The veteran business executive talks about the university's programs and the industry he knows well.
After real estate veteran Herb Tousley was tapped in December 2009 to head the real estate education programs for the University of St. Thomas, he became the go-to guy for unbiased information on local commercial real estate.
Before entering academia full time at the university's Opus College of Business, he worked in multifamily and affordable housing and office, mixed-use and retail properties with particular expertise in investments, financing, acquisition and operations, most recently for Coldwell Banker Commercial Griffin Cos.
He also bears a famous name -- in 1956 his father, also named Herb Tousley, founded an auto dealership on Hwy. 61 south of White Bear Lake that television viewers of a certain age will no doubt remember.
QHow has moving from the hurly-burly of the commercial real estate world to academia been for you?
ARunning the real estate programs that I run here is a little bit like running a small business within the university. We're recruiting students, we're looking for customers, we're constantly working on improving our programs, which is really our product. We have marketing, we have a lot of the same issues you'd have if you were running a small business. The biggest difference I've noticed is that things happen slower at the university than they do when you're out working in commercial real estate. That's a good thing but it can also be frustrating when you just want to go out and get something done quickly. But the good thing is they have a lot of people and resources here to help you get things done, so it's not all bad.
QWhat was your proudest commercial real estate achievement?
AI would say that would be leading the development team for a 202-unit apartment project in Shakopee called Shenandoah Apartments. That happened in two phases. We basically took it from a piece of land all the way through construction and lease-up and worked on that for about 3 1/2 years. It's kind of cool that when it's all done you can drive by and say, "Hey, we did that!"
QAnd how about at St. Thomas?
AI'd say that so far the thing that's been a good accomplishment and fun at the same time was establishing the Minnesota Real Estate Hall of Fame. We started it last year and had our first induction ceremony last October, bringing six people into the Hall of Fame, and now we're working on our second induction, which will be happening this October.
QIn terms of the economy, what sets the Twin Cities apart as a better-performing market than other Midwestern cities?
AI think that's because we have such a diverse economy and so many different kinds of industries here -- some of them are technology-oriented and biomedical -- there's a mix. We've got a lot of Fortune 500 companies  that are based here, which is a lot for a city our size. So there's that diversity, and we have an educated workforce. When we look at other Midwestern cities and compare, I think that [the] diversity makes our economy just generally stronger ....
QSo, we're at a competitive advantage with some our peers?
AIf you look at Denver, they're very dependent on the oil and gas and energy industry, so when that's going well, they're doing great, but when it's not ... They tend to have more ups and downs, where we tend to be a little bit more stable because of that. Agriculture and food processing helps us, too, having companies like Cargill and General Mills, that's certainly part of it.
QWhat's driving the multifamily housing boom and do you see it lasting?
AA couple things are driving it. Part of it is that we went through a period back in 2004-06 when the percentage of people who owned homes went up to a historical high, but then the for-sale housing market began having all its troubles and now it's a lot harder to get a mortgage. Underwriting criteria are now much more stringent. Now more people are renting because it's a little bit harder to buy a house. But the other part of it is just the demographics. The younger people in their 20s and 30s, people in their prime renting years, there's a bubble going through that demographic and there's going to be more and more of those people around. They like to rent and like living in a more urban-type environment. That's what's really driving the multifamily housing boom.
QHow about on the financing side?
ABecause of the Fannie Mae and Freddie Mac agencies, you can get multifamily housing deals financed, whereas to develop retail and office buildings it's very hard to find financing. Fannie and Freddie have been ... operating pretty much normally through the recession. When you read about a lot more apartment projects being started or proposed, part of that is because of the financing that's available through Fannie and Freddie -- that's why I think the apartment boom is going to last.
Don Jacobson is a St. Paul-based freelance writer.