Lindsey Builds Legacy

Jim Lindsey has been a Santa Claus, a child prodigy and an idiot. That’s how he describes the evolution of his real estate business in Northwest Arkansas.

“When we bought this land where the mall is, the lady that sold it to me had said that several people had told her she should take the offer because I was the biggest Santa Claus they’d seen in 30 years of the real estate business,” Lindsey said of the Northwest Arkansas Mall area. “When I sold the land for maybe four times what I paid for it, everyone thought I was a child prodigy. And then when somebody else sold two tracts for more than I got for the whole thing, I went back to being an idiot.”

An idiot, he is not.

Lindsey graduated from the University of Arkansas with a degree in mathematics. Listen to him calculate the effects of differing mortgage rates on a $100,000 note, and his knack for figures becomes astoundingly clear.

Today, some of that former pasture land around the Northwest Arkansas Mall would probably sell for $15 per SF, or $654,000 an acre, so Lindsey has heard.

The former Razorbacks and Minnesota Vikings football player is now chairman and CEO of Lindsey Management Co., a firm with more than 800 employees in seven states, a $15 million annual payroll and monthly apartment rents totaling $11 million. That includes more than 95 apartment communities and 28 golf courses.

Lindsey is also president of Lindsey & Associates Inc., Lindsey Construction Co. and Lindsey Communications Inc.

Lindsey & Associates rang up $646 million in 2004 sales volume with more than 140 agents. That’s up 17 percent from $555.47 million in 2003 and 47 percent from $377.26 million in 2002.

Gary George, CEO of Springdale poultry producer George’s Inc., said he has partnered with Lindsey on several ventures in the past 10 years — most recently, The Links at Springdale apartment complex. George also serves with Lindsey on the UA Board of Trustees.

“He is very obviously astute with numbers, but probably the best thing that I could see is his ability to deal with people,” George said. “You could never ask for a better business partner. He is 100 percent trustworthy.”

George said Lindsey is probably more worried about his business partner than he is about himself.

Lindsey’s Start

“My dad wanted my brother and me to play ball and enjoy what he wasn’t able to enjoy as a young boy because he had to start working immediately,” Lindsey said. “He wanted us to get an education, and that was a whole different motivation in his mindset where he came from.”

That sometimes meant calling Lindsey, the youngest of six, in from the field so he wouldn’t miss a practice or a game. Although, Jim Lindsey admits farming didn’t interfere with football too often.

“We were raised on the farm,” Lindsey said. “We had an appreciation of the land and property and of work, and we saw how hard other people had to work, and we worked some, but we weren’t over-worked.”

Football brought Lindsey from Caldwell, a tiny town on the outskirts of Forrest City, to Fayetteville to play for Razorbacks Coach Frank Broyles in 1963. Lindsey calls the move one of the most defining moments before his 39-year real estate career.

“I’ve told some people here that when I was a kid, the thought of going to the University of Arkansas was just like thinking of going to Yankee Stadium in New York [City] and hitting three home runs,” Lindsey said. “I mean it was just way out of my thought processes. It was a dream, a fantasy, and all of those fantasies came true for me, every one of them.”

Lindsey eventually became a standout running back on the UA’s 1965 national championship team. He went on to be selected in 1966 as the No. 2 overall NFL draft pick and played for the Minnesota Vikings. From 1966 to 1972, he fought to gain ground in the NFL while selling real estate in the off-season.

Outfitted with a $75,000 signing bonus and a loan from a Forrest City bank in 1966, the 21-year old Lindsey made his first land purchase of 137 acres at $1,100 per acre in north Fayetteville. That same purchase inspired the Santa Claus tale he tells today. Lindsey credits his father’s reputation in Forrest City for that borrowing ability.

“They were bankrupt during the depression and they held on and maintained a level of integrity, ultimately paying their bills and 20 years later paying off all their debts and having a magnificent farm,” Lindsey said. His father didn’t own a car until 1950, at the age of 48.

“They paid their bills and that allowed my initial business to be jumpstarted by banks in Forrest City, not up here [in Northwest Arkansas].”

The banker issued him a loan without ever seeing the property, Lindsey said.

Along with his brother and sisters, Lindsey still maintains an ownership in the 8,000-acre family cotton farm and gin in Caldwell. Some of the land dates back to his grandfather.

Real Estate Realities

Lindsey said historically when a buyer is “scared to death” to make a purchase that’s an indication they’re doing well in the business. Mistakes are made, he said, when a seller gets “giddy” to sell and make a bunch of money. That’s because it means someone else is going to take the next segment of the profit out of the market.

“Bottom line,” Lindsey said, “[Working in real estate] in Northwest Arkansas has been like having a 30-mile-an-hour tailwind behind you. I mean it’s always been in favor of those who stepped out and bought and risked. And then the growth has just constantly outdistanced people’s mistakes even.” Lindsey said.

John David Lindsey, sales manager at Lindsey & Associates in Rogers, said his father’s positive attitude has been an influence.

“I think he always seemed to instill confidence that it was going to work,” John David Lindsey said. “I think more than anything his greatest qualities are his determination, his work ethic and I think his ability to reward personnel for achievements.”

When interest rates hovered from 7 to 10 percent, Lindsey founded Lindsey & Associates in 1973 with partner J.W. “Gabe” Gabel, who still works and maintains an ownership in Lindsey & Associates today. Lindsey worked with Gabel and Gabel’s former partner, the late Jim Sullivan, in his off-seasons from the NFL. Lindsey said the most he ever made playing for the Vikings in a season was $37,500.

Gabel said Lindsey has unbelievable talents, and a “fine mind for figures.”

“He doesn’t go around trying to tell everyone how important he is,” Gabel said.” I think more than the money involved [now] it’s the challenge. I don’t think there is a question. He doesn’t need the money.”

Gabel said 1980 and 1981, when interest rates climbed to 20 percent, were harder years for the firm.

“Those two years were really a challenge either in developing property or making payments on loans,” Gabel said. “Unless you could work out a contract between two people where loans were assumed.”

Assumed loans entail a contract to make specific monthly payments generally at an owner’s original interest rate, so as to avoid taking out a loan at inflated interest levels.

Gabel said contracts were the only way to move property in those days.

“The real estate business really didn’t get started like we know it today until maybe the early ’90s,” Gabel said. He credits Wal-Mart Stores Inc. and the retail vendors it attracted for that growth.

Apartment Avenues

Lindsey got his start on apartment buildings by accident in 1980.

He purchased some land in Fayetteville and had it rezoned “multi-family” for resale, but the sale fell through, said Roy Stanley, president of Lindsey Management Co. The following year, Lindsey built a 44-unit complex, Chestnut I, on the site and started construction on the 80-unit Sunset Apartments in Springdale.

Three years later, Lindsey came up with the signature Lindsey design: the 12-unit building consisting of eight two-bedroom units and four one-bedroom units.

“What we’ve found on average there is usually two people looking for a two bedroom to one person looking for a one bedroom,” Lindsey said.

Lindsey also used the “backed and stacked” design of apartments from the beginning, Stanley said.

“It’s kind of like the body,” said Kim Fugitt, an architect for Lindsey Management since 1984. “In the building, we centralize everything from the heart, and it branches off in each direction. The typical ‘other’ building has to have four or five hearts.”

Fugitt said Lindsey’s centralized Chase Wall system, in comparison to the standard “breezeway” designed apartment, saves in labor and material costs because most trades are simplified.

“The design lends itself to speed,” Fugitt said. “Those trades are minimized in their efforts. Jim has always known that interim interest costs in a construction project can escalate the longer it takes to build, and that dips into your profit.”

Lindsey Management was founded in 1985 with 17 employees and 788 apartment units to manage. In 1994, the company became the largest apartment manger in the state with 5,000 units. Four years later, it passed its 10,000-unit milestone, and four years after that in 2002, Lindsey surpassed 20,000 apartment units.

Counting those now under construction, Lindsey Management has 121 projects and is approaching 27,000 units.

“With an average of 2.2 people living with us per unit, we have more than 60,000 people living with us,” Lindsey said.

Forecasting

Lindsey carries around a 70-plus-page report every day to update himself on each property.

“Most every business that functions really good has common denominators, and also has signals and mathematical forms that tell you a lot of things, from attitudes of people in an apartment complex to what the market is doing,” Lindsey said.

For example, he said, uncollected rents lead to vacancies, and vacancies, he said, lead to trouble.

“If something starts to go downhill, that could be an indicator of what’s going to happen next week or next month,” Lindsey said.

There is no perfect formula, he added.

Lindsey said in most places his more affordable apartments have higher occupancy rates than his new higher-rent “cutting edge” apartments. Although Lindsey does have 153 higher-end executive apartments in Northwest Arkansas, they account for less than one percent of his local product. He’s not interested in concentrating on the higher-end market.

“I mean why is Wal-Mart not Dillard’s?” Lindsey said. “They’ve tried to expand more into nicer stuff in some ways to broaden who will come and shop there, but they are not going to go out there and be Neiman Marcus, and I don’t think I ever want to be Neiman Marcus.”

Lindsey At a Glance

• 1966: At age 21, Jim Lindsey takes his signing bonus from the Minnesota Vikings and buys 137 acres of land that would later become the site for the Northwest Arkansas Mall. He sells the acreage two years later for four times his purchase price.

• 1973: Lindsey retires from the Vikings and founds Lindsey & Associates with J.W. “Gabe” Gabel.

• 1981: Interest rates climb to 15 to 20 percent. Lindsey hires a draftsman to develop apartment plans utilizing the “backed and stacked” design. He builds Chestnut 1 Apartments in Fayetteville, his first complex. Lindsey bought the Chestnut land in 1980 and had it rezoned for resale, but the sale fell through.

• 1985: Lindsey Management Co. is founded with 17 employees and 788 apartment units to manage.

• 1994: Lindsey Management becomes Arkansas largest apartment company with just over 5,000 units managed.

• 1998: Lindsey Management surpasses 10,000 units managed.

• 2002: Lindsey Management manages more than more than 20,000 units.

• 2005: Lindsey Management approaches 27,000 apartment units managed or under construction.