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Business Observer Friday, Apr. 27, 2018 4 months ago

Dealmaker grabs life by the horns

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Tampa real estate investor Brian Katz zigs when others zag, and he isn't afraid of a few risks, particularly in lending money for deals. The strategy, so far, has paid off.
by: Brian Hartz Tampa Bay Editor

In seven years, Brian Katz has built a company with an enterprise value, including third-party valuations of its investments and subsidiaries, estimated at about $40 million.

But instead of having the mentality of a hunter always looking for the next big prize, he thinks of himself as a farmer.

Katz, 40, founded the firm, Katz Capital, in 2011 with the profits from a sale of his first investment property, a condo in Tampa’s Ybor City. He bought it for $33,000 and sold it 18 months later for $65,000. But he aspired to be more than just a savvy real estate investor. He wanted to launch and run an economically resilient and diversified company that would be a vehicle for investors and a provider of essential services to property buyers and sellers.

“I think of myself as more of a farmer,” he says. “My strategy has been to grow my farm by planting different crops. That protects the company, and it also creates its own ecosystem whereby the whole is greater than the sum of its parts.”

“My thought was, ‘If there are things that I want to achieve for myself, I just have to go out and do it.’” Brian Katz, CEO of Katz Capital.

The parts, in this case, are a quartet of companies that operate under Katz’s Pineywoods brand: Pineywoods Capital, for investors; Pineywoods Realty, for property buyers, sellers and agents; Pineywoods Title, which handles escrow and title processes; and Pineywoods Insurance, which offers individual and commercial policies.

“What tends to happen is a client will come into our platform through one channel, but in a lot of cases we're able to cross-sell,” he says. 

The strategy works: Revenues at the firm have grown 159% since 2015, from $2.9 million to $7.5 million last year.

Katz Capital’s subsidiaries take their name from the Pineywoods breed of cattle, which are native to Florida. Katz says he adopted the imagery of the Pineywoods bull because it symbolizes strength, steadiness and independent thinking. He’s such a fan of the animal he commissioned a huge steel Pineywoods bull sculpture that was temporarily displayed last year in front of Ulele, a popular Tampa restaurant.

Katz characterizes his business strategy, and success so far, as focused on service and culture. "We crafted a unique strategy to provide capital to real estate investors when no one else was lending — that included banks as well as private capital sources. The business model was scalable and ultimately allowed for the critical mass that allowed us to fold out related business lines."

Before going out on his own, Katz — he's from St. Louis and graduated in 2000 from that city’s Washington University with degrees in accounting and international business — worked for Goldman Sachs’ credit risk management and advisory group in New York. But he yearned for entrepreneurial independence. 

“My psychological profile is that I am an entrepreneur at heart,” says Katz, but he needed professional experience that would give him a track record and confidence.

Katz’s résumé after Goldman Sachs and prior to buying the Ybor condo is eclectic: it ranges from a stint with PricewaterhouseCoopers in Tel Aviv, Israel, to working for community banks in Tampa and Bradenton. Katz was familiar with the region, having traveled to the area on vacation with his family when he was a kid.

During the recession, while living in Florida,  Katz says he “came to a point where my thought was, ‘If there are things that I want to achieve for myself, I just have to go out and do it.’”

Katz went on to spin that first investment property, the Tampa condo, into a portfolio of 15, and that put him on the road to becoming a private lender. Today, he has eight full-time employees and 100 real estate agents affiliated with his Pineywoods brands. Pineywoods Realty ranks in Hillsborough County’s top 30 in overall market share, moving up from No. 47 over the past year, according to MLS statistics. 

Katz, even with the success, worries about the future and tries to be counter-cyclical in his strategy. “The general state of the economy is good,” he says, “but tied in with that, rising interest rates are concerning. I would like to be relatively insulated from that.”

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