The Real Deal Miami

Lynd readies Florida commercial strategy

By Jennifer LeClaire | August 06, 2009 12:03PM

David Lynd is returning to his roots and spreading his wings at the same time. 

The West Palm Beach native has been managing real estate projects since he was a teenager. He helped build Lynd, an Austin-based family business, into San Antonio’s largest residential property management firm.

Now Lynd is moving aggressively into the South Florida commercial real estate market and plans to expand across the United States.

Lynd wants to acquire stakes in commercial property management firms in Miami, Washington, D.C., New York, Boston, Chicago, Seattle, Los Angeles, San Diego and Phoenix and establish an immediate market presence, then leverage its expertise to grow there.

“The next five to seven years are going to be the age of the operator. Operators are coming at a premium,” said Lynd, president and chief operating officer. “There are no financing tricks, no easy money, and no cap rate compression. It’s back to the fundamentals of increasing value through hard work. That’s how we’ve always operated.”

In Miami, Lynd acquired a 50 percent stake in the Easton Group. Easton Lynd Management will offer third-party commercial property management services for industrial and office properties in the 13 states where Lynd operates. Easton’s own management portfolio includes 6.5 million square feet of office, industrial and retail space.

The Easton partnership thrusts Lynd into an ailing South Florida commercial real estate market and pits Easton Lynd head to head against established firms such as Stiles Property Management and KW Property Management & Consulting.

“In order to compete in the commercial property management space in South Florida, Lynd needs to show a strong track record of successful management and maintenance of portfolio assets,” said Jack McCabe, principal of McCabe Research & Consulting in Deerfield Beach. “Lynd also needs to show it can keep costs down.”

Lynd’s 25-year track record is strong. Lynd manages 35,000 apartment units, mostly in Texas and the Southeast U.S. Lynd ranked No. 1 in the San Antonio Business Journal’s 2008 list of largest apartment management firms. The firm also owns 14 apartment projects in San Antonio. 

The Easton partnership puts Lynd two-thirds of the way toward creating a full-service management platform, Lynd said. The plan is to use the company’s experience in multi-family real estate to raise the service bar in commercial property management.

Lynd said his company is positioned for expansion while others are struggling because it doesn’t operate its core business with debt. On the acquisition side, the company practices a conservative debt strategy, is well-capitalized and has strong lines of bank credit. As Lynd sees it, the pieces are in place to build a national platform.

“Our biggest challenge is time. This crisis won’t last forever. Building and operating a company — and handling growth responsibly — is always a challenge,” Lynd said. “We have to continue to provide great results and keep quality up while expanding into these new markets.”

McCabe said Lynd appears to be in a prime position to make it happen. At the end of the first quarter, about 7 percent of commercial real estate loans on banks’ books were considered delinquent and hundreds of billions of commercial mortgage backed securities will mature between 2010 and 2012. 

“The capital markets are in no position to facilitate loans to cover these refis, and many lenders are anticipating having to foreclose on volumes of commercial properties in the next few years,” McCabe said. “There is going to be a need for property managers to oversee these assets. Lynd is making a smart move.”