A Passion for New Mexico

New Mexico Business Journal, Dec, 2001

Some 14 years ago, Jim Long ran a company with a single employee himself. Today, American Property has 6,000 employees throughout the count and is probably the stat's largest privately held company.

JAMES LONG MAY WELL BE ONE OF NEW MEXICO'S BIGGEST promoters although his company, American Property Management Co., has interests throughout the country including some 50 hotels and office and apartment buildings and employs about 6,000 people. American Property is headquartered in Albuquerque and has offices in Charlotte, N.C., and Las Vegas, NV. Its hotel division is based in La Jolla, CA.

American Property, which opened its doors 14 years ago, actually consists of a number of companies of which Long is either chief executive or managing member. His partner, Michael Gallegos, overseas hotel operations and acquisitions of hotel properties while Long raises equity and sees to the financing of the company's various projects. The seven New Mexico hotels are managed out of the Albuquerque office. American Property is an intensely private company and thus relatively unknown to many in New Mexico. Its gross annual revenues are "somewhere between $100 and $500 million," Long says, and is "very profitable."

Jim Long, 41, was born and reared in Albuquerque and is an architecture graduate of the University of New Mexico. He is Hispanic on his mother's side (an Aragon) and takes a particular pride in his background and culture. He and his wife, Rebecca, have three children.

The New Mexico Business Journal spoke with him at his offices on Coors Boulevard.

NMBJ: How did an architect find himself in the hospitality and real estate business?

LONG: That's a good question. I think that I have always been more of an entrepreneur than an architect. What I'm probably best suited for is recognizing opportunities when they present themselves.

American Property is probably the largest privately held company in New Mexico. How did it get that way?

LONG: By simply finding great people for our company and providing them with exceptional opportunities and letting them do what they do best. We try to eliminate barriers and not create limitations on their efforts. We have created an entrepreneurial, capitalistic structure in which they operate.

But how did this all start? The company certainly wasn't created overnight.

LONG: I had worked in the architecture profession for a couple of years but found I had a taste for business. And, particularly, the real estate industry. I was able to take a step back and see if opportunities in that industry might present themselves. I started fairly small, acquired a few projects and tried to use the knowledge that others could provide. I tried to base my strategy on the ideas of others. And so in the first few years I basically found a successful formula. Through that process of trial and error--I made lots of mistakes--I began to develop the company.

What's the formula?

LONG: The formula is very simple. Everything I read about the real estate business discussed how important it was to buy real estate using maximum leverage, buy by using tax advantages, rely on appreciation of real estate for upside value. When I started buying in the early '80s there was no appreciation in our market and the tax laws changed so the advantages weren't great. What I quickly le learned is the key to success was buying for cash flow, recognizing that the real estate market is all supply and demand, and those factors at different points in time and at different points around the country offered interesting buying opportunities. Every part of the country goes through some period of supply imbalance; when that occurs there are exceptional opportunities There is usually a window of time of about six to nine months, and in that period the opportunities can be phenomenal. But if you are so focused on a single market, you have to wait until those cycles reappear. That might take 7 years, it might take 25 years, and that's the reason American Property has gone beyond the state of New Mexico. At any point in time, somewhere around the country, there is a supply and demand imbalance and those are the markets that we seek out.

Now, how do you do that, based as you are in Albuquerque? It really isn't the center of the real estate industry in the country. How do you go about discovering these different opportunities?

LONG: We live in a world of free information. It's very easy to look at markets where there are imbalances--there will be vacancies or other economic problems in those markets and so we target those markets and develop personal contacts within those markets. And those folks will help you find the opportunities.

I assume you're doing conventional financing on these properties, is that an easy thing to do?

LONG: In our business we look for properties that arc not economically performing. So we may want to buy an office building, for example, that has a high vacancy rate, or is inefficiently run. From a lender's perspective, these assets appear to be very difficult to finance; as a result, we finance our purchases through local financial institutions because they know their market. We don't work with large national banks or insurance companies. We work with small, regional independent banks that know their market and as a result of that knowledge can understand the value.