The FORT Podcast – Craig Hall – Founder & Chairman @ Hall Group
Craig Hall is an entrepreneur, bestselling author, vintner, and philanthropist who founded HALL Group in 1968 at age 18 with $4,000 saved from small ventures that began at age ten. HALL Group comprises diverse entities in real estate, lending, winemaking, and startup investments.
We discuss:
- Surviving the 80’s financial crisis
- Building Frisco, TX
- Building a wine business
- The state of the RE market
Listen on:
Spotify
Apple Podcasts
YouTube
Topics
(00:00:00) – Intro
(00:03:04) – Building a portfolio of 72,000 apartments and pivoting away from multifamily
(00:06:32) – Surviving the 80’s financial crisis
(00:11:15) – What was your plan after divesting from multifamily?
(00:14:07) – Becoming your own partner
(00:15:36) – Building Frisco, TX
(00:24:10) – Mindset changes post-covid
(00:29:39) – Planning meeting structures
(00:31:55) – Building a wine business
(00:39:04) – Leveling the playing field for the American Dream
(00:41:03) – The state of the market
(00:44:46) – What types of deals are you looking for in this environment?
(00:47:12) – Craig’s passion for art
The FORT is produced by Johnny Podcasts
Episode Summary
Craig Hall, a prominent real estate investor, entrepreneur, and philanthropist, joins Chris Powers on this episode of “The Fort” to discuss his extensive experience in the real estate industry, his business ventures, and the lessons learned over decades of success and challenges. Hall, known for owning and managing significant real estate assets, including 72,000 apartments at his peak, offers insights into navigating economic downturns, diversifying investments, and adapting to market shifts.
The conversation begins with Hall recounting his start in real estate in 1968, purchasing a rooming house, and how that initial investment laid the groundwork for a much larger portfolio. Over time, Hall expanded his holdings to thousands of apartment units, growing his business consistently until the mid-1980s. Hall explains that this period was marked by excessive construction across all property types, driven by tax laws and an overabundance of capital. The 1980s real estate downturn hit hard, and Hall reflects on how the industry misjudged supply and demand, leading to widespread vacancies. The experience, he says, taught him invaluable lessons about market cycles and the importance of managing risk, particularly the need for liquidity during difficult times.
Hall highlights that from 1986 to 1993, the real estate market was in a state of survival. During these years, he worked tirelessly, managing relationships with lenders and investors while navigating a highly challenging economic environment. While many businesses in real estate faced collapse, Hall and his team managed to stay afloat. He emphasizes that much of his success during this period was due to maintaining transparent and honest communication with stakeholders and always focusing on adding value, whether through capital injections or strong property management.
One of the key topics of the conversation is the difference between the 1980s crisis and the Great Financial Crisis of 2007-2008. Hall notes that while the latter was severe, it paled in comparison to the turmoil of the 1980s for the real estate sector. He attributes this difference to structural changes in the financial system, such as the disappearance of savings and loans institutions and the evolution of more regulated, stable lending practices. He contrasts the loose, capital-driven environment of the 1980s with today’s more disciplined, economics-driven market, which he believes makes another 1980s-style crash unlikely.
Hall then shifts the conversation to his decision to divest from the apartment business in the 1990s. After weathering the challenges of the 1980s, Hall felt the time was right to pursue new opportunities. Over the years, he diversified his portfolio, investing in both real estate and non-real estate ventures, such as a successful software business, which he sold to Oracle. Hall explains that this sale provided the liquidity needed to continue navigating uncertain markets and reinforced his belief in always maintaining a strong cash position.
The discussion then turns to one of Hall’s most notable real estate ventures: Hall Park in Frisco, Texas. In 1989, Hall purchased land in what was then a largely undeveloped area. Despite initial skepticism from others, Hall believed in the long-term potential of Frisco and eventually developed the land into a thriving office park. He credits the success of the development to the city’s pro-business attitude and its commitment to quality infrastructure, education, and public amenities. Hall emphasizes that Frisco’s growth was not just about luck but also about the collaborative efforts of local leaders who created an environment where businesses could thrive.
Hall shares his views on the future of office parks, particularly in light of the pandemic. He discusses his decision to transform Hall Park from a traditional office park into a mixed-use development, integrating luxury apartments, retail, and office spaces. Hall believes that the future of office real estate lies in providing tenants with a comprehensive environment that offers a range of amenities to attract and retain talent. As part of this transformation, he developed a new 19-story luxury apartment building and introduced green spaces and other amenities to enhance the overall appeal of the area.
A key takeaway from the conversation is Hall’s outlook on the apartment market. Despite a current oversupply in some areas, he predicts that by 2026-2027, there will be a shortage of apartments due to the lack of new construction. He discusses his current role as a lender, explaining that he is taking an aggressive approach to lending for apartment construction, particularly in markets where he anticipates future demand. Hall sees this as a strategic move, taking advantage of the current slowdown in construction to position himself for future growth.
Hall also touches on his lending business, which he has been involved in since 1995. He explains that while he initially focused on apartments, he has recently expanded into lending for other property types, including hotels and, more recently, office buildings. He sees opportunities in capital-starved office markets, where properties may be underdeveloped or undervalued due to a lack of available financing. Hall’s approach is to lend conservatively in Texas and California, where he sees strong long-term potential, while being more cautious in markets like New York, where the regulatory environment poses greater challenges.
Towards the end of the conversation, Hall discusses his involvement in the wine industry, which he entered in 1995 at the behest of his wife. He candidly admits that the wine business is difficult and not particularly lucrative but finds it fulfilling. His winery, which focuses on producing high-quality wines, has grown to become one of the largest direct-to-consumer wineries in the U.S., with a substantial wine club and several tasting rooms. Hall attributes much of the winery’s success to its commitment to quality and the relationships it has built with consumers over the years.
Throughout the podcast, Hall emphasizes the importance of adaptability, whether in real estate, technology, or wine. He also reflects on the consolidation happening across industries, expressing concern about the shrinking number of players in markets like real estate and wine. Hall believes that public policy should focus on supporting entrepreneurship and providing opportunities for small businesses to succeed. This, he argues, is vital for maintaining the innovative spirit that has driven his success and that of many others in America.
The conversation between Chris Powers and Craig Hall offers a deep dive into Hall’s decades-long career, touching on critical lessons about real estate cycles, the importance of liquidity, and the need to continually adapt to changing market conditions.