Thomas Capital Works with Investors on Real-Estate Projects that Deliver Returns
When future Thomas Capital owner, Jeff Donalson graduated from the University of Florida with a master’s degree in environmental engineering, he went straight to a job in Miami. He quickly realized that wasn’t for him and returned to his native Winter Haven, where another job awaited.
After three years, his life was not what he expected. He had to find his own work, navigate systems with city and county officials, and write Requests for Proposals (RFPs). “I got good at that,” he said. “But I looked in the mirror after three years. I had just finished designing a $50 million reverse-osmosis system for Clearwater, which was about to be constructed. I was working 12 hours day, making $50,000 a year. That was crazy.”
So, he started talking with family and friends, saying, “We should start buying things.”
“I had the knowledge and willpower,” Donalson said. His idea turned into Thomas Capital, a Winter Haven investment group focused on developing alternative real-estate opportunities in Florida.
Thomas Capital – named after Donalson and Brad Lunz’s middle name Thomas (notice the two Ts in the logo) — started off as a grassroots company, first buying the Gourmet Goodies building in downtown Winter Haven. “What I did was get a map out. I looked up commercial retail. Anything that popped up in Polk County, I knocked on the door of tenants” and started asking them questions like the square footage of their leased space, when their lease expired, and what they liked and didn’t like.
He developed a list of 300 tenants. When that first building was under contract, he looked for what was missing, then moved to buy a building in downtown Bartow. Again, he knocked on doors. “Do you want to become a tenant? This is what we do,” he said. “We find businesses that had willpower and a business plan and we got behind them. We don’t overcharge on rent; we want them to survive, not just get by.”
Before long, he and his business partners had half a million square feet of commercial property. “It was a great time to buy, but no one knew that at the time,” he said, adding that his buildings have been 100% occupied since then.
On one project, Donalson wrote the RPPs while Lunz did the designs. “He gave us our seed money to get started. He’s a member of the company.”
Donalson said he’s an entrepreneur. “That’s what’s ingrained in me. I’m always looking at something and saying, ‘I can do that better.’ What makes or breaks it is trying to figure out if I can get it done in capital, time, etc.”
He loves to learn and continues to do so. He runs acquisitions for a $500 billion real-estate investment trust (REIT) in New York; REITs allow individuals to invest in large-scale, income-producing real estate – what Donalson is doing locally. “I learn a lot of lessons through other people’s mistakes.”
Donalson lives by the principle of “Hell Yes or No,” he said. “We didn’t buy anything in 2022 or so far in 2023. We’re simply managing what we have. We’ve maintained full occupancy and had a lot of renewals we didn’t expect, especially those that are citrus-based,” a segment of the economy that’s been especially hard hit.
Right now, Thomas Capital has several properties under contract in Winter Haven and inside and outside the city limits of Auburndale — all for less than $100 a square foot in good locations, he said. “I’m excited to see that.”
A Prestigious Award
In January 2022, Thomas Capital completed the development of the country’s first modular Jimmy John’s double drive-thru concept – a result of the COVID pandemic. “It’s not really what we do, but it was an opportunity. How do I fix this problem?” he said.
Inspire Brands, which owns Jimmy John’s, couldn’t open a restaurant on the Winter Haven site because it couldn’t get financing. And, at that time, no one could eat in a restaurant. So, the new modular building was designed for drive-up and walk-up traffic. He ended up being part of a team that took his concept and made it better. “It took 120 days of total development time, and it’s revolutionized quick-service restaurants,” he said. “We started an industry trend and won an award in January for Best New Prototype in 2023.”
The goal is to add to his portfolio, he said. He wants to continue to “take local investors who don’t know what to do with their money and introduce them to an institutional level investment structure.”
He and Lunz are involved with transforming The Ledger property in downtown Lakeland. “Structure is important,” he said. “All of that is important to an investor, but they don’t necessarily know it until they experience it.”
An example: In Gainesville, he worked with another company to buy a value-add apartment complex, capping any of Thomas Capital’s return on investment around 40%. “We brought equity and structured it in a way we would be able to buy out the partner if everything went bad. We wouldn’t go bankrupt. In the end, we sold the complex for almost three times what we bought it for. We gave our investors over a 40% return 18 months later. The partner’s investors got over 200%.” Everybody has to have an alignment of interest in a joint-venture partnership, he said. “We abide by simple principals that drive Wall Street; those are the ones we try to mimic.”
Donalson said he had no idea what the company would be when he started it 10 years ago, but for now, he’s happy with it. “I had a bigger ego back then. My humility has grown.”
Donalson learned early on that being a part of the community was important. He grew up on Thornhill Road in Winter Haven, “living” on horseback and driving cattle until he was 18, he said. His father was a cattleman until beef prices dropped; he then switched to citrus. He graduated from Winter Haven High School before getting his bachelor’s and master’s in engineering from UF.
“When I started working downtown, I realized I needed to get involved. Anita Strang was starting up Main Street Winter Haven, so I asked her to put me in the right room. She was running a wine shop, so I said, ‘Can you just put me to work on a volunteer basis so I can figure out what’s going on?’ All of a sudden I was the president of Main Street; simultaneously, I was also the head of Young Professionals. I was 27 or so and that went on for two to three years.”
He’s also served on the boards of the Winter Haven Chamber of Commerce, the Lakeland Downtown Development Association and the Boys and Girls Club.
Work – And Beyond
Donalson loves working for himself, the ability to do what you want. “A big part of my business is not being tied down, creating financial freedom. I have 3- and 4-year-old boys, and I spent two months with them this summer on and off. My wife is an attorney, just starting her own office, so it was great to have the flexibility I have.”
His parents are workaholics, he said. “I never thought that was the way to live. They are workaholics for somebody else. What’s the point of working if you can’t enjoy your life? I have to repeat that to myself every day. I will do something really intense, hard, then get it stabilized quickly. Then I manage that. I have one employee in my company, my dad, who is retired and does a little property management for me. I don’t need a big staff. I’m more efficient these days. Using people outside your company these days can be a little easier.”
He’s created many efficiencies that help. “Part of my structure is one-click spreadsheets that do everything – investor statements, sales tax. It’s pretty much on auto pilot to the penny – it’s very accurate.”