After 22 years with his father’s company, Mike Lynd Jr. set off on his own last year with a vision of creating one of the best development firms in the U.S.
The new company, Kairoi Residential, is making a name for itself with its plans to build the tallest tower in Austin’s booming downtown: an 850-foot, 66-story skyscraper with 350 luxury apartments and 580,000 square feet of office space. The tower is expected to break ground in the fourth quarter of this year.
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Lynd and his partners plan to focus on building, acquiring and managing residential projects in about a dozen fast-growing metro areas in the U.S., including San Antonio, Austin, Houston, Denver and south Florida, he said. The 174-employee company is currently headquartered on the North Side but will move its offices to Travis Park Plaza downtown in late summer, he said.
The goal is for Kairoi to own between 5,000 and 7,000 apartment units in each of the metro areas, which the company is picking because they have “tomorrow’s jobs,” Lynd said.
“We don’t want to be in 50 different metros. What we want to be is in 10 metros or 12 metros, but to be the best in those areas,” he said. “We want to be the best investor, we want to be the best property manager, and we want to be the best developer.”
Lynd joined his father’s property management company, Lynd Co., shortly after graduating from Trinity University in 1995. He expanded the company’s focus beyond property management when he founded an acquisition wing, Lynd Residential Properties, in 2003 and development wing Lynd Development Partners in 2005.
Late last year, Lynd created Kairoi with longtime business partners Samuel Kasparek, Daniel Zunker and Madison Marceau, bringing 22 employees with him from Lynd Co. Kairoi took over the projects Lynd was working on at his father’s company, including the tower in Austin.
Lynd and his partners have tackled major development projects in Dallas, Denver and Chicago, where they own part of the iconic John Hancock Center. They have built several luxury apartment complexes in San Antonio, including at The Rim.
Lynd, who lives in Olmos Park and has three daughters, sat down with the Express-News in Kairoi’s offices overlooking Loop 410.
Q: You come from a family with a history in the real estate business. Did you consider doing anything else?
A: When I first graduated from school I went on a tour to different employers and went through the interview process. I always felt like I wanted to be an entrepreneur, I wanted to be in a business environment, I wanted to see how much of my potential I could reach.
After going through all of those interview processes, I went back to my dad and I said, “Alright, I can go here, here, and here but what I really want to do is see if I can build a real estate company here in San Antonio.” And he told me no and said, “Listen, you’re smart, you’re gonna do fine. Go do something else. It’s really difficult to make it in the real estate business over time.”
That’s the truth, when you look at developers and real estate investors. Inevitably they run into a cycle that’s bigger than them and it crushed them. But I took that advice and I came back to my dad with a new plan, and finally he said, “Yes. I’ll hire you on three conditions. Number one, I’m not doing any work, number two, I’m not investing in any of your projects or any deal, and number three, I’m paying you $20,000 a year as your first salary.”
Q: What was your reason for setting off on your own with Kairoi?
A: The real reason for me was risk. I felt like I needed full and complete control over the (property) management function given the fact that I have substantial investment in every property, both our developments and things we’ve acquired. My dad has none.
And really, there’s a difference in what they do and what he believes in and what I believe in. I talked to him about it. I didn’t just make a decision and say this is the way it is. Obviously, he’s my role model. He taught me everything I know.
Q: What was it like to start your business from scratch? Was it hard to find talent?
A: There was a time when it was really tough to recruit to San Antonio. Recruiting somebody from Phoenix or Denver, Dallas or Boston was hard until now.
We’ve been able to attract some very high-level talent. We’ve been very picky. Our philosophy is we’d rather not hire the wrong person, we’d rather wait and continue to look for somebody who is culturally the right fit, who is going to help us build our business.
We didn’t take the Lynd Co.’s blueprint and just copy it. For me, it was important to differentiate ourselves. What we’ve done is we’ve reexamined, really, every single process and procedure that exists in multifamily and we’ve sort of reinvented it, asked ourselves, “Is this best practice? Can we do it better? How can our customer service be better?”
Q: It seems like you have been tackling projects that are more and more ambitious. Why have you been taking that trajectory?
A: Opportunity drives our mindset. But if you ask me where are we special, we’re special in these big urban large projects.
Our principals, including me, who are developing these deals spend tremendous amounts of time working on them. We’re not delegating it down to somebody who ultimately doesn’t care as much as we do.
That’s exactly the business plan: We do fewer (developments) but they’re highly, highly focused. We work to get them perfect. And we get better on all of them; we learn. I go to these things and no matter what they do or what award we get, all I see is everything I did wrong.
Q: You’ve done a lot of work around The Rim. What appeals to you about that market?
A: You’ve got all the components of the urban lifestyle in The Rim. You’ve got employment, you’ve got office, you’ve got retail, shopping, and you’ve got entertainment all within a very short distance.
Q: A lot of construction is going on around The Rim. Is there a danger the market is becoming oversaturated?
A: Sure. Can you negatively impact rents? Of course. Too much of anything at once can be bad.
But I think when you look at the demand drivers around The Rim, that location long-term is going to be great. All those projects that are going to be built, ultimately, will have success. It’s just a matter of when.
(The benefit of) our location is being able to walk to the Lifetime Fitness and walk to the movie theater and walk to all those bars and restaurants. I wish there was an H-E-B. There’s not, but there’s a Target — at least it’s a full grocer in there.
Q: Why are you moving your headquarters downtown?
A: We have a lot of exposure to a lot of different people from around the country who come and visit us. I felt like it was an opportunity to get them in the downtown atmosphere and expose them to the velocity and trajectory of San Antonio’s culture.
Talented people continue to migrate towards downtown — doesn’t matter whether they’re millennials or baby-boomers. People are starting to gravitate more and more to that lifestyle. San Antonio’s late to adopt that trend, but it’s happening.
Q: As of right now you haven’t built much downtown. Do you think that will change?
A: I’d like to. We need better incomes downtown in San Antonio and I think that’s happening, which is great.
When we feel like it makes the right economic sense for the risk, then we’ll do it. Right now it’s still a challenge for us. It takes a $3 (per square foot) rent to build a high rise rental in downtown and do it the way we do it, which is really best-in-class real estate.
The other component is, as a market, San Antonio has to be attractive. We have to sell it to somebody. San Antonio’s making strides as an institutional (investor) market. I think it still has a little bit to go, which leads to, again, my decision to relocate our headquarters downtown.
We do bring those institutional investors through town often. We’d love to have the opportunity to demonstrate the city to them because they don’t see it — they don’t see the Pearl, they don’t see what’s going on at Hemisfair, they don’t see what’s doing on in lower Broadway, they don’t necessarily all see what’s going on in Southtown.
Q: How is the trajectory of Austin’s growth different from that of San Antonio?
A: It’s not that long ago that Austin’s economy was not that much different from San Antonio.
It was primarily a semiconductor town — that’s kind of the exposure to technology that it had. I trace back their success to the advent of Opportunity Austin, which is an economic development effort which has been highly successful in terms of diversifying that technology component of their city into what is now Facebook, Google, Oracle, Apple’s largest campus outside Cupertino.
You’ve got tremendous amounts of diversification, you’ve got talent that is very well trained, and then of course you’ve got a city with a lot of culture that is a very desirable place to live.
Richard Webner is a San Antonio Express-News staff writer. Read more of his stories here. | firstname.lastname@example.org | @RWebner