Headquartered in Dallas, HPA has 364 employees spread throughout 11 U.S. and five international offices. It does approximately 100 projects per year, totaling more than $6.5 billion in construction. In addition to architectural services, the firm does interior design, landscape architecture, civil engineering, construction administration, real estate development, and even has a recycled glass surfaces business and a luxury aircraft charter service. Recently, Texas Architect Editor Aaron Seward sat down with founder and chairman Mark Humphreys, AIA, and new CEO Megan Dimmer, who joined the firm from leadership roles in the tech industry, to discuss how HPA became what it is today and where it’s headed.
Mark Humphreys: I have a question for you. Why did you choose to talk to us?
Aaron Seward: I’ve been fascinated by your firm for quite some time.
I’m fascinated by the business-centered approach and how successful you’ve been. Most architects struggle to make ends meet, and you just
keep growing. I wanted to find out what was at the heart of that.
MH: Aaron, it’s pretty simple. There are two architects: a rich one and a poor one. Seventy-five percent of architects approved by the AIA are really artists, and 25 percent are into the business of architecture. I decided at a very young age that I wanted to be an architect. Before that, I wanted a Learjet. One night I woke up in the middle of the night and thought, I need to have a business to have a Learjet. So those two motivations came together over time. I needed to own a business, and I liked architecture.
AS: What was it about architecture that attracted you initially?
MH: I wanted to be an aviation designer. I went to architecture class in high school and I was very, very good at it. There was a citywide competition by this national association of homebuilders. It was a competition between every architecture student at every school, and I won. I decided on Texas Tech over UT and worked my ass off up there. I worked in engineering and worked for an architect developer that did apartments. I eventually had 12 students working for me. I had a little deal with the school secretary, where she gave me leads of people calling in and saying they needed an architect. I did restaurants; I did office buildings; I did apartment projects; I did houses; I did additions to churches. Then I worked with another gentleman here [in Dallas] for 13 years.
AS: I’m curious about the expansion of the firm throughout the U.S., but also globally.
Megan Dimmer: There are a few different global diversification scenarios. We have offices in Vietnam and Montevideo, Uruguay. In Montevideo, we have 45 people.
MH: We’re the largest architecture firm in Uruguay.
MD: We have really talented architects in an economy that allows us to do things much less expensively. It just kept growing because it works. Vietnam is another — the wage is such that it makes sense. In [the Vietnam] scenario, they’re awake when we’re asleep, so we’re truly able to work around the clock. In some of the other locations — Canada, Mexico City, London — these are places that had a need. London is a great example. You have architectural firms that have been around for hundreds of years, and you have some of the best architects in the world, but they don’t know how to design for-rent apartments. They just don’t.
AS: Multifamily housing seems to be a specialty of the firm. Most of these awards here in this conference room seem to be for multifamily housing projects. How did you decide to focus on that market sector?
MH: When I look back, there are certain triggers in my life that have brought me on the road to where we’re at. Any architect can draw, but you need someone to pay you to draw. As time went on, I gravitated more toward real estate development projects for architecture, hotels and retail and homes, mass production homes, and apartments. Everything dramatically goes up and down in every sector — and when it goes down, it goes down flat for five, seven, eight years — except for apartments. So that’s how we gravitated toward that area. We fixate on a business model that we are an expert in. We got into apartments largely before it was considered institutional investment quality real estate. Before then, big companies would never invest in apartments. They would invest in hotels, office buildings, stuff like that. But then they started noticing, hey, we have 40 percent hotels, 40 percent office buildings, 10 percent retail, 10 percent apartments, and they go, during the recession, we had no defaults on the apartments. None. Zero. So they come back this time around and go, okay, we’re going to do 40 percent apartments. It’s the number one investment choice of all real estate investment companies, because it’s the safest. During a recession, a few people move home with mom and dad, but you don’t buy a house, and you’re not traveling, you’re not going to hotels, you’re laid off, but you have to have a bed to sleep in.
MD: We have positioned ourselves as the go-to multifamily architecture firm, globally. And although we do the other use types, and we do them well, to be the lead, and to take all of that experience and expertise and continue to hone it, and to take all the lessons learned from all the relationships — I mean, we’re still doing projects with people the firm started working with 20-plus years ago. And we have a research and development group. One of the things we are finding is that the length of the construction period is growing. When you are designing a project, you have to have the future in mind. We think about the impact the future will have on the developer to anticipate changes in the market during the construction period.
MH: Our whole essence is think different. It’s even evident in the names of our conference rooms in Dallas. We did a renovation on our space, and we needed to name the conference rooms, and I had in my mind what I wanted to do. This was kind of controversial, but I stuck to my guns. We have the Tesla room, we have the Elon Musk, we have the Bill Lear, we have Hedy Lamarr, and Steve Jobs. [There are also conference rooms named after Grace Hopper and Shirley Ann Jackson.] Those three gentlemen — Bill Lear, Steve Jobs, and Elon Musk — they all have the same catch phrase, and that is think about what they don’t have out there, that we can create, that will fill a need maybe not even known.
MD: So once they have it, they can’t live without it.
MH: So just think different. It’s a business and the architecture is a means. I own five businesses and it’s one of them. I believe in having non-architects running and marketing the company. If I ran an aviation company, would I have an aerospace engineer running the company? No. I’d have him design an airplane. He doesn’t have to worry about financing or how to market it. You asked the question of why we are business-centered, and how we got to where we are, and that’s how. It’s a good situation. Your profits are higher when you’re large. We have centralized financial business development. Between us friends, we have the architecture fee, the interiors fee, the landscape fee, I did the developer fee, and we will gladly make their countertops for them.
MD: We have what we call shared services, so all of those things, those departments that cross over the different lines of business, so civil engineering and architecture and interiors and our glass recycled services business, and our real estate development company, all need marketing, they all need sales, they all need business development, they all need IT, they all need HR, they all need legal, so we have a centralized hub for shared services that supports each of those, so it really allows us to leverage resources.
AS: Is that hub here in Dallas?
MD: For the most part. That segues a little bit into the new leadership team. On November 1, I took the CEO role and Mark took the chairman role. We made the decision to strategically put leaders in different places around the country. We promoted an individual to lead architecture who is based in our Newport/L.A. offices; we hired a new chief operations officer based in our New York office. Our chief innovation officer is in Dallas part time and part time in our Montevideo office. And we are putting leaders in all of our regional offices to really regionalize.
MH: She’s talking about the philosophical direction we’re headed.
MD: In January, we established a vision for 2024. The goal is for us to be the ideal design partner that delivers seamless experiences through thought leadership and value creation. We want to create inspired, influential, and impactful design. We want to drive increasing levels of creativity. What we’re wanting to do is start collaborating amongst all of the offices and start becoming one cohesive organization, which makes us that much stronger. We can work on projects from all different places together, and it’s changing the face of who we are. We’re coming out with a couple of new prototypes that we’ll be launching — like our Big House®, like our E-Urban® — driving efficiency for the clients as well as staying ahead of the curve.
AS: And the prototypes drive efficiency because they’re standard designs that you can then roll out —
MD: It’s twofold. There’s efficiency within the building: So, we are focused on how can you get the most units for a client so they can get the best rents. This goes into the whole world of where architects typically don’t think. Mark being a developer, and us being a developer’s architect, as we like to call ourselves, we’re thinking about, how do we design this project for that developer so they are going to get the biggest bang for their buck? And, obviously, then they’re going to turn around and use us again because we’ve then helped them. The next piece of it is, they can reuse the design as long as they’re working with us. We can do the Big House in multiple different places around the country. Mark has always said be friends with your clients, which is obviously a good thing to do. I had a meeting with one, and he said “What I really love about working with you guys is, I can be in one of my projects, it doesn’t matter where in the country, but I know I’m in one of my projects.” So we’re going to design it so that you have that same experience, and that’s a brand statement. A lot of times, they want their tenants to move from one of their projects to another as they move throughout the country, or as they just want to move into a new building.
MH: I don’t know another architecture firm that can design a product,
like the iPhone, where you have to buy it from us.
AS: Was the Big House the first of these prototypes?
MH: Yeah. And the sales on the Big House have never dropped off. It has continued to grow. And our E-Urban is about equal to that.
MD: The E-Urban is actually starting to surpass the Big House. The next prototypes are the House America prototypes. If you can do it, efficiently, quickly — because obviously the cost of construction is killing everybody — if you can have some consistency in construction, and the methodology, and you can build quickly, you’re going to save a lot of money, and you’re going to save time. We have to make sure legislation allows for it.
AS: On your website, you talk about entrepreneurial spirit, and internal competition to drive success. Is that still a part of the culture?
MD: So our values are humble, hungry, and smart. As for the internal competition piece, I think the culture is shifting more to a collaborative culture.
MH: I think that has a negative connotation, to say competition internally. It’s not competition, it’s a little bit peer absorbance.
MD: It’s become more of an efficiency statement. If you think, a lot of the vernacular has been around the competition part being this billing perspective, and this financial perspective, but what we’re moving toward in our new culture and aligned with our new vision is for everyone to think, “How can I work most efficiently? I’m going to design a quality product, a quality deliverable, but I’m going to do it efficiently.” We’re giving [our employees] the technology and the tools that they need to do their job and the training that they need to do their job well. If you’re doing it efficiently, you’re thinking about it being a business. If you’re not doing it efficiently, you’re not going to accomplish that business aspect of it. There is an element, though, I think that people miss: We are trying to house America, truly. We want to be at the forefront of that movement, because there’s a need, and we want to be known as the firm that’s housing America — and that is from affordable, to luxury, and everywhere in between.
AS: How do you encourage your team to be more efficient with their time?
MH: We have a spreadsheet that comes out every Monday morning —
MD: It is changing significantly, though, so I think the whole competition part has proven to not drive the best behavior. We’re modifying the culture, there. The purpose behind it is —
MH: Information. They know what’s going on.
MD: We grew so fast, and we had to put infrastructure in place to support that. The spreadsheet that Mark’s referring to is essentially resource planning. The insight you get from leveraging this information is, say, how many hours are you budgeting for any given project? So you know how many hours you are expecting it to take. We’re saying, if you do it efficiently, it should take you that many hours, or less. And we’re giving people, as I mentioned earlier, the tools to get it done. And, obviously,
the other part of this is the fee.
AS: How do you do the fee calculation?
MD: We’ve been really good at capturing data, over time. We know what it takes, and we know how long it should take you to do it. We’re also exploring artificial intelligence, which I think is super cool and super cutting-edge for our industry. More on that to come. In your next interview we’ll talk more on that.
AS: Has the company grown at a pretty steady rate since the beginning, or did it really take off after the recession?
MD: In the past seven years, we have increased in full-time employee count by 98 percent.
MH: During the recession, we were very fortunate. We gained total market share and never lost it. I went to talk to our president. We knew of government-guaranteed loans, and we tapped in on that, and we were the first and only ones doing it. What banks wouldn’t do an apartment loan if it was 100 percent guaranteed by the U.S. government? There is no risk. Zero. We’re it. We’re number one. We are the biggest apartment architecture firm in the United States. That’s a big statement. And we are the largest by a big margin — 20 percent or something, maybe more. I also made a statement to everyone in the company and everyone we’re hiring, and said, “If you’re not growing, you’re getting smaller.” There are firms I know of, several of them, who are in Dallas, who have 55 people. That’s kind of like, you’re not a big firm and you’re not a small firm. You’re kind of in this no man’s land. Three or four firms, they’ve said, “We’re staying where we are; getting larger is too much of a hassle,” or whatever. I wouldn’t want to work for a firm that doesn’t want to grow. Unless somebody moves, you’re not moving up. I mean, what kind of a statement is that? We had a client who takes photographs — the most expensive photographs that have ever been taken, $8 million for a photograph. He takes these photos, with the right lighting over them and everything. It’s not like they’re Vegas paintings, like an office painting, it’s not like that. They’re really, really good photographs. They are just beautiful. He’s a billionaire, he’s got it down. You buy early on, at $3,500 for that print. But he’s raising it monthly, and it’s going up $1,000 a month, and he’s lowering the amount of prints available. He has figured this game out.
MD: He drives the demand.
MH: But to an artist, he’s sold out. Now, I have news for that artist: Some of the most famous artists that we’ve all studied had assembly line paintings. They had people who did the landscape, people who did the foreground, doing this and doing that. So bologna to that stuff!