By: Scott Nishimura
By: Scott Nishimura
Photography by Alex Lepe
It was, as Chris Powers acknowledges, “the epitome of what was wrong with the economy.” Only, “I didn’t know it back then.” A freshman at TCU interested in business, Powers befriended Adam Blake, a TCU student who was already buying houses around the university and later hit the headlines when he bought the Electric Building downtown as a 24-year-old.
The strategy Powers learned from Blake during that era of loose money: “You could go downtown to Countrywide Financial and get a loan with 3 percent down and 6 percent cash back at closing.” Buy the home, lease it to a tenant, take the deal back to the bank for a refi. “Now I can start borrowing against that,” Powers recalls.
By the time Powers graduated early from TCU at age 21, using that strategy, he owned eight single-family homes around TCU. And he’d launched a real estate management business with a web site, running 40-50 units and earning bonuses if he got higher rents than the property owners had been making.
From there, Powers quickly moved on bigger real estate deals. Today, he’s taken the lead among several developers in rebranding 275 acres overlooking the Trinity River off of White Settlement Road in west Fort Worth, with a goal of redeveloping it into a luxury mixed-use hub for residents of Westover Hills, Westworth Village, and Arlington Heights. Powers, who does business today under his Fort Capital banner, says the firm has done $78 million in projects in six years and has $55-$60 million in assets under management. That’s a long resume and expansive portfolio for a 29-year-old.
“You only live one life, and you ought to spend it pursuing something you're passionate about,” Powers likes to say, quoting his dad, who died in 2012 from injuries suffered in a cycling accident.
Chris Powers in his River District development, overlooking the Trinity River to the south.
Killer Bees and a Lifelong Mentor The seeds of entrepreneurship were sown early for Powers, who found a mentor in the El Paso developer Meyer Marcus, whose Mimco Inc. today holds an estimated 7.5 million square feet of space in 320 projects in Texas and New Mexico and has more than 1,600 tenants. The Powers and Marcus families have been friends for several decades, and Powers is close friends of, and plays golf with, Marcus’ son. Powers worked as an intern for Marcus. As teenagers, the boys would convene regularly for all-night parties at the Marcus home, Marcus recalled in an interview. “Then, Chris would wake up at 6 in the morning and come with me” to look at real estate projects, Marcus says.
It wasn’t difficult then for Powers to figure out that Marcus knew real estate. “You drive around El Paso, you see his signs everywhere,” Powers says. “I knew he owns every great building in El Paso.”
Marcus says Powers’ dad “was always so grateful” that his son had a business mentor at such a young age. “It was not my intention to teach Chris everything I know, but it was his intention to grab onto everything I know,” Marcus says. “It’s just very rare to see a guy like that.”
Today, Marcus and Powers invest in each others’ deals. Marcus, in an interview, said he couldn’t immediately recall the details of his investments in Powers’ deals. “I’ll be honest with you,” Marcus, 63, says. “I don’t even know what they are. But the fact that it’s Chris Powers, I’m not investing in a project, I’m investing with him.”
Their first deal together – the first deal Powers raised money for - was a $35,000 duplex that Powers, then 22, found in foreclosure in south Fort Worth. Powers had noticed some bees flying around the porch, but wasn’t concerned. Then the contractors Powers hired to work on the house disturbed a huge bee’s nest. “The contractors got stung; the bees killed a neighbor’s dog; I thought the world was ending,” Powers says. Worried, among other things, that the bee discovery was going to change the project’s financial pro forma (it didn’t), “I called Meyer.”
Marcus chuckles at the memory. Years earlier, his family owned a 30-unit apartment complex. Fire broke out, killing six people. “Chris, this is just the beginning; one day, you’ll laugh at this,” Marcus remembers counseling Powers. “I’ll never laugh at mine. I was 22 or 23. There’s nothing like seeing six body bags lying in the street.”
First Deal: A Westcliff House Powers graduated a year early from high school and headed for Fort Worth and TCU, where he quickly found another mentor and future partner in Adam Blake, one year ahead and “already the poster boy at TCU of entrepreneurship,” Powers says. “He taught me the ropes.”
Powers looked for his own rental houses to buy, setting up a limited liability company to buy under in 2005. His first deal: a three-bedroom, one-bath home in Westcliff that he converted to a four-bedroom, two-bath house. He lived in it his sophomore year, recruited friends to rent rooms, and learned the basics of property management.
Powers made the 3 percent down payment from money he saved in high school. He had no problems qualifying for the loan, he says. His dad had put him down as a joint holder on a credit card, so Powers – by virtue of his father’s good standing - had strong credit. “It’s one of the best life hacks you can do” for your child, Powers says. “In real estate especially, your credit score is as good as your Social Security number.”
Powers bought the house for $100,000 and, once leased, refinanced the loan at a $140,000 valuation, taking money out to buy more homes that he rented out. “We did that over and over again, until the economy crashed,” he says, using the word “we” to refer to himself. He also obtained a $250,000 line of credit that allowed him to make cash offers for property.
When Powers graduated TCU in December 2008 with a double major in finance and marketing, he already had the full portfolio. He also had earned his real estate broker’s license, having been sponsored by Blake. “I didn’t believe there was a risk,” he says. “There was always demand for stable housing. I wondered why isn’t everyone else doing this? Some of the best ideas were started by people who were super-naïve.”
Still, he says he was afraid of missing payments on his loans and aggressively managed the houses to ensure tenants paid on time and took care of the houses. He hired a firm and started offering monthly cleaning service, which allowed him to check regularly on his properties, he says. “By the end of the year, we knew what kind of property we were getting back.”
For a year and a half after he graduated, Powers flipped houses with Blake, who liked Powers’ ambition and understanding of the power of leverage in doing real estate deals. They focused on properties in foreclosure, using tricks – Blake says - like using student loan money for down payments. The market crash in 2009 put an end to the speculation in housing flips.
“The banks back then would give almost anybody a loan,” says Blake, who today runs an energy company called Brightergy that he founded in Kansas City. “It was easier to get a loan back then than it is today.”
The market crash meant Powers had to change his financing model. “That’s when I really had to learn how to raise money,” he says. “It went from being ‘we’ll lend money to everybody’ to now they wanted to know everything about you.”
Big Step Up Powers took an even bigger step up with his next partnership, with the builder Andrew Curtis, who was erecting speculative homes on Fort Worth’s West Side. Teaming with Curtis from 2010 to 2012, the partners built speculative luxury homes around TCU. And in partnership with Blake, they also built the Cantey Townhomes, a 12-unit, 36-bed project near the university.
Then, in what turned out to be their biggest deal in 2011, they took an acre under option in the old Linwood neighborhood west of Montgomery Plaza in the West 7th corridor. “During our due diligence, we were told to contact the owner of 6 acres nearby,” Powers says. “We knew our own capabilities,” but he and Curtis decided to have the conversation anyway.
“The whole time we’re meeting with him, he’s selling us on why we need to buy his 6 acres,” Powers says. “And all we wanted was an acre to build 12 townhomes.”
He and Curtis decided to pursue the 6 acres, which were dominated by small 1950s-era single-family homes that were leased to tenants. They closed on the deal in a week, figuring “it was going to be in demand one way or another,” Powers says.
A month later, Powers took a call from a broker in Dallas representing Greystar, the national apartment developer. It took 18 months to close the sale of the property to Greystar, during which Powers and Curtis had to reroute a water line, take a street out of the grid, replat lots, do a land swap with another property owner, navigate through a contentious zoning case, and learn how to work with institutional developers.
Powers declines to disclose what the partnership received for the property. “That was my MBA. It was a gamechanger.” Greystar, which developed the site into the Elan West 7th apartments, would pop up again soon in Powers’ Rolodex.
Curtis moved to Pampa to join a family business, and Powers rebranded the Powers and Curtis holding company as Fort Capital in 2012. In 2015, he brought Jake Proctor, who’d been an investor in other deals with Powers, on board as a partner in the firm.
Proctor had assembled six single-family properties near TCU in 2012 and pitched that deal to Powers, who went in on it. The two demolished those houses and built new large homes aimed at students, subsequently getting sucked into a protracted debate between neighborhoods and developers and investors about the integrity of the old neighborhoods around TCU.
“I probably spent more than 100 hours on that,” says Powers, who was named to a city task force that came up with new rules designed to limit the growth of so-called “stealth dorms” in the neighborhoods around TCU. “I was surprised the city let it go to the point it went to.”
Proctor, who played football for Navy, honed his skills as a door-to-door salesman in high school, setting appointments for a window company. At Fort, he brought a system for property assemblage. Boiled down to a 50-page manual for new hires that the company refers to as its “Fort Capital Bible,” it lays out a system for approaching property owners, including multiple contacts, and a promise of fair all-cash deals with two weeks to closing.
That’s paid off, Powers says, in the River District play, where Fort Capital has purchased more than 70 properties in 18 months, Powers says. Including the neighboring Westworth Village, Fort Capital has accumulated more than 110 properties, and it now has three people who work on property acquisitions. “It was all door-knocking, cold-calling,” Powers says. “Most people will not walk up to someone’s front door.”
Ideas from the 19th Hole The River District investment began similarly to the Linwood investment: with different intentions.
Powers, who is a member and plays golf at Shady Oaks Country Club, and eats lunch there regularly, likes to go the “scenic route” down White Settlement Road from the company’s offices in the West 7th corridor. Powers was looking for a site for a new office building for the company when he spotted a 2-acre site on White Settlement Road for sale. “We bought it,” he says. Then he saw the 5.5-acre RV park next door and bought that. “We bought it for the value of the land, but were able to cash-flow on it” with the RV leases while Fort Capital figured out what to do with it.
“The light went off,” Powers says. He contacted his friends at Greystar, who took the entire 7.5 acres under contract, forming the company’s piece of the River District.
Other developers – Village Homes, builder Jim Harris, LVG Investments, and Greystar – are also launching projects in the area, which borders the Trinity River on the north and is bisected by White Settlement and Roberts Cut-Off roads. Powers brought the groups together, and they worked with the Balcom Agency in Fort Worth on a branding of a 276-acre zone including the developers’ property as the River District. Half of the district is owned by the developers, Powers estimates.
Powers believes 500 single-family homes, 1,500 apartments, and 2,500-3,000 new residents are likely for the River District over the next five years. Salsa Limon, the popular Fort Worth restaurant, is moving its Cultural District restaurant building to the River District, joining several tenants that have already been announced (see box).
“Over the next 24 months, the transformation you’ll see will be significant,” says Powers, who sees the area as a restaurant, entertainment, retail, and office hub for affluent West Side neighborhoods and Westover Hills.
“There’s really no central area for them,” he says. “West 7th is for the younger millennial. The scene has become more about nightlife and bar scenes, which aren't as attractive to those affluent neighborhoods. If it works the way we think, it changes the lifestyles of the west side of Fort Worth.”
Fort Capital owns 40 acres in the River District, half commercial, half residential, Powers says. Fort Capital plans a 16,500-square-foot building and is in master-planning its holdings for restaurant, retail, entertainment, and office, Powers says. “We hope to be done with that by November.” He believes Fort Capital could invest $150 million-$200 million in the River District in the next five years. The firm has raised about $24 million to buy its property, he said.
Powers, who lives in Tanglewood with his wife Mikal, who he married in 2014, are already soaking up the district’s various access points to the river levees, often walking their dogs along the waterfront. Powers says the couple, expecting their first child in March, has no current plan to move to the River District, “but would love to one day.”
Chris Powers, Mentor Powers has also become increasingly active in the entrepreneurship programs at his alma mater TCU, speaking to real estate classes and judging business plan competitions. “I want to wake people up to the opportunities that are available to them,” he says. “Everybody’s got their cause. That’s what gets me out of bed.”
He gets questions these days from would-be real estate investors. The sort of financing he used early on isn’t available any more. But Powers advises these students to focus on projected rents, principal, interest, taxes, maintenance, and fix-up expenses. “Be able to tell a story about the submarket it’s in,” he says. Visit three banks for their perspectives and the possibility “maybe you can get a loan,” he says. Look for potential investors, he says. “The easiest is a family member.”
Most of all, he advises projection of self-confidence. Today’s technology and flow of information helps drive “super-cheap” costs to start businesses, he says. “Some of the biggest companies in the last 10 years were all started by people who were under 25 years old. It’s the perfect time in life to fail. It’s also the perfect time in life to get started.”
Chris Powers: On Growing Up
Born: 1987, El Paso
Grew up: El Paso and Lubbock
Parents: Christopher and Peggy Powers. Father a Harvard and University of Virginia-educated lawyer who practiced labor law in El Paso until age 38, then decided to become a physician, moving his family to Lubbock, where he graduated from the Texas Tech medical school.
Being the 7-year-old son of a resident physician: “When you’re 7 and a half, you don’t really know what’s going on. We lived on the nicest street in El Paso; in Lubbock, we lived in a 1,000-square-foot home. Going out to Rosa’s Café was a big deal. But life was still really good when Rosa’s was a big deal.”
High school: Coronado High School, El Paso
Hobby: Golf. Started age 8, played high school varsity, plus-2 handicap. “I wasn’t a superstar, but I was good enough to be dangerous.” Today a 1 handicap, plays once or twice a week, usually at Shady Oaks Country Club in Fort Worth, where he’s a member.
Making money as a teenager: Sold golf clubs on eBay, washed cars, mowed lawns. “If I wanted to buy a golf club that was $100, I’d have to wash (my dad’s) car five times.”
Mentors: Meyer Marcus, father of a buddy and CEO of Mimco, a shopping center owner with properties across Texas and New Mexico; Adam Blake, TCU whizkid entrepreneur who took down the Electric Building in downtown Fort Worth at age 24.
First deal: Single-family home he bought in Fort Worth at age 18, while a student at TCU.
(This graphic contains corrections from the original version in print and online.)
New Hub: Fort Worth’s River District
Several developers, brought together by Chris Powers, plan the mixed-use River District on the Trinity River off of White Settlement Road in west Fort Worth. The first phase:
Crystal Springs on the River, LVG Investments. Named to commemorate the birthplace of Texas Swing, will combine food, healthy living, shopping and recreation. Includes 46,000 square feet of retail/office and 265 apartment units. LVG is working on plans now. Confirmed tenants so far: The Truck Yard, Mi Camino, The River House, Nourish at Crystal Springs. crystalspringsontheriver.com
Elan at The River District, Greystar. Four-story, 328-unit Class-A “highly amenitized” apartment building that will resemble Greystar’s successful Elan at West 7th in Fort Worth. Under construction, with first units to be completed in summer 2017. elanwest7th.com
Fort Capital, Powers’ firm. Building 16,500-square-foot Class A office building. Fort Capital taking 25 percent for its new offices. Under construction, 97 percent leased, January move-in. Confirmed tenant: Salsa Limon
Rivercrest Bluffs and River Heights, Village Homes, James R. Harris, and other builders. Two luxury housing communities on the Trinity will feature homes ranging from $400,000-$4 million. Model homes under construction or already built. riverheightsfw.com and rivercrestbluffs.com
The River District Garden Homes, Fort Capital and Village Homes. 16 luxury 1,800-2,000-square-foot units starting at $450,000.
Retailers, others that own their buildings: Lettuce Cook Gourmet, Abundio’s Fitness Studio, Flowers on the Square. HGC new headquarters.
By: Scott Nishimura
By: Scott Nishimura
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