20th Anniversary Oral History of NAI Partners
NAI Partners today is the 7th-largest Houston-area commercial real estate company and one of the oldest independently owned commercial real estate services firms founded and headquartered in Houston, Texas. The company has offices in Houston, San Antonio and Austin, employs more than 100 real estate professionals, and arranges more transactions than any of its competitors, annually completing upwards of 800 commercial lease and sale arrangements every year. NAI Partners is a full-service firm offering client leasing and sales solutions in the areas of office tenant representation, office landlord representation, industrial tenant representation, industrial landlord representation, landlord services, retail services, property management, investment sales, an investment fund, and project management, among other services. The company has been named a Best Place to Work by both the Houston Chronicle and Houston Business Journal, and is among the University of Houston’s Cougar 100 Fastest-Growing Companies. NAI Partners is part of the NAI Global network.

 

This is the story of how it all began.

NAI Partners 20th Anniversary Oral History‚Äč

Participants:

John Ferruzzo
Partner
Industrial Group Leader

Jon Silberman
Managing Partner

Dan Boyles
Partner
Office Tenant Rep Group Leader

 

 


Getting the band together

Dan Boyles: I started in the real estate business working with Jon [Silberman], before making a move to another organization. Fortunately, we joined back up shortly after Partners Commercial Realty (PCR)—which we would eventually rename NAI Partners—was founded. Got some of my training from this guy [points to Silberman], actually.

Jon Silberman: I got into the commercial real estate business part-time in the late 1980s, then shifted to full-time in the accounting department at a property management company. Following that experience, I moved on to office project leasing, and then eventually into the tenant rep business, which is what I still specialize in today. A few years later, in 1997, [veteran real estate brokers] Drew Lewis and Brad Marnitz teamed up to establish PCR, and [current NAI Partners partners] Randy Wilhelm, Jason Whittington, and I were also among that original partnership group.

Boyles: Like Jon, I too started in property management, but also realized I did not want to be on that side of the business. I asked around and was told I needed to tell my boss directly about my desire to switch. "Sorry, I don't like you; I want to go over there." So that was humorous, especially coming from my 23-year-old self.

Silberman: He [Boyles’ supervisor] was used to that because I did the same thing.

John Ferruzzo: I got my license when I was 18, at the University of Texas, and I was leasing condos while also doing a little commercial real estate on the side to put myself through school. I decided I needed to come back to Houston. One of my first interviews was with this guy [points to Silberman]. And I almost went to intern under him right out of college; but ended up first going to Grubb & Ellis, which is where I met [Dan] Boyles. I spent some time in the development business, and eventually learned that PCR was looking to start an Industrial Services group. So the time was finally right for me to partner with Jon and Dan.

Silberman: Ferruzzo was a team of one when we started the industrial group in 2000.

Ferruzzo: I was originally going to spend half my time on development, but our industrial brokerage platform kicked into gear fairly quickly, and it made sense to make it my full-time focus.


Joining the NAI Network and Texas expansion

Boyles: We’ve been in the NAI Global network more or less since our 1997 founding. Back then NAI was referring to itself as New America International, and so our company’s full name was Partners Commercial Realty New America International. To no one’s surprise, we shortened that to NAI Partners.

Silberman: In 2004, we changed the name to NAI Houston to leverage our deep local ties—all of our founding partners were native Houstonians, and we felt a deep connection to our hometown. We kept that name for 10 years, until the opportunity to expand to Austin and San Antonio presented itself in 2014.

Boyles: There was a fair amount of debate on whether we should open in those markets, given the risk involved. We had also been laser-focused on Houston as things started improving post-2009, and had gotten back to where we’d been.

Silberman: In virtually every successful business on earth you will reach a point where you have no choice but to grow. There are also only so many ways you can grow; geographically is probably one of your better bets. Not only that, but those markets—right in our backyard—don't come up that often. And so it was the right decision for us, but also a big undertaking, as we more or less had to operate as if San Antonio and Austin were new companies being built from the ground up.

Boyles: We obviously realized that we couldn't be NAI Houston in San Antonio or Austin. So after all was said and done, we went back to our original name—NAI Partners, to represent all three office locations. And you know what? That transition wasn’t a big deal.

Ferruzzo: That’s right.

Silberman: Everybody already called us “NAI.” So the rest of the name? Not that critical to the marketplace.


How to survive a downturn

Silberman: Following Enron in 2001, we were still so young and small as a company that I don't remember it being a massive issue. We had a really nice growth spurt from 2000 through 2007. But the 2008 recession was another animal entirely. I remember sitting in the conference room with Dan, John and Randy in early 2009, looking at each other wondering, “Are we ever going to close another deal around here?"

Ferruzzo: But you know, we made the decision to not cut as much as the other firms around town. We cut a lot less compared to our competitors.

Silberman: We spent the next few years in survival mode, focused on production. Eventually we decided that we wanted to diversify our income streams a little bit more, so that we wouldn't be as susceptible to that sort of downturn again. One of the most important lessons you can take from leaner times is that it can be a great opportunity to build, find great talent, and do whatever you have to to keep things moving things forward.


Future growth

Silberman: We’ve set a strategy to be a regional firm, and we are well on our way to getting there with our locations in Austin and San Antonio. We want to continue to develop those markets—I’d like us to have 15 brokers in each of those cities in the next couple of years. We want to continue to expand project services in our Landlord side of the business. We’re also focusing efforts on our investment business [NAI Partners Investment Fund], and really see that as an opportunity to continue to grow. We've already set a lot of things in motion that should start yielding results in the next three-to-four years. We ultimately want to be a $30 to $50 million regional full-service firm with an investment fund component, and that's what we're driving toward.


Joining the club

Boyles: We have a lot of new talent that has joined our ranks these past few years, and I'm excited to see some of these brokers hopefully developing into the partners of tomorrow. We'd love to have 30 partners. To me, that elevates the firm to another level of strength.

Silberman: Even in the past few years, we've doubled our number of partners. We had seven, and now we’re at 14. We have a process in place for how you become a partner. Once you're a partner, you can buy more stock, and ideally the current generation is able to buy out those who are ready to move on from the business to keep the company going. We don't have to do too much for that to naturally happen—it's already happening.


Company culture

Ferruzzo: I can tell you that on the industrial side...we have a good time.

Boyles: Ferruzzo’s our chief culture officer.

Ferruzzo: It's a work-hard, play-hard mentality. And I think everybody's adapted.

Boyles: It's kind of like going to work with good friends. Over the years a lot of us have gotten recruiting calls from companies throwing significant dollar figures around, but when you get to a certain stage in your career you start to think about what’s really important. And you can’t put a price on getting to work with colleagues you’ve known for decades and who you get along with extremely well.

Silberman: We also don't take ourselves too seriously, and I think that's an attractive feature for a certain type of sales professional. It tends to be a good fit for people that work hard, like to have fun and that are also driven and highly entrepreneurial. That's a big deal for us.


On technology’s effect on the industry

Boyles: Back when we launched our careers, it was all about building your database, and it took a lot of legwork. Now you can get any piece of information you need with a keystroke. Not having to physically canvass buildings has certainly sped up the pursuit of business.

Ferruzzo: The broker that was going to outwork the competition by digging deeper to find the information now has a ton of competition because everyone has access to the same data.

Silberman: Our value today is more advisory. We provide a service that not only does the heavy lifting but also interprets the data and advises the client.

Boyles: Most clients do this [negotiate a real estate lease] once every five to 10 years. The process hasn’t changed all that much, but how you go about getting to the endpoint can be more difficult or different.

Silberman: You used to be able to differentiate yourself by simply knowing where every available space was. I’m a big fan of technology, and am excited to see where things go and what new tools will be at our disposal as quickly as they become available. The business will inevitably evolve, but we always adapt, and that's the key. As long as you can adapt and figure out where you can add value, there is always opportunity.


NAI Partners’ Legacy

Silberman: To be in the brokerage business, invest in real estate, reach shareholder level in a company, and participate in the growth and management of building a business—I think I speak for each of us when I say I wouldn’t trade my experience for anything. I'd like to pass that along to the next generation to be able to do the same thing. And I think we're doing that, and I think we will continue to do that. So for me that's the most rewarding part—to open up that same opportunity to talented folks to eventually follow a similar path.

Ferruzzo: I completely agree. And I'd like to see us continue to become an even more dominant player in the market. We’ve grown from being one of the smaller organizations to become one of the main shops, and—depending on who you talk to—potentially the best in the city. I'd like to see that continue and for us to increase our market share over the years.

Boyles: I’m proud to be part of a group of individuals who are hard-working and provide unmatched service. We’ve always put our clients first, and rooted our company in integrity, passion and collaboration. That’s baked into our DNA, and always will be.


Larry Koestler
Vice President of Marketing
larry.koestler@naipartners.com
tel 713 275 9623