A street from long ago

I saw Zygi Wilf's name in the news this week.  I guess if I were a follower of the NFL (National Football League...no, it's not soccer!) or of the Minnesota Vikings, I would know every move Zygi makes.  But I don't and I'm not too sure that I ever met Zygi but if I did it was after his uncle Harry died.  Let me explain:  In the 1980's a good friend of mine, Stan Berenzweig, who founded and operated a retail chain called "Rag Shop" introduced me to Harry Wilf.  Harry and his brother Joe (Zygi's father) came to the U.S. after surviving the holocust and got into the real estate business.  They developed and operate tens of thousands of garden apartment units (aka mutli-family housing) and eventually shopping centers which were built on the commercial parcel of one of their large apartment communities.  Harry took a liking to me and I used to go over to his modest house in Hillside, NJ (the same house he lived in for a long time) and we'd go for a walk, his constitutional, after dinner around the neighborhood.  I'll never forget the first walk.  We started from his house and we're walking down the street and we run into a guy.  Harry introduces me and as we walk away he says, "He's one of my partners."  I learned that Harry had a lot of partners.  During the time Harry and I knew each other I was working for a developer in New York called Mall Properties and he was always interested to hear what we were doing as I was to hear about what he was doing.  He listened to me and often gave me good advice....particularly when I moved from one house (that I could afford) into one I couldn't afford and for the wrong reasons.  I'd see him from time to time.  After a relatively long period between walks someone told me that Harry was sick; that he had cancer.  I called his house and said I had heard he was sick but did he want to go for a walk?  He said, not that night but to call him in a couple of days.  I did and he said, "Come over."  I got there and his wife met me at the door.  "He hasn't been out for a walk in quite a while but he wanted to walk with you tonight.  Don't let him go to far."  We walked.  We talked.  Only once about his health and then the subject was dropped.  He died the following week.  When I went to their home during the "Shiva" period his wife told me that I was the last one who he walked with.  He was only 68, the same age as my mother was when she died of cancer.  I sat down in a chair in their living room near his brother Joe who was totally distraught as you can imagine.  He was sitting with his head hung low.  After a few minutes, he looked up at me.  I said, "I was very sorry."  He said thank you and then asked me how I was doing; I realized that Harry and he talked about me.  Who knew?  I didn't stay too long and haven't had any contact with the family since.  Harry and Joe were from the old country as they say.  They built a business on being smart and tough.  One time when we were walking, I said, "Why don't I come work for you?"  Harry's said, "I don't pay my people anywhere near what you're making in New York (their company was based in New Jersey).  I have a lot of family that works for me. I don't pay them all that much but they earn a little piece of a deal that they work on."  He was describing the typical real estate family business model if you can call it that.  I have always cherished those walks I took with Harry.  I don't have anything more profound to tell you.  I guess I was just thinking back on those days after reading that Zygi Wilf lent three of his players his private jet to go to Hattisburg, MI to convince Bret Favre that he should play for the Vikings for one more season.  Seasons change.  Harry used to fly coach to Florida every winter!




On the road....
Aug. 23-Sept. 3:  The City That Never Sleeps
Sept. 3-7:  California Wine Country
Sept. 8-10:  IAmsterdam (INREV Meeting)
Sept. 27-29:  Tysons Corner, VA (NMS Fall Conference)
Oct. 4-7:  The City By The Bay (PREA Conference)
Oct. 12-15:  City of Magnificant Distances (ULI Fall Conference)
Oct. 19-21:  Lost Wages (IREI's Dealmaker's Conference)
Oct. 26-27:   The City So Nice, They Named It Twice (PERE New York Forum)

Photo:  My view from a beautiful grand piano in a classic hotel lobby this week. 







These are my views and not that of my employer.

While summer had historically been a slow time for business (it still is in Europe as they know how to live and take real vacations), this summer, like the summer of 2009, has been anything but slow.  We've been seeing and hearing about pension funds making new commitments to real estate.  Many of those are with managers with whom they have a pre-existing relationship.  But a number of them are with, for lack of a better term, emerging managers.  Some of these emerging managers are refugees from other, larger firms who have gone out on their own and who had built up excellent relationships with investors in their previous lives.  More investors have been telling me that they are getting ready to start investing with new managers again but probably not until 2011 (which amazingly is not really that far off).  European investors have really picked up the slack investing especially in opportunistic strategies (which has a more broad interpretation than ever before).  But then there's the question of "are there good deals to be had?" Which takes us back to the overriding issue, in my mind, of managing the expectations of the buyer and the seller....the familiar 'bid/ask' spread.  There's been some serious Canadian money flowing into the U.S. recently and that is a good indicator as Canadian pension funds have typically taken a more conservative approach to real estate investing (not unlike the overall Canadian culture).  So, as we get closer to "Back to School" (actually where I live in CA schools start on Aug. 18th) we are optimistic about the future as the commercial real estate industry has never been one to let a little thing like a global recession get it down.


Given the amount of airplane travel I've done in my career I feel compelled to at least mention something about that Jetblue flight attendant who made the news last week.  While there are always three sides to every story:  your side, my side and what really happened only those people who were there know for sure.   Flying is no fun anymore and hasn't been for some time.  I don't know how some flight attendants stop themselves from really telling some passengers where to get off.  I think that the Jetblue guy may have had a lot going on in his head personally and that this was just the straw that broke the camels' back so to say.  But the fact is that there are a lot of passengers who have no consideration at all for anyone else and that in itself is very sad as it's just representative of how our society has deteriorated.  But, I've seen some inconsiderate behavior on the part of the flight crew as well; so, it's like "F--k me?  F--k you!  But to me it all boils down to this:  The experience of air travel is so not fun that from the get-go (i.e. getting to the airport, checking-in, waiting on security lines, going through security and then waiting for your flight) equal an exasperating experience and one which, for some people, manifests itself in an "I don't give a shit about anyone else" attitude.  But, because I've loved (and tried my best to practice) Gandhi's quote, "You must be the change you wish to see in the world", I believe there is hope and it won't take much work.  Just be conscious of what you're doing and your surroundings and treat others like you want them to treat you.  You may have to grit your teeth as this is not going to change quickly but at least we can try.  Taking some poetic license with Arlo Guthrie's masterpiece, "Alice's Restaurant" I propose this:  If one person, just one person changes their ways it's a start.  And if two people do it, well, it's an increase of 100%.  And if 50 people, can you imagine 50 people doing it, well it then it's a movement.  We can call it "The Be Kind To Your Fellow Passengers (and flight crew) Movement".  And all you have to do to join the movement is be nice.


On the road....
Aug. 19:  America's Comeback City
Aug. 20:  The Steel City
Aug. 23-Sept. 3:  The City That Never Sleeps
Sept. 8-10:  IAmsterdam (INREV Meeting)
Oct. 4-7:  The City By The Bay (PREA Conference)
Oct. 12-15:  City of Magnificant Distances (ULI Fall Conference)
Oct. 19-21:  Lost Wages (IREI's Dealmaker's Conference)

Photo:  Amazing shot of the Schultz forest fire north of Flagstaff, AZ in late June.  22 Square Miles.  Caused by careless campers.          

















These are my views and not that of my employer.

July 30, 2010

There's a difference between diplomacy and politics. Others have told me that I'm diplomatic so let's assume that I am.  Some people are good at playing politics. I'm not talking about professional politicians although some of the folks I'm thinking of while writing this may have attended a Politics at Work Seminar at one point or another.  I've never been good at politics at work and when dealing with the pol pros sometimes, actually most times, I've lost out.  Not too bright of me you may be saying. A light bulb, or better a warning alarm accompanied by a police flashing red light should go off to alert me. But the idea of game playing just always been something I can't and won't do.  Listen, I try not to shoot myself in the foot anymore like I did earlier in my career and the way I do that is by biting my tongue instead of flapping it.  I've realized that not everything I think or say is right (only most of it :-) But to me that then gets into the realm of diplomacy (can you say 'keep your job'?) So maybe, after many years in this great industry and working in so many different environments (entrepreneurial, family-controlled, big, public, start-up) I've been exposed to lots of dynamics and yes, office politics.  But things are not going to change just because I want them to and so I need to change (I guess you've realized by now that I'm writing this as an aide to me but maybe some of you may have struggled with these things as well and if you have any suggestions...please send them...maybe, like with other things we've shared over the years we can once again help each other).

I love sitting in the far reaches of restaurants. it's not because of the old mafia adage 'don't sit with your back to the window' it's more that I like the show, I love people watching and as I eat a lot of meals solo, well, it's a substitute for a dinner conversation. I've been convinced for years that real life is more interesting, engaging and amusing than movies or TV (actually my cousin who for years was a top Hollywood TV comedy writer and producer (Mary Tyler Moore, Cheers, Wings, etc) told me once that most of his ideas come from observing life.  So in addition to stopping to smell the roses I suggest living with eyes open and enjoying the show.

Some interesting takeaways I saw on Creopoint.com.  They have been hosting 'impromptu' get-togethers of Creopoint members in various cities and the topics of discussion are pretty wide-ranging.  But one topic that comes up at all these sessions is how to better use, for lack of a better term, 'social networking' resources to build business.  Here are some of the comments from attendees:

• Real estate professionals have to extend even more their personal digital branding and improve their networking.
• The question is no longer "Should we network online?" but "How do I maximize my time on various platforms without making mistakes?" 
• Creopoint members cite one major advantage:  Creopoint is exclusive: one needs to be invited and vetted before becoming a member.
• CREOpoint and other data mining tools are now allowing people and organizations to regain control of their online reputation while cutting marketing expenses.  

More than virtually anyone in our industry, Creopoint founder, JC Goldenstein, has continued to develop tools to help us learn more about each other, about different markets, about how to use the Internet (it seems like such an ancient word now) to market services, promote deals, raise our own visibility and share ideas and knowledge.  I salute JC for his dedication and tireless energy over the past two years.  In an industry that has been one of the, if not the, slowest to adopt new technology, it appears that after trying out general business and social networking services, more and more people in our industry are turning to Creopoint.  As I've mentioned before, collaboration and networking is a cornerstone of my life, both business and personal.  Creopoint is a powerful tool and some of its more recent data-mining capabilities are very cool.  It is becoming, as they say, a "24/7 Meeting Place" for the global commercial real estate industry. If you have not yet checked it out I think it would be worth your while.  


On the road....
July 30-Aug. 6:  Vacation
Aug. 7:  Santa Barbara for my nephew's wedding
Aug. 9-Aug. 13:  West Coast
Aug. 17-19:  Midwest
Aug. 23-Aug. 27:  New York

Photo:  Bob White of RCA and me on a beautiful NY summer night last night at a Baby Shower on the rooftop "conference room" of RCA's HQ on lower Fifth Avenue in NY.

These are my views and not that of my employer.

Simply a week on the road

Before getting into the eclectic stuff, here are some bullets from RCA's Mid Year Capital Trends Report which was published yesterday: 

1. Sales of significant commercial properties jumped to $9.7 billion in June, the highest level since September 2008.
2. Even as large portfolios trade hands, distressed sales activity has remained relatively subdued.
3. The office sector enjoyed its best quarter since the financial crisis began.
4. Sales of significant retail properties slipped in the second quarter of 2010.
5. Sales of significant industrial properties rose to in the second quarter of 2010.
6. Sales of significant hotel properties rose in the second quarter of 2010.

There is action but from where I sit I'm not sure it's enough action to suggest that expectations of buyers and sellers are copasetic.  In some ways it feels like 2010 is another year we'd just like to get through and we're looking to 2011 to be the year of our recovery.  There's a bunch of European money coming into the U.S. but I don't see anywhere near the velocity either going the other way or even coming out of the U.S. investors piggy banks into the U.S....yet!  

I don't know why it took me so long to realize or remember this but many hotels offer free bottles of water in the gym and also for joggers.  Even if you don't work out or jog go get some of that free bottled water and bring it back to your room instead of paying $4.79 for a bottle in your room.  Duh to me!

I was talking with someone last week about managing emails and remembered something from long ago, before email existed.  It's about managing paper that comes across your desk and I thought it could be applied to email as well.  Here it is:  When you open and read an email, do one of three things with it:  (1) Act on it; (2) Delegate it; (3) Delete it.  I purge my email account regularly as the clutter just, well, clutters things.  I do use some files to keep certain things but have realized that I'm keeping a bunch of stuff that isn't necessary.  Anyway, this system, if you will, is part of some 'stress management' stuff I read a long time ago and sometimes refer back to it.  We're living in stressful times and unless we make the effort to manage it ourselves, to keep from being sucked into the whirlpool, no one else is going to help us. 

There's an excellent piece in the NYTimes Sunday Magazine this week called "The Web Means the End of Forgetting."  Given that a couple of years ago I decided to drop off Linkedin (which took a lot of effort to accomplish), dropped off Facebook,  signed up and used Twitter only in the days leading up to the birth of my grandson, reading this article made me feel good about my decisions.  It's a very interesting read and will get you thinking about things that you probably have either not thought about or wish you didn't need to think about in terms of the Internet, the 'cloud' and what have you.  But there are a few of quotes from the article that I want to share with you here (Disclaimer: It's written by a law professor and thus has a lot of references to suing people, etc. but still worthwhile):

• 75% of U.S. recruiters and human-resource professionals report that their companies require them to do online research about candidates. 
• 70% of U.S. recruiters report that they have rejected candidates because of information found online, like photos and discussion-board conversations and membership in controversial groups. 
• A 26-year-old Manhattan woman told The New York Times that she was afraid of being tagged in online photos because it might reveal that she wears only two outfits when out on the town — a Lynyrd Skynyrd T-shirt or a basic black dress. “You have movie-star issues,” she said, “and you’re just a person.” 
• The fact that the Internet never seems to forget is threatening, at an almost existential level, our ability to control our identities; to preserve the option of reinventing ourselves and starting anew; to overcome our checkered pasts. 
• The Internet is shackling us to everything that we have ever said, or that anyone has said about us, making the possibility of digital self-reinvention seem like an ideal from a distant era. 
• In addition to exposing less for the Web to forget, it might be helpful for us to explore new ways of living in a world that is slow to forgive. 
• Our character, ultimately, can’t be judged by strangers on the basis of our Facebook or Google profiles; it can be judged by only those who know us and have time to evaluate our strengths and weaknesses, face to face and in context, with insight and understanding. In the meantime, as all of us stumble over the challenges of living in a world without forgetting, we need to learn new forms of empathy, new ways of defining ourselves without reference to what others say about us and new ways of forgiving one another for the digital trails that will follow us forever. 

It seems like we may be entering a time where people may just start thinking of future consequences before acting.  This, I read in a random book plucked off a hotel library shelf this week, is a form of wisdom.  But, is wisdom only something that comes with age? 

Without wanting to give him even more press, an industry friend of mine sent me this about Tom Barrack's recent diatribe:  "Best evidence yet for a breathalyzer on a Blackberry."  You gotta love it!

Photo:  Haslemere, Surrey, England

These are my views and not that of my employer.

On the road in London

I've been in London this week and had what I believe will be a life-changing experience.  I learned how to play Croquet.  Not only did I learn but a couple of days later, paired with a great player and colleague, Alex Rigby, one a sports day Croquet tournament hosted by CBRE.  I guess the reason I am now hooked on the game is that I seemed to have taken to it pretty quickly.  While my partner gets total credit for all the strategic playing (and there's a lot of it) I can honestly say that I followed his instructions pretty darn well (actually I think Alex would agree).  It seemed as if I might have been born with a croquet mallet in my hands.  Anyway, I'm going to see if I can see up something on my lawn.  It's really fun and can be both social and cut-throat depending on the level of play but winning doesn't make you a bad person.

Great story:  There are these three English guys who had been sitting around their local pub for years looking at their pints and saying, "We can do better than this."  Finally, on a dare, they went ahead, bought some brewery equipment, signed a lease and went into business.  Although none of them has given up their 'day jobs' this year they hired some full-time people work the place.  The result, Langham Brewery whose brews are both award-winning and have some great names (Hip-Hop, Halfway to Heaven, LSD (Langham Special Draught in case there were any questions).  While supplying pubs and a supermarket chain, they are open to the public and are situated in a beautiful part of the English countryside in West Sussex.  If you're in the neighborhood, stop by and if you have friends living or visiting the UK please tell them about it.  It's good stuff and a special experience.

Big companies spend big money on outside consultants some of whom refer to themselves as 'gurus.'  I've read some books by supposed gurus who merely steal ideas from others and repackage them or give them a catchy name.  The scary part of all this is when people in the audience walk away and immediately start to implement changes-sometimes simply for the sake of change.  I wonder if the gurus warn people of the potential consequences of quick change or maybe they see more business from that client after things get even more screwed up when their suggested changes are adopted.

A voice that myself and millions of other baseball fans who had visited Yankee Stadium grew up with was silenced this week.  As Yankee Stadium's public-address announcer from 1951 until 2007 Bob Sheppard became one of the major figures in Yankees history without ever having come to bat or thrown a pitch. He died Sunday morning at his home on Long Island. He was 99.  He was a class act.

Alex and Steve after winning the Croquet Tournament.

Restaurant:  Momo, 23, 25 Heddon Street, London (http://www.momoresto.com).  An eclectic Mediterranean place with good food.  Take someone there for their birthday; they make it fun here (we missed mine by one day).

On the road....

July 20-21: Midwest, U.S.

July 22:  Pacific Northwest

July 27-29:  Southeast U.S.

Aug. 2-10:  West Coast, U.S.

These are my views and not that of my employer.

Road Under Repair

Are you also trying to figure out what the heck is going on in the real estate industry; I’ve been looking at more and more publications and talking to more and more people but then, finally, this morning, the lightbulb went off while I was walking my dogs.  While there seem to be a few property deals going on the types of deals that are most popular are of the people type:  switching jobs, leaving jobs, starting their own firms (what is the definition of a boutique anyway?) I’ve never liked the word ‘poaching’ when one firm hires people from another firm (sometimes groups of people) but that’s just a personal preference.  And most of these changes are probably personal choices of the employee as opposed to the notification from their employer that their services were no longer needed (I also never liked the term ‘redundant’ as I’ve felt that it’s a chicken-shit way of saying you’re being fired). But it looks to me like there's a lot of thinking and planning going on in many of the real estate private equity shops; looking into the crystal ball to see where the next opportunities will be and deciding when to strike.  In the case of investors, well, they're taking their time too.  Starting early this year many told me that it might not be until 2011 that they were going to put new money out into real estate and as the year moves on it looks like that just might be the case.

A Fourth of July BBQ at someone’s house.  It was a small get together at a very large house that a good friend of mine was the architect on.  I only knew a couple of the people but it was a friendly and diverse group.  The one person that got most of my attention was the 94 year old father of the woman that hosted the party.  I’ve always been interested in people but especially hearing the stories  old folks and the wonder and amazement of the young people.  In this gentleman’s case, he told me his life story which revolved around his career as a haberdasher and retailer.  His exploits, moving from city to city as he took on more and more of a challenge and risk (and debt:  he told me that to open a 16,000 sq.ft. store in the early days of enclosed malls he had to borrow $250,000 to build it out.  He moved forward bought larger and larger stores which grew at one point to him operating several what used to be called Junior Department Stores (Are they still?).  I listened intently. After all isn’t experience the best source of learning?  He told me that his wife died two years ago and that until a couple of months ago he was still living on is own (he now lives with his daughter).  He spends most of his day watching sports and CNN on TV and misses having something to be busy with.  During his story, I asked a few questions but at the end I asked him this one, “When you think back over your life is there anything you wished you had done differently.”   “I don’t regret anything I did”, he said.  “When I look back I only remember the good things in my life and that’s part of what keeps me going.”  I thought this was really good advice.  It sort of plays into some of the things that I’ve recently found that work for me:  forgive myself for things I did in the past, forgive others for things they did in the past, focus on today and don’t worry about yesterday or tomorrow. Listening to Jack I realized that the road many of us take is curved, twisted, under construction, closed or has fallen rock zones.  But that’s what makes us who we are and if we hit a “Dead End” on our road we have choices to make and as he told me about some of his decisions I realized that this man, who never made much money (in his own words) had something more than money can buy:  integrity and courage.  I hope that when I’m 94 and someone asks me to describe my life I’ll be able to keep it short and also have that person take away something that helps them, even if it’s a little thing like I took away from Jack on the Fourth of July.  

I was reading "Four Recovery Stories" on RCA's website today.  These are detailed descriptions of four actual deals involving troubled assets.  Some months back I asked you guys what you felt the difference was between the early1990's (aka RTC days) and this era and published the results.  But having been involved in workouts before they were fashionable and with the RTC and then being part of the team that worked out a large (for it's time) troubled real estate loan portfolio for a major commercial bank, our stuff was simple compared to these deals today.  I had some of the more complex deals back then and I used to put up large sheets of paper on my office walls to diagram the deal (to the amazement of my colleagues at the bank).  But fuggedaboutit, today there are so many parties, so many tranches, so much to unravel and then reconstruct, debt looking like equity and vice-versa.   Real expertise is needed for all of these sort of deals, whether they're troubled assets, troubled portfolios, troubled funds.  As some of what is going on involves what some call "rescue capital" I poked around the web and found this gem (which I've adapted to our industry):  "One of our main priorities is to be a source of rescue funding for real estate deals, portfolios and/or funds  that are in need of urgent, time critical support.  We will look at providing funding for management teams on condition that a new and clearly profitable strategy can be presented. A new business model, combining positive aspects of the previous model with evidence of changes to be made, which tackle the issues that caused the previous model to fail, would need to be presented."  No question:  the underwriting not only of the deal but of the management team is crucial when making a decision to invest new money.  And, does the strategy still make sense or have things changed enough that a new one needs to be implemented?  Lots of questions in these type deals, eh?

 

These are my views and not that of my employer.

Happy Fourth of July!

This is my photo and not that of my employer