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Real Estate
Roy Carroll II
President and CEO, The Carroll Companies, 55
By Mark Tosczak
Photo by Stacey Van Berkel
On Dec. 1, 2009, Roy Carroll contemplated the $22 million he still owed to three banks for Center Pointe, a signature redevelopment project in downtown Greensboro. It was the most high-profile effort Carroll had undertaken. He had gutted a 16-story office building built in 1966 and turned it into a residential tower packed with condos selling for as much as $600,000. While such projects are common in big cities, it was new for Greensboro.
When he started Center Pointe in 2006, Carroll’s father told him, “Make sure you can afford the worst-case scenario.”
“And I kind of chuckled,” he says. “Things had been good for a while.”
Two and a half years later on that December morning, things weren’t so good.
Unemployment in North Carolina topped 11%, and foreclosures had soared to post-Depression records. Developers across the U.S. and in North Carolina were handing keys back to their lenders. Many of Center Pointe’s prospective condo buyers were backing out of sale agreements. While proceeds from condo sales had whittled Carroll’s $33 million project loan, he still owed $22 million, with the loan due for refinancing.
“So that morning,” Carroll says, “I’m like, ‘You know, I think I’m just going to pay that loan off, that $22 million.’”
Almost a decade later, Carroll has emerged as one of North Carolina’s most successful real-estate developers, leading a 400-employee company that has high-profile projects pending in Greensboro, High Point and Wilmington. Carroll estimates his portfolio has a market value of $3.5 billion, including $2.3 billion in completed apartments, mixed-use projects, self-storage facilities and raw land. He says he carries debt roughly equal to about half of his portfolio, which stretches across the Southeast to Texas.
Unlike most of North Carolina’s better-known developers, Carroll says he has no equity partners. In short, he appears to be in striking distance of billionaire status. The biggest part of his portfolio is about 15,000 apartments, spread across the Carolinas, Tennessee and Texas, that The Carroll Companies built and owns. (At a hypothetical $75,000 per unit, their value would exceed $1.1 billion.) The apartments provide cash flow even during a down economy, allowing Carroll more flexibility than more leveraged developers. “He can invest and then, as the market rises over the next seven to 10 years, he can see those rewards,” says Greensboro developer Marty Kotis.
While his business has expanded into other states, Carroll’s biggest mark is in his hometown. “He’s certainly changed the face of the city,” says former Greensboro Mayor Robbie Perkins, who is president of a commercial real-estate company. “He has a combination of vision and love for the city, and he’s shown it by making investments in places where others either couldn’t have done it or would have shied away.”
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Carroll says none of his peers at Southeast Guilford High School in the class of 1981 would have foreseen his success because studies weren’t his priority. “I got out [of high school] at 1:30 and drove a school-bus route,” he says. “My father always believed in working and really pushed me.” He also started a dozen or so short-lived businesses in high school and college. One was a partnership with a friend to build tree stands for hunters. The pair took the stands to a hunting show at the Greensboro Coliseum in the early 1980s. With dozens watching, Carroll’s friend inched up a tree to demonstrate the stands, hit a slick spot on the smooth poplar and fell to the floor. “We couldn’t give them away after that,” Carroll says.
What did work was what he calls “sticks and bricks.” When Carroll’s father, Roy Carroll Sr., was laid off from a grocery-store job in 1983, a family friend asked him to build a new house. The elder Carroll enlisted his son, then in college, to help. “After class, I’d come out and we’d both [hammer] nails and sweep floors,” Carroll says. “We did a big percentage of the work ourselves.”
The father-son duo soon had a company that built about six homes annually in the Triad through the ’80s. Carroll’s father ran the site crews while the younger Carroll handled billing and office duties.
In 1990, Roy Sr. sold his interest to his son, who earned a contractor’s license at Guilford Technical Community College. Instead of custom homes, Carroll envisioned a manufacturing mindset that employed the same designs repeatedly in various subdivisions. Over the years, the company has built about 2,000 homes in the Triad and still owns more than 1,100 lots.
As his real-estate experience grew, Carroll concluded recurring revenue provided by apartments could be more lucrative than competing with national homebuilders. He still builds a handful of single-family homes annually, but the focus has moved to rental properties and other ventures with steady cash flow. The company has opened five self-storage facilities, called Bee Safe, with 24 more being developed in the Carolinas, Tennessee and Texas. Four hotels are planned in Greensboro, High Point and Wilmington. Now, Carroll is contemplating investing as much as $100 million in the industrial sector for diversification.As a start, he’s considering a 300,000-square foot building on land he owns near downtown Greensboro.
In each of its property types, Carroll uses standard approaches created by his company’s own engineers, architects and interior designers. “We have it down to a science on what it costs to build that building,” Carroll says of the company’s apartment complexes.
Though he insists he has no desire to leave the Triad, Carroll is targeting faster-growing markets. In 2012, he expanded to Austin, Texas, where he says he now has about 2,370 units built or under construction. A year later, he moved into Nashville and now has 1,983 units in the Music City. The Texas and Tennessee capitals are among the nation’s fastest-growing metro areas, enabling higher returns than more stable markets like the Triad, Carroll says.
“We build pretty much the same apartment building, be it, you know, Charleston, Asheville, Nashville, Austin, Greensboro.” Land costs are higher in some places, but labor and building materials are similar, he says. The rents, however, are different.
In the Triad, an apartment might rent for $1 per square foot, versus $1.40 in Austin or Nashville.
“That’s why I get on a plane every 10 days and head out west,” he says. “I can get a better return on my investment.”
Still, Carroll’s biggest impact is in Greensboro. The Carroll at Bellemeade development adjacent to the city’s minor-league baseball park will include 289 apartments and a Hyatt Place Hotel, marking downtown’s first new hotel in 30 years. It’s on land that Carroll acquired more than 20 years ago.
“I’m not sure that people are fully aware of how significant Carroll at Bellemeade is for Greensboro,” says Zack Matheny, chief executive officer of Downtown Greensboro Inc. Carroll also played a key role pushing for the Steven Tanger Center for Performing Arts, to be built in the central business district rather than near the Greensboro Coliseum, Perkins says. The relationship got more cozy in December when the Greensboro City Council agreed to pay Carroll’s company up to $30 million to help build a 1,050-space, eight-story downtown parking deck.
In Wilmington, Carroll is planning a $200 million mixed-use development called The Avenue that would include apartments, a hotel and high-end retail that he says will be akin to Palm Beach, Fla.’s exclusive Worth Avenue. The site is near the high-end Landfall neighborhood and Figure Eight Island. He’s filed requests for building permits and estimates it will take eight years to develop.
Then there’s Furniture City, where Carroll was recruited by High Point University President Nido Qubein for a downtown revitalization project that will include a baseball stadium and conference center. The two men discussed Qubein’s vision of a hotel that can attract trade associations and non-furniture industry events. “Roy is a very logical, highly reasoned, intelligent business person,” says Qubein, who has known Carroll for 20 years. “I know how he thinks.”
Sure enough, when Qubein announced in September he had gathered $100 million in investments and development commitments for the project, a Carroll Companies representative shared the stage with the university president.
Long-term success in real estate requires patience and lots of study, Carroll says. “Before we built the first hotel, I went to every hotel conference that you could go to,” he says. “I’m still a student.” He visited Austin monthly for two years before breaking ground on his first apartment project. Prior to launching his self-storage business, “I studied everything I could, read everything I could, went to conferences.”
He’s also willing to pull back when he thinks a recession might be on the horizon. “Things today look kind of like ’06 a little bit,” he says. “I don’t think it’s necessarily 2018, but there is a recession somewhere. And I can tell you we’re putting capital on the sidelines and we’re going to be ready to deploy that capital when it makes sense.”
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As his businesses have grown, Carroll has gained notoriety in Greensboro. In 2013, he bought the Rhino Times, a failing weekly newspaper known for its anti-government venting. Carroll calls it a money-losing hobby in which his only role is to suggest story ideas and pay the bills. Its offices are housed away from Carroll’s headquarters. “I think there’s benefit to the community,” he says, praising its more conservative, skeptical style as a counterweight to Greensboro’s more liberal daily News & Record. “The local dailies, most of them have been cut back to the point where, you know, the poor reporters, they’re having to turn out a story every day.”
But Carroll is gaining influence in more traditional ways, gaining an appointment to the North Carolina Railroad Co.’s board in 2016. His wife, Vanessa, is a trustee at UNC Greensboro. He also formerly spent eight years on Greensboro College’s governing board, which his daughter joined last year.
Carroll has donated tens of thousands of dollars to state and federal Republican candidates, while making his presence felt in local civic circles. He says local elected leaders have at times failed to focus on creating jobs, and he criticizes them for feuding with influential state lawmakers, especially state Sen. Trudy Wade. Without fanfare, he says, she helped secure money for a big nursing school building at UNC Greensboro.
“One of the things in the Triad here we have failed at is building bridges to Raleigh,” he says. “Let’s face it. Megasites and things like that don’t happen in a vacuum.” Now, he says, local officials are much more focused on creating jobs.
Carroll and his wife live in a penthouse home on the top floor of the Center Pointe tower, while also owning homes on Figure Eight Island and in Palm Beach, Fla. The couple almost moved to Florida for tax reasons, he says, but cuts approved by state lawmakers starting in 2013 changed their minds.
In 2014, he bought a 154-foot luxury yacht for his wife and named it the Rhino. It is now up for sale. He’s since acquired a second boat, a 74-foot fishing boat called the Rhino Fish.
And there’s the ever-changing collection of Ferraris in a private garage in the basement of Center Pointe — seven on a December day. “I’m not a super car guy. I’m more of an economics fan,” he says. “I actually make money on Ferraris.” The Italian-made cars typically retail for $200,000 to $400,000.
Carroll sees his job evolving into more of a chairman role, with a greater focus on philanthropy and outside interests. Still, he reviews cost variance reports in the evening, sometimes asking managers for more details. And he likes spending time at work zones. “It’s in my DNA to get out on the job sites and walk around,” he says. There’s no intention of retiring anytime soon.
“I work around a great group of people,” he says. “I tell folks that we’re blessed enough that we operate in a pretty big sandbox. We’ve got lots of toys we can play with, so why do something else?”
Click the links below to read more:
The intro
The Power 100 list
Dale Jenkins
Leah Wong Ashburn
Robert E. Barnhill Jr.
Frank Emory
Mark Bellissimo
Icons and change agents