Monday, July 23, 2018

A friend who has made a difference in the commercial real estate industry: Marjorie Tsang

Marjorie Tsang is a Visiting Scholar with the Johns Hopkins University School of Advanced International Studies on issues relating to financing climate-resilient real assets projects worldwide, an initiative on behalf of the UN Secretary-General.  She is a board member of the USAA Real Estate Company and an active member of WX (New York Women Executives in Real Estate), having served on the WX, Inc., and WX Charitable Fund, Ltd. boards and serving on the Philanthropy Committee currently.  Marjorie is an instructor for the REAP-NY program.

Marjorie served as a senior investment officer at the New York State Common Retirement Fund, the third largest public pension fund in the United States.  From 1999-2011, she was the Assistant Comptroller for Real Estate Investments with investment and asset management responsibilities for the Fund’s $9 billion Real Estate portfolio.  From September 2011 through August 2012, she served as the Interim Chief Investment Officer. Until her retirement from the Fund in 2014, she covered strategic initiatives including the Real Assets portfolio, asset allocation and the Environmental Social Governance program.  Marjorie joined the Office of the New York State Comptroller in October 1993 as Assistant Counsel for Real Estate Investments and later assumed legal responsibility for the Fund in all asset classes.  She received her BA from Yale University and her JD from Columbia Law School. 

Marjorie and I met like a lot of us in the institutional real estate world via attending conferences such as PREA (Pension Real Estate Association).  We’d cross paths periodically and catch up on things.  As I got to know Marjorie better I learned what a great advocate she has been, throughout her entire career, for women and younger people in the real estate industry - such an admirable trait to be so giving of your time to others.

Q.  How did you get your start in the commercial real estate industry?

A.  My first employer encouraged rotating through different departments. That was an important criteria for me when evaluating law firms.  I thought I was headed to a banking law career but the work didn’t excite me. Tax, trusts & estates and corporate law didn’t fit well either. I found that I could learn and apply the law but the passion was missing.  In contrast, by the time I got through a month of my real estate rotation, everything clicked.  I loved my colleagues, the clients, the work, the responsibility that was given to me as a young professional and the sense of accomplishment after a workout or closing.  And as all real estate practitioners know, real estate provides something wonderfully tangible, as well as its connection to people. 

Q.  What advice would you give to someone who’s been in the industry for a short time or a student looking to get her or his start?

A.  We all have to take a certain amount of risk in our lives. That may involve taking on a project that you don’t want, working with someone who terrifies you or going back to school when there are so many demands on your life. In the end, it will enhance your options -- opening up different paths that you could never have imagined.  

My life example of this risk-taking issue comes from my first career transition. After practicing law in firms for several years, I answered a New York Times ad for a real estate lawyer and joined the New York Common Retirement Fund.   I spent a few years leading the real estate legal department, and then was promoted, against my will, to be Investments Counsel for all of the pension fund's asset classes. I didn't believe that I could learn beyond real estate, and I didn't want to; but the general counsel said I had no choice.  I surprised myself by absorbing new fields of business, different terminology, conflicting policies and meeting people from vastly different backgrounds.  It was great. Having been inspired by this shake-up, I felt a need to do something new but to return to real estate. I saw that an asset management position would be opening up. I wondered, “Can I do that job?  I have a JD, not an MBA.” After endless self-doubts and debates with myself, I thought, "OK, let's give it a shot." I threw my hat in the ring.  I had to persuade key decision-makers, including the Trustee, Carl McCall, that I could serve the pension fund, the retirees and beneficiaries -- as a business person, not a lawyer -- managing the real estate portfolio for, what was then, the second largest public pension fund in the country.  That career risk paid off in multiples.  Never in a million years -- when I was in junior high school, when I aspired to be a lawyer -- did I ever imagine that I would be the CIO of a huge pension fund. 

As I encourage everyone -- including myself -- you have no idea what 10 years may bring.  Take the meeting, read the article, accept the nightmare project, invite someone to join you for lunch, take on a pro bono assignment, speak up even if you are the contrarian (but be well-reasoned).  Try on something new for size before telling yourself it can't work for you.  

Q.  As you look back on your career is there anything you wish you had done differently?  If so, what?

A.  For the most part I would do it all over again because I wouldn’t want to miss the people I met along the way.   I do wish I had taken my own advice -- to take more risk early in my career, visit different cities, volunteer for projects out of my comfort zone -- because every single task/assignment/trip reveals something new. This is my lesson even today: to do as much as I can, but not make myself crazy either.  

Q.  Who have been the major influences on your career?  How? Why?

A.  I’m sure everyone tells you that’s a very hard question and I put a lot of thought into this.  There are just so many. Here are three people who stand out and I realize I'm clearly missing some very important folks.

My father Robert Tsang, who is a first generation Chinese–American, didn’t have a chance to go to college. He was an entrepreneur and got involved in different business ventures and community activities.  He dragged me and my siblings along everywhere.  From the earliest memories he said to me, "You are going to be working and you can do whatever you want. You better work hard and you just have to do the best you can.” He was the kind of parent who left a list of potential colleges on the kitchen table to review over breakfast. Or, he would hear me talking on the phone setting up an interview and after I’d hung up he’d bark, “Call them back and do that call over.”  He demanded high standards through tackling new challenges and never settling.

Another big influencer is a law firm partner, Steve Buchman, because he told me the truth. He told me when I messed up, missed an opportunity or dropped the ball. As hard as that was to hear, it was couched in how I could reach the next rung if I were more aware of my impact.  I needed to hear the critiques because it forced me to step up my game since I wanted to do a good job on behalf of our clients.  He supported me when I was treated unfairly by coaching me to stand up for myself.  I’m still grateful to him and try to celebrate his birthday with him every year. Steve was also a big booster and fan of our clients.  I got to watch - through him - how to be not only a lawyer, but a solid corporate citizen and worthy friend.

And, then there was the irrepressible Alice Connell - whom we all miss tremendously (Alice died of a brain tumor in early 2017 at age 70). Alice and her gritty/gracious attitude, her can-do spirit. She taught me by example and often invited me to programs to open my eyes to new business challenges.  There wasn't anything that Alice wouldn't tackle and persuade others to follow if it were a noble endeavor.  Alice-isms -- and the way she enunciated them - encourage me still, when things appear dire and I hope they will improve. "Dear, hope is not a strategy!"

Wednesday, June 6, 2018

Alaska Cruise

When I was in my 20’s I saw an ad in the Sunday New York Times Magazine section that immediately grabbed my attention.  The ad was for an Alaska cruise and the photo showed the ship cruising between two snow-capped mountains.
I took this one!
Well, I finally did it!

This was my first real cruise. Thanks to the advice of some frequent cruise friends I contacted only one line: Regent.  Last Wednesday I returned from a 7-day cruise.  It started in Seward and docked at Skagway, Sitka, Juneau and Ketchikan before ending up in Vancouver, British Columbia (Canada). 

Regent is a luxury line.  The ship had 700 passengers and 465 crew…a pretty good ratio I’d say and it was evidenced in the level of service that exceeded anything I had ever experienced.  Everything was included (unless you wanted spa services ‘special’ excursions or an expensive bottle of wine) – at each port there were free excursions available.

I’m glad I took the trip.  The scenery was unbelievable. Alaska is one friggin' big place.  I saw some whales, sea otters, a bunch of bald eagles and one brown bear.  The only real disappointment was a special excursion I had bought that was cancelled due to weather conditions (it was cold, rainy and foggy the entire trip…except for the last day).  That excursion was a helicopter ride, which ended in a dogsled ride.  I had been looking forward to it.  Only on the cruise did I learn that the weather in Alaska at that time of year is like someone who lives in Sitka told me.  “We expect it to rain every day.”

Within a day or two of boarding the ship, a number of the crew members knew my name (and likely the names of many of the other passengers as well).  Pretty amazing I’d say, right?  I made some friends amongst the crew and learned a lot: they operate on 6 month contracts – they work on the same cruise for the entire six months, take two months off and then hope they get rehired - it may be for the same cruise or a different one. An interesting lifestyle choice.

One of the really fun evening activities was ‘Crew Capers’ where members of the crew performed.  More than 70% of the crew is Filipinos.  Multiple others came from Serbia and South Africa - customer service is in all of their DNA’s. 

Each suite has it’s own balcony. I spent a lot of time on mine watching the scenery, writing, thinking. The Alaska landscape is awe-inspiring.  My suite was the smallest but still luxurious.  I did meet a couple that invited me to see their suite.  Wow!  It was as big as my one-bedroom apartment and had a balcony that wrapped around the front of the ship. Needless to say, it cost an arm and a leg whereas my just cost me an elbow!

The ports we stopped in were small towns (even the state capital Juneau is fairly modest sized).  The economy is oriented to passengers on cruise ships.  In one town I counted 16 jewelry stores! There were also a lot of vacant stores, some of which I learned are only occupied/open during the peak season - which is upon us.

When I stopped into the Visitor Center in Anchorage I met a woman. As we chatted I learned that she was Head of HR for 'Visit Anchorage!' I've already connected her with my partner Liz Weiner and they may be discussing us conducting some of our workshops in Anchorage. You never know!
Below are a few photos I took.  Early on the first morning aboard ship I saw a rainbow – it was special way to start the trip. From what I can gather I was one of the few folks that saw it – there are definitely benefits to getting up so early!

If you’re thinking about this type of cruise please reach out. I’m happy to give you more insight about my experience.


Friday, June 1, 2018

A friend who has made a difference in the commercial real estate industry: John Baczewski

John Baczewski, CPA, CRE is president of Real Estate Fiduciary Services, LLC (REFS), which provides independent fiduciary services and consulting to institutional investors. He has over 30 years of experience in institutional real estate investment, finance, management and monitoring, along with 10 years of Big Four public accounting experience.

Since 1999, he has been an independent consultant serving the institutional real estate industry. He has served as: chief financial officer of Pyramid Hotel Group; and managing director of business development for AMRESCO Advisors, where he was a member of the firm’s Management and Investment Committees. Mr. Baczewski also held real estate consulting and portfolio management positions with PricewaterhouseCoopers, the Frank Russell Company, Russell Fiduciary Services Company and AEW Capital Management.

He is a former Chairman of the REIS Board, a joint initiative between NCREIF and PREA, which promulgates information standards for the institutional real estate investment industry.

How John and I met: 
I don’t remember exactly.  It may have been at a NCREIF event or another industry event.  John and I hit it off right away (at least that’s my recollection).  He’s a very generous person and has contributed immensely to the institutional real estate industry.  As a person, John is a good guy.  He’s friendly, honest and forthright – characteristic I admire.  He also has a great, dry sense of humor, which resonates with me.  John and I are both early risers and some of our catch-up phone calls occur before the roosters are up!

Q. How did you get your start in the commercial real estate industry?

A.  I was an auditor with one of the largest public accounting firms and had several real estate auditing clients. One of those was a public REIT, which was doing very interesting things. As a result of that experience I was interested when a recruiter called me about an opportunity with a small, innovative real estate firm.  They were looking for a portfolio controller. But the recruiter said something along the lines of “Don’t get your hopes up. They’ve been looking for months and have talked to everyone in town.”  I decide to go on the interview – with AEW. Given the recruiter’s warning, I figured the interview would last 45 minutes.

After I had met with a handful of people David Evans, CFO / Treasurer – who ultimately became my boss said to me, “We think you should work here” and about 6 weeks later, I did.  Looking back on that day of the first ‘interview’ I had no expectation I would be staying there 5 hours and talking with 6 or 7 people. All of those meetings were clearly impromptu, including meetings with AEW co-founders Tom Eastman and Peter Aldrich and other principals of the firm that happened to be in the office that day.

A funny anecdote:  you remember the big spreadsheets and flow-charts companies put together when analyzing a deal? David Evans very quickly walks me through a deal they just closed. The deal was laid out on at least six 8 ½ x 11 pieces of paper – taped together – that had been photocopied and were sitting on his desk. At the time, AEW prided themselves on doing big, complex capital structure deals. Tom Eastman is sitting there with us. After Evans finishes he asked me, “So, any questions?”  What’s going through my head is, “Hmmm, I’m not sure how much of this I actually captured.”  But I looked at it and said, “I do have one question.  You told me that the arrows represented cash moving from one entity to another.” David replied, “Yes.”  So, I say, “Okay, here’s what I don’t understand and I pointed to this spot in the middle of the chart. “I don’t understand this arrow because the way you explained it I would have expected the cash to move in the opposite direction.”  I don’t know if you ever met David Evans or Tom Eastman but Evans snaps to attention, he’s looking down and, remember those big pink erasers? He started rubbing away at the arrow and, of course, it’s a photocopy so it doesn’t erase. I thought Tom Eastman was going to fall off his chair. He was laughing so hard! I’m not sure if I’ve just embarrassed David or even did the right thing? However, an interview process is a two-way evaluation.  At the time I was a manager in a public accounting firm and then, as now, it was a pretty solid job.  There’s probably a level of tension when you don’t have work. But you’ll do a better job in the interview the more relaxed you are.

Q.  What advice would you give someone who has been in the industry a short time or a student looking to get his or her start in the industry? 

A.  There are a couple of things that I would suggest.  First: don’t limit yourself and be prepared to try anything.  If you get an opportunity to do something interesting, even if it’s not exactly what you thought you might start with, throw yourself into it and have at it because you’ll probably learn something. Odds are that if you’ve been asked, someone saw something in you that got them thinking you could be helpful.  Don’t limit yourself. Don’t say, “Gee, the only thing I wanted to do is, for example, to be an analyst who works on retail properties.” There just may be a broader opportunity as an analyst that supports another part of the organization that you may turn out liking as you get closer to it and more familiar. The second piece of advice is a little more unusual and a little gut-wrenching at times. That is: volunteer for messes.  In every company there’s something that’s not going well. And people are running for cover. Maybe there was a market downturn, maybe bad execution or something else like that.  If you have the opportunity to work on a mess of someone else’s making, particularly early in your career, remember: No matter what kind of trepidation you may have it’s very unlikely you’re going to make it worse. You just may be part of the team that makes it better. You’ll learn a lot through that. You’ll get to see some mistakes that other people made. That won’t preclude you from making a mistake but the experience will more easily help you find a solution.  So, volunteer for the mess – that’s always been a great learning experience for me. 

Q.  As you look back on your career is there anything you wish you had done differently?  If so, what?

A. I don’t tend to be a look-back guy but you’ve gotten me thinking. There were some things I didn’t do, because I was too tentative. I should have made different and bigger mistakes than the ones I made. At one stage of my career I spent a lot of time trying to find the job that would expose me to global real estate activities. I never did that but I probably should have; I should have worked just a little harder at it – to find that job that would have broadened my exposure.  It’s one thing that I thought I always thought I wanted to do and never did. 

Q.  Who have been the major influences on your career? How?

A.  There are a number of real estate people who deserve mention but I’m going to start in a fairly unlikely place.  I had an accounting professor when I was a freshman at Merrimack College - Dick DelGaudio. In those days accounting professors tended to be a lot like everyone thought of accountants.  They were serious; conservative and pretty buttoned – up.  Dick was incredibly serious about the material and very smart – after all he was the professor. But he spent more time in his classroom exhibiting his personality while we were covering the material. The lesson there was even if you’re doing something that is very serious you don’t have to sacrifice your personality. It was a while before I realized how important that lesson from Dick was. But the real thing that he did for me, was he force me to go on the interview with Arthur Young, (now Ernst & Young)

It was a co-op program. I started working there after my freshman year in college. Dick refused to send me on any other interviews unless I did that first.  I didn’t know what a public accounting firm was. I didn’t understand it and couldn’t imagine it was something that a kid from a small town could do. So, if you want to talk about influence, that’s probably the biggest one because that was a pivotal point in my life.  I was a young, impressionable kid. I’m still friends with Dick today. 

There’s no shortage of real estate people that I worked with and who have had an impact on my career. Early on at AEW Tom Eastman and Peter Aldrich. It was just so interesting to watch the way they managed a growing company; how they created an environment where, not only was it acceptable to make a mistake but if you made a particularly big one, it might be celebrated in front of the entire firm. They didn’t have to tell me twice.

Peter Aldrich asked me to evaluate membership in NCREIF (National Council of Real Estate Investment Fiduciaries) where I met Blake Eagle who also became an influence on my career. Peter’s advice before sending me to NCREIF: “When you’re going out into the marketplace, if there’s an argument, be involved.  It doesn’t matter if you’re right or wrong.  People will remember that you were engaged, not necessarily what you said – don’t be shy about it”. Blake was a very thoughtful, even-handed consultant, who’s now retired. The lessons from Blake were simple and reinforced some of the lessons I had already learned. These included always listening to people - you might learn something.  Ask a lot of questions. Think about your clients – something I already knew but Blake opened my eyes to another way to do it.  Those are the people who I would say had a strong influence. How do you find those people in your career?   Well, they don’t come to you and announce themselves. Sometimes you need to ”hang around the hoop” a little bit  and watch – maybe mimicking their behavior a little bit.  There are a lot of articles published for people seeking mentors and being a mentor and how important it is: it’s really important.  Don’t worry if you can’t find a mentor quickly: they’ll appear in your life and, curiously, they’ll appear when you need them.  Even though sometimes you don’t realize it at the time.

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