The FORT Podcast: Laird Sparks – Sr. Managing Director, Development at Greystar
Laird Sparks is a Senior Managing Director for Greystar Development and Construction Services, with responsibility for multifamily development in the Central North Region.
He joined Greystar in 1998, holding various positions across multiple disciplines prior to joining the development team. Laird has been involved in all aspects of the Greystar business, including third-party property management, development, renovation, acquisitions, refinance and dispositions, and the asset management of approximately 20,000 apartment units with a capitalized value of approximately $2.5 billion.
On this episode, Chris and Laird discuss the behemoth that is Greystar, their work in Texas, conventional multifamily age-restricted developments, the explosion of Single-Family Rentals, student housing, Industrial, and much more. Enjoy!
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(03:56) – Laird’s Career Story and How Greystar Has Evolved Since Being There in 1998
(05:47) – How is Greystar set up from the national level to the regional level?
(06:53) – What does your office do and what’s your role?
(07:37) – What’s changed about development over the past 14 years?
(09:35) – Are there amenities that are becoming obsolete?
(10:41) – Did you primarily do deals in the core during this cycle?
(11:37) – What markets do you play in?
(12:46) – Are entitlements in suburban markets tougher to get?
(14:25) – What are the differences between urban and suburban facilities?
(15:48) – Workforce Housing
(16:56) – Is there anything from a cost perspective on the horizon that excites you?
(20:24) – What makes up the bulk of cost increases?
(21:07) – What are the factors in labor cost increases?
(22:09) – What’s driving the massive jump in rents since Covid?
(24:53) – Are we anywhere close to meeting demand in apartment developments for DFW?
(25:37) – How much do property taxes impact deals?
(27:02) – Is there anything different about this cycle from the others you’ve experienced?
(28:56) – Are there any permanent changes you’re making in your products in light of the pandemic?
(30:19) – Why is SFR so hot right now?
(34:00) – Is there anyone doing luxury SFR?
(36:35) – SFR Tenant Demographics
(37:17) – Leasing Factors
(37:49) – How are capital markets looking at SFR?
(39:36) – Is there talk about not taking the merchant developer route with SFR’s?
(42:33) – How do you define age-restricted deals?
(47:13) – Student Housing
(49:38) – Senior vs. Student Demand in Regards To Capital Markets
(51:47) – Thoughts on Industrial
(56:01) – Is the data you have across different asset classes helpful or is it pretty siloed?
(58:55) – How is Texas positioned vs. the rest of the country?
(1:00:37) – Getting a Deal Done in CA vs. TX
(1:02:45) – What metrics matter most to you when underwriting a deal?
(1:04:41) – Have the basis point spreads between what you’re building to and what you’re exiting on changed drastically?
(1:06:30) – How are 10-year hold deals structured if you’re underwriting a Merchant Development deal?
(1:08:20) – Thoughts on Opportunity Zones
(1:10:03) – Property Management
(1:15:52) – Is there anything that keeps you up at night or risks in the market?
(1:17:41) – Has Social Media been a major player in making the developer a ‘villain’?
(1:22:09) – Is crowdsourcing the future?
Episode Summary
Laird Sparks, an adept individual in the real estate realm, shares his comprehensive understanding and insights into real estate cycles, cost trends, and market dynamics. The conversation embarks with Sparks delineating his observations on major real estate cycles. He underscores the consistent pattern of escalating costs, followed by a market stall when rents cannot align with the surging expenses. Despite a subsequent decline in costs, Sparks emphasizes their inability to revert to original levels, presenting a persistent challenge in the real estate landscape.
Delving deeper into the sphere of construction, Sparks illuminates the substantial augmentation in the costs related to garden products over the years. His discourse offers a granular view of the escalating construction expenses, impacting overall project budgets, and accentuating the criticality of adept cost management to navigate these financial intricacies. This section of the conversation provides listeners with a clear, detailed insight into the practical challenges encountered in real estate project execution, emphasizing the crucial role of strategic financial oversight.
Navigating through the intricate corridors of market dynamics, Sparks explores the delicate balance between construction costs and rents. He elaborates on the market stagnation resulting from an imbalance when construction costs overshadow rent increments. The discussion amplifies the importance of maintaining an equilibrium, ensuring consistent market growth and stability, pivotal for the sustained success of real estate ventures.
The podcast unfolds further, with Sparks dissecting the various elements contributing to the surge in construction costs. From labor to material expenses, the conversation delves into each aspect, offering a well-rounded view of the factors influencing overall construction expenses. Sparks’ emphasis on efficient project management and strategic planning stands out as a beacon of guidance for mitigating these challenges, ensuring project feasibility and sustained profitability.
In the realm of cost management, Sparks’ insights shine brightly. He shares pragmatic strategies for efficient construction cost control, underscoring the significance of detailed planning, budget adherence, and consistent cost monitoring. These strategies emerge as foundational pillars for ensuring cost efficiency, contributing to the successful, timely completion of real estate projects.
As the dialogue progresses, Sparks delves into the nuances of project financing and investment. His comprehensive discussion offers a lucid understanding of real estate financing dynamics. The emphasis on strategic financial planning and astute management resonates strongly, showcasing their indispensable role in ascertaining project viability and ensuring robust investment returns.
Exploring the impact of market trends on real estate investments, Sparks offers a detailed analysis of the interplay between economic factors and investment decisions. His discussion accentuates the paramount importance of exhaustive market analysis and research, ensuring informed, strategic investment decisions, pivotal for investment success and growth.
The conversation further illuminates the transformative role of technology in the real estate sector. Sparks highlights the multifaceted benefits of technology integration in project management, cost control, and investment analysis. The discourse underscores the pivotal role of technology in enhancing operational efficiency, precision, and profitability in real estate operations.
Looking towards the future, Sparks provides a panoramic view of the emerging trends and innovations shaping the real estate landscape.
The FORT is produced by Johnny Peterson & Straight Up Podcasts