Ex-CEO launches property venture

Paul Layne, former chief executive of Howard Hughes Corp., has formed a privately held commercial real estate investment firm focusing on Houston-area properties.

Layne Property Partners, or LPP, will include properties his family had previously purchased, including apartments in Montrose and an antique show venue in Round Top. On the company’s website, six apartment buildings in the Heights and a property in Oak Forest are projected to close later this year.

Layne left Howard Hughes in September 2020 with a $2.63 million severance package during a year when the pandemic had battered the company, which is known for its master-planned communities but owns real estate in most sectors, from office and retail to hotels and a baseball stadium.

At the time he departed, its stock had fallen 54 percent from the start of the year as COVID-19

pummeled the real estate industry.

Now, he’s reentering commercial real estate as investor activity is on the upswing, this time at the helm of a privately owned company.

Layne, who is in his 60s, said that during his brief retirement, he and his wife spent a few months on a Florida beach, where he spent much of his time playing golf.

“It was my intention to retire,” he said. But after about four months, he began getting the itch to go back into real estate. Four of his six children are in commercial real estate, and he describes his new company, which has three employees, including one of his children, and an office in Memorial as “sort of a family affair” drawing on the relationships they’ve built in the industry over the years.

One of LPP’s investors, Joe Agresti, chief executive of Dream Motor Group, said in a statement the economy’s current inflation had driven him to invest in LPP as a way to increase his commercial real estate investments.

“With record inflation, I have the need to diversify my investment portfolio,” he said. “Increasing my concentration in commercial real estate in the trusted hands of Paul Layne was an easy decision.”

Layne said in an interview he’s focused on investing in walkable neighborhoods with high job growth. And multifamily, he said, is the most consistent type of real estate when it comes to cash flow during unpredictable times.

Currently, rents in the Houston area are rising at the fastest pace in years, according to Zillow data, and investors in the second quarter rushed to put their money in multifamily properties across the country.

According to commercial real estate firm CBRE, multifamily investment in the second quarter was $52.7 billion — the highest it’s been for any second quarter in at least 15 years. That hunger for multifamily has also driven the prices for multifamily buildings, compared to the income they generate, to the highest they’ve been in the same timeframe.