Trammell Crow Residential’s Ron Terwilliger on building a healthy business culture, taking risks and giving back.
The chairman emeritus and retired CEO of Trammell Crow Residential, Ron Terwilliger is the founder and chairman of the J. Ronald Terwilliger Foundation for Housing America’s Families. His philanthropy focuses on core needs for children—in particular housing and education—to help them get out of poverty.
He talked with me about clearing hurdles, listening to your dad and why everyone should think about becoming a philanthropist.
Q: What was your upbringing like?
A: I grew up in Arlington, Va. We were a lower-middle-income family. We lived in an 800-square-foot house. My dad worked two jobs but never made more than $10,000 a year in his life; he would come home, take a nap and go off to his night job. I was the first in the family to go to college.
I got a scholarship to George Washington University to play basketball and baseball. I woke up one day and couldn’t bend over and learned I had a back problem. George Washington told me to go home and took away my room and board. I was told by a doctor to rest my back, and it healed. I was upset with George Washington, and the Naval Academy was recruiting me so hard that I just decided to go to the Naval Academy. I played two sports for four years there and did everything in the military that I was supposed to do.
How did you get into business from the Naval Academy?
I wanted to be an aviator, but they said I couldn’t because of my bad back. I thought: If I’m not going to be an aviator, what am I going to do? And somebody said, “You know the supply corps is the business arm of the Navy.” So I joined the supply corps, and I learned about business.
And real estate?
I went to Harvard Business School and was a Baker Scholar. I had no clue what I wanted to do, but I was always good at math. I took one real estate course, and it just made sense to me. I started [my career] in the resort real estate business at Sea Pines Company in Hilton Head Island. After the company went bankrupt in 1974, I moved to Dallas and became the CFO of a commercial construction company. But I got bored there because I had been running companies, and at that point I wasn’t running anything.
A Harvard Business School classmate of mine said to me, “Why don’t you move to Atlanta and rebuild the residential companies in the eastern United States of Trammel Crow?” I took a big pay cut, but I was offered an equity stake. They loaned me money to start the business and said, “Go figure it out.”
I was 38. It was tough to make this decision. I had two kids. At the time I was making a lot more money; I was living nicely with the country club membership and the car.
Earlier in my life my dad said something to me I never forgot. He was offered a job at the first Marriott by Bill Marriott, and he turned it down. He was so security conscious because he had come up in the Great Depression. He said, “I always regret that I didn’t take that chance.” So I thought to myself, If I don’t take this chance to be an entrepreneur now, I’m never going to do it. I took a big pay cut, moved to Atlanta, relocated my family and tried to figure out how to make a residential business profitable.
Were you scared?
I was really nervous—I literally couldn’t sleep some nights. I was giving up a very secure job. I had a family. Don’t forget that right around 1980 the interest rates went up to 21 percent, there was a gas crisis and I thought to myself, How long are we going to be able to stay in business? It was really nerve-wracking. My wife didn’t work; it was all on my shoulders, and I had no significant net worth at all. Our parents didn’t have any money. There was no safety net.
What did you tell yourself?
I said to myself, “We just gotta work through this period.” There are recessions regularly—this one was just particularly unsettling. I just had to keep getting up in the morning and do the best I could to make sense out of the business.
Tell me about the culture of the business.
My interpretation was that Trammel Crow wanted his partners to become wealthy. Once they get wealth, if they sponsor a deal and it doesn’t work out, then they won’t get their share of the profits. It’s nice to have partners who have something to lose.
The real key in business is alignment of interests. We had a very collegial environment. I think we did it right—morally, ethically, we worked hard, and I think people liked doing business with us. Out of that came some great leaders. I’m very proud that many of the largest apartment development companies in the country are run by my former partners.
How did you then shift to the next phase of your life, philanthropy?
When I ran Trammel Crow Residential, I was a part of industry organizations like Urban Land Institute—I became its board chair—and Habitat for Humanity. I had to fly down to Habitat to ask to be on its board. I thought it was the perfect charity for Trammel Crow to put money towards since it was in home ownership.
Initially [Habitat cofounder] Millard Fuller didn’t accept my proposal to embrace Habitat as our charity because our business was in multifamily rental buildings and [theirs was] single-family home ownership. So a few of us went down to do a build. Their volunteer program is great—you can go volunteer and build a house. It’s very emotional, particularly if you give the key to a family.
I got hooked. I flew back down, and I told Millard, “I don’t know what your criteria for board members are, but I have a lot of experience nationally and residentially, and I’ve got the time.” I joined the board in 2002. Then eight or nine years later I became the chair.
I was still working at the time, being an industry leader and a company ambassador and flying around a lot. [Then] I decided I wanted to be more involved in the nonprofit community.
Why did you want to be engaged in the nonprofit community?
If you come from an upbringing like mine, it seems natural. I never knew anyone who belonged to a golf course. I grew up modestly, and yet I’ve lived the American dream because I had a chance, with two loving parents and a decent public school.
I started obtaining some wealth in my late 40s and early 50s, and I began thinking about what I should do with that wealth and what my purpose was. I know a lot of people just save their wealth for their families, and I don’t understand that. I think it’s more difficult for children who grow up in great affluence to have a sense of self and go on to be successful people.
I decided I’d better think about how to give back. Ultimately, I made a $100 million legacy gift to Habitat for Humanity, and that kind of established me as a philanthropist.
How does philanthropy fit into your financial plan?
I put my estate plan together to make sure my family is set, and I decided I would give the rest of my money away in my lifetime. I’ve given money to the Naval Academy and a lot to Habitat. I’m on 10 nonprofit boards, and I chair five of them.
My number one passion is affordable housing both in the U.S. and internationally. I chair the I Have a Dream Foundation for a family to be able to pull themselves out of poverty—I think having a home in a decent location, with a decent school for the kids, with access to food and jobs, is fundamental to that. If the kids can get a decent education and the skills to be successful in future jobs, they can elevate that family out of poverty. Once you get kids to college, there is a high probability that they are going to get their kids to college.
What do you want others to know?
I want to encourage other people who have wealth to seriously consider what they’re doing with their money. Yes, they should make sure their family is taken care of—my family is provided for. But they don’t need all of the money. Why wouldn’t I give the rest of it for people who really need it? I’m trying to lead by example on this and encourage people. I think people should find a cause they care about and be more philanthropic, at any age, at any level of wealth.
I’ve found that it’s rewarding to give away money, particularly when I can be actively involved with what’s being done with the money. If you make money during your business career and then you start to think about your next chapter, well if you are going to live until 90 or so that’s a long time. You want to think about what you’re going to be doing with that time and energy.
I think about that. And I know I want to be remembered as a philanthropist—being a good business man has enabled me to give back.