Interview: Transwestern CEO, Larry Heard

By Mike Myatt, Chief Strategy Officer, N2growth

Larry Heard

Today marks the beginning of a series of interviews with some of the top CEOs in the commercial real estate industry. First up is Larry Heard, President and CEO of Transwestern. Founded in 1978 and headquartered in Houston, Texas, Transwestern has grown into one of the country’s largest privately held, nationwide, full service (Agency Leasing, Tenant Advisory, Investment Services, Development, Property & Facilities Management, Troubled Assets and Research) commercial real estate firms. The reason I chose to begin with Larry Heard, is not only because he is highly regarded for his leadership ability, but also because Transwestern as a company is widely known to be one of the best managed companies in the commercial real estate industry.

As an advisor to CEOs, I have the priviledge of being able to discuss the topics of leadership, strategy and branding with CEOs on a daily basis. I felt it would be encouraging to many readers given the current state of the commercial markets to view things through the lens of the chief executives whom they may not otherwise have the opportunity to interact with. Remember that it is the CEOs interviewed in this series that will be largely responsible for helping to lead the industry back to better times. On with the interview…

Mike Myatt: Larry, for readers not familiar with your background, please give us a brief summary of your commercial real estate career:

Larry Heard: I started in the business in 1980 and became immersed in the development and leasing of the product we built for many years. The early 1980s was boom time in Houston, so I learned my way around the banks, design architects offices and on-site construction shacks. I joined Transwestern in 1983, so I have only worked for two firms in my career. Since that time, I have enjoyed expanding my areas of focus and expertise as our firm has grown and developed into one of the largest private real estate firms in the country today. Ours is a terrific firm filled with motivated and high quality people – I am proud of what we have created.

Mike Myatt: What has Transwestern done from a strategic and tactical perspective to successfully navigate this market?

Larry Heard: Early on, we deleveraged by paying off our corporate debt just before the downturn, stayed almost singularly focused on the needs of our clients and tried to continually elevate the workplace environment at each Transwestern office around the country. As we have moved through this cycle we have been opportunistic with a few new initiatives aimed at gaining market share. We are in the process of working with our clients from an investment perspective to take advantage of the opportunities that will present themselves over the next year or two.

Mike Myat: What do you see as your primary role as CEO from a leadership perspective?

Larry Heard: 1.) To set a clear vision as to where we are going as a firm; 2.) To empower our top leaders and producers to design the road map to achieve the vision; 3.) To try to lead by example each and every day, and; 4.) To make certain to serve those you lead.

Mike Myatt: What is the most significant leadership decision you’ve made in 2009?

Larry Heard: In light of the unprecedented economic decline the decision to dramatically reduce costs without reducing headcount. Our leadership team recognized early on that our people are the company. We have worked too hard to recruit and develop our team members and working units all over the country to dismantle them in response to the downturn. As the economic picture has finally stabilized a bit, we feel good about having our full complement of team members on the field ready to play the next half of the game.

Mike Myatt: What is the toughest leadership decision you’ve had to make in 2009?

Larry Heard: The aforementioned decision. Our decision to cut costs, but not team members was made late last year when the economy, stock market and real estate business appeared to be in a free fall. Transaction activity had come to a virtual halt as decision makers took as much time as possible to make decisions. There was no clarity at the time as to the depth of the economic slide. Job number one for me is to ensure the health, vibrancy and continuity of the company. So, sticking to our plan could have been second guessed as not dramatic enough. As noted above, at this point in the recovery, we are pleased with the steps we took and the results that are beginning to emerge.

Mike Myatt: How do you see markets changing in 2010 if at all?

Larry Heard: From a services perspective, and by that I mean transaction activity, I think activity will actually pick up in 2010 over 2009 levels. Now, that’s not saying much, but it is trending in the right direction. The recovery will be slow, but I think steady. Real estate companies will make more money on less revenue than in the past due to the cost containment initiatives that have been implemented. Real estate equity values will take longer to recover because the decline has been so steep and the deleveraging process is still underway. That said, most real estate people are resourceful and loaded with perseverance. We will just have to prove it one more time……………

Conclusions:
After having the opportunity to look inside the mind of Larry Heard I think it’s easy to see why I chose to begin this CEO interview series with him. Larry is a person of great character who grasps the importance of servant leadership, vision, clear messaging, strategic planning and team building. Feel free to leave your comments below, and stay tuned for next week’s interview.