March 16, 2020
When seeking a capital partner for a new project in Richmond, John Clarkson, a former JBG executive who now leads the Mid-Atlantic region for Greystar, decided to tap the wide network of professionals he worked with at his previous employer.
Clarkson reached out to Whitson Huffman, the head of acquisitions for Capital Square whom he worked with at The JBG Cos., which morphed into JBG Smith. The partnership, which also includes Greystar Senior Director and fellow JBG alumnus George Hayward, is planning to build a 350-unit multifamily project with retail in an opportunity zone in Richmond.
The partners say the deal was made easier because of the shared trust they developed while working together at one of the Washington region’s largest real estate firms.
“Right out of the gate, we’re already partners with a former JBG alum,” Clarkson said. “Our alumni base is not only embedded in the D.C. community, but they serve in very important roles within larger organizations that play a big role in the real estate world through the country.”
The Richmond deal is just one example of the power of the alumni network that has developed in recent years as former JBG deal-makers have spread throughout the real estate industry. At least 30 real estate professionals, from midlevel managers to high-level executives, have left the company in the nearly three-year span since The JBG Cos. merged with Vornado’s D.C. arm and became a publicly traded REIT, JBG Smith.
Some of these professionals say their decision to leave was directly tied to the merger, as the REIT structure changed the way the company operated and they sought more entrepreneurial opportunities. Others say it was a natural progression of their career that was unrelated to the merger.
While their reasons for leaving may differ, one thing is certain: These JBG alumni are not losing touch. Several former JBG professionals, in interviews with Bisnow, described a tight-knit group that texts and calls each other daily. These frequent conversations range from chatting about their families to asking for advice on challenges they are navigating in their new roles to pursuing joint venture partnerships and closing deals together.
“I bet you I talk to a JBG alumni every day,” said Washington Property Co. Vice President Quinn Rounsaville, who left JBG Smith in December 2017. “It’s almost like a co-ed fraternity. You call your brothers and sisters to bounce ideas off of them, and they’re people you trust.”
Former JBG Smith executives have founded multiple new companies in recent years and brought their old colleagues with them. Todd Rich co-founded Declaration Partners in 2018 and brought on former JBG colleagues including Ron Dalal and David Rabin. Rod Lawrence founded Network Realty Partners last year and hired multiple fellow JBG alumni, including John Simeon, Sam Hollman and Greg Trimmer.
People who departed JBG Smith in the last three years have joined established real estate companies of all sizes, including Greystar, Regency Centers, Grosvenor Americas, Nuveen, ASB Capital, Artemis Real Estate Partners, Redbrick LMD, MRP Realty, Washington Property Co. and Dweck Properties.
“We have always viewed JBG Smith as one big extended family that encompasses our current talented workforce as well as those who have gone on to do great things at other firms across the region,” a JBG Smith spokesperson wrote in an email to Bisnow. “It is especially gratifying when we are able to partner with JBG Smith alumni on new development, acquisition, and leasing opportunities.”
Multiple former JBG Smith employees say the company becoming a publicly traded REIT was a turning point for how the company operated. Some left because they didn’t want to work for a company with so much more corporate structure, while others say it was more about an opportunity arising that they couldn’t pass up.
As soon as JBG told its employees about the merger plans in 2016, Buji Tallapragada said he began thinking about other options for his career. He said he preferred the private company model in which senior-level employees served as partners, and didn’t want to work for a public company with a more traditional corporate structure.
“So JBG executed the transaction with Vornado, and when it became known to us internally that was happening, I made it known I probably would not be sticking around long-term under the new set-up,” Tallapragada said. “I preferred to do something more entrepreneurial at that stage of my career.”
Tallapragada and his JBG colleague Ashesh Parikh left in January 2018 to launch their own company, Lock Three Properties. They sought to make value-add multifamily acquisitions, but given the deluge of capital coming into that sector, they were unable to close any deals.
Eventually they folded Lock Three Properties and found jobs at established companies. Parikh joined Rubenstein Partners and Tallapragada became chief operating officer of Dweck Properties, a job he started earlier this month. He said the relationship he developed with Dweck while he was at JBG helped him land the executive position.
For Rounsaville, the public company model also seemed less appealing. He said having to convince stock market investors and analysts to support every deal a company pursues creates more hurdles and makes it harder to take risks. He joined WPC in January 2018 because he wanted to work for a private company with more flexibility. He said many of his former JBG colleagues made the same decision.
“There’s a big difference between JBG Cos. and JBG Smith in my opinion,” Rounsaville said. “There were a lot of people at JBG Cos. that valued the entrepreneurial spirit and deal-making and things that went along with that, and they believed a public company wouldn’t be able to do that. So they sought in their next employment opportunity something that they could build or join that was very similar to what it was at the JBG Cos.”
Chatham Financial Managing Director Brian Gould stayed at JBG Smith as director of capital markets until June 2019, but he ultimately decided that the REIT life wasn’t for him. Because public companies source financing differently and don’t pursue as many separate debt and equity deals, he said his team didn’t have as much work.
The JBG Smith capital markets team that was previously seven people is now less than half that, which Gould said is reasonable for the amount of work they have.
“When they no longer are looking to put debt on many of their buildings, it is really just less work for me and my department,” Gould said. “It’s one of those things where the moment they decided to go public, it was not shocking that a few years later it would make sense to part ways.”
Not all JBG alumni attributed their departure to the company’s public offering. Clarkson, who became the head of the Mid-Atlantic region for Greystar in May, said he couldn’t pass up such an attractive opportunity.
“At JBG, we worked independently within the framework of a larger company,” Clarkson said. “It’s very similar at Greystar, except that our group oversees just one region for an internationally focused organization. Our region is from New Jersey through Virginia, and we’re a smaller team of 12 people. So by the nature of leading a region, I have the autonomy to do the things I need to do to build our business.”
Huffman was drawn to the opportunity to take a larger role at another company, Capital Square. He said this is typical for a company like JBG, which has a history of investing in developing young talent.
“What you’re seeing is the natural progression of people who were given growth opportunities where they’re teaching you and mentoring you,” Huffman said. “At some point, other companies realize that’s where they want to hire from, and for people to continue to progress in their careers it makes sense to move on. It’s a natural progression of a business that invests in young people and makes them attractive to other companies.”
‘It’s A Tight Group’
As the talent that JBG developed has departed for bigger opportunities, it has created a web of former colleagues across the real estate industry that remain in close contact, seek advice and close deals together.
Gould, the sole member of Chatham Financial who works in the D.C. area, works in the same Bethesda office building — 4800 Hampden Lane — as several other former JBG colleagues. Companies with large ex-JBG contingents, including Declaration Partners, Boundary Cos. and Willard Retail, all work on the second and eighth floors of the building.
The close proximity and constant contact Gould keeps with former JBG colleagues has benefited his work at Chatham, advising commercial real estate owners on capital markets activities. Gould said a vast majority of the deals he has worked on at his new company have involved JBG alumni. He said he is currently working on a deal, the details of which he did not disclose, that includes five JBG alumni working on various development, acquisition and financing aspects.
“It definitely is an unofficial alumni network, and JBG has a very collaborative culture in general,” Gould said. “We all work closely together. We may not all be at the same shop anymore, but we can all still collaborate and help one another and know the skill set of each of us to get a deal done.”
When Tallapragada was trying to launch his own multifamily acquisitions firm, he said he frequently called former JBG colleagues to ask for advice and to bounce ideas for potential deals off them.
“There were people that I informally chatted with and kept them up to date on my progress,” he said. “If there were specific business issues I was wrestling with, I reached out to different people at different times kicking the tires on potential investments and trying to get different perspectives.”
Not only did his connections from JBG help him land the job at Dweck, but Tallapragada said he continues to tap the network as he adjusts to the new role. In his first 10 days, he said he set phone calls with two former JBG colleagues to ask their advice on specific issues on which he knows they have expertise. Additionally, he has a handful of other former JBG colleagues he keeps in touch with as friends that update each other on their lives.
“A number of people decided to go and do something different right around the same time I did, or soon thereafter, and it’s a tight group,” Tallapragada said. “There are a number of them I’ve stayed in touch with, asked for advice and remained good friends with.”
Huffman said he has also kept in touch with former JBG colleagues as friends whom he can call for advice. And the deal he closed with two former colleagues now at Greystar showed him the power of the network.
“I worked with John for a bunch of years at JBG Smith, and we knew he’d be a good fit because he knew the local market and we had a lot of experience working with each other, so it made sense to pair up,” Huffman said. “It was great because I know exactly what his capabilities are, I’ve seen the buildings he’s built, and that adds an additional layer of trust.”
Rounsaville also emphasized the trust factor, saying it is beneficial to have contacts throughout the industry who have already proven to him they can get the job done.
“There’s a whole lot of value in having a group of people I know, I know they’re smart, I know they know what they’re doing, and I don’t need to vet them,” Rounsaville said. “It’s really wonderful to talk to someone who’s been at JBG, and I know I’m talking to someone who has been through the life experience and training I went through.”