Tricia Esser, CEO, of architecture firm KTGY, on the fire escape outside the downtown Los Angeles location. (Photo by Thomas Wasper)
Downtown-based architecture and design firm KTGY is growing. The company – which specializes in residential and hospitality properties – recently acquired GDA Architects, a Dallas-based architecture firm specializing in high-rise projects, and also announced an extrinsic rebrand, pushing out a new logo and website.
The Business Journal sat down with KTGY’s chief executive, Tricia Esser, to discuss this expansion, as well as dive into current design trends, affordability and the company’s evolution.
Esser joined KTGY in 1991, at the time of the company’s inception. She started as controller and worked her way up, eventually taking the reins in 2006.
Tell me about your background. You’ve been with KTGY for over three decades. What’s it been like to rise the ranks and now oversee it all?
It’s so different now. People say, ‘how could you stay at one firm for that long?’ My response is always, ‘because it’s not the same firm.’ When I started, at the beginning with KTGY, we had 25 employees. It was really small, and I was the controller and helped them figure out how to run payroll and build the clients. And the company just grew over time and has changed so much. I went from the controller position to the CFO role and then in 2006 took over the CEO role. It’s changed a lot over time. It’s very different now than it was then.
What asset types are KTGY most passionate about?
We are designers so that’s where the passion lies – in great projects, great communities and enhancing what we’re living in. We look at living – whether you’re on vacation, whether you’re in your condo or your single-family home or your apartment, student housing – we’re looking at all of it. Anything residential, hospitality, retail-based, sort of where life is happening, is where we are most passionate.
KTGY has done a number of affordable projects. Why is KTGY interested in affordability and has this become a new focal point for the company?
I think affordable has been important to us for 30 years. I think the challenge that we’ve had is that it’s sometimes difficult to get communities to see that you can add a beautiful affordable project to your neighborhood that isn’t going to create a problem for your neighborhood. Our passion has always been there. Nothing’s changed, but we’re finally seeing more traction in certain areas – Los Angeles being one of those.
I think we have these preconceived ideas, all of us as citizens in our cities, especially the older we are, about what an affordable housing project is going to look like. We’re trying to prove that we can make that look better. It’s always been a passion. It’s always been a concern. We have to be considering how to house for all, and affordable is part of that. That doesn’t mean we’re not looking at market rate and those projects as well, but we’re happy when developers are saying ‘we think we can make this happen in this neighborhood.’
Tell me about KTGY’s research and development studio. What is it working on?
It’s very unique and it’s important to us. We talked years ago about what our clients are thinking about and trying to solve and whether there are ways that we can get ahead of some of the questions they’re asking before they ask them. Before they have a specific project, get them thinking about how we would go about it.
And so, for example, one of them that we’re working on now speaks to adaptive reuse. In a lot of urban cities, Los Angeles is one of them, where there’s a lot of conversation about adaptive reuse – adapting a commercial building into a residential building and how does that pencil – our research and development group, combined with construction and some engineers, came up with some answers on how to get there.
It’s an opportunity to say, ‘Hey clients, we’re one step ahead. Come to us. Let’s have a conversation about it.’ It just shows the clients that we’re not just robots doing whatever they’re asking us to do. We’re also offering a value back to them of a thoughtful approach on how to address a project.
Many developers are complaining about high interest rates and high costs of construction right now. Have these scaled back your designs at all?
I think, here in Los Angeles, it’s a combination of those two things and just overall uncertainty. Developers are uncertain right now about city legislation – which way it is going to go, where things are going to land. I think the heart is in the right place to try to figure out how to solve some of the problems down here, but at the same time, I think it’s created some uncertainty for our clients on the developer side. I do think that, across the country, we’re going to see a boost when we see construction costs come down a little bit and interest rates come down a little bit – I think we’re going to see more activity on the residential side. I think it could take a little longer for the city of Los Angeles to really feel a rebound because I think there’s some other uncertainty that needs to be solved.
Any plans for KTGY to venture into development itself?
I would say, while I’m the CEO, no. My feeling is we have to stick with what we’re experts at. I think we understand what the developers are asking, but only as it addresses the architectural or design specifics. I don’t think we should be in the development business. I think we’re experts at design and that’s where we should stay.
KTGY just announced it has acquired GDA Architects. Tell me about this merger and what it means for both companies.
We have wanted to be strategically in Dallas for years and have tried to find the right kind of marriage to be able to do that. Texas is a huge market. It just didn’t make sense for us not to be in that market. GDA has a specialty in high-rise (buildings) and, when you drive around Dallas and you find out what high-rise projects they’ve done, it’s astounding. They’ve been in business for 40 years. Their reputation is amazing. It seems to perfectly fit our portfolio to be able to add, not only the geographic location but also more high-rise work and be able to influence expertise for us across the country. I think what we do for them is provide the opportunity for growth because, when you’re a larger company, you have marketing, you have HR, you have all these resources that they don’t have because they’re smaller. So now they have the capacity to dive into our knowledge base and to grow that office in Dallas, which will be our goal.
Will future growth be organic, or will there be more acquisitions in the future?
We’re always looking for how we provide opportunity to people that are working for our firm. That opportunity could be moving to a new location to help start a new part of the business or moving to a brand-new location where we don’t have an office. That organic growth can, and should, always happen. If we’re doing it right, we’re providing opportunity for people. That should always be happening.
And then we’ll continue to look at acquisitions in locations where we want to be. We’re just starting this Dallas conversation in a lot of ways. We’re not the firm that’s going to get on the next acquisition next week. It’s probably going to be two years before you’ll see us do another one. We have to take a breath, get them integrated, figure out what Dallas looks like and then we’ll figure out where to go from there.
KTGY also just announced that it’s updating its logo and website. Any other growth plans or upcoming announcements?
We’ve done a total rebrand which has been really fun, and I think refreshing, to see new (signage). Dallas is definitely where we’re going to spend a lot of time and energy to expand and grow. We’ve also added a new principal in Chicago, Sam Luckino. We’ll see him grow our business in Chicago which is really exciting. Locally, we have Jordan Downs opening (KTGY is designing Phase Three) which is super cool in terms of a whole master-planned affordable community which is exciting. Across the country, there are just different things happening that provide a lot of energy. It’s been a slower year this year in terms of residential architecture (so) it’s really fun to have some things happening that provide energy and will spur us into 2025.
