Standing nearly a foot taller than the average U.S. male, Transwestern Investment Group's newly hired head of acquisitions Paul Noland says he's had a pretty good view over the years of the commercial real estate business. And now he sees an opportunity in the property market.
Noland joined Transwestern Investment Group, or TIG, last month, and plans to help the Dallas-based real estate firm realize its growth ambitions. Standing 6-foot-8, Noland said he's often the tallest person in a room, and he jokingly calls himself "Tall Paul." He played basketball in high school and now helps coach his son.
Transwestern Investment Group, which is "really in growth mode" is prepared to go out and buy properties with the help of a variety of funds, Noland said. Last October, the firm raised $325 million for redevelopment projects.
In his new position, Noland is responsible for the firm's acquisition activities throughout the U.S., including sourcing, structuring, negotiating, financing and closing investment and development opportunities.
As head of acquisitions and a senior managing director, the native Texan is set to oversee the purchase of a wide range of strategies, ranging from core to value-add investments in industrial, apartments, retail, healthcare and life sciences.
"We have a lot of dry powder right now that wants to be invested," Noland told CoStar News. "People are not wanting to sell and some of the properties have been taken off the market. We're still definitely heavily tilted to residential and industrial space, but we play in that space a little differently from a value-add standpoint."
Industrial Opportunities
That heavy tilt to industrial and residential is playing out in a few different ways, and TIG is considering investments in cold storage and outdoor storage as well as potential built-to-rent properties.
Nearly every major property type is being considered except for office, he said.
Noland and his team are tracking the office investment sales market, but pricing has not gotten low enough yet for the firm to consider it for conversions to residential or hotels, he said.
"The real hard thing with office is that financing is non-existent," he said.
To be able to pay for improvements in an office building, the developer needs to be able to take out a loan, and "that's the piece holding back not just us, but anyone, is (that) a lot of money wants to go make high returns and office will provide it. But everyone needs debt, and lenders won't even consider it."
That response from lenders reminds Noland of what happened with aging malls years ago, he said. Once the debt becomes available, Noland said he expects the firm to take a hard look at office properties.
Looking at the Sun Belt
TIG President Charles Hazen said the current investment climate is full of opportunities, but he's "never seen the fundamentals between sectors as differentiated as they are today." Noland's experience will help achieve the firm's objectives on behalf of its investors, Hazen said.
Like other real estate investors, Transwestern Investment Group is banking on growth in U.S. markets, such as Atlanta, Dallas-Fort Worth, Nashville, Tennessee and certain markets in Florida and North Carolina. Noland said the firm also sees promise in gateway U.S. markets such as New York City and Boston.
"I'm a big believer that interest rates are not the sole mover of the real estate market," he said. "The flow of money is way more important to cap rates than interest rates and there's a lot of dry powder on the sidelines that needs to be deployed. People are starting to understand where pricing is post-interest rate moves and we are seeing a lot more comps, which is always key.
"Now that there's enough out there, we have a pretty good sense of where industrial and multifamily should be trading and the pipeline is heating up and coming."
Noland joined TIG from L&B Realty Advisors, where he served as executive vice president and head of acquisitions. In his nearly 20-year career, he has completed more than $3.5 billion of investments and joint ventures, including $1 billion in the life science sector.
He earned his bachelor's degree in real estate and management from Baylor University in Waco, Texas.