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Slow and steady: Real estate firm HGC expands as demand increasesApril 14, 2014
John Giordano, Kelly Beal, Hannah Behrens, Rick Wegman and Karl Hahnfeld
Photo by Kenneth Perkins
HGC got its start not in a garage, but with a garage remodeling.
Nearly 15 years later, the Fort Worth company has done incalculable garages that went with what principal John Giordano says must be the “hundreds and hundreds” of homes it’s built.
HGC Real Estate Services – named for the original three principals Giordano, Karl Hahnfeld, and Rob Cocanower – has built a panoply of five companies – residential and commercial real estate brokerages, residential and commercial development companies, and an interior decorating company.
It’s added new principals – Rick Wegman is a principal with Giordano in all five companies, and Eric Walsh and Todd Davenport run the commercial side – and is pushing eastward into markets like Southlake and Dallas and planning on playing in the far West Side’s Walsh Ranch as it develops.
“All these companies kind of grow slowly and methodically,” Wegman said during a recent interview at the companies’ modest West Side offices on Bailey Avenue. “We never try to bite off more than we can chew.”
HGC today looks to serve all of the real estate needs of its high-end clients: help them select residential lots, design homes and build them, sell their existing homes, remodel, find sites for their businesses and build their offices, sell their properties, and decorate the home and work spaces. HGC also builds properties for investors, and has done an office building on West Seventh, apartments, townhomes and restaurants.
“We’re able to offer our customers anything that has to do with real estate,” Giordano said. “There’s nothing that we can’t do. There’s no transaction we shy away from.”
Hahnfeld, Giordano and Cocanower started the company on one garage remodeling and soon moved into residential real estate sales.
Wegman, who went to Texas Christian University with Giordano and had been flipping houses and selling real estate, joined the group and helped set up the formal structure for the residential brokerage and development companies.
After growing into that business, Wegman says the partners saw opportunity in commercial, and they brought in Walsh to start the firm, which moved into buying pad sites for energy companies at the height of the energy boom.
During the recession, they started the commercial construction and residential and commercial interior companies.
But the partners say they moved so deliberately, they were able to keep it together during the downturn.
The residential development company today has 47 open permits, and “another 50 behind that, working pre-construction,” Wegman says.
“We’re most proud of the fact that in the downturn, for three years, the owners were very conservative about putting the money back in the business,” Wegman says. “While other builders were going bankrupt and basically abandoning the houses they built, we were still doing warranty work and standing behind the product. We were able to maintain and continue to move forward.”
The company runs a lean ship, with about 25 employees, and it’s brought on residential and commercial agents, and hired an operations manager, Kelly Beal, who oversees all of the residential development company’s supervisors.
That frees the partners to focus on “customer satisfaction and quality control,” Wegman says. “As owners, we stay extremely involved in projects, even at the scale we are.”
Of the five companies, the commercial brokerage does the most business, “but it’s at such large chunks, it’s hard to compare,” Wegman says.
The residential development business has grown every year, they said, and the residential brokerage is showing the strongest sales gains, Wegman and Giordano said.
These days, the residential development company is building in River Hills in southwest Fort Worth’s popular Tanglewood Elementary School feeder zone the near West Side, TCU, and Monserrat and La Cantera in far West Fort Worth.
Most recently, it’s pushed into the Mid-Cities and Southlake, and Dallas’ Park Cities and Lakewood.
“Our ambition is to continue moving east,” Wegman said. “The model is now streamlined and very fluid and very replicable.”
The company also has “been in touch” with the Walsh Ranch development team, Wegman said. “They’re doing the major infrastructure now, and they’re hoping to sit down with some builders here in the next six months.”
The recession helped further diversify the business, the partners say.
During the boom, the company was brimming with requests to do residential remodels, Wegman said.
When banks stopped funding speculative residential construction during the recession, “we opened up remodeling,” Wegman says. Clients who could afford to build new but decided not to during the downturn often chose to remodel instead, he said.
Today, “that’s 30 percent of our business” in the residential development company, he said. “That buoyed us. That made us more solvent than anything.”
Some of the remodels are not the typical single-family home. Last year, the company remodeled penthouses in the Omni and The Tower in downtown Fort Worth, Wegman said.
The residential company has also opened up to working with outside architects. At the start, it designed what it built. Today, about 40 percent of its projects are designed by other architects, Wegman said.
The recession has changed the residential tastes of HGC’s wealthy clients.
Before the downturn, maximum square footage and “over-the-top” amenities were de rigeuer, Wegman said.
Today, “it’s really a question of what I need as opposed to what do I want,” he said.
More of the company’s clients are also blending families in the homes they need built, he said. Detached apartments with second kitchens, or even attached, but “independent” quarters with their own kitchens have become more common, Wegman said.
More than anything else in the future, the partners figure to keep growing slowly.
“Fort Worth is so first blush and has a long memory, and our ambition is to maximize investor dollars and to make sure all of our customers are incredibly happy,” Wegman said.