In the business communities of Dallas and Houston, Trammell Crow is a household name. In the Washington area, the man and his company are almost unknown, but they won't be for long.
Trammell Crow Co., the world's largest developer of commercial and industrial property, a real estate powerhouse with $3.6 billion in assets, has begun work on two large projects that will give the company a strong presence in the Washington market and that presage rapid expansion here.
In Rockville, Trammell Crow is constructing an 80-acre industrial and office park known as Metro Park North, fronting on East Gude Drive adjacent to the Metro tracks.
And in Georgetown, preliminary work began in December on Jefferson Court, a 300,000-square-foot office and retail building at 30th and K streets NW, on the waterfront beneath the Whitehurst Freeway. The site is the former W. T. Galliher lumber yard, which Trammell Crow acquired last July in a $9.5 million land swap.
"My office opened in the fall of 1980, and we have yet to build one square foot. We have been learning the market," said Ben C. Paden Jr., the firm's Washington partner. "Now we're here to stay, and we're trying to get known in the community. The Crow strategy is to have an office in every city they operate in, to be citizens of the city and part of the community."
Judging by the company's history, that means Trammell Crow will rapidly become a major player in the Washington-area real estate development game. The company retains ownership of almost everything it builds, and does its own leasing and managing. Paden said it would follow that pattern in Washington, maintaining a permanent presence here.
What will be bad news for Washington's office-leasing and management firms, which apparently will get no contracts from the Trammell Crow organization. "We market all our own properties. We lease and manage everything ourselves, because we think we do it best," company spokesman Gary E. Griffith said.
The rise of Trammell Crow is one of those bigger-than-life stories that seem to flourish in the Texas atmosphere. Once the accountant for another Texas tycoon, Crow--now 67--went out on his own with the construction of a warehouse in Dallas in 1948 and never stopped. Forbes Magazine last year estimated his personal net worth at $500 million.
He now spends most of his time on his pet project, the vast Dallas Market Center, which is said to be the world's largest wholesale merchandise center. But he remains a senior partner of Trammell Crow Co., the separate commercial real estate development firm.
Trammell Crow Co., based in Dallas, is not a corporation but a partnership, with 63 operating partners who are the owners of the company. Their average age, a company spokesman said, is 36. Most of the partners are recruited out of leading business and management schools as leasing agents, and have three to five years to make partner or move on.
Those who make partner move out to run Trammell Crow offices in communities other than Dallas, and are largely autonomous in their decisions on what and where to build, according to Griffith.
As a privately owned firm that sells no shares to the public, Trammell Crow is not obliged to release any profit figures, and does not do so. According to information made available by the company, it currently owns, leases and manages 15 million square feet of office space, 103 million square feet of industrial space, and 4.1 million square feet of retail space.
In both 1981 and 1982, it reported the value of its construction starts at more than $1 billion. According to the annual survey of developers published by Building Design and Construction magazine in December, the value of "construction put in place" by Trammell Crow is nearly twice as great as that of the number two firm, Lincoln Property Co., also of Dallas.
The Rockville industrial park is expected to take five years to complete and to cost about $50 million in 1982 dollars, said Don Taylor, a warehouse specialist in charge of the Rockville project. The first phase, consisting of eight buildings, is being undertaken entirely on speculation--that is, no major tenants have been signed up in advance, Taylor said. In later phases, he said, Trammell Crow would consider building on order to the specifications of an individual tenant. Taylor declined to say what Trammell Crow paid for the property.
The Georgetown project will be an eight-story, red-brick installation clearly aimed at the upper brackets of the rental market--some of the offices will have working fireplaces and private balconies.
Paden acknowledged that there is a risk in undertaking such a project at a time when the citywide office rental market is weak, especially since Georgtown lacks subway service.
But, he said, "we like to think we know how to go through good times and bad. A lot of people, in real estate as in the stock market, think that the best time to get in is when things look grim."