John Breaux is a partner at Lexxus, Prague's biggest residential real estate agency, and a fixture on the local real estate scene. His career began at the fledgling company over 10 years ago, when it boasted just five employees. Breaux sat down with The Prague Post at the Lexxus New Home Center on Panská street recently to discuss the path that led him to Prague, and the future of the city's increasingly competitive residential real estate market.

The Prague Post: You've been in Prague for more than 10 years. How did you get here, both geographically and career-wise?

John Breaux: I started in commercial real estate doing investment brokerage and advisory work in New Orleans, and from there I moved into institutional asset management. There was an oil and gas problem in the South in the mid-'80s that led to a savings-and-loan debacle in the United States, and the commercial and residential real estate markets went into the tank. So I moved into asset management and restructuring work for the Federal Deposit Insurance Corporation. When banks went bankrupt, all the assets from the bank were transferred to the FDIC, and there a real estate group was established to help restructure and dispose of all the assets accumulated through this debacle. I worked with them for a number of years and then moved over to an insurance company in Atlanta doing the same thing.

I came to Prague on holiday in 1992, and when I returned to the States I decided to sponsor an exchange student from Prague. He stayed with me for a year in Atlanta, and when his parents came to visit they invited me back to Prague. When I came here his father showed me around town, and I could see that there were a lot of opportunities in the marketplace. In the summer of 1995 I came back to visit them again, and made the decision to stay. I went back to Atlanta, quit my job, put my affairs in order and moved over here not knowing a soul except this one 18-year-old and his family.

TPP: How did you find your niche in the real estate market?

Breaux: I met a guy called Roman Miča who at the time owned Lexxus. Roman is a Czech-American from Chicago whose wife was working setting up the Arthur Andersen office in Prague, and there were no English speakers that could help the Americans, Brits, Irish and others find housing. Roman found himself going through the newspaper, talking to owners and finding housing for the Arthur Andersen people, which led to the Pepsi people, which led to the Philip Morris people and so on. When we met in 1995, he told me that once people found a house and got settled in, they often needed office space. He said, 'They come to me and I don't know anything about the office market — this is your background, would you like to help me?' And that's how it started.

TPP: You deal almost exclusively with residential properties now. What happened to office space?

Breaux: I still do it from time to time, but it's very boutique. I could probably count on one hand the commercial tenants we've worked with — the most recent being the European Union. But our core business is residential, so that's where we want to keep our focus. We feel we should stick to what we know best, and what we know best is residential.

TPP: What's the most notable trend in the Prague residential real estate market today?

Breaux: I see the market becoming more professional on the residential side. There's no national association here on the level of the National Association of Realtors in the United States; there isn't a fixture that requires professional licensing, certification, continuing education and such. I think we're going to start moving in that direction and I think consumers are going to see that and start demanding it from agents.

We're also seeing an influx of international companies, just like Cushman and Wakefield and Jones Lange Lasalle are here in the commercial sector. It's a natural thing that's happened in Western Europe — and it's a good thing, because it continues to establish professional standards for the industry.

TPP: How do you expect the increased competition to affect Lexxus?

Breaux: Well, the increase in competition is inevitable, and the thing we're most proud of is that we've been ahead of the curve in terms of establishing standards of reliability, professionalism and courtesy. We're representing more than 60 developments, and I think that says a lot for what we can give to a developer and what we can provide to the end consumer who comes in to buy a house or flat, or for an expat moving here and looking to rent.

TPP: How do you see the rental market developing in the future?

Breaux: I think it will grow a little bit larger, mainly because of the changes in rent regulations. More and more Czechs are going to want to get out of the environment that they're in. Their income is increasing and their lifestyle is going to change.

Also, for many years Prague has had very steady investment from wealthy private investors, but now we're seeing institutions that are interested in buying into the residential arena. In the United States, investors always have a varied portfolio, and residential is part of that. But in Prague we don't have the same kind of rental market. I think that trend is going to change slightly, in that we're probably going to see more rentals geared to expats coming in for short-term contract work.

Most of the people who are coming in now are signing one-year contracts. They're looking for furnished apartments and amenities. They have to go to work and they want to take it easy when they get home — they don't want to have to worry about things. So the rental market is shifting a little bit toward having quality furnished apartments in good locations. We've got all of that, but now it's about putting it all together into one package where an investor can buy a block of apartments.

TPP: Where are the ideal locations for those types of apartments?

Breaux: Prague 1, of course, and Prague 2. The Malá Strana part of Prague 5 is ideal, and even parts of Prague 3 — the parts closest to the center, like on Italska for example.

TPP: Where are locals buying?

Breaux: We're seeing a lot of attention in areas that were pretty much sleeping for a number of years. Karlín, for example, is back on the map. Holešovice, with Prague marina, is really putting Prague 7 on the map and getting a lot of attention now, because you've got something akin to the Docklands in London. Prague 3 is still kind of sitting; it hasn't hit the map as hard as it could. Prague 6 is always a favorite because it has a lot of green space and fresh air, proximity to the airport, proximity to the center, the International School and so on.

TPP: What do you anticipate further down the line, once the obvious areas begin to get saturated?

Breaux: Well, the Czechs don't really think in single-family homes; this is a culture based on living in an apartment in the city. But we do have developers who are looking at buying plots of land to build subdivisions of single-family homes right outside the center. It's inevitable that there's going to be development outside the city. We hear talk about Prague 4, developers buying land in Modřany and out toward Barrandov as well.

TPP: With international companies coming into the residential market, what will give Lexxus the edge?

Breaux: I think what we've developed here is something that you don't see anywhere else. We've taken the best of the British and North American models and put them together to have a hundred agents working on selling everything from the new developments to leasing a flat to selling villas in Prague 6.

We also deal with other segments of the market. Lexxus Classic works on resales for people who have owned homes for several years and are looking to sell. We have a sister company called Realitni Svět that handles the opening price points in the marketplace — people who have a panelák apartment, or something that would be considered more of a starter home. These customers work with Realitni Svět to market and sell their property, and work with our New Home Center to buy something in one of the new developments. So they get to trade up.

We're really covering everything from soup to nuts now. When I started we had five people, and now we have 105 including back office. And we're very proud of the fact that we have virtually zero turnover in agents.