Commercial Real Estate Legacy – A Podcast with Rusty Tamlyn

HOUSTON – (Realty News Report) – The latest episode of The Ralph Bivins Project podcast features an interview with veteran Houston broker Rusty Tamlyn, senior managing director at JLL Capital Markets who is retiring from commercial real estate after 42 years to take the position of non-executive chairman of Tamlyn, Inc., a building product firm.

RALPH BIVINS: Welcome to the Ralph Bivins Project. We’re here today to talk with one of the most experienced guys in the commercial real estate industry in Texas. He’s done some phenomenal deals that have made a big difference in what has been built here. He’s got a lot of insight into what people think about major-scale investments right now. Who wants to buy an office building? What is the pitch for buying retail? He has done it all with major institutional investors, the ones that are buying big properties that we drive by every day.

We’re with Rusty Tamlyn. He’s been senior managing director at JLL Capital Markets – and he’s been in Houston for quite some time. He began, I guess, at CBRE back in the 1970s; it was CB Richard Ellis at the time. He also worked at Trammell Crow Co., Cushman & Wakefield before joining HFF, which was merged into JLL a couple of years ago.

Rusty, welcome.

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RUSTY TAMLYN: I didn’t think I’d be in the real estate business for 42 years. I’m a native Houstonian and I graduated from the University of Texas. I just had dinner last night with Bill Smith and his wife. Bill was my mentor at CBRE many, many years ago. I have tried to mentor a lot of young kids in the industry as part of my give-back. It’s been a great ride, but I’m ready to get off the real estate roller coaster.

RALPH BIVINS: Houston has changed a lot over the years. The population was tiny then compared to what it is now. What do you see as the big changes in Houston over the years?

RUSTY TAMLYN: You know, I sold property with an international firm, so I have a pretty good perspective on how investors view Houston. It’s frustrating because Houston is probably the most misunderstood large city in the country. So many people think that the price of real estate in Houston rises and falls with the price of oil and gas. That’s not true. When I first got involved in real estate around 1978, Houston’s dependency on oil and gas was about 85 percent. Now, it’s more like 30 to 35 percent.

The three legs of Houston’s economy today are oil and gas, the medical center and the port, all of which are doing very well. The perspective most people have of Houston is what they see on the national media. They see the flooding from Hurricane Harvey, they see last year’s freeze which, in a week, cost the city billions in productivity, and this year, we have the water boiling situation. We wonder how a community that is about to become the third largest city in the country is losing its water capacity. It’s frustrating.

A lot of people feel that Houston needs more planning. And we have no zoning laws. But if you look at Houston, it doesn’t appear to be much different than any other large city. Actually, there’s an advantage to having no zoning. In other cities that do have zoning, it could take up to three years to change land uses. In Houston, you can tear down an old industrial building downtown and change it to mixed use in short order. But still, many people say we don’t have enough planning or infrastructure.

RALPH BIVINS: What has been mentioned a lot is the conversion of office buildings into residential uses – and we certainly have a lot of vacant offices. We can always use more places to live.

RUSTY TAMLYN: Of the four major food groups, office is the one that’s struggling the most. This is really a national issue, and it has a lot to do with COVID. A lot of people are cutting back on space. When we consolidated, we took less space. A lot of companies are renewing leases with less space. Many people are working in the office only three days a week and the rest of the week at home. We have all learned to work remotely. My iPhone is my office today. It’s always with me. That is just a fundamental long-term change.

RUSTY TAMLYN: We have a number of challenges in Houston. To me, one of them is leadership. I remember when we had people like Ric Campo or Bob Lanier. We need a pro-active person with business experience and leadership. We have a lot of major companies, but for whatever reason, maybe it’s the strain of running a major company, we don’t see that many business leaders engaged in the political process. A lot of real estate developers have found out the hard way that even though we don’t have zoning, you had better involve the community if you are working on a development, because they can impact the success or failure of your development. The Ashby high-rise was a good example of this.

RALPH BIVINS: We’ve heard Ric Campo mentioned over the years as a mayoral candidate. A couple of years ago, I asked Ric about it, but I don’t think he has an interest in running for office.

RUSTY TAMLYN: If you look at the history of Houston, you find that we’ve had tremendous leadership. The Medical Center was established by business leaders who assembled the land, and now it’s the largest medical center in the world. Same with the airport. We need more forward-thinking, long-term folks because we’re growing and will continue to grow.

Rusty Tamlyn’s biography

After 42 years in the real estate industry, veteran Houston broker Rusty Tamlyn will take the position of non-executive chairman of Tamlyn, Inc., a wholesale building materials firm that he owns with his two brothers, Tom and Ron. During his career, Tamlyn participated in some $14 billion in transactions, including the sale of Meyerland Plaza and the 150-acre KBR campus, which is being redeveloped by Midway as East River. He also handled the $400 million sale of the 30-story Memorial Hermann Medical Plaza, the largest medical office deal on-record, according to the Wall Street Journal.