Jeff Berry and Kip Sowden
By Ryan Parr
Realty America Group principals Jeff Berry and Kip Sowden have grown their real estate business immensely since its January 2002 inception. But these enterprising executives have been seizing business opportunities since their days of playing hooky from school at the Byron Nelson Golf Classic in the early ’70s.
Beginning when they were 10 and 11 years old, Kip’s dad, who was in the Salesmanship Club, let Kip and Jeff skip school starting on the Wednesday of the Nelson, where they would caddy for some of the pro golfers and members playing in the pro-am. The following day through Sunday, they would carry the standard bearers, which indicated different pros’ scores relative to par, outfitted in official Byron Nelson coveralls.
“We thought we were really official cool people because we had these Byron Nelson coveralls, we got inside the ropes and would walk with the pros,” Sowden said. “After we finished walking those 18 holes with those signs we’d just run around the course, never turn our coveralls in and act like we owned the place.”
One rainy Saturday at the Nelson, the pair was running around the course, enjoying themselves, when they saw a Salesmanship Club member who was working as a marshal stumble from his cart into a port-a-potty.
“We thought maybe he’d had a little too much to drink, and we’d be doing a big favor to the crowd and the Salesmanship Club by commandeering this golf cart,” Sowden said.
So the duo jumped in the cart and took off. Seeing an elderly couple making its way through the rain to the parking lot, the youngsters generously ferried them to their car, and they were rewarded with a $5 tip. An idea was born, and three hours later, they had each made $100 by accepting – but not asking for – tips. And in 1972, $100 “bought a lot of bubble gum,” Sowden noted.
They would continue to ferry folks around the Nelson for the next five or six years, or “until we thought it wasn’t cool wearing coveralls,” Berry said. “Those were the old, traditional Byron Nelson days at Preston Trail, when Preston Road was two lanes.”
Berry and Sowden first became friends when they were opposing quarterbacks on a pair of Park Cities YMCA football teams back in their elementary school days. They remained close throughout their adolescence, sharing memorable days at the Nelson, before both graduating from Highland Park High School.
After graduation, they went to different schools (Sowden’s a proud Longhorn, while Berry went to Texas A&M) and in their post-college days, largely lost touch, save the annual Christmas card.
In fact, it wasn’t until 2001 that they finally caught up with each other, at Peggy Sue’s Barbeque in Dallas, where they met as part of a planning committee for their 20th high school reunion.
“We sat down to catch up, and it was amazing how our careers were just parallel,” Sowden said. “We just started reminiscing and talking about old times and then what we had done since we had last seen each other, and they were just parallel paths.”
They actually ended up working for the same company after college, Lomas & Nettleton, albeit they were unaware of this, as Sowden worked in San Antonio and Berry in Dallas. Moreover, they both started their own financing and investment sales companies at different points in the 1990s.
“So we just said, ‘Hey, let’s go have fun. Let’s spend more time on the golf course, more time with our kids and start Realty America Group,’” Berry said. “Unfortunately, the time on the golf course hasn’t increased, but more time with our kids has – which is a good thing!”
That’s just what they did, starting Realty America Group in 2002. They started RAG to set up a boutique operation with national capabilities and to do what they had essentially been doing before, while adding a few more disciplines related to the commercial real estate industry.
The original intent behind the company was threefold: 1) Investment sales of real estate, in which they exclusively list income properties on behalf of institutions and other clients, 2) Financing of real estate through various means of structured transactions (they often are referred to by their peers and clients as being “financial engineers”) and 3) Acquisition of real estate in which they buy both “core/A” properties as well as “value-add” opportunities.
This was basically what both Berry and Sowden had previously been doing, but now they were able to get in on the principal side of things. One of their first acquisitions was a million square-foot mall in Chicago, a “huge value-add play,” Sowden said. On the opposite end of the spectrum was 4809 Cole Ave., a 60,000 square-foot office building that they currently work from.
As RAG has grown the past few years and Berry and Sowden have added additional disciplines, they’ve also started a pair of new companies under the RAG umbrella: Realty America Development and Realty America Hospitality.
One of their more recent development ventures was revitalizing what is now the Hotel Palomar (formerly a Hilton Hotel, and most recently the Hiltop Hotel) and its surrounding area, located on the southeast corner of Mockingbird Lane and Central Expressway; a change-of-use operation that was quite complicated, as they had competition from several large commercial real estate companies, and had to carefully blend the old and new elements.
“We bought the old hotel and totally gutted this tower,” Sowden said. “We took it back to its concrete frame and tore down the buildings to the south and dug a deep hole and built the condo tower from scratch ground up.”
The $100 million operation has been a stunning success, thanks largely to its dynamic location amid Mockingbird and Central, Katy Trail, Highland Park Village, NorthPark Mall, SMU and the forthcoming President Bush Library – all just minutes from downtown (“Main & Main,” Sowden called it). But it was also special project for Berry and Sowden, as the area was full of memories from their more formative years.
“Kip and I had such great experiences at this whole development,” Berry said. “We saw the potential in [the property] and it just made it that much more special, not to mention that it was in our own backyard from the Park Cities area where we grew up and currently live. And that really plays into why it’s so well-received. It’s because of the nostalgia, the history. People want to come here and check out the rebirth of this property. When they walk in, their jaws literally drop to the floor.”
Part of the project – which they’ve dubbed the “first ever mixed-use urban development” – included reopening the once bustling Polynesian-themed restaurant, Trader Vic’s. Trader Vic’s exotic atmosphere and savory dishes – most notably, the succulent meats cooked in the signature Chinese wood-fired ovens – had been lacking since the restaurant closed in 1987.
“As soon as we bought this property, the consistent question was, ‘When are you bringing back Trader Vic’s?’” Berry said. “We’ve had people come in and just get teary-eyed after they see the rebirth of this iconic legend. People are making reservations as they’re leaving to come back.”
Thanks to Berry and Sowden, you too can take a trip down memory lane at Trader Vic’s – if you can get a reservation. And guests at the Hotel Palomar can actually be ferried over to the restaurant in a red, bicycle-fused rickshaw, which was used during the restaurant’s heyday.
Amazingly, much of the restaurant’s culturally unique tapestries were still intact and able to be re-used. Matching up new pieces with the original ones was made possible thanks to R.A. Hospitality’s ability to get identical pieces shipped in from Indonesia and elsewhere. For example, the light, chestnut-tone wood comprising Trader Vic’s bar is half original, while the other half was shipped in from Osaka, Japan; but the two pieces blend together seamlessly.
The success of Trader Vic’s reopening has spurred the development of several others (there are currently 11 in the U.S. and 19 other international locations); including a planned September opening of an extra large Trader Vic’s in Las Vegas, on the Strip across the street from the entrance to the Bellagio.
“Of course, again, the common denominator is location, location, location,” Sowden said.
Trader Vic’s is just one of many projects keeping Berry and Sowden busy these days. They’re currently working on turning a former Doubletree Hotel in Westwood, Calif., into a five-star Hotel Palomar that will be managed by Kimpton Hotels, which also manages the Dallas Hotel Palomar. With this project, like all the others, it’s all about location.
“It is directly across the street from UCLA, Rodeo Drive is a couple miles to the east and Santa Monica Pier is a couple miles to the west,” Sowden said. “Phenomenal location.”
Additionally, RAG is in discussions related to several different international resort developments, with potential projects in exotic destinations like Costa Rica and Panama.
“That growth is really the result of us being a small boutique company that can react quickly and adapt to different situations,” Berry said. “So when we see an opportunity, we’re skilled enough and have enough wherewithal to hire the right people and grow that way.”
Understandably, busy day-to-day affairs limit the duo’s time for golf, but rest assured they will be in attendance at their beloved Byron Nelson golf tournament.
For Berry’s son Trevor, 12, and Sowden’s son Graham, 13, going to the Nelson is a great time to collect autographs from all the golfers. Of course, Berry and Sowden still have their own priceless mementos from their days of schlepping bags and signs around the Nelson. Sowden has autographed gloves from the likes of Arnold Palmer, Jack Nicklaus and Chi Chi Rodriguez. Berry has a hat signed by legends Ben Crenshaw, Lanny Wadkins and others, which, of course, he gave to his son.
If Trevor and Graham’s penchant for autographs is any indication that they take after their dads, Sowden and Berry better keep an eye on those kids … and keep them away from any unattended golf carts.
In the Bag
Jeff Berry
Clubs: TaylorMade Dual r5 driver, Callaway X-18 irons, Odyssey White Hot 2-Ball putter and Titleist ProV1 balls Favorite courses: Locally – Dallas National Golf Club; Nationally – The Prince Course at the Princeville Resort in Hawaii, and Banff Springs Golf Club in Canada
Best round: 84 at The Northwood Club
Favorite golf moment: “Just seeing my son at the driving range hitting his first shots.”
How often he plays: “Kip and I play really just to get out of the office; sometimes for clients, but mainly just go get out of the office together and brainstorm in a great environment – the course!”
Age he first started playing golf: 7 years old
Fantasy foursome: Byron Nelson, Ben Hogan and Tom Watson
Family: Wife Beth, son Trevor, 12, daughters Reagan, 10, and Brooke, 8
Kip Sowden
Membership: Dallas Country Club and Brook Hollow Golf Club
Clubs: Titleist woods, Callaway X-12 irons, Callaway wedges and putter, and Titleist ProV1 balls
Favorite courses: Locally – Brook Hollow; Nationally – Shadow Creek Golf Course in Las Vegas
Best round: 79 at Brook Hollow
Favorite golf moment: “Would have to be the Byron Nelson story. That’s something we’ve told for 30 years.”
How often he plays: “It’s gone from twice a week to twice a month now.”
Age he first started playing golf: 7 years old
Fantasy foursome: Jack Nicklaus, Arnold Palmer and Byron Nelson
Family: Wife Marinelle, daughter Haley, 15, and son Graham, 13