Thirty years ago, Jon Hammes left his position at Dallas-based Trammel Crow Company, one of the largest commercial real estate development firms in the nation.
Hammes had been with Trammel Crow since 1974, the same year he received a master’s degree from the University of Wisconsin-Madison. At Trammel Crow, he worked his way up to becoming a managing partner, serving as the firm’s regional partner in its Chicago office.
“It was just a great experience to understand a multitude of real estate (types) in a multitude of different geographies,” Hammes said. “That was probably the best business decision I ever made just coming out of school and working with a very entrepreneurial organization that embraced innovation.”
Hammes left Trammel Crow in 1991 to start his own real estate development company in the Milwaukee area. However, it was a challenging time to do so. The economy was in a recession and the real estate industry was in even worse shape.
“We knew it was going to be four, five or six years before real estate was going to be restabilized,” he said. “So, we looked at a lot of different ideas.”
Hammes Co. turned its attention to health care. That industry was intriguing because of its size, and developers of health care buildings were “not quite as sophisticated as compared to the type of players we were competing against during my Trammel Crow tenure,” he said.
Hammes thought his firm could apply its expertise to health care real estate, providing project management services to help facilities get built on time and on budget.
“Which back then was rarely done,” he said. “But we felt if we could build a high-rise building in Atlanta, we should be able to take that same level of expertise … and provide that same discipline to health care.”
At the time the health care real estate market was commodity-driven, so projects were usually awarded to the lowest bidder, Hammes said. Seeking an advantage and a better way to grow the business, Hammes Co. positioned itself as a consultant to guide health care providers through the planning and evaluation process for building new facilities, which helped the company get awarded project management contracts for the construction projects.
“We rolled all of those services into a strategic planning group, and we were out in front of the market,” Hammes said.
That approach led Hammes Co. to become the industry leader. The company has been ranked as the nation’s top health care facility developer 19 times by Modern Healthcare’s Construction & Design Survey.
The company also became a major player in sports facility development. It started in the 1990s when UW-Madison was working on plans for the Kohl Center. The project was behind schedule and over budget. The state turned to the private sector to manage it, and, through an RFP process, Hammes Co. was selected.
“I guess the thought was if we could build a high-rise office building or a hospital, we should be able to take those same fundamental disciplines and apply it to a sporting facility,” Hammes said.
After the completion of the Kohl Center, Hammes Co. became project manager for several other major sports facility projects, including Ford Field for the Detroit Lions, the expansion of Lambeau Field in Green Bay, MetLife Stadium for the New York Giants and New York Jets and U.S. Bank Stadium for the Minnesota Vikings.
Hammes Co. also launched a private equity fund in 2014 to raise capital for health care real estate investment and development. The fund was necessary to help it compete with large real estate investment trusts. The company initially raised $400 million for the fund and three years later raised another $700 million. The money mostly came from state pension funds. By leveraging it with debt, the company generated more than $3 billion for its health care real estate investments and developments.
“It’s been a significant game-changer for our organization,” Hammes said.
The fund is an example of how the company has remained nimble and innovative.
“We’ve always embraced the idea of staying ahead of the market a little bit and looking at our own bundle of services and realizing internally where we need to change,” Hammes said.
Hammes Co. has completed a staggering number of projects over its 30 years in business.
“Any of these projects, large or small, it takes a team and it takes a lot of quality input from a lot of people,” Hammes said. “We’ve been able to attract quality talent and, just as importantly, retain the people that have been with us.”
Hammes also said he’s grateful for mentors including Trammell Crow, whom he described as “a second father to me,” and James Graaskamp, professor and real estate department chair at UW-Madison.
At Graaskamp’s urging, Hammes taught at UW-Madison for a time. He has served on several education-related boards including Teach for America, Wisconsin Foundation & Alumni Association, Marquette University and the Medical College of Wisconsin.
“I think we have a responsibility to help others,” Hammes said. “It’s been a fun ride. It’s been a very rewarding career. There’s been a number of mentors and role models. … I feel very fortunate.
“Nothing’s easy. It’s hard work. The subject of entrepreneurship is work. It takes a lot of work to build an organization that wants to be thought of as innovative and continue pursuing strategic initiatives. It just takes work. It’s not something that comes naturally.”
