After their former employer, Grubb & Ellis, was folded into Newmark Knight Frank at BGC Partners, Moody Younger and Kathy Permenter decided the timing was right to launch their own firm. They did so at the beginning of May. By June, they had a team in place—nine in Dallas and one each in Austin and Fort Worth. The duo recently sat down with RealPoints to talk about how things are going at Younger Partners—and what’s next.
RealPoints: So, why did you decide to go out on your own?
Moody Younger: For me, I always had it in the back of my mind that I wanted to start my own company, but the timing never really made a lot of sense. This time, it just seemed like the right thing to do. For me personally, I want to work for 15-20 more years, and I feel like I have better control over my own destiny by doing this with Kathy, having our own smaller company, here in Dallas and maybe a couple of other markets in Texas. We realized that there’s a great opportunity for a new boutique firm that’s fun and also insightful; we’re going to do some things with research that we think will add value for our clients.
Kathy Permenter: I knew I was going to be making a transition and looking at the opportunities that were out there. The best option was for Moody and I to continue to work together and to develop a culture that we knew could be created: A culture where people love coming to work in the morning, a work environment that’s fun, but where people are serious about getting their work done and believe client satisfaction is the most important thing.
RealPoints: What other things factored into the decision?
Permenter: We had a lot of clients pushing us to do this. They told us, “This is the time.”
Younger: We have continued to grow with some of our clients. They have been unbelievably supportive; that’s been the most rewarding thing about everything.
RealPoints: Now that you’re several months into it, how are things going?
Younger: We have gotten off to a good start. I’m pleased with where we are. One thing I didn’t realize was how much work is involved in starting a company. None of it’s like rocket science, there’s just a lot of administrative stuff to do, and you have to do it all at once. And you have to do it while you’re doing your “day job,” too. Initially, Kathy and the leasing team focused on our business. I was more focused on the administrative piece, putting everything together. Your branding, your logo, company name, website—it all takes time. It wasn’t until late August or early September that we were settled in to a normal rhythm.
RealPoints: How large do you hope to get? What is your ideal size?
Younger: If you look at growing out all of your service lines—we will eventually be a full-service boutique firm—that probably gets you close to 50 people on the transaction side of the business. That doesn’t include the property management component of the business, which will grow significantly, once we get into that. So about 50 is probably the ideal size, and that might take 10 years.
RealPoints: What was the reaction from your former team at Grubb?
Younger: We left, and we thought it might just be the two of us, then we had other people who wanted to be a part of it.
Permenter: They all had plenty of opportunities, but they knew what kind of a business we were going to build.
Younger: It may sound strange, because we were just starting a company, but it seemed to many like a more certain opportunity, they knew what kind of an environment we’d provide.
RealPoints: What’s your current portfolio?
Younger: We currently lease about 6 million square feet of office space, including Occidental Tower and Park Central 3 and 4 in Dallas, Valliance Plaza in McKinney, and The Avallon in Austin. There’s some additional information on the Dallas properties in the case studies section of our website. And we’re starting to focus on new stuff, too.
RealPoints: What about leasing activity?
Permenter: It has been very good. Our performance during the first four months of our company significantly exceeded what I was expecting.
Younger: The market is healthy. That’s indicated in the numbers. It has been a pleasant surprise. We were planning for the worst and hoping for the best.
Permenter: I’m anticipating that the market will continue to tighten up and that rates will continue to rise. We seem to be hitting the market at the right time; we’ve had very good activity.
RealPoints: Are you seeing it certain submarkets?
Permenter: You’d be surprised. We’re even seeing it along Interstate 635, which, as you know, is under construction. It’s really broad-brush.
Younger: The most activity is centered where you’d expect—Legacy and Uptown. The Freeport/Las Colinas market is also very busy, with some big deals and build-to-suits floating around. We’ll see how many land, but there’s a lot to work on right now.
RealPoints: In terms of building out your service lines, do you have a certain order for that?
Younger: One thing we want to be very sensitive to is sticking with what we’re real good at, and getting firmly established in that area before we move into another. I’d like to grow synergistically, in a ideal world. But we’re also in a people industry, so it’s going to depend on the talent. We’ll probably adjust growth plans according to the availability of talent.
RealPoints: What has been the most surprising thing for you so far?
Permenter: For me it has been just the ability to focus on business, instead of worrying about what’s going on with your employer. You don’t realize how much of an impact that has, the constant overhang, and the phone calls about what’s going on, versus now being able to focus on moving forward. It’s liberating.
Younger: It’s the freedom to pursue the opportunities that are out there, without a governor. That’s not really surprising, but being able to now think that way feels very good.