Tom is Chairman of the Coast Group of Companies. Together with his brother Shawn, CEO, Tom has led the Coast Group from a very modest start in 1987 to a diversified group of commercial real estate services companies offering property management, facilities maintenance, specialized construction, and advisory and transaction services to private and institutional owners throughout the Pacific Northwest the United States. Tom is also an active investor in commercial real estate through CEP Multifamily which he co-founded in 2004.
Tom leverages his vast network, engaging personality and refreshingly transparent approach into many venues, including his long-running column in the Herald Business Journal , as a freelance writer and as a guest speaker or lecturer all while serving on several boards or advisory functions, including Santa Clara University Real Estate School Advisory Board, Washington State University – Everett, University of Portland board of trustees, The Washington State Governor’s Affordable Housing Advisory Board, The Commercial Brokers Association of Puget Sound, Archbishop Murphy High School (Everett, WA), The Boys & Girls Clubs, chairman for the Snohomish County Airport Commission, The City of Everett Economic Development Advisory Council, Pacific Alliance for Catholic Education Advisory Council, and others. The brother’s ventures together earned them two very prestigious awards: The Washington State Family Enterprise Institute’s Family Business of the Year and The University of Notre Dame Alumni Association co-alumni of the year.
We asked Tom some questions about his background, investing, and the history of CEP. Here are his answers:
What was your first job?
Everyone likes to tell their rags-to-riches story, but my first job was literally about rags! I was 14 in 1976 and got a job bagging ice at the local grocery store a mile bike ride from our house. Five cents a bag seemed like a lot of money then. One day, I was short on rags to wipe down my freezer so I borrowed one from the meat department. “Don’t you know that uncooked meat can make people sick”!? barked my 17-year-old boss. I nodded along and somehow kept my job and eventually worked my way up to bagger where I could earn tips. Once I could drive, I worked construction, was a farm hand and got on as a deckhand on a commercial fishing boat in the Pacific Northwest town where I grew up. My first professional job was as a commercial lending officer at First Interstate Bank (now Wells Fargo) in Downtown Seattle just after college.
What was your first introduction to real estate?
I grew up in a blue-collar mill town of about 35,000 and there was one rather well-known guy everybody talked about in town who seemed to have a lot of money. It seemed like every other building in town he owned. So one summer I reached out to get a job just so I could just figure out how he did it. I painted apartments, installed smoke detectors, washed windows, and did all kinds of odd jobs for him.
My junior year in college, my dad changed careers and started in commercial real estate sales. He is the best salesman I have ever known, so I paid close attention to his work. Instead of selling a product, though, when he got into selling real estate, he talked about his job being to help people solve problems. That really resonated with me and was helpful in introducing me to real estate as well.
How did CEP get its start?
My brother, Shawn, and I had been managing property for about 15 years before we realized that we had accumulated a lot of experience. Soon after that, a client with a 14-unit apartment building we managed offered to sell it to us. Another client did the same and we bought that one. After repeating that through much of the late 1990’s and early 2000’s, we noticed that 100+ unit workforce type apartments out-performed just about every other type over the long term, but we did not have enough money to buy anything that big. About that same time, we ran into Mike Harmon, a fellow Notre Dame alum and friend of ours. He was interested in building a real estate investment company after spending a decade in consulting while buying and owning rentals of his own. The timing of that meeting and the match of our values and ideas were perfect and CEP was born.
Tell us about an accomplishment that shaped your career.
We won the Washington State Family Business of the Year in 1999 and that was the first time I realized that people were noticing just what we had created at Coast.
A few years later, something happened at our annual summer Coast employee event that I’ll never forget. It was my turn to take the mic and just as I stepped up to thank everyone for coming I looked out at this sea of 500 or so employees and their families and I lost it. It dawned at me right then and there that it is a privilege to be in a position to create jobs for people. I saw the pride and dignity our people felt and how it literally shaped their families, gave them a firm footing and sense of security. It’s had a lasting effect on me for sure and really shaped our idea of what it means to be a business owner.
What have you learned from 2020?
I’m actually amazed at how resilient American people are through the pandemic and social unrest. I never imagined people would be able to care enough about each other to go through what we’ve gone through as a nation this year and not see even more suffering. Inside of our companies, I see how our staff have responded, leaned on each other, and just stepped up with strong leadership at every level in admirable ways. I’m actually inspired by what I’ve learned even though there’s plenty of tragedy to go with it.
I did change a lot of personal and professional habits this past year. I’m in constant contact with our teams, other business leaders, family, and friends trying to bring support or guidance to whatever the circumstance demands. I had given up any social media and cut out mainstream media (with a few exceptions) some time ago and that turned out to be a great tool. By taking in news slower and not in the moment, it gave it time to curate, to be vetted, and for responsible journalists to do good work from which I could draw conclusions. That helped a lot as I think I made better decisions and gave better advice. It’s a habit I’m keeping as we round the corner into a year with this virus and start to open back up.
I’ve also become more prayerful and spiritual. There’s a mystery that we all know is part of life, but I have spent most of my life trying to tap out the mystery and find firm footing, safety, success or whatever you want to call it. 2020 taught me that mystery is part of life. Embracing it opens me up to my faith and spiritual side. There has been a ton of tragedy and pain through 2020, but I’ve stopped asking why and have simply learned to embrace what is.
Do you have any investment tips?
Shawn and I had the idea to start the first of the Coast Group of Companies in the teeth of a recession, so to some degree being recession-proof is baked into our experience and informs our investment decisions. Our partners and leaders share that same idea and it shapes what we look to buy at CEP and manage at Coast Property Management. By focusing on limiting risk, protecting downside and swinging for consistency and cash flow, our pathway has been maybe longer than others, but we have gotten to a good place even through the pandemic.
In our non-real estate investing, we take the same approach often investing in companies with strong sustainability, good cash positions, great leadership, a history of steady cash flow/distributions, etc. We are in the shelter business, so we like to look for businesses that tie to core human needs like that. We do dabble in some early-stage investments as well, but not much. They just present too much risk for us. Real estate has been our primary focus and it’s worked very well.