JLL's Tony Lenamon discusses his first 100 days – Dallas Business Journal – Dallas Business Journal

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It’s been a little more than 100 days since Tony Lenamon took the lead for JLL Valuations Advisory Americas.
JLL Inc. (NYSE: JLL) announced in July that Lenamon, who is based in Dallas, was promoted to the role after guiding the real estate and investment services firm’s National Valuation Advisory Multi-Housing practice to 45% year-over-year revenue growth amid the upheaval of 2020 as managing director.
Lenamon grew up in Fort Worth before attending Texas A&M and the University of Texas at Arlington for finance and real estate degrees – and he’s been working in appraisal ever since, outside of an eight-year stint as a real estate consultant with Deloitte.
“Appraisal is my first love, and I keep coming back to it,” said Lenamon in an interview.
And with that experience, prowess and passion, Lenamon is looking ahead to furthering the success and growth of his group with his appraiser’s eye.
“JLL is the class brand in the market, and for the appraisal group that I run, my only task is to bring them up to the already world-class standard that the rest of JLL is already at. Our Capital Markets group, occupier, investment, these are all real class organizations. I need to bring us up to that same level, and I have the full resources of the brand behind me to accomplish that,” he said. 
Specific growth opportunities for the group include investments in technology that enhance client experience; efforts tied to ESG, such as a new group focused on environmental property conditions reports; and better leveraging JLL’s brand as a Fortune 200 company with more than 90,000 employees. 
“Our clients expect us to be the tip of the spear and tell them about things they don’t know about yet. When they come to us and say, ‘I’m hearing about this new ESG thing.’ We can’t say, ‘Yes, we’ve been hearing about that and somebody should look into that.’ We need to tell them that we are all over that. We are subject matter experts in that, and here’s what you need to know,” said Lenamon. 
Valuations Advisory Americas is not a group short on key assets as it looks to continue to seal its position as a leader and employer of choice in the market. Lenamon noted the firm’s acquisition of HFF in 2019, especially pointing to its clout on the appraisal side. He also acknowledged the culture set by Roger Staubach for the business that would become JLL Americas  – “There’s never a traffic jam on the extra mile,” Lenamon intoned in words attributed to the former Dallas Cowboys quarterback.
Lenamon spoke more about what drove the growth tied to Multi-Housing practice during 2020, what he sees across the country and more:
Can you discuss some of the fundamentals that helped yield 45% year-over-year revenue in your time guiding the National Valuation Advisory Multi-Housing practice?
It started with my bosses having a really great commitment to my success, and they committed to any resource I needed. 
A lot of the success came from this: We re-configured, we retooled, we reconsidered how we approached our clients and how we approached our staff. We’re still in that process today. We have committed ourselves to being the employer of choice, and that means culture and training. We’ve hired a training czar; we’re starting JLL University, and we’re really committed to our people. 
We’ve also entered into a relationship with Market Force, and they’re teaching us how to interact with each other and how to interact with our clients.
Reflecting on financial collapses, recessions and rebounds, as we’ve seen over the past 18 months, what does that look like from an appraiser’s point of view?
As appraisers, we have no choice but to reflect the market. No one actually cares what my opinion is, but they do care what the market thinks. If you’re going to make a $100 million loan or a $1.3 billion loan, you need to know what the market thinks about that property, and my job is to be an expert on that. 
When the market is optimistic, my job is to reflect that and explain why. Sometimes the market is pessimistic.
I’ve been through several down cycles: 1988 through 1990 was a rough time to be in the real estate business in Texas; the tech wreck after 2001 was a rough time; and then 2008 through 2011 was a rough time.
Have you seen certain asset classes bouncing back more quickly over the last 18 months than other types? 
If you look nationally, there are some very clear trends. There’s a lot of capital flowing into multifamily. It’s a favorite class. That automatically means there’s a lot of capital in demand. That automatically bids up prices. And multifamily bounced back very nicely because people pay their rent first. Industrial was second because of all the supply chain issues. Those two are really hot. 
Retailers struggled because people didn’t go to retail. What really struggled in the depths of COVID were hotels because all the hotels were closed. It’s hard to be in the real estate business and not generate any income. So that was tough. 
Not all property types are created equal. Office is a little different. We polled the leading CEOs in the country, and we asked them this question: Are you coming back into your offices or not? They tell us unequivocally yes. I’m very bullish on that fact about office, but in the short-term office is heavy. One thing about office is it’s harder to get good financing on it. You and I might like office – we might have a good story – but it’s just tough for us to get cheaper financing, which affects what we can pay for the property. If we have higher interest rates, we have to pay less.
What’s hot in your space right now?
One thing that’s a really topical topic is why the south is doing so well. Why is Texas doing so well? Why is Dallas doing so well? 
There are some specific reasons for that that everyone should know about, and it’s a 30-year trend. It’s this: We have something called the “economic miracle.” We have a low-regulatory and low-tax environment. That sounds simplistic, but if you can create that, people move to that. When people move to that, industries move to that. And when industries and people move somewhere, now you’ve got a real estate market. Real estate-wise, if people are moving out of your state or your city, you’re probably in trouble. 
Dallas right now is considered ground zero for the entire country for some property types. It’s quite a spot to be in considering historically we’ve been a second-tier market as the East and West Coasts were really the sexy investment areas.
For 30 years, I’ve been hearing about Dallas as a second-tier market. We’ve had plenty of investment during that time, but it’s just always been a secondary market. But not today. We don’t hold our hat for anybody.
What’s keeping you up at night? Anything you’re keeping an eye on? 
In 1981, we started a cycle that we’re still in. Prime hit 21.5% in 1981, and now prime is virtually zero. That trend has fueled a 30-year real estate cycle. While we’ve had ebbs and flows and blow-ups in that cycle, it has been impressive because real estate is a highly leveraged commodity and it likes low-interest rates. In the longer term, what cannot continue forever must stop. Interest rates cannot go down forever. Therefore, at some point mathematically, they will stop going down. When they do, the markets will have to absorb that, and we’ll have to see what that means for us.
In the short term, the only concern I have is there is a lot of exuberance in the market right now. As an observer of the market, I’m always a little nervous about exuberance, but I have grown to be a lot less nervous because the market will move in a way to suit itself. People have been calling for the demise of real estate and the rise in interest rates for as long as I’ve been in the business. They will be right eventually, but they’ve been calling for it for a long time. Rates can’t go any lower; values can’t go any higher. They’ve been saying that for five years, and they’re off by 5x. I don’t spend much time worrying about it because that’s what they do.
I’ve been hearing about fears and hesitancy related to changes in policies and legislation tied to capital gains and carried interest, but realistically people won’t stop doing deals just because they don’t like the terms as much.
The greatest factor at work in the world today is the fact that there’s a lot of capital that simply must be put to work. It will choose the best available deal and it will flow to opportunity. Those things you can count on. There are only two motivations for the market: That’s fear and greed. That’s been true since Adam and Eve.
I know this: the market will do whatever it wants to do. They say the market will move in such a way as to frustrate the maximum number of people, and that’s often true.
It sounds like it’s an exciting time to be doing what you’re doing. 
Quite literally this morning, the alarm clock had not gone off yet and I thought, “Well, maybe I’ll wait an extra minute and try to get some more sleep.” After five minutes, I rolled out of bed and said, “I’m excited about the executive board meeting we’re going to have today. I’m excited to go talk to my people and plan the future.”
This interview has been edited for brevity and clarity.
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