Big Tenn: How Kyle Matthews Built a Successful Real Estate Brokerage in Nashville

Headquartered in Nashville, Matthews Real Estate Investment Services is the largest privately held brokerage in the United States. The firm boasts more than 1,000 agents across 25 offices, and has closed $54 billion in sales volume. Matthews sat down with Commercial Observer in mid-June  to discuss his life and career. 

This conversation has been edited for length and clarity.  

Commercial Observer: Talk to me about how you entered the real estate industry?

Kyle Matthews: I played football at USC in Los Angeles from 2000 to 2004, and we won national championships. And, so, when you’re a guy like me playing on a team that good, you realize very quickly you’ll probably have to find something else to do with your life (laughs). 

The NFL likely wasn’t going to be in my future. I played safety, and the guy who started ahead of me was a future NFL Hall of Famer named Troy Palamolu. As much as it was a blessing to play with someone that good, it’s a blessing, in retrospect, too because it made me aware that there’s a strong possibility you won’t play football for a living, and, naturally, you say, “What else will I do?”

I always had an interest in real estate. My dad owned apartment buildings, and as his oldest son, I had the privilege to go with him to collect rent or laundry money or pick out a new roof, so I found it fascinating — there was a building where people lived in, and they pay you rent each month. I thought it was the coolest thing in the world, so I said, “If I don’t play football, I want to pursue commercial real estate.”   

I identified brokerage as what would be the best dynamic for who I was in terms of my mindset, my mentality, and just also my options. I didn’t have a CRE finance degree, so that limits your options in terms of entry level into commercial real estate. My specialty in football was running down the field full speed putting your head against a metaphorical wall. Well, what better industry to pick than commercial real estate brokerage, where the first couple of years you pretty much run full speed and bang your head against the wall? 

Ha! Why put yourself through that again? 

What I loved about brokerage was it’s like athletics, where, in theory, the best player plays. If you’re the best player, you’ll see the field and eventually be the starter, and I felt a similar dynamic like that existed in CRE brokerage: Whether you’ve been in the business 20 or 30 years or two to three months, if you’re the best agent for the assignment, in theory you’ll get hired by the owner. 

Also, I loved that there was no income ceiling. The downside is you don’t make much early on — I didn’t make money for 17 months before closing my first deal. But I just love the idea of meritocracy, the idea that the best player plays, the idea that whatever you’re willing to put in overtime, this industry will give back to you.

And what made it difficult? 

Brokerage is very difficult. Historically it’s a 1099 commission job, so you must answer: How will I survive and pay rent if I’m not making money? The answer is either savings, borrowing money, or living at your parents’ house. In brokerage, it generally takes 12 months to earn your first paycheck. That’s a barrier. 

But the bigger barrier is the mental and emotional toll that rejection takes. If you’re starting out, you’re making 300 cold calls per week, you’ll talk to 100 people per week, so if you set three meetings that’s a good week. Three meetings out of 100 conversations, that means 97 percent reject you and said, “No, I don’t see the value in meeting with you.” A lot of times they can be less friendly.  

So you’re not making money, you’re facing rejection in both value and pain, and you’re so hopeful. Look, I don’t care who you are, it starts to wear on you. It creates doubt, despair, sometimes even hopelessness. That’s when most people quit, when they enter what we call “the valley of despair” and they never come out. 

How do you come out of it?

Credit to my parents. In my house growing up, to be called a quitter, it’s a four-letter word. In the Matthews family, you weren’t allowed to quit. Once you commit to doing something, you have to see it through, and I committed to brokerage. So, while the rejection was hard, because I knew I wasn’t going to quit, it freed me of that weight you carry of not knowing if you’re doing the right thing or where you should be. 

I remember saying, “I don’t care if it takes me five years to close a deal, I’ll bartend or valet cars on the weekend if I have to.” For me, quitting just wasn’t an option. It appears that’s not the case with a lot of people, they say brokerage is not my passion, whatever, but however they want to package it up, at the end of the they’re quitting and they’re quitters.

After working as an independent broker, what was it like to start Matthews Real Estate Investment Services?

Ignorance is bliss. When you don’t know what you’re getting into, it’s ignorant optimism. I was running my own team at Colliers, at the time there were four employees that I paid for. I had my own database, templates, training program, for goodness sakes — that’s what I needed to do to run my business. I said, “I’ll start my own company. What’s the difference? There is none?” I couldn’t have been more wrong. 

First thing is getting office space. You’re this new person and you want to take a nice pretty office, and they’re like, “You have no track record operating a business, so you’re personally guaranteeing this lease.” Then it’s, “Who will be your payroll provider? What about business insurance? Your D&O insurance? Your general casualty insurance? What about furniture?”

There’s so much that went into opening and operating a brokerage company as its own business. I ignorantly thought as an agent it was the same thing, but it’s not even close.

Matthews was founded in California but relocated to Nashville in 2019. Why Nashville?

The company was growing from 2015 to 2019, we went from one office to 10, and we had offices as far east as Atlanta. So I was traveling a lot, but traveling from Los Angeles is a challenge, and not just the time zones. I had three little kids, I have four now, and I just felt travel was becoming too much time away from my family, and I wanted to be at these offices.

We looked at different cities and eventually settled on Nashville for multiple reasons. No. 1, there’s a reason FedEx and UPS are centered out of Tennessee: It’s very central to the actual population center of the United States. But I had an uncle who played for the Tennessee Titans for a long time, so that put it on my wife’s radar. 

What makes Nashville different?

Simply put, it punches above its weight class. Nashville is not a big city, at least not yet. Certainly, we’re adding population each day, but for being somewhere around 30th biggest city in the U.S, you feel like you hear the name of Nashville in the top 10 of cities. The uniqueness of Broadway and the county music, the culture of the city, the “Nash Vegas” elements, where it’s a great time for young people, it’s the bachelor and bachelorette capital of the country — here’s a lot of that down here. There’s so much tourism in Nashville and it just dumps money into our economy, so, even if you’re not in real estate, it’s almost like everyone is talking about Nashville and visiting Nashville, and it creates a buzz. 

For development, in Nashville, it’s the total opposite of New York City and L.A. It’s what we all want and what you think a market should be. It’s like: “If you have a lot and the zoning is there, go build it.” What’s made Nashville so unique in the five years I’ve been here is the amount of cranes per capita — at any given time, it seems like there’s 30 or 40 cranes in the sky, and outside of Austin, Texas, it has to be the busiest from a development standpoint in the nation. The culture of the city is pro-development and pro-build. 

How has Nashville changed in the last five years? 

It’s a completely different city now than it was five years ago when I got here. Guess what happens to rents when you let people build a bunch of supply? They go down, so that’s one of the things I’ve been saying. Housing affordability gets brought up, but it’s not a housing affordability crisis, it’s a housing supply crisis. We need more supply. It’s not complicated in how to stimulate more supply — you’ve got to elect people into office to do that. 

What’s been fascinating to see is rents softening quickly in Nashville. They’re down year-over-year in the local market and it’s because such a huge amount of supply has hit the market in the last 12 months. 

It seems like the city itself has had a bit of a metamorphosis since the Tennessee Titans arrived 25 years ago. How would you describe the evolution of Nashville in the 21st century?

Before it kind of evolved into the modern city it is today, it was a culturally unique city. From what I understand, Broadway 25 years ago had the honky-tonks, it had the music, but it was a much tougher city; it was a traditional, blue-collar country town. Something happened the mid-1990s, maybe the Tennessee Titans relocating to Nashville put it on the map, but Nashville said, “We really want to lean into who we are in terms of our country music and attracting tourism, but at the same time, we do want to evolve, modernize and bring the city into the 21st century.” 

I wasn’t here yet, so I’m generalizing, but from stories locals have told me and that my uncle told me, the city has completely evolved and changed, starting with the physical footprint of the skyline. Five years ago, it was different. But there is a downtown feel now and walkability, whether its Germantown or the Gulch, there are buildings after buildings of mixed-use going up in urban settings, especially for young professionals who moved here — millennials or Gen Z, they live and work in the same area. Now there’s a real downtown. There’s also a really burgeoning restaurant scene, bar scene. It’s really become a very modern city in that regard. 

What makes Matthews different from other brokerages?

It’s a perfect intersection of culture and technology. When I was an agent at other companies, my experience was you do it yourself. I need help with underwriting — hire your own analysis. I need professional photographers — cool, do that yourself. As you grow in business, you’re managing a lot of these people. It takes time away from revenue-producing activities [RPAs]: calling, meeting, pitching or executing. If you’re not doing one of those four things as an agent, you’re doing something wrong. So, when Matthews started, I said we’ll build the best-in-class support system.

We call it the Platform. While we have 800 agents, we have close to 200 employees on the Platform. It could be property production, digital marketing, creative design, transaction management, financial analysis — whatever it is, the services to execute the blocking and tackling of brokerage are there for the agent so they can focus on RPAs.  

But what’s the difference in Matthews’ culture? 

You’re in New York? Stop by our office at 575 Fifth Avenue, come in unannounced, at 6:30 a.m., and tell me what you’ll see. I’ll tell ya: You’ll see a whole office filled with men and women professionally dressed at 6:30 a.m. 

You can’t force them in. There’s a difference between wants and needs in life. Everyone wants to be successful, but at Matthews we need to be successful, and, because our agents need to be successful, they’re willing to put in the work. It takes getting in at 6 a.m. It takes staying till 8 p.m. It takes making 500 phone calls. It takes securing four meetings per week. Not because we say you have to. It’s because this is what the industry has told us you need to do to ensure success. It’s a very hard job. 

It sounds challenging. 

It’s a culture of commitment, a culture of sacrifice, a culture of delayed gratification that exists here.

How would you describe your leadership skills? 

Lead from the front. I’ll never ever ask nor advise you to do something that I haven’t done. When I say early on in your career that you need to work like a maniac, 14 to 15 hours a day, I worked like that for a very long time. First-year agents, it’s your first week out of training, you don’t have any owners or relationships, you need to make 500 calls a week and set four to five  meetings per week. I did that for a very long time. 

Last couple of questions. What would you say your hobbies are? 

My hobbies are my family. I work and I dad, and I dad and I work. I enjoy working so it doesn’t feel like a job. I have four children between the ages of 3 and 13, and, if I’m not working, I’m with them. I coach as many of their sports as I can. Respectively, that doesn’t leave time for hobbies. 

What’s the best piece of advice you ever received? 

Life’s not fair. Life’s not fair, and no one said it would be. My dad would always tell me, and his dad would tell him that. Whenever something happens to me, our innate initial reaction is “That’s not fair, I’m a victim.” I immediately remind myself life’s not fair and no one ever told me it would be. 

I can sit here and be a victim and be victimized, or I can be like it is what it is, and how will I respond? Over a long enough period of time in brokerage, you start to realize everything in your career can be traced to what you did or didn’t do. 

Brian Pascus can be reached at bpascus@commercialobserver.com