Gary recently retired from Ernst & Young (E&Y). He had been the managing partner of real estate transaction services. Prior to joining E&Y Gary was the head of real estate and financial products at Arthur Andersen. Gary continues his board involvement at Phipps Houses. Phipps Houses is the oldest and largest not-for-profit developer, owner, and manager of affordable housing in New York City. Its social services affiliate, Phipps Neighborhoods, provides children, youth and families in low-income neighborhoods the opportunities they need to thrive through comprehensive education and career programs, and access to community services. Together they are changing lives in New York City.
Gary and I met a number of years back when he moderated a panel at an industry event. He did a great job and I said, ‘Hey, I’d like to meet this guy.” And that started us off on a friendship that has weathered a number of industry ups and downs. The more I got to know Gary the more I learned how much he loves and appreciates people. He has been a mentor to countless people as they grow in their financial services industry profession. Gary is also one of my mentors. Gary is a connector and someone who loves bringing people together. He has dedicated substantial time to not-for-profit work and is simply a special individual.
Q. How did you get your start in the commercial real estate industry?
A. I started my career at Arthur Andersen working with clients in various industries. After my first real estate company engagement, I knew I had found my passion. I got hooked on the transaction environment and was fortunate to have worked with a number of great real estate companies. Clients like Tishman Speyer Properties and Zeckendorf and Co. were early influencers.
At Andersen I was in a position to ask probing questions to senior executives early in my career. “Why are you a net buyer/seller in this market?” “Why is your capital stack organized this way?” “Why do you believe that interest rates will move up or down and how does this impact your cap rate assumptions?”
As a learning ground, it couldn’t be beat. I was thrilled and energized to scan the New York City skyline and recognize I had inside knowledge of the motivations behind the trades that gave rise to the landscape. The real estate business is immensely interesting and to this day I am still growing/learning from that association.
Q. What advice would you give to people who have been in the industry a short time or a student looking to get his or her start?
A. For young people new to the business my advice is ‘Choose broad experience over narrow advancement early in your career.’ If possible, get a foundation in each part of the real estate business; acquisitions, property/portfolio repositioning, development, leasing, financing and dispositions. The broad foundation will give you perspective that will pay dividends throughout your career in any aspect of the business you decide to focus.
For those that have a few years under their belt, always remember, “Trees do not grow to the sky.” I remember hearing that phrase my second year in the profession yet witnessed some of the most intelligent real estate practitioners of the day get caught short in a market cycle.
Real estate markets are local, dynamic and perpetually moving. Real estate practitioners must stay nimble, recognize the shifting macro and microeconomic landscape, anticipate shifts to property performance and have contingency plans in place should results not match up to underwriting assumptions. Never become emotionally attached to an investment decision. Assess the market, re-underwrite your property/portfolio objectively and make the tough decisions as needed.
Q. As you look back on your career is there something you wish you had done differently? If so, what?
A. I retired from the real estate advisory profession this past year and have had a bit of time for reflection. Have I made mistakes throughout my career? Most certainly, but I would not undo them, even those that cost me dearly. It’s the mistakes and setbacks that give rise to the greatest opportunity for growth. We learn so much more from our failures than our successes and that experience is rarely transferrable.
My advice to young professionals/entrepreneurs: Do not be afraid to take a risk. Taking risk is an inevitable part of working in the real estate business. Don’t be paralyzed by this dynamic. Be thoughtful about the risks you take, weigh carefully the alternatives and ensure you are getting appropriately compensated for the risks you are underwriting with both your capital and your career.