How SummerHill is Expanding its SoCal Development Pipeline
- Aug 27, 2013
San Ramon, Calif.—SummerHill Apartment Communities, part of SummerHill Housing Group in San Ramon, Calif., has hired Patrick Simons as the senior vice president of its new Southern California division. MHN talks to Simons about his new role and how he plans to expand the development pipeline.
MHN: What are your priorities in your new position?
Simons: We are building a business for a long-term presence in Southern California. So, although my number one priority is ramping up our pipeline of land, I am also working on putting into place all the other aspects of a sustainable business platform including consultants, contractors, brokers and a business plan that maps out our staffing strategy. I am fortunate in that the capital piece for our division is already well established so we will not need to scramble for funding on new deals.
MHN: How do you plan to expand the development pipeline to over 1,000 units within the next three years?
Simons: The simple answer is “one deal at a time.” I started out 20 years ago in land brokerage. What I learned starting back then and throughout my career on the development side is that relationships fuel deal flow. Over the years, I have been able to cultivate an extensive ‘Rolodex’ of brokers, owners and consultants who provide many great opportunities. And I try to add to that list every day.
Perhaps because of my brokerage background, I appreciate the value that brokers bring to the table, and am always committed to financially protecting them whether representing listed or unlisted “off-market” opportunities. Also, because our pipeline is our number one priority, my first hires will be in the land acquisition area.
MHN: What puts SummerHill at an advantage to accomplish these goals?
Simons: First, SummerHill’s unique combination of being a private company with institutional-quality capital is a tremendous advantage in this market. While we can be very flexible in our structuring of deals as well as having a streamlined, non-bureaucratic approval process, we also can flex our financial muscle to close deals quickly.
Second, due to our private status, we have the distinct advantage of being able to take on entitlement risk, which most of our institutional competitors simply cannot do. In fact, we have such a strong group of entitlement professionals in our San Ramon headquarters that we are especially targeting unentitled “off-market” sites in dense urban infill neighborhoods throughout Southern California.
Finally, our private status allows us to look at a very broad range of project sizes from large institutional scale down to about 100 units where most institutional developers don’t play. While I would love to put together two 500-unit deals to hit our initial pipeline goals, I can also string together a number of smaller deals that are economic homeruns.
MHN: What challenges do you foresee?
Simons: Clearly the biggest challenge is the extensive amount of competition from other groups. But we think we’ve put together a pretty well-thought-out business plan to navigate that competition. While I think that there is a lot of very high-caliber talent chasing deals right now, history has demonstrated that not everyone will have staying power over time. What attracted me to SummerHill is that it has just the right characteristics to find and finance the right deals to build a sustainable business for the long term.
MHN: Any plans to expand the pipeline beyond California? If so, where are you looking?
Simons: While future plans certainly could include other western states, I am focused entirely on building a successful business here in the urban areas of Los Angeles, Orange, San Diego and Ventura Counties.
MHN: Is there anything you’d like to add?
Simons: Yes. Although our industry tends to focus on the financial bottom line, SummerHill has demonstrated through its successful track record in the Bay Area that we really try to make a difference in people’s lives. In fact, part of the SummerHill mission statement says, “The developments created by SummerHill Apartment Communities are an integral part of our communities. It is important for us to preserve the environment, improve urban settings, and cultivate the beauty of our surroundings. Smart growth offers more than just shelter, it enhances neighborhoods and lifestyles.” I’m excited to represent SummerHill in bringing that vision to Southern California.