GlobeSt.com EXCLUSIVE: HSM Team Exits, Starts Highland Capital Group

Making an amicable break, Terry Gwin will lead Highland Capital Real Estate Advisors, a division of Dallas-based Highland Capital Management LP. At the senior managing director's side will be Marshall Hess, managing director; David Dunson, managing director of real estate acquisitions; Stuart Smith, associate director of acquisitions; and the only one not from the HSM Equity camp, Dan Healy, director.

"Terry is the best person out there of any person that I know," Vance C. Miller, chairman and CEO of the Henry S. Miller Cos., tells GlobeSt.com, "and, we wish him well." To offset the loss, Miller backfilled the top job with Steve Harris, who's also president of Henry S. Miller Investment Co., and promoted Chance Johnson to senior vice president and general manager with Lynn M. Peters riding shotgun for the restructured group.

Miller says he's interviewing prospects to fill the four seats vacated a week ago. Gwin was president of the group, which accrued $220 million in assets in three years; Hess, senior vice president; Dunson; vice president of acquisitions; and Smith, associate vice president. Healy closed an independent shop to join the quartet.

Highland Capital, a limited partnership investor in many HSM Equity deals, has set up a new division to acquire investment-grade properties in a sweeping path across the South from Arizona to Georgia--with a hard focus on Texas metros. "The amount will be dictated by the amount of good real estate," Hess says.

With 29 years invested in the best and the worst of times in Dallas/Fort Worth, Gwin tells GlobeSt.com that "it was just a unique opportunity for me and the group" that "came up fairly recently." Though Miller is a 91-year-old firm with deep ties in investment circles, most of its assets have been sold and it, like other Texas investors, are struggling to beat out sky-high prices by out-of-state investors for replacement properties. In contrast, the 12-year-old Highland's international platform has $15 billion of assets under management and a blue-chip investor base with more than 200 institutions.

Gwin says there are still decisions to be made with regard to the group's purchasing plan, but expects all details will be ironed out within six months. "We have existing investors who have been with us for years and years, institutional and private," he says, "and they are looking to us to invest for them. This move had no dissatisfaction with the Miller family of companies."

The investment sales team is chasing retail, multifamily and industrial products as well as land deals for single-family and townhouse development. The acquisition sweet spot is $5 million to $50 million. "We don't have a definite budget," Gwin says. "We just want to spend as much as we can on good real estate."

Just four days into the launch, Gwin says the team has two deals working in Dallas and one in Austin. Another one in Houston is under review. "In 30 days, we will have identified several projects," he says. "We're doing due diligence now."