through the security checkpoints. And this is just basically shows the numbers, the number, the gross number of travelers going through those GSA checkpoints and we’ve shown that growth. So we show that on a daily basis. And so those advisors know they’re going to get that report every Wednesday night, and it’s going to also show them anything that’s pertinent, it’s germane to their property and the third license that they’re invested with one though. And that goes back to the advisors, but also to, 

Paul Nicolini:

I was going to say that, um, knowing you for, for many years and showing up at conferences together at a few along the way, do you now, because of COVID, is it now more, um, uh, virtual presentations that you do? 

Billy Glass:

It really is all, I mean, you know, we had a dinner meeting last night, which was, I guess the first dinner meeting that we’ve done since March. Um, and so it was a group of people that were with one advisor and they were comfortable getting together. And so we went and had had dinner with them, but that’s the first meeting that we’ve had. Obviously we practice social, discuss this distancing, warm, asking things of that nature, but try to be the safe as possible, but most of what we do now, our zoom meetings, uh, and then of course, communication, email communication letter by letter, just basically written communication. 

JP Maroney:

If you’re listening or watching the deal flow show, you can get more episodes@thedealflowshow.com and you can also subscribe and follow us for future episodes as we release them. Um, you know, Paul is, I was sitting here thinking you were asking the question about the relationships with reps and, um, he was talking about the dinner meetings and such the digital landscape in general. How has that affected or evolved your capital raising? Is it still for you? I know COVID has affected things and we just discuss that. But in general, as things have become more and more computerized and digital, how have y’all evolved to keep up with those technologies? 

Billy Glass:

Well, we had to step up our game and, and, you know, really get familiar with all the different digital group digital vehicles to use, to communicate with advisors and with their clients. And, you know, we were, we thought that we knew how to use all the different tools pretty well, but we’ve become, uh, much more proficient with the different formats, the different media formats that you could use to communicate with folks. And we all know who they are, what they are and what they use. And so like bringing central zoom, uh, those different meeting formats, uh, our, our, our vehicles are mediums. We use those a great deal, and they’re very, very, very helpful.

JP Maroney:

I want to shift gears just a little bit and talk less about your specific company or deals and talk about the underlying principles or skills or strategies you’ve been involved in the deal making process for many years now. How do you prepare for the game? If you go back to the NFL, is that a metaphor? Again, obviously there’s a lot of mental preparation, physical preparation, watching tape, all those things that happened before that, but in the deal making process, what are you doing to prepare for the next deal that you’re engaging with your team and with your counterparts that you’re engaging with on a, on a pro  

Billy Glass:

It’s just as very detail oriented. I mean, we have an underwriting process. I have a partner named Scott Palmer. Who’s been my partner for many years and he’s out on the marketplace looking at hundreds of deals for us to find one. Uh, and we, you know, both that, those deals when he gets them to the point where they’re, you know, to the final Tim, we take those final 10 and we we’ve, we vet them individually. Uh, he gives me what he thinks about the broccoli’s and I review the properties and we talk about the different deal points, but, you know, with, for us, JP, it’s always about value. Okay, what are we buying the property for? What’s our basis in the property? And we think that that’s just a fundamental thing that you can’t ever get away from the real estate business. What did you pay for the property? 

Because what you pay for a property is going to determine how profitable that asset or that investment’s going to be for the limited partners at the end of the day. And so we’re, we’re a very much keyed into those fundamentals, what it cost you, what’s the replacement cost of this property. If we had to build it today, what would it cost? Are we better off to buy this existing asset at this basis? Or should we go and try to build a similar asset? And, you know, so those are the things, what, you know, what’s my debt gonna cost me, you know, how much leverage do I put on this property? Cause obviously broker dealer can use very sensitive leverage. And so we saw our weeds and because they are, we are. And so we were very cautious about that. What’s obviously we’re sensing that themes. I mean, how you can have a great low basis in the property, in this totally so many feeds on it, that it makes zero sense financially. So we’re very, uh, synced to that as well. And, uh, you know, we’ve had a longterm relationship with broker dealers, max, because we listened to what the broker dealers tell us about what they’re willing to pay and what they’re not willing to pay and what their advisors can accept and what they can acceptance. So we listened to those things. 

JP Maroney:

If you go into a deal and the numbers are right, are there any other deal, stoppers, deal killers for you? 

Billy Glass:

There are, there are a lot of them, uh, you know, I think that, um, you know, a management company that’s in a property and existing hotel that, uh, you can’t, uh, you have, uh, a longterm management contract that’s in place. That’s, uh, it’s a deal stopper force. Um, you know, obviously it’s got to pass a whole lot of hurdles. You know, the location of the property is, um, we try to be close to what we call room night generators on our hospitality properties, close to convention centers, hospitals, colleges, things that generate room nights that will make that property, uh, our calls that property to have some success. We don’t want to just be another property at the corner of an intersection on a freeway. Uh, so we, we want to have a great flag. Inferior flag is another one. I mean, obviously if you don’t have a good slag and that for us, it’s Marriott or Hilton or high, um, so we’re very cautious about the slag deal. Stop retaking. Those are just a few, 

Paul Nicolini:

I did want to ask. What, what, what about a deal that got away? Can you, can you talk about that? Was there a deal that got away from you that you just regret now? 

Billy Glass:

I think there’s always, there’s always deals that we underwrote too hard and probably should’ve been a little, a little, uh, more, uh, forgiving on, uh, I can think of one in Jacksonville, uh, uh, that, uh, DoubleTree that we missed on. And it was, it ended up being a cheerfully successful project and a Jacksonville before. And, um, I don’t want to say much more cause y’all probably all know the property, but great property. Probably. We missed all that when there’s lots of properties that we missed on, um, right after the downturn in 2006, a lot of properties and markets that we missed on that. I wish that I’d have been more aggressive, but, you know, I don’t have any marks on my tractor either. So I, you know, um, I guess, you know, you thank God for ins or prayers. I mean, maybe I didn’t get that one, but maybe that was a good thing because we don’t have any thank goodness on our track record that we put together over the last, you know, years in 2006, we don’t have any properties that have been a loss for our investors. 

JP Maroney:

You, so the particular types of investors, you mentioned the dinner show, the, you know, pitch last night that you had dinner with an advisor’s clients. What is the mix, if you don’t mind sharing, what is the mix for y’all of retail versus institutional versus family, office money, et cetera? 

Billy Glass:

That’s a, that’s a great question, JP, you know, we’re, we’re made, we basically nine 90% of our money comes from broker dealer, the broker dealer, financial services community, either our brokers advisors that work for different broker dealers, uh, you know, bounce that 10% would come from high net worth individuals. 

JP Maroney:

I know your son was on earlier and potentially was going to be on with us. You’re this is obviously a family business still. Um, what’s the future? How do you, how do you as a leader and I’m asking this selfishly, you know, um, you got a couple of years on me, but selfishly, how do you direct a business and then, um, bring your family in and involve them in such a way, but also the company in and implant the values, but also allow them to evolve with new technologies, new ways of doing business. How do you make all of that mix work?

Billy Glass:

Great question. Uh, the question that we get from every third party due diligence, a advisement comes in here. We have to do obviously third party due diligence for all of our different broker dealers. And they always ask us about succession and, uh, again, but that’s, it’s important to the broker dealers it’s become very important to us. Um, but you know, in order for us to move forward into the future, uh, you know, we need to bring young people in, uh, that have a vested interest in the company that want to see succeed. And so I’ve started training my son, he’s been here with us for five years, uh, that he’s been working in the business. My wife works in the business. I have another son that works part time in the business. Um, so, and then of course I have a lot of very seasoned professionals that work with us, Becky. 

Well, she’s been with me from the very beginning. She’s here with me. We worked together for over 30 years. Uh, Scott Palmer, my acquisition partner is, uh, HPP. He’s older than I am. And, uh, you know, so he’s working to find the success of first and we’ll take his disposition and acquisition. Um, and so we’re constantly looking for new young people to bring into the business. You know, young people have a different view of that technology than, than I do. I mean, it’s, my son just naturally works on the computer just so much. Obviously you use it in college and, you know, and all the positions he held before he came here and they are just, they just take too much quick, more quickly than, than I would. Uh, and I think that the kids they’re Joshua’s children, they’re my grandchildren. They’ll be much more fluid than he is unsure, but, you know, it’s just something that we’re constantly working on, thinking about the future, thinking about, you know, when I stepped down or when Becky steps down or when Scott steps down silver spot and we, we have, uh, you know, people that we have in position now, and that we’re looking to hire in the future to take those individuals.

Paul Nicolini:

Billy, tell us a little something about yourself, professional organizations or charities that you may belong to.

Billy Glass: 

Thanks, Paul. I mean, my dad and my father worked in prison. [inaudible], uh, uh, inmates, [inaudible] inmates that are in prison and give them a reason to stay out of prison. And so that’s one of the things that we did and I have my first born down syndrome. And so [inaudible], I stepped off the board and, uh, and so, but I’ve had to have a [inaudible] great job, uh, working, not only working with the young people, Olympic Olympic [inaudible] people participate in organized events. We organize, they support more than, than there’s. They support the family. So circle of friends. So it becomes your once your circle of friends, watch your children compete with the huge support with the parents of those kids. [inaudible]. So you’ll see on our website, those are two organizations that we support, I guess, for the last 38. Now, I guess for the last, since my son will be 38 now, and my father is 50 years old. So we have supported those two ministries for a long time. 

JP Maroney:

Over the years of watching other deal makers in the process could be people you’ve sat next to on your side of the table or people on the other side of the table, or you’ve been involved with, what do you believe are the characteristics of truly exceptional deal-makers? 

Billy Glass:

Well, I think that they’ve done depart from what I talked to you about earlier about those work ethic, that you can see a man or a woman’s life. I mean their, their work ethic, uh, because it’s reflected in the people that they have around. And so, you know, we think that when I find somebody that’s honest, it’s hard working. Um, I can name a few people in our industry that I just really respect. Uh, they’re fine. Examples of that. And some that have already passed, um, that I worked with, I had the good fortune to work with. Uh, but I worked with a lot of people in the company. Bill Duvall comes to mind as the chairman of Lincoln property company that I think is just exemplary. Um, persons. I would like to pattern my life, great guy, great deal maker, a tremendously successful company. Uh, so there’s, I’ve been very fortunate to, for a man like Hank Bickersons work around the circle of men and women in the industry that were great deal makers and great business people.

JP Maroney:

You’re listening to the deal flow show or watching, and you can get more episodes@thedealflowshow.com you can watch or listen to past episodes and subscribe or follow us for future episodes. I’m JP Maroney. This is my cohost Paul Nicoline. We’ve got Billy Glass on with us today from Gentry mills capital and, um, you know, the, the common thread. And especially with guys that have been around the business for a while, is your word, is your bond? Do what you say, say what you’re going to do show up, but I liked something you were talking about. You said you’ve never had a real big Mark on any of the deals you’ve done, where you had to go back to the investors and say, you lost money on that deal. So that’s, that’s a positive, but when you face hurdles or setbacks or obstacles, how do you deal with that? The mental side of that game, 

Billy Glass:

It, you just have to, you have to just face what’s happened. Um, and then, and this report, I mean, tell people what’s happened, explained to them what’s happened. And then, and, uh, I just don’t shy from the facts. I mean, I’ve just learned that over a long period of time, my wife tells me that, you know, she seen that growth in me through the years, you know, that, uh, um, sometimes I’d want to tell people what they wanted to hear, which is not necessarily the exact hard truths. And, uh, in, of course, as you get older, you realize that the truth is the best is the best thing that you can say. And so you just get shocked from the facts. And so I just, I just come out with what’s happened, what our plan of attack is. I always try to always come up with a plan of attack because I don’t think that there is, I don’t think the theme is acceptable. And so I always come out, I try to engineer our way through to the problem, and that takes time and it takes patience. It takes experience. It takes the counsel of other great folks in your organization to try to engineer a way through a problem. And then that’s sort of what we, that’s what we do.

Paul Nicolini:

Billy, what kind of people would you like to connect with from our audience or our guests 

Billy Glass:

Appreciate that, Paul. I mean, I just like to visit with other broker dealers that, uh, like what I’ve said, um, that are interested in looking at a copy. That’s a small company with a great track record, uh, utilize, uh, we, we have a lot of our properties that didn’t hit proforma, but they didn’t lose money for investors. Okay. And, you know, that’s, we’re proud of that. Uh, we didn’t just do that through the good markets. Uh, the first feeling you, I told you about the Hilton garden in Houston, Texas, that was built in 2006. And if I’m not mistaken, 2007 was the beginning of the great depression or what people have called the great depression after the real great depression that happened earlier in the century. But, uh, you know, that was, uh, we ended up selling that property for 6.7, tap achieving a 6.7% annualized rate of return. 

We hold it for five years. And, uh, that was our worst return that we’ve had in our history. Um, you know, that’s not to say that we won’t have some properties that are affected by the coronavirus that won’t do poorly as well. And I’m not saying that we are going to be able to maintain that track record, but right now we re, as I said before, we’ve sort of engineered a way to get through the situation and still generate a return, a good return for the park. So I would say that a broker dealer advising horray, that’s interested in, in what we do or I mean, that kind of a philosophy that we’d love this with those types of individuals. Now I have a project that I wanted to talk to you about that if you want me to do policy a situation on an existing property that we have, we had the opportunity because of the virus by the note of the discount and so visit about that.

We can at some point in time, would you like to say a few words about it now? Well, yeah, it’s just approximately we have a Washington DC, it’s a Hyatt place hotel, 200 round Hyatt place hotel. Uh, we, uh, refinanced that probably bought it in 2017. Um, we bought it in what we felt was a great price in the properties located in the Noma district of Washington, DC, which is North of Massachusetts Avenue. So Noma is an acronym Stanford North of Massachusetts Avenue. If you’ve ever gone to union station in Washington, DC, get out of union station, looks out and you’re looking directly with capital. Uh, in the Capitol building is one mile South of the station are high places, one mile North of union station. So it’s, you could walk around the back of union station, go out the North side of union st

Our property would be one mile North. That whole district North of union station was called Noma. Uh, and so we bought that property. We refinanced it in, uh, 2000 and, um, refinanced it. We bought it in 2017, refinance it in 2019 with a lender. And, uh, that was in, uh, I guess that was in October of 2019. And we were rocking along, got a great rate, then rock and the Noma struck in March and they made the decision that lender arbitrarily made the decision to sell our note into the bark. Um, we were working with him trying to get her a forbearance agreement negotiating with them. They dragged their feet who couldn’t get the agreement negotiated. They ultimately solar in the, or a broker in Chicago called Eastville. And then we all know who we got a package wherever you buy it. It was a high bidder. 

We bought it at a $9 billion discount. So we bought a 15 million, $750,000 loan for $42 million. And, uh, we, um, it’s gonna greatly benefit existing investors. And then of course, anybody else that wants to invest in that note, it’s gonna make a really, really nice return, a rate of return that I don’t typically quote, but it’s a higher than me return we’ve ever made in our portfolio. It’s North of 20%. We feel very, there’s no guarantee teach for that. Obviously you can get out of a resurgence of the coronavirus and we could have a slowing of the market, but we feel like if everything continues, we get a vaccine in good therapeutics and the markets open up a little bit. We were going to make a really nice sprayed return. 

JP Maroney:

Fantastic. How can folks get in touch with you if they would like to reach out to you?

Billy Glass:

I’m just thinking, call me here at our office in Dallas at (972) 759-8725, or you can talk with me or my Becky welts or vice-president, um, uh, just give us a call. We’ll be happy to get back in touch with you and visit with you. You can go to our website, www.jp mills, capital.com. Uh, and we’d love to just do us a holler and we get together and he loves this. 

JP Maroney:

Excellent. I’m sure some of our audience will get in touch with you on behalf of Paul Nicoline, myself, JP Maroney, our team here at Harbor city capital and the deal flow show team. I’d like to thank you again for taking the time to come on the show, share your wisdom, share your information. And we look forward to getting to know you better. I know Paul’s got a great background with you and has said some great things look forward to meeting you, maybe when I’m back at my stomping grounds in Texas. Um, but thank you again for coming on Billy. I appreciate it. 

Billy Glass:

Thank you, JP. Thank you, Paul.

JP Maroney:

Once again, if you’re watching our listing, this is the deal flow show. You can get more episodes@thedealflowshow.com or you can subscribe to future episodes on JP Maroney. Paul Nicoline. We’ll see you again in another episode, very, very soon

October 7, 2020

Billy Glass Talks On Raising Over $300 Million for Real Estate Hospitality Projects


Description:
Billy Glass is an Ex-NFL Player, Founder, and CEO of Gentry Mills Capital. He has been involved in the real estate business for over 30 years. Gentry Mills Capital is a real estate investment firm whose purpose is to seek out, package and provide quality commercial real estate investment opportunities to investors represented by investment professionals in the financial services industry. 

What you’ll learn from this episode:
– Raising capital through the retail brokerage channel
– Key advice on his longevity in the business
– How the hospitality industry is coping with COVID-19

Connect with Billy:
LinkedIn

Full Transcript:

JP Maroney:

Hello and welcome to another edition of the deal flow show. I’m JP Maroney, your host, along with my cohost for this and many episodes, mr. Paul Nicoline, regional director here at Harbor city capital on today’s episode, we’ve got a very special guest. His name is bill glass from Gentry mills capital. And you’ve got a background with this guy. I’m going to let you maybe do lead us off on some questions. And I’m excited about getting to know you and especially getting to know your family and, and the son that came on there at the end and said that we had enough ugly on the screen already, or we didn’t meet anyone else. But I think he was talking to me. We don’t know that exactly, but all right, so let’s jump into the questions and get to know, let our guests get to know Billy A. Little bit better. 

Paul Nicolini:

You know, Billy, we can start right in with telling us about Gentry mills capital. 

Billy Glass:

Sure. I mean, Gentry was capital was something I formed back in 1997, uh, as a consulting entity. Um, when I was sort of basically working as a wholesaler for other work for other people for many years. And I put together this company, Gentry mills capital, um, and it was 96 or 97 Becky. I can’t remember, but it was, I think it was 97 and we formed it to consult with people because I was fully licensed at that time. And we had to have something for outside business activities. We changed the name in 2006 to Jeffrey Mills capital when we went into the full time deal business and putting together our own offerings. And so that’s a little bit of background about for 

JP Maroney:

Paul May know this, but I’ve got curiosity questions. Cause I read here background NFL. I want to get into that in just a few minutes and talk about maybe even some of the parallels, but how did you actually get started in the capital markets? Can you talk a little bit about that?

Billy Glass:

Sure. I mean, uh, I, I went to Baylor university and I played for a couple of years, Cincinnati after I got out of, um, being a Baylor and playing football at Baylor. And I went to work directly for a man by the name of Hank Dickerson in here in Dallas and uh, gosh, 1981. And you know, at that time there were 13 large real estate firms in Dallas are sending company who I was very fortunate to get to go to work for Dan Henry S. Miller. And so mr. Dickerson taught me the real estate brokerage business. And while we were involved in that and I was learning in the real estate brokerage business, I became really close to Mr. Dickerson. And he taught me about partnership, putting together partnerships and, you know, I would pick a property so you didn’t go shove this buyer and that buyer and, and, uh, you know, as the market sort of got worse, he said, you know, that’s a great property nobody’s interested right now, but we should buy it. I said, that’s a great idea, mr. Dickerson. And so we started a decent lookout, we’ll put together the Texas partnership with Texas joint venture. Those were the old general partnerships. And so we started putting joint ventures together and he taught me how to do that. I became very interested in actually left business in the 1983 and started my own company to put together a joint ventures called BGI commercial real estate. And I put together 50 land syndications and sold those to a public company that I was really on raising capital and syndication business in the securities industry. So that’s how we started. 

Paul Nicolini:

And so what kind of investments are, are involved there underneath the Gentry mills capital?

Billy Glass:

We’ve really sort of focused on hospitality, although we have a wide range, real estate background and office and industrial and triple net lease warehouses. Um, but we’ve really focused since 1986 on hospitality, terminals capital. We really there’s a lot of things about hospitality that we really like, and that is that we can change the rates on our rooms, on our, what we’re selling. If you will, you know, as many times a day as we would, like, I mean, we can bring the rate up or down to capture business. If the market is soft, we can lower the rate and capture more business. You have a very tight market. We’re fortunate because we work with Hilton and Marriott and we get a lot of advice from them every day on what we should do with in our room rates. And obviously they’re interested ranking franchise fees and, uh, the better, the more they can increase our revenue, the higher their franchise fees are. And so it’s, it’s, um, it’s a great marriage, uh, what really works well for us?

Paul Nicolini:

You mentioned Hilton hotels. Um, how did you, how did you get involved with Hilton? And then also as a two part question, how do you acquire your hotels?

Billy Glass:

Well, the way we originally got involved with Hilton was that we, we basically had some partners that we had worked with in the previous life, in the hospitality industry. We had provided some capital to, even when I was working for another firm. And that was the old American literary American Liberty hospitality, um, a farm in Houston. And we started working with American Liberty hospitality and they have a long standing history with built and for operation. Um, uh, Nick Massad, their president, uh, I went to the Hilton college foster healthy they’re the university of Houston, uh, and a very big donor, uh, to that school of hospitality. And, uh, we stood our dirt first deal on the West side of Houston, which is 192 Filton, um, hotel. Um, and, um, we, we built that, that property right before another hurricane that was coming to that area, built it. Um, we had minimal damage, uh, and, uh, we had a great success story with that property, but that’s how we got involved with Hilton and, uh, you know, and through, and develop a relationship with the development. That’s the way we source our properties. We work with developers, um, many developers that we work with in the past, come to us and say, we have this project or that project and that project, our Marriott project, our high place project. And, um, uh, and so that’s basically how we w we built our relationship with the different plans. 

JP Maroney:

You you’re the sponsor in the deal. And then are you taking Carrie? Is that how you’ve built your business model or

Billy Glass:

At the beginning, when we were working with like Nick and some of the other developers we work with, we took a carrot and first in the program, uh, and then a lot of the, in several occasions, we’ve just gone into the property ourselves just directly. We bought the land and built the property from the ground up. And we were the, the franchisee 

JP Maroney:

That guy on the ground, in the NFL, a history there. Can you talk a little bit about just kind of give us a encapsulated view of that career and maybe a couple of highlights if you don’t mind. And then I have a followup question to that. 

Billy Glass:

Sure. Well, my career is very short. Um, I grew up, uh, in the NFL because my father played the tape and Browns and Detroit lions. He ended his career. He played for 11 years in the league and he ended his career in Cleveland. And so as a boy, I was in an NFL locker room and that was always my goal to be a player at some point, you know, if I could possibly do it. And so my goal was from a very young age, I was to play in the NFL. And so, uh, I did that. I was drafted in 1980, uh, 80, I suppose, 1980 and played in 81, 82 or 80 and 81. And that was my last year got hurt. But, uh, my dad calls my career a cup of tea. So, uh, you know, very short, I went up there and got, I made the team player, played for the full season and part of another season. And then, then I got, um, you know, got, got back to Dallas and went to work for mr. Dickerson in real estate.

JP Maroney:

The journey though, because even as short as the current amount is being, obviously you set a goal, you went after it, you achieved that goal. Um, no fault of your own. I’m assuming you got hurt. Uh, but the question is, do you see for yourself or what you’ve seen in the league over the years, parallels that have maybe taught you lessons or prepared you in any way for the deal making process, that and business building that you’ve now gone through as a professional career? 

Billy Glass:

I don’t think there’s any doubt. I mean, my, you know, the coaches that I played for, you know, taught me things that were incredible. Like, you know, we, we were coming up, we play and if we had the chance to play in the NFL, it’d be great, like a little bit of money, but not nothing like the money that they’re making a day. And my dad played, you know, he always had a job in the off season, as I told you, JP, my dad was a minister and he still isn’t minister. And so he did that. It’d the all seasons. He went to seminary. And then, and then, uh, you know, did his ministry work, built his ministry, a worker to 50 years? And so, you know, that in itself taught me a lot about hard work and, uh, my coaches grant tasks that Baylor would always tell me, you know, you find out that you are when adversity strikes. 

And so, you know, my career has been built on just, uh, uh, long term learning, uh, experiences, you know, building relationships over a long period of time telling him the truth and trying to be a purveyor of truth and not, you know, just, um, uh, to involve with the deal and the hype of the deal. Uh, and just trying to do the best job we possibly can for everybody involved the advisors that we work with in invest alongside of us, and then, you know, the fundamentals, the blocking and tackling, and we really pride ourselves on how we report. We report every quarter, but through this coded period, this period that we’ve had right now, we’ve been reporting weekly, uh, to all of our partners and the chicken, then the prize of what’s happening with each property. So, yeah, I think there’s a great deal of parallel JP, uh, in the fact that, you know, uh, you learn your craft over a long period of time, and it’s a great deal of fundamentals, and we’re constantly learning from the experiences that we’ve gone through and what we have, what are the things that are always coming up? 

We always know that there’s a new learning experience. It’s coming up in the real estate business right now. We’re going through something that’s incredible. [inaudible], COVID-19 rich who could underwrite, you know, such a thing as this. And I could never imagine a black Swan event like this, but here we are in the middle of it, the midst of it. And we’re getting to learn a lot. Again, 

JP Maroney:

I like your term. We’re getting to learn a lot. I call those learning experiences myself as well. Um, as you said, this is unprecedented, an unprecedented historic worldwide global impact. Um, you mentioned that your coaches, your coach at Baylor, talking about you find out who you are when you’re faced with adversity. Uh, obviously this is a big deal. The hospitality industry among a few others have taken it really on the chin. Um, but my guess is, and I want to get your input on this. My guess is there’s a, maybe a mixed feeling about this because there’s what you’re into and right now, and then there’s, what’s most likely going to follow over the next two or three or four years. Can you comment at all about how COVID has affected your deal flow or deal making process now, and where you see this going in the real estate industry, especially in the hospitality industry over the next few years, as we see this play out?

Billy Glass:

Well, we we’ve been really, um, impressed with the wonderful attitude of our lenders, how well they’ve worked with us and how, um, uh, really they’re great attitude and working with us, uh, as we negotiate, um, forbearance agreements, uh, we think that this is, we really are excited about it because I’ve lived through the grammar rub and tax reform act in 86, you know, the downturn in 91, the downturn in 2000 and in 2019 96, then we had another one in a horrible one, depression that people talk about the 2006 and seven, which was horrible. Um, and then of course, you know what we’re going through right now. Um, so we saying that there’s going to be a great opportunity because of what’s going on in, in the code with festival what’s happening in all facets of real estate. We think at some point in time, that attitude, the gracious attitude that we experienced with lenders going to have turned a little bit rougher, because if we don’t properties, don’t have the dollars to pay payments.

Ultimately after all the government stimulus ones out there, the banks are going to have to take back some of these properties. So we great source of acquisition will be through the banks. We also think there’ll be a lot of, uh, possible acquisitions through, um, the REITs, uh, some of his various owners of real estate that are gonna have to offload, you know, a great number of properties, not only hospitality properties, but, you know, we know that retail has gone through a tremendous change before COVID, uh, because of the general public, uh, deciding to shop online and not to go to the malls into the typical flip traffic, uh, storefront, retail, uh, shops. And they typically, um, join too. And so there’s, there’s been great change, but I think COVID is just going to exacerbate all that and move it forward and close office. We know there’s a lot of talk that office will not be used in the same way that there’s going to be no need for a central business district office.

We don’t know if we’re totally, you think that there will be a lower a lowering of, uh, a demand for that, but we just don’t know to what extent I find myself in this situation, that experience when people ask me these questions, but just the fact, I really don’t know because that’s the truthful answer. I don’t know what the ultimate outcome is going to be, but we do know that an all those different times that I’ve talked about, there has been a great opportunity to acquire real estate. And so that’s what we’re preparing ourselves for right now, 

Paul Nicolini:

Billy let’s look back for a minute. You’ve raised a great deal of money on the last 15 to 20 years through the broker dealer communities. Um, and that would be utilizing the reg D and the private placements, private placement offerings. Can you give us what you’ve learned from that experience? 

Billy Glass:

Yeah. I just think that, I mean, that was the chorus Bali. I mean, thanks for the opportunity to, to, to answer that question. I mean, I think the biggest thing we’ve done is that we’ve built our relationships with different broker dealers. Uh, I think it’s built on a basis of just good, honest business dealings with the principles of the broker dealer firms. They know that we’re going to tell them exactly what’s going on with the property and report the exact truth, not ever hide the ball and tell them what’s going on with each property. And we’ve had a great experience. We’ve done about 31 different offerings. We’ve had 11 go fully cycle. We’re getting ready to have three more go full cycle. We have two more offerings that are going to come out in the next month. So we’ll be at 33 total offerings with about 14 that are gone full cycle since 2006. So that’s not a great number of offerings, but it represents about 200. And when we’re done, it will be around $300 million of a total amount of cash raised and about a billion dollars in real estate, that report. 

Paul Nicolini:

Um, and I do want to go back to that your latest offering. Cause I know we spoke about that the other day, but how do you manage your relationship with the reps that you currently doing business with?

Billy Glass:

One of the ways that we manage that relationship is like, you know, the fundamentals of reporting. We are constantly every week, we have a report that comes out on Wednesday night and we just went to that weekly format just because when Sankey advisors and their clients and to be communicated with. And so we just try to update, we take some basic fundamental information, um, right. Two of the things that we show every week are the occupancy of our properties. And we show the trailing weeks and months of occupancy so they can see the growth pattern. And then we show travel because travel obviously very much affects the hospitality industry. So we share the TSA numbers or turnstile numbers from the administration during transportation traits and safety administration that we all go through the security checkpoints. And this is just basically shows the numbers, the number, the gross number of travelers going through those GSA checkpoints and we’ve shown that growth. So we show that on a daily basis. And so those advisors know they’re going to get that report every Wednesday night, and it’s going to also show them anything that’s pertinent, it’s germane to their property and the third license that they’re invested with one though. And that goes back to the advisors, but also to, 

Paul Nicolini:

I was going to say that, um, knowing you for, for many years and showing up at conferences together at a few along the way, do you now, because of COVID, is it now more, um, uh, virtual presentations that you do? 

Billy Glass:

It really is all, I mean, you know, we had a dinner meeting last night, which was, I guess the first dinner meeting that we’ve done since March. Um, and so it was a group of people that were with one advisor and they were comfortable getting together. And so we went and had had dinner with them, but that’s the first meeting that we’ve had. Obviously we practice social, discuss this distancing, warm, asking things of that nature, but try to be the safe as possible, but most of what we do now, our zoom meetings, uh, and then of course, communication, email communication letter by letter, just basically written communication. 

JP Maroney:

If you’re listening or watching the deal flow show, you can get more episodes@thedealflowshow.com and you can also subscribe and follow us for future episodes as we release them. Um, you know, Paul is, I was sitting here thinking you were asking the question about the relationships with reps and, um, he was talking about the dinner meetings and such the digital landscape in general. How has that affected or evolved your capital raising? Is it still for you? I know COVID has affected things and we just discuss that. But in general, as things have become more and more computerized and digital, how have y’all evolved to keep up with those technologies? 

Billy Glass:

Well, we had to step up our game and, and, you know, really get familiar with all the different digital group digital vehicles to use, to communicate with advisors and with their clients. And, you know, we were, we thought that we knew how to use all the different tools pretty well, but we’ve become, uh, much more proficient with the different formats, the different media formats that you could use to communicate with folks. And we all know who they are, what they are and what they use. And so like bringing central zoom, uh, those different meeting formats, uh, our, our, our vehicles are mediums. We use those a great deal, and they’re very, very, very helpful.

JP Maroney:

I want to shift gears just a little bit and talk less about your specific company or deals and talk about the underlying principles or skills or strategies you’ve been involved in the deal making process for many years now. How do you prepare for the game? If you go back to the NFL, is that a metaphor? Again, obviously there’s a lot of mental preparation, physical preparation, watching tape, all those things that happened before that, but in the deal making process, what are you doing to prepare for the next deal that you’re engaging with your team and with your counterparts that you’re engaging with on a, on a pro  

Billy Glass:

It’s just as very detail oriented. I mean, we have an underwriting process. I have a partner named Scott Palmer. Who’s been my partner for many years and he’s out on the marketplace looking at hundreds of deals for us to find one. Uh, and we, you know, both that, those deals when he gets them to the point where they’re, you know, to the final Tim, we take those final 10 and we we’ve, we vet them individually. Uh, he gives me what he thinks about the broccoli’s and I review the properties and we talk about the different deal points, but, you know, with, for us, JP, it’s always about value. Okay, what are we buying the property for? What’s our basis in the property? And we think that that’s just a fundamental thing that you can’t ever get away from the real estate business. What did you pay for the property? 

Because what you pay for a property is going to determine how profitable that asset or that investment’s going to be for the limited partners at the end of the day. And so we’re, we’re a very much keyed into those fundamentals, what it cost you, what’s the replacement cost of this property. If we had to build it today, what would it cost? Are we better off to buy this existing asset at this basis? Or should we go and try to build a similar asset? And, you know, so those are the things, what, you know, what’s my debt gonna cost me, you know, how much leverage do I put on this property? Cause obviously broker dealer can use very sensitive leverage. And so we saw our weeds and because they are, we are. And so we were very cautious about that. What’s obviously we’re sensing that themes. I mean, how you can have a great low basis in the property, in this totally so many feeds on it, that it makes zero sense financially. So we’re very, uh, synced to that as well. And, uh, you know, we’ve had a longterm relationship with broker dealers, max, because we listened to what the broker dealers tell us about what they’re willing to pay and what they’re not willing to pay and what their advisors can accept and what they can acceptance. So we listened to those things. 

JP Maroney:

If you go into a deal and the numbers are right, are there any other deal, stoppers, deal killers for you? 

Billy Glass:

There are, there are a lot of them, uh, you know, I think that, um, you know, a management company that’s in a property and existing hotel that, uh, you can’t, uh, you have, uh, a longterm management contract that’s in place. That’s, uh, it’s a deal stopper force. Um, you know, obviously it’s got to pass a whole lot of hurdles. You know, the location of the property is, um, we try to be close to what we call room night generators on our hospitality properties, close to convention centers, hospitals, colleges, things that generate room nights that will make that property, uh, our calls that property to have some success. We don’t want to just be another property at the corner of an intersection on a freeway. Uh, so we, we want to have a great flag. Inferior flag is another one. I mean, obviously if you don’t have a good slag and that for us, it’s Marriott or Hilton or high, um, so we’re very cautious about the slag deal. Stop retaking. Those are just a few, 

Paul Nicolini:

I did want to ask. What, what, what about a deal that got away? Can you, can you talk about that? Was there a deal that got away from you that you just regret now? 

Billy Glass:

I think there’s always, there’s always deals that we underwrote too hard and probably should’ve been a little, a little, uh, more, uh, forgiving on, uh, I can think of one in Jacksonville, uh, uh, that, uh, DoubleTree that we missed on. And it was, it ended up being a cheerfully successful project and a Jacksonville before. And, um, I don’t want to say much more cause y’all probably all know the property, but great property. Probably. We missed all that when there’s lots of properties that we missed on, um, right after the downturn in 2006, a lot of properties and markets that we missed on that. I wish that I’d have been more aggressive, but, you know, I don’t have any marks on my tractor either. So I, you know, um, I guess, you know, you thank God for ins or prayers. I mean, maybe I didn’t get that one, but maybe that was a good thing because we don’t have any thank goodness on our track record that we put together over the last, you know, years in 2006, we don’t have any properties that have been a loss for our investors. 

JP Maroney:

You, so the particular types of investors, you mentioned the dinner show, the, you know, pitch last night that you had dinner with an advisor’s clients. What is the mix, if you don’t mind sharing, what is the mix for y’all of retail versus institutional versus family, office money, et cetera? 

Billy Glass:

That’s a, that’s a great question, JP, you know, we’re, we’re made, we basically nine 90% of our money comes from broker dealer, the broker dealer, financial services community, either our brokers advisors that work for different broker dealers, uh, you know, bounce that 10% would come from high net worth individuals. 

JP Maroney:

I know your son was on earlier and potentially was going to be on with us. You’re this is obviously a family business still. Um, what’s the future? How do you, how do you as a leader and I’m asking this selfishly, you know, um, you got a couple of years on me, but selfishly, how do you direct a business and then, um, bring your family in and involve them in such a way, but also the company in and implant the values, but also allow them to evolve with new technologies, new ways of doing business. How do you make all of that mix work?

Billy Glass:

Great question. Uh, the question that we get from every third party due diligence, a advisement comes in here. We have to do obviously third party due diligence for all of our different broker dealers. And they always ask us about succession and, uh, again, but that’s, it’s important to the broker dealers it’s become very important to us. Um, but you know, in order for us to move forward into the future, uh, you know, we need to bring young people in, uh, that have a vested interest in the company that want to see succeed. And so I’ve started training my son, he’s been here with us for five years, uh, that he’s been working in the business. My wife works in the business. I have another son that works part time in the business. Um, so, and then of course I have a lot of very seasoned professionals that work with us, Becky. 

Well, she’s been with me from the very beginning. She’s here with me. We worked together for over 30 years. Uh, Scott Palmer, my acquisition partner is, uh, HPP. He’s older than I am. And, uh, you know, so he’s working to find the success of first and we’ll take his disposition and acquisition. Um, and so we’re constantly looking for new young people to bring into the business. You know, young people have a different view of that technology than, than I do. I mean, it’s, my son just naturally works on the computer just so much. Obviously you use it in college and, you know, and all the positions he held before he came here and they are just, they just take too much quick, more quickly than, than I would. Uh, and I think that the kids they’re Joshua’s children, they’re my grandchildren. They’ll be much more fluid than he is unsure, but, you know, it’s just something that we’re constantly working on, thinking about the future, thinking about, you know, when I stepped down or when Becky steps down or when Scott steps down silver spot and we, we have, uh, you know, people that we have in position now, and that we’re looking to hire in the future to take those individuals.

Paul Nicolini:

Billy, tell us a little something about yourself, professional organizations or charities that you may belong to.

Billy Glass: 

Thanks, Paul. I mean, my dad and my father worked in prison. [inaudible], uh, uh, inmates, [inaudible] inmates that are in prison and give them a reason to stay out of prison. And so that’s one of the things that we did and I have my first born down syndrome. And so [inaudible], I stepped off the board and, uh, and so, but I’ve had to have a [inaudible] great job, uh, working, not only working with the young people, Olympic Olympic [inaudible] people participate in organized events. We organize, they support more than, than there’s. They support the family. So circle of friends. So it becomes your once your circle of friends, watch your children compete with the huge support with the parents of those kids. [inaudible]. So you’ll see on our website, those are two organizations that we support, I guess, for the last 38. Now, I guess for the last, since my son will be 38 now, and my father is 50 years old. So we have supported those two ministries for a long time. 

JP Maroney:

Over the years of watching other deal makers in the process could be people you’ve sat next to on your side of the table or people on the other side of the table, or you’ve been involved with, what do you believe are the characteristics of truly exceptional deal-makers? 

Billy Glass:

Well, I think that they’ve done depart from what I talked to you about earlier about those work ethic, that you can see a man or a woman’s life. I mean their, their work ethic, uh, because it’s reflected in the people that they have around. And so, you know, we think that when I find somebody that’s honest, it’s hard working. Um, I can name a few people in our industry that I just really respect. Uh, they’re fine. Examples of that. And some that have already passed, um, that I worked with, I had the good fortune to work with. Uh, but I worked with a lot of people in the company. Bill Duvall comes to mind as the chairman of Lincoln property company that I think is just exemplary. Um, persons. I would like to pattern my life, great guy, great deal maker, a tremendously successful company. Uh, so there’s, I’ve been very fortunate to, for a man like Hank Bickersons work around the circle of men and women in the industry that were great deal makers and great business people.

JP Maroney:

You’re listening to the deal flow show or watching, and you can get more episodes@thedealflowshow.com you can watch or listen to past episodes and subscribe or follow us for future episodes. I’m JP Maroney. This is my cohost Paul Nicoline. We’ve got Billy Glass on with us today from Gentry mills capital and, um, you know, the, the common thread. And especially with guys that have been around the business for a while, is your word, is your bond? Do what you say, say what you’re going to do show up, but I liked something you were talking about. You said you’ve never had a real big Mark on any of the deals you’ve done, where you had to go back to the investors and say, you lost money on that deal. So that’s, that’s a positive, but when you face hurdles or setbacks or obstacles, how do you deal with that? The mental side of that game, 

Billy Glass:

It, you just have to, you have to just face what’s happened. Um, and then, and this report, I mean, tell people what’s happened, explained to them what’s happened. And then, and, uh, I just don’t shy from the facts. I mean, I’ve just learned that over a long period of time, my wife tells me that, you know, she seen that growth in me through the years, you know, that, uh, um, sometimes I’d want to tell people what they wanted to hear, which is not necessarily the exact hard truths. And, uh, in, of course, as you get older, you realize that the truth is the best is the best thing that you can say. And so you just get shocked from the facts. And so I just, I just come out with what’s happened, what our plan of attack is. I always try to always come up with a plan of attack because I don’t think that there is, I don’t think the theme is acceptable. And so I always come out, I try to engineer our way through to the problem, and that takes time and it takes patience. It takes experience. It takes the counsel of other great folks in your organization to try to engineer a way through a problem. And then that’s sort of what we, that’s what we do.

Paul Nicolini:

Billy, what kind of people would you like to connect with from our audience or our guests 

Billy Glass:

Appreciate that, Paul. I mean, I just like to visit with other broker dealers that, uh, like what I’ve said, um, that are interested in looking at a copy. That’s a small company with a great track record, uh, utilize, uh, we, we have a lot of our properties that didn’t hit proforma, but they didn’t lose money for investors. Okay. And, you know, that’s, we’re proud of that. Uh, we didn’t just do that through the good markets. Uh, the first feeling you, I told you about the Hilton garden in Houston, Texas, that was built in 2006. And if I’m not mistaken, 2007 was the beginning of the great depression or what people have called the great depression after the real great depression that happened earlier in the century. But, uh, you know, that was, uh, we ended up selling that property for 6.7, tap achieving a 6.7% annualized rate of return. 

We hold it for five years. And, uh, that was our worst return that we’ve had in our history. Um, you know, that’s not to say that we won’t have some properties that are affected by the coronavirus that won’t do poorly as well. And I’m not saying that we are going to be able to maintain that track record, but right now we re, as I said before, we’ve sort of engineered a way to get through the situation and still generate a return, a good return for the park. So I would say that a broker dealer advising horray, that’s interested in, in what we do or I mean, that kind of a philosophy that we’d love this with those types of individuals. Now I have a project that I wanted to talk to you about that if you want me to do policy a situation on an existing property that we have, we had the opportunity because of the virus by the note of the discount and so visit about that.

We can at some point in time, would you like to say a few words about it now? Well, yeah, it’s just approximately we have a Washington DC, it’s a Hyatt place hotel, 200 round Hyatt place hotel. Uh, we, uh, refinanced that probably bought it in 2017. Um, we bought it in what we felt was a great price in the properties located in the Noma district of Washington, DC, which is North of Massachusetts Avenue. So Noma is an acronym Stanford North of Massachusetts Avenue. If you’ve ever gone to union station in Washington, DC, get out of union station, looks out and you’re looking directly with capital. Uh, in the Capitol building is one mile South of the station are high places, one mile North of union station. So it’s, you could walk around the back of union station, go out the North side of union st

Our property would be one mile North. That whole district North of union station was called Noma. Uh, and so we bought that property. We refinanced it in, uh, 2000 and, um, refinanced it. We bought it in 2017, refinance it in 2019 with a lender. And, uh, that was in, uh, I guess that was in October of 2019. And we were rocking along, got a great rate, then rock and the Noma struck in March and they made the decision that lender arbitrarily made the decision to sell our note into the bark. Um, we were working with him trying to get her a forbearance agreement negotiating with them. They dragged their feet who couldn’t get the agreement negotiated. They ultimately solar in the, or a broker in Chicago called Eastville. And then we all know who we got a package wherever you buy it. It was a high bidder. 

We bought it at a $9 billion discount. So we bought a 15 million, $750,000 loan for $42 million. And, uh, we, um, it’s gonna greatly benefit existing investors. And then of course, anybody else that wants to invest in that note, it’s gonna make a really, really nice return, a rate of return that I don’t typically quote, but it’s a higher than me return we’ve ever made in our portfolio. It’s North of 20%. We feel very, there’s no guarantee teach for that. Obviously you can get out of a resurgence of the coronavirus and we could have a slowing of the market, but we feel like if everything continues, we get a vaccine in good therapeutics and the markets open up a little bit. We were going to make a really nice sprayed return. 

JP Maroney:

Fantastic. How can folks get in touch with you if they would like to reach out to you?

Billy Glass:

I’m just thinking, call me here at our office in Dallas at (972) 759-8725, or you can talk with me or my Becky welts or vice-president, um, uh, just give us a call. We’ll be happy to get back in touch with you and visit with you. You can go to our website, www.jp mills, capital.com. Uh, and we’d love to just do us a holler and we get together and he loves this. 

JP Maroney:

Excellent. I’m sure some of our audience will get in touch with you on behalf of Paul Nicoline, myself, JP Maroney, our team here at Harbor city capital and the deal flow show team. I’d like to thank you again for taking the time to come on the show, share your wisdom, share your information. And we look forward to getting to know you better. I know Paul’s got a great background with you and has said some great things look forward to meeting you, maybe when I’m back at my stomping grounds in Texas. Um, but thank you again for coming on Billy. I appreciate it. 

Billy Glass:

Thank you, JP. Thank you, Paul.

JP Maroney:

Once again, if you’re watching our listing, this is the deal flow show. You can get more episodes@thedealflowshow.com or you can subscribe to future episodes on JP Maroney. Paul Nicoline. We’ll see you again in another episode, very, very soon

dealadmin

Leave a Comment Below

Billy Glass – The Deal Flow Show - October 8, 2020 Reply

[…] Billy GlassEpisode #10 : Raising Over $300 Million for Real Estate Hospitality Projects […]

Brad Truesdell – The Deal Flow Show - October 14, 2020 Reply

[…] Billy GlassEpisode #10 : Raising Over $300 Million for Real Estate Hospitality Projects […]

Leave a Reply: