American Dreamers


Paige Phelps
November 16/2006

One man played for the Highland Park YMCA's Blue Bruisers, the other, the Maroon Nighthawks; one wears jeans and boots, the other, a suit and tie; one was a Longhorn, the other an Aggie.

These two opposites, Kip Sowden and Jeff Berry, are the founders of Realty America, and they say it's their differences that give them the business edge.

And with a track record of four successful companies encompassing five real estate disciplines in the past five years, there might just be something to their formula, which goes a little something like this:

Step 1: know your future business partner from the time he or she was a child. Berry and Sowden started their first company at the age of 10, driving a purloined golf cart to take people to their cars at the Byron Nelson golf championship

Step 2: Help plan your Highland Park High School 20-year reunion and catch up with your old buddies. Berry and Sowden ran into each other while at a reunion committee meeting inside Peggy Sue BBQ. They soon realized they were in the same business with similar goals. Also in that moment, the two discovered that they both worked at Lomas Mortgage USA, which was one of the nation's largest lenders at the time. Before too long they had started Realty America Group and right away listed $100 million in commercial real estate, which sold within a six-month period.

Step 3: Take your successful base business, commercial real estate sales and financing, and expand it to reach commercial real estate lending, acquisitions and investment management. Under the title Realty America Investment Management Ltd., or RAIM, the guys began to handle several billion dollars a year in transactions.

Step 4: Take all your resources and expertise and begin to develop. Berry and Sowden teamed up with another HPHS grad, real estate expert Phil Brosseau, and jumped headlong into property development. For this step, Sowden and Berry knew they'd need to launch with a trophy asset. The solution: The eyesore in their own backyard, the old Hilton, which is now Hotel Palomar.

Step 5: Extend your talents by opening Realty America Hospitality Group. This is the latest chapter of Berry and Sowden's company, which, among other things, will reopen and operate the famous Trader Vic's. The company is looking to acquire and operate all sorts of hospitality-related projects, including a possible resort in Costa Rica.

Of course, anyone could follow the prescribed steps and still come up short on success. The difference, Sowden and Berry explained, is that they chose to "grow smart" instead of simply big. The deals they guys look for are ones where they can ask, "Where did others go wrong?" Berry said.

There will always be naysayers on market conditions.

"We'll always be in the 'bad market,' and we'll always be contrarians," Berry said. "I know it's cliche to say we think out of the box, but it's true. Our clients come to us because we're good at figuring out challenges."

"Anyone can shoot straight down the fairway," Sowden said.

One of their challenges was the Palomar. As Hotel Online reported, the hotel that was built in 1967 was a popular Hilton for nearly two decades.

"But business suffered with the economic bust of the 1980s," Sowden said. "The hotel's condition became so tarnished by 1990 that it lost the right to retain the Hilton brand."

The new hotel became the Hiltop Inn, but it was in 1993 when the property took on cult status. The Maharishi Mahesh yogi, former spiritual advisor to The Beatles, bought it and turned it into a center and dormitory for the transcendental meditation movement.

In 1997, an affiliate of Hicks, Muse, Tate, and Furst tried to buy the then Hotel Santa Fe, but the deal went sour and the building was tied up in court battles until 2003.

"We knew the site could work," Sowden said. "But it couldn't support a hotel all the way or a residential development all the way. Our entrepreneurial spirit took over, and we turned it into the city's first mixed-use urban resort."

The location was great, we knew we had to redevelop this, " Berry said. "Dallas needed it. We needed it."

Today, the hotel is open and blows past all projections; the Exhale Spa's classes are creating a buzz, the conference rooms are full, the restaurant Central 214 (named by Berry) is a veritable scene. And, a mark f any good hotel in Dallas, there's already been a wedding reception in the ballroom.

Next up, the 59 condos, which start at about 1,200 square feet, are almost finished, and ready to sell. The popular Trader Vic's is reopening in January or February, and retail space will open for boutique shopping.

All of which is a nice bit of publicity for the boys who grew up under the old Hilton's shadow.

"We knew we'd be good partners," Sowden said. "But we had no idea we'd be this successful."