Reinventing Yourself & Your Company / Franny's Pizza / Moody's RCA CPPI / Bice Ristorante / Rate Your Boss

I’ve reinvented myself many times in my real estate career and lately I’ve been having conversations with a number of people and companies who are thinking about how they can reinvent themselves. 

On the individual side, it’s about both finding job opportunities and finding something you really like doing.  Some go back to school to get a new degree, let’s say Masters in Real Estate or M.B.A.   It’s reasonable to assume that these folks were in the real estate industry in one, way, shape or form and wanted something different.  So they invest the time and money to get this next degree, one of the steps on the stairway to re-invention heaven.  Then they’re ready to come back into the workforce and, oh no, they can’t find a job.  Why?  Employers want to and are able to find people who fit nicely into their job box.  Someone who has done exactly what they’re looking for someone to do and they’ve done it before.  Many employers consider that a much ‘safer’ hire. 

But there’s a lot more to think about when adding a person to your team and I challenge you to look holistically at the person who has taken the time to reinvent themselves and consider whether they bring something to the table far beyond that of simply done that particular job before.

When companies want to reinvent themselves it’s equally challenging.  The industry sees them a certain way. But they want to be seen differently.  Well, we’ve all seen cases where companies, both in our industry and outside, have reinvented themselves.  And it takes a good idea, a plan, the team to execute it, the investment of some money and, what I believe is most important, patience.   When a supermarket company has a successful store they use the analogue process: finding something that is similar to something else.   So, one piece of advice that I give to firms looking to reinvent themselves is to look around and see who has done it before and learn from them.  Decide what you want your firm to look like and then start behaving like that.  And, while it's not that simple, perception is reality.  But, you’ll still need to be very patient.

When an internationally famous restaurant consultant suggests you go out for some pretty good pizza, the immediate answer is, "Yes."  Last week, my good friend (and international restaurant consultant), Michael Whiteman took me to Franny's on Flatbush Avenue in Brooklyn.  I have always loved pizza and could probably eat it every day.  When we got there it was crowded but we managed to get a table even without a reservation.  Michael told me that Franny's is considered one of the top-10 pizza places in the U.S.  Without rambling on let me say this:  it is!  

The Felix Consulting Group: Someone once told me that if you don't toot your own horn once in a while there's no music.  So, I got an email from someone I met at the ULI Capital Markets Conference a couple of weeks ago.  He said, "On the elevator down, after the final ULI Panel (the one I moderated), someone remarked:  "If only all the other sessions had a moderator like the last one.  It was great...he involved the audience, he asked intelligent questions and everyone was engaged."  Five other heads nodded in agreement."  Moderating panels is something I love doing and I get good reviews.  If you're firm is running an event and you're interested in considering the value to the audience of having a knowledgeable, independent, third-party as moderator, host or facilitator, let's talk.

The Moody's/RCA Commercial Property Price Indices (CPPI) report was published this week.  These measure price changes in U.S. commercial real estate, based on completed sales of the same commercial properties over time, known as the “repeat-sales methodology.

Notable Observations and Themes 

• Apartment prices were down 1.2% in April after increasing by 37.4% from their January 2010 trough. 
• Industrial saw the only gain among the property sectors in April at 1.1% and was the biggest gainer over the last quarter at 3.9%.
• CBD office in non-major markets was the first sub-sector to bottom, 31 months ago, but it has yet to gain traction, retracing only 7.5% of its peak-to-trough decline.
• Suburban office in major markets has seen a significant setback to its nascent recovery, falling by 14.4% over the last 5 months. 
• Prices of non-distressed properties in major markets have recovered to 90.9% of peak levels in nominal terms. Distressed transactions are showing price recovery in major markets, up 27.8% from the trough 19 months ago, while distressed transaction prices in non-major markets continue to languish, essentially flat since Q4 2009. 

What and where are you buying today?

I got an interesting survey in the ‘mail’ this week: It's called “How do you rate your boss' performance?”

1.  Behaves professionally towards employees.

2.  Encourages employees to excel.

3.  Communicates a clear vision of success.

4.  Is willing to undertake the hard jobs.

5.  Expresses values and personal beliefs in work.

6. Sets a good example for employees.

7.  Earns the trust of employees.

8.  Deals capably with workplace conflicts.

9.  Is open about own strengths and weaknesses.

10.  Delivers on promises made.

11.  Acts in an ethical manner.

12.  Performs well under pressure.

13.  Does not let emotions get in the way of decisions.

14.  Motivates employees during adversity.

15.  Listens to employees work concerns.

16.  Is even-handed in dealing with employees.

17.  Is open to suggestions and new ideas.

18.  Finds a way to show appreciation for a job well done.

19.  Is collaborative and works well with others.

20.  Looks for ways to improve leadership skills.

Maybe at least or more important than the way the employee rates the boss is the boss looking at this list and thinking....how would I rate myself?

In 2006 I spent a month in Monrovia, Liberia working with The MacDella Cooper Foundation, which helps needy children.  Since then the foundation has made great strides including building and opening The MacDella Cooper Academy: Free boarding school for orphaned and abandoned children.  They're having another one of their very cool events and I thought some of you that will be in the Hamptons might like to go.  The DJ Universe & All White Party/July 14/15 Prospect Avenue/Southampton.  If you’re interested let me know and I’ll forward the invitation to you.

Congratulations: 

• Mike Everett, CIO at Sage Hospitality Resources
• Byron Carlock, global real estate leader focused on the U.S. at PwC 
• Tom Calahan, investment associate at Aviva Investors

Restaurant of last week:  Bice Ristorante:  7 E 54th Street, New York (212.688.1999).  My review of this place is simple:  Things Done Right.  It's amazing how few restaurants really get it.  This place, where I've been to about six times, is always on top of their game.  The staff is friendly and professional, the room (and sidewalk dining) is welcoming and the food is very, very good.  Perfect for a business lunch or dinner and a hangout for commercial real estate people.  You never know who you may run into.  

Please check out our new CD of original tunes which is now available on iTunes (search 'felix wait for me').  And, yes, the cover photo is from the Summer of 1982.  With the guitar is my son Brian, formerly co-leader of the touring jam band, OM Trio, who produced the album and played keyboards and  now is an assistant professor of music at UNC-Asheville.  On drums is my son Kevin, formerly a member of the band, "Fear of Sheep," who wrote the words to "Me Who Sticks Around" and "Robot Mannequin" and is a producer of TV reality shows. More photos here.  Thanks.

On the road....

June 18-20:  Chicago 

June 21:  New York for client consulting/coaching sessions

June 28: New York to attend the invitation-only Asset Management Roundtable

July 11-13:  Lansdowne, VA to attend the NCREIF Summer Conference

Sept. 10-12:  Paris to attend the GRI Europe Summit

Oct. 14-16:  Houston to conduct presentation training classes for one of my clients

Oct. 22-24:  Los Angeles to attend the PREA Fall Conference

Nov. 5-10:  New York for client meetings & other stuff

Nov. 7:  Washington, DC to speak with real estate students at Johns Hopkins University about careers in real estate

Nov. 8 & 9:  New York to attend the PERE Forum

"Core is just a moment in time" / ULI Capital Markets Conference / How to run a successful panel

I've been having some very interesting new business development conversations lately with real estate companies who are thinking about what they'd need to do to get into the institutional real estate fund management business. 


Yesterday, apropos of that,  I moderated the closing panel at ULI's Capital Markets Conference in New York.  You and I have both been to enough conferences to have seen that the closing panel is quite often populated by enough attendees to sport a baseball team (for those not familiar with baseball, that would be nine!).  However, yesterday, our room was full to capacity (120+).  I first thought it was because we had such a great panel.  Then I thought it was because I was hosting the session :-)  But the real reason was a combination, which also included the topic:  How To Raise & Manage A New Fund (although we also discussed more than just the commingled fund structure).  The number of people in the audience who raised their hands when I asked 'How many of you are in the market now looking to raise capital?' was way more than the majority.  


It was a great session (based on feedback we all got after leaving the stage) due to the experience and willingness of my panelists to share openly, and without self-promotion, what they know:  Claudia Faust, Hawkeye Partners; Jennifer Morgan, Kirkland & Ellis; Bill Cisneros, GTIS Partners and Tom Mizo, HFF.  Thanks you guys.  


The formula for a successful panel session is pretty simple:  A topic of real interest to the audience, a good moderator, experienced panelists and making sure to give the audience ample opportunity to join in the discussion (I allow and encourage questions at any time).  


Oh, one more thing:  the entire conference was really good.  Why?  Here are just some of the people who spoke there:  Steve Furnary, Clarion Partners; Jacques Gordon, LaSalle Investment Management; Tom Arnold, Abu Dhabi Investment Authority; Joh Kukral, Northwood Investors; Steve Kohn, Cushman & Wakefield (who is a very good moderator); Ron Kravit, Cerberus Capital; Lee Neibart, AREA Property Partners; Wendy Rowden, Jonathan Rose Company; Gil Tenzer, Contrarian Capital; Doug Cameron, CRL Senior Living; Robert Byron, Blue Vista Capital; Chris Merrill, Harrison Street; David Maki, Heitman.


A few interesting comments I heard this week at various stops along the way:

• "Are U.S. pension funds really Sovereign Wealth Funds?"
• "Being a core asset is only a moment in time."
• "Looking solely at IRR is a poor measure of things."
• "There are unintended consequences of every decision we make."
• "We are in a world of turmoil.  World events are affecting this country.  We are really scared."
• "The world wants to invest in the U.S."
• "More institutional investors are trending towards direct relationships with real estate operators to get away from the double promote."
• "Lenders are not comfortable underwriting to retrofit benefits."
• "Value-add is all about buying 'under-loved' assets."

You've probably experienced this too:  the wonderful thing about attending an industry event is running into someone you haven't seen in many years (although this can also happen when you bump into someone on the street).  This happened to me yesterday at the ULI conference and we're going to get together in a couple of weeks and catch up on the past 20 years or so.  

Cool & new:

(1) KossREsource.com:  recently launched, this is a website that, while it offers a lot more, is designed to become a commercial real estate industry specific Linkedin.  I got a drive-through from with the architect behind the design of the site and it's definitely something worth checking out. 


"Felix...Wait for Me."  After playing my new album for two of my former bandmates last weekend they told me how I should answer the question I get asked most:  "What kind of music is it?"  The answer: R&B.  Please check us out on iTunes (search 'felix wait for me').  Thanks.


Something I've noticed:  When answering a question, too many people start of by saying, "I think...."  I think (woops) this is an attempt, conscious or sub-conscious, to soften their response and perhaps not sound like a know-it-all.  Maybe I'm totally wrong.  But if you're answering a question, about something you know about then you don't 'think' you 'know.'  I don't know when this started. Maybe it is really part of "How to Talk Like A Valley Girl" (see tips below):

Instructions:

1. • 1
     Speak with what linguists call a high rising terminal. That means end your sentences with a rising intonation. It's as if you're asking a question with every statement you make.
   • 2
     Say the word "like" at least once in every phrase you say. For example, "She like totally went to the store."
2. 3
   Use the words "totally" or "way" in place of the words "very," "really" or anywhere in the sentence where it can add some emphasis. For example, "The milk is way creamy."

   
   

   On the road....

June 25-29:  New York for new client meetings.
Sept 10-12:  Paris to attend the GRI Europe conference
Oct. 14-16:  Houston to conduct a class in "Improving Your Presentation Skills" for one of my client firms.
Oct. 22-24:  Los Angeles to attend the PREA conference.
Nov. 7:  Washington, DC to speak with a group of real estate students at Johns Hopkins University about careers in real estate.
Nov. 8 & 9:  New York to attend the PERE Forum

Interesting view of The Chrysler Building I took from the Sentry Conference Center  at  730 Third Avenue

IMN, RCA and Rock and Roll

I've been in New York this week and will be here until next Friday. Other than the terrible news about losing our friend Deb to Glioblastoma on Monday it's been another good week. It included a consulting gig with a new client and attending and moderating a panel at IMN's Opportunity & Private Fund Real Estate Investment Forum. My estimate is that about 900 commercial real estate professionals, from all walks, were at the IMN event. Also, yesterday morning, I attended the Asset Managers Roundtable which has been hosted for the past eight years by my great and good friend, Ed LaGrassa.  Some things I heard as I roamed around this week that I want to share with you:

• "We hired some people who are not the typical opportunity fund wise guys and actually have some real estate operating experience."
• "Alignment of interests is at the top of the list of institutional investors and consultants."
• "It's important to have the ability to change course in your investment strategy as economic factors dictate."
• "Foreign capital sees investing in the U.S. today as their 'flight to safety."
• "The only investors in our first (time) fund who wanted to beat us up were the hedge funds."
• "We like to be stealth sometimes when looking at buying mezz pieces."  
• "There is definitely an informational (lack thereof) risk when buying CMBS debt today."
• "You're getting a discount on the mezz piece; we don't feel obligated to give you a lot of information." Mezz piece seller.

At the Asset Management Roundtable yesterday I was reminded how great it is to listen to real estate people talk about a deal they've done. The good ones of course!  They know all the details and want to share the adventure of what twists and turns it took from the start to the finish. Those of us who have been dealmakers can totally relate to it. They're our war stories and today, with the capital stack so complex and convoluted, some of the stories I've heard make me just shake my head.  But I guess, in the end, it's all worth it.

RCA (Real Capital Analytics) had their first rooftop party of the season last night and it was a perfectly beautiful evening with moderate temperatures, low humidity and a peaceful, easy breeze.  I got to spend time with my old Internet-era buddy, Michael Stewart and his partner, Neville Teagarden of Lucid Holdings who are involved in some very, very cool stuff, as their website states, "Leveraging the Power of Casual Learning AI (Artificial Intelligence)."  What they've developed will be a true game-changer in our industry.  

Solutions by Steve Felix update:  Each of my consulting clients has asked me to help them in different ways.  Generally, I'm hired by the CEO.  This week's client story:  Investment Management firm.  Has been investing in apartments for 20 years.  Their CFO is changing jobs and taking the role of marketing and raising new institutional capital.  While he's been involved in 'pitches' before, until now that had not been his primary job.  Basically, I've become his coach.  Getting him ready to go on the road to call on pension funds, endowments, foundations and consultants.  They have a long and successful track record, their stable of institutional investors has been a small but loyal group.  Those of us that have been in the marketing/capital raising role can appreciate that one of the things you have to prepare yourself for is rejection, on a regular basis.  But it's part of the game.  So we worked on developing a logical process to setting up meetings, how to most effectively tell their story, how to respond to certain questions and what you need to do to break in with the consulting community, among other things.


I've also had a breakthrough in my own new business development:  my eight current clients have all known me so there was a basis of trust established long ago.  The hiring of me came as a result of each of those firms determining that there was something I could help them with that would add value.  But last week I got hired by the first firm that didn't previously know me.  They had heard me speak recently at an industry event and something caught their fancy.  They checked me out and then reached out to introduce themselves. We scheduled an exploratory phone call during which they explained to me where they are now and where they'd like to be.  I told them I could help them and sent them an agenda for a day-long consulting session.  They asked me for two references. They reached one quickly and came back to me and said, "Let's do it."  So that felt pretty good to me and I'm meeting with their senior team next week.


I got an email last week from the real estate investment person at a college endowment:  "I have noticed  that many real managers are not on point with their fee structure. I have seen two offerings in the past week that charge 1.75% management fee, 8% pref, 20% incentive up to 12% net return then 50% carry after 12%. Expected return is stated at 12% net. From an LP's perspective that is very rich in any market. I politely declined meeting with them. If this was a one off, I would just think that the one fund just was off, but I see it in too many funds. Is this an industry thing, or are the present offerings just way off base?"  I gave him my opinion.  Do you guys have any thoughts you'd like to share?


Some very interesting stuff from an interview I read with Kyle Zimmer, president, chief executive and co-founder of the nonprofit, First Book, which provides books for children in need:


Q. Let’s talk about hiring. What questions do you ask?
A. I’ll say, “Have you ever started anything? From the time you were little, did you invent anything? An organization? Did you start a club?” Then I’ll ask, “What was the hardest part of that? What about failure? Talk to me about failure.” I think that is really important, because if you’re pushing, you’re going to fail. If you’re pushing in whatever you’re doing, you’re going to fail way more than you succeed. It’s that old saying: “You can fail without ever succeeding, but you can’t succeed without ever failing.”  The culture we live in teaches us to fear failure, and I think that’s a huge mistake. When I look back over the history of our organization, the times we’ve been most creative were a result of the pressure of a failure or near failure.  So I’ll have people talk about that, and see if, in their narrative, they blame other people. Or do they have some degree of humility in what they maybe should have anticipated and didn’t? And what they would do differently? We try to detoxify that at First Book.  Occasionally, we give out a Brick Wall Award for an idea that should have gone really well, but ended up crashing into a brick wall. It’s a way of saying, “It’s O.K., you did the thinking, and you gave it your best shot, and it crashed, but it was an honorable step.”


Q. What else?
A. I think that somebody with a sense of humor is really important, both directed at themselves and others. So I have an anti-bump policy. We don’t hire people who don’t have a spark. If they seem like they’re just a bump in the road, they’re not going to do well.


Show this one to your son or daughter who is taking piano lessons.


Music news:  Our new album, "Felix...Wait for Me", is now available on iTunes and I'm starting to get emails from people telling me what their favorite tune is.  We're pumped about this and hope you'll take some time to at least listen, perhaps buy a song or two, and spread the word.  Thanks a lot.


On the road...
June 4-8:  New York for client meetings and to attend and moderate a panel at the ULI Capital Markets conference on June 6 & 7.  I believe you can still register for it.
June 25-29:  New York for client meetings
Sept. 10-12:  Paris to attend the GRI Europe Conference.
Oct. 14-16:  Houston to conduct a training class on improving presentation skills.
Oct. 22-24:  Los Angeles to attend the PREA conference.
Nov. 7:  Washington, DC to speak with a student group from Johns Hopkins University on careers in real estate.
Nov. 8 & 9:  New York to attend the PERE Forum.

Glioblastoma takes our friend Deb

We lost our dear friend Deb to Glioblastoma on Monday.  She outlived the doctors' original prognosis by many months but we all knew all along that there is no hope of surviving this most aggressive of brain tumors known to man.  Even knowing that, the news was devastating and just so, so terribly sad.  Deb and I first met in summer camp when we were teenagers.  She was my brother Jay's first girlfriend.  We were out of contact for many years until a camp reunion in 2003 brought us all together again.  Coming from here adopted home in Guatemala she assembled us in a circle and gave out friendship bracelets that had been made by natives in that country.  Those of us who were there will always remember that special ceremony.  That bracelet remained on my wrist for almost a full year before it simply wore out.  It was at that reunion that Deb and my wife met and became instant friends.  A few years later, when Deb was in a soul-searching period her life (aren't we all from time to time?), they went on a Thelma & Louise road trip in the southwestern U.S.  The stories and photos of that trip are fantastic (even though I'm sure there are some adventures that they'd always kept between themselves!).  Some years back, Deb lived with us for a few months and at one point moved to Geneva where her writing talent landed her a great job with Rolex.  She had rediscovered herself and created a new life there.  Deb was a also a breast cancer survivor. She loved music.  She loved life.  She never said a bad thing about anyone.  She was 59.

Wait for Me on iTunes / Improve Your Presentation Skills / Driving With Your Knees

The big news this week is that our new album, "Wait for Me" is now available in the iTunes store (search 'felix wait for me').  This album was three years in the making.  It's a collaboration between my sons, Brian, Kevin and me and a very talented group of Chicago based musicians.  The initial feedback is very positive and we are very excited about the potential for a few of the songs to be used for movies or TV.  You can listen to the tunes free here.  And you can buy individual songs or the whole album on iTunes.  Let me know which song you like best.  Thanks.

I continue to pick up new consulting clients (which is terrific and is keeping me off the streets and on the road).  But as I've learned with other real estate consulting companies I've operated, the financial challenge is to get a couple of retainer clients, who pay you monthly for a period of time.  This then gives you the cash flow to actually cover your fixed expenses each month (like food and shelter!).  While I'm not there yet, the progress has been very encouraging.  

Each clients' needs, as you would imagine, are different but what gives me a good feeling is that I'm doing things that I'm good at and have gotten excellent feedback from all of my clients (7 so far with 4 more on the calendar).  Interestingly, I have had more conversations (some from referrals, thank you very much) than I've had in a long time from experienced real estate operators who have asked me, "How do we get some of that there pension fund money?"  The basic answer has always been pretty much the same:  you need to have patience.  But what strikes me is that there are a number, of very credible real estate operators, ready, willing and able to invest the time and money that is a requirement to break into the institutional real estate community.  And, I think it's a great time for them given how that world has been evolving and that there are more and more opportunities for first time and minority/woman (I refuse to use the acronym) owned real estate investment management businesses.  Stay tuned!  Things are getting interesting.

One of the things that I've been helping some of my clients with is how to improve their presentations.  Getting the message right so that the audience takes away what you want them to is key.  But here's something I found years ago, rediscovered this week and want to share with you.  Btw, I believe a first impression is formed in four seconds; just long enough for someone to reach out, shake hands and look the other person in the eye.

First Impressions

Within the first thirty seconds of a speech, sales presentation or media interview, audiences decide whether they like you, trust you, and think you know your stuff.

Ironically, most business presentations are weakest at the beginning. Presenters who spend hours preparing their message and creating fancy visual media give little, if any, attention to their critical opening lines. As a result, flat greetings, bad jokes and the predictable welcome-name-topic approach ("Good morning, my name is Mary Smith and today I'm here to talk about...") are the norm.

The negative impact of a weak opening is two-fold. The unprepared speaker not only fails to inspire the audience's confidence in him, but also compounds his nervousness as he recognizes he's not generating any interest.

Your first words quickly set the tone of your presentation. A strong opening is your golden opportunity to capture your listeners' attention, establish your credibility, build rapport and entice the audience to listen to your message.

Make your first moment count. The adage, "You never get a second chance to make a first impression" applies to presenters.

Find a relevant anecdote or quote; refer to a current event or something newsworthy in your industry; or make a provocative statement that will draw your listeners in. Carefully plan and rehearse a compelling opener for your next presentation. You'll appreciate the difference—and so will your audience. 

Tips for a Better Beginning:

* Engage the audience immediately with ...a provocative statement ...a reference to a current event ...a quote ...an anecdote

* Elaborate on this initial idea as it relates to your topic

* "Tell 'em what you're gonna tell 'em" and provide a reason for listening

* Rehearse your opening until it feels natural

* Breathe slowly in the moments before your presentation begins

* Direct your opening line to a friendly face and build momentum

So take note of those people who make presentations that grab your attention and hold it.  Learn from those who do it well and from those who don’t do it well.  Adopt the techniques that will work for you and engage your audience.  You don’t have to adopt the exact style of someone else, in fact being yourself is really important.  But you can make changes, subtle or otherwise, to the way you handle yourself at the front of a group.  Practice on small groups before you take it to Broadway.   You’ll find out what works and what doesn’t and you’ll be better for it (and your audiences will too). 

Last item:  At the suggestion and with the encouragement of a close friend I have started working in earnest on completing a long-standing project: publishing a semi-autobiographical/semi-self-improvement book called Driving With Your Knees to be published Second Quarter 2013.  

On the road...

May 29-June 8:  New York for client meetings and to moderate panels at two events:

May 30 and 31: IMN U.S. Real Estate Opportunity & Private Fund Investing Forum

June 6 and 7:  ULI Finance & Investment 2012 Conference.

June 25-29:  New York for client meetings.

Sept. 10-12:  (t) Paris to attend the GRI Europe Conference.

Oct. 14-16:  Houston to conduct a training class on improving presentation skills.

Oct. 22-24:  Los Angeles to attend the PREA Conference.

Nov. 7:  Washington, DC to speak to a group of students in the accelerated Masters of Science in Real Estate Program at The Johns Hopkins Carey Business  School about what I've learned during my career in real estate.

Nov. 8 and 9:  New York to attend the PERE Forum.

Hanging With Some Very Smart People / Spec Development / Pinball Wizards

This week I sat in a meeting room in North Palm Beach, Florida with some of the industry's best research and Ph.D minds.  The event was the annual meeting of The Hoyt Fellows and The Maury Seldin Advanced Studies Institute.  The wonderful thing about this group is that egos are, pretty much, checked at the door.  There are short presentations on timely topics impacting the global commercial real estate industry and there is as lively a discussion as anywhere I've ever been.  Some of you have heard me say, "You know what happens when two real estate people get together, right?  They're talking or waiting to talk" (Btw, it's not just real estate).  And this group is no exception as everyone has something to say about the topic of the moment.  But that's the beauty of it and, in this group, it manages to work.  Plus, I heard the word 'spec' development uttered for the first time in quite a while referring to new construction industrial buildings being built in the LA market.  

Here are a few of my takeaways from the discussions:

• It's possible that increasing cash flow, expected from core assets, will be offset by increasing cap rates.
• One thing that's debated is the question of investing in a core property vs. a core market
• Apartments:  lowest cap rates in the U.S. are in the San Jose, CA market.
• Retailers are simply chasing population growth.  Here's where they want to be:  Raleigh, Oklahoma City, Denver, Portland (OR), Jacksonville, Sacramento, Tampa and Phoenix.
• Opportunistic plays may surface in some unexpected places:  Atlanta, Dallas/Fort Worth, Indianapolis, Inland Empire, Jacksonville, Las Vegas, Memphis, Phoenix, Portland (OR).
• The Federal Reserve Bank of New York is developing a tool that will analyze every commercial real estate loan made by banks and have the ability to predict the probability of default.
• The opportunities today:  Debt, Distress, Development

And...

• In the next 10 years, of the 10-15 million new households in the U.S.
• recent legal immigrants will account for 1/3
• 3/4 will be minority headed

Things Beyond Business:

-Ron Donahue has a passion for pinball machines.  So much so that he has converted his garage into a virtual arcade (see photo).  He is the Chairman of Hoyt Advisory Services and invited us over the last night.  It was very cool.  While I was never big into pinball games Ron does have Skee Ball, which my friends and I used to play at Fairyland Amusement Park on Queens Boulevard in Rego Park, NY.  He also had two very old baseball machines.  I hadn't had my hands on these type things in a really, really long time.  Standing there took me back to my days growing up and thinking about the friends with whom I shared those innocent days.  

Where the Pinball Wizard Hangs Out

-Rick Wincott is a bass guitar player.  He also is also Senior Executive VP at Altus Group.  In his house, he has a room that houses everything you need for a band to walk in, flip on the switches and rock out.  He's got more than 50 guitars and countless, classic amplifiers, etc.  He's invited me over when I'll be in Houston in the fall.   

Thanks to everybody who attended my 'launch party' in San Francisco.  We had a really nice group, about 25 people, and everybody was engaged with everyone.  A couple of folks totally surprised me by showing up which was very special.  It also is no longer a surprise to me about how small the world is and I'm not just talking about our industry.  We'll do another one of these get-togethers in Chicago one of these days.

I received a number of emails about the mother's day piece I published last week. Thanks, especially those of you who shared your own stories with me.  

Congratulations:  

• Bob White, President of RCA (Real Capital Analytics) who has been named to the Board of Directors of PREA (Pension Real Estate Association)
• Justin Laub who is joining Churchill Capital. 

Providing deeper transparency into the commercial real estate transaction world, RCA and Moody's have announced the launch of the Moody's/RCA Commercial Property Price Indices (CPPI).  These will used advanced repeat-regression analytics to measure price changes in U.S. commercial real estate on five major property types (apartment, retail, industrial, central business district office and suburban office).

On the road...

May 21:  San Francisco to work with a new client.

May 22-25:  Napa, CA to mow the lawn and rake leaves.

May 29-June 8:  New York to work with a new client on improving presentation skills and to attend (a) IMN's U.S. Opportunity & Private Fund Investing Forum where I'll be moderating a panel on GP Mergers  on May 30 & 31 and (b) ULI's Real Estate Capital Markets Conference where I'll be moderating a panel on Launching & Managing a New Real Estate Fund.

June 25-29:  New York to work with a new client on developing a process to raise institutional real estate capital.

Sept. 10-12:  Paris to attend the GRI 

Oct. 14-16:  Houston to provide a class on Improving Presentation Skills to one a new client.

Nov.8-9:  New York to attend the PERE Summit 2012

Mother's Day Regret

My mother and I had, I guess the best way to put it, a strained relationship.  Maybe it was because we were similar but I didn't see that until much later.  

I am the oldest of three boys and she had me just two years after Benjamin Spock published his book, Baby and Child Care.  I don't know for sure, as that book is not one of the ones that I inherited, but it's a good bet that she had it. Spock's simple core message was revolutionary at the time:  "Don't be afraid to trust your own common sense."  Between that and his insistence that parents should show love and affection to their children rather than constant strict discipline, he challenged the conventional wisdom of early 20th century child rearing like no one else.  

One of the reasons I think she had the book is that part about parents showing love and affection to their children rather than strict discipline. Growing up, I was shown love and affection but was not disciplined at all.  I paid a price for this and for many years blamed my parents for not having disciplined me when I was younger.  If I had to guess, they just weren't sure what to do with me (as my middle brother, Jay, has different recollections of growing up than I do).  But, they thought they were doing the right thing.

I grew up in a middle-class family although my mothers' parents felt that they were more high-class, perhaps based on their ability to pay for a pretty lavish wedding in an well-known New York City hotel (I have the receipts and the prices are simply amazing...so much for so little!) and they could afford go away for the whole summer (a modest resort in Morris County, NJ) and they had made the move from Walton Avenue in the Bronx to Haring Street, off 63rd Drive in Rego Park, Queens, New York into a large two-bedroom apartment that they lived in for more than 40 years.  My mothers' father, Herman Silverman, worked in the fur business.  I have some photos of him in the great white north standing around, smoking his cigar and talking with fur trappers.   

My father came from a very, very poor family and I am pretty sure that my mothers' parents were not happy that she fell in love with someone 'beneath them.'  Actually, now that I think of it, I wonder if their divorce, some 30+ years later had anything to do with their basic differences:  my father was ultra-conservative (even when they had the chance to buy Weight Watchers stock as insiders) and my mother was an independent woman, an entrepreneur and a world traveler who ran her own travel agency for many years.

I also had issues with my mother when she turned out to not be the grandmother that she claimed to be.  But, when I got to a stage in my life where I realized I needed to deal with these and other issues, I understood that she was only doing the best she could and she wasn't going to be the person I wanted her to be, just because, and so I decided that I needed to work on accepting her as she was.  

Sadly, that insight came very close to when she got sick and died at 68.  But, although having been distant (philosophically but living physically close), when Jay called from Arizona to tell me she had fallen off a chair and that something was wrong and I needed to go to her aid, of course, I went immediately. She had survived lung cancer a good number of years before and I don't know if she had gone for her six-month checkups religiously.  But, after this event, she deteriorated pretty quickly.  And, as I spent time with her, taking her to doctors, finding someone to come in and watch her (she complained about all of them), I noticed a change in her.  She got nicer.   I didn't realize it then but that was the dementia setting in which was the result of the diagnosis that was confirmed:  brain cancer (although supposedly not connected to her previous cancer).  Some of her comments were funny but the situation was sad.  And, after consulting with a wonderful doctor at one of the top hospitals in New York, we decided to let nature take it's course rather than subject her to chemotherapy.  

At some point, probably about a year before she got sick,  when I had separated from the mother of my sons, living in a basement room of a good friend in Sea Bright, NJ (it actually was a pretty nice room and I learned how to live vertically...needing to stack stuff up rather than spread out), I received an envelope from my mother.  This was, sadly, before I had reached the point of wanting to accept her and reconcile with her.  From my recollection of the feel of the envelope, it was likely a letter of some length. All in all, there are really very few things I regret in my life.  Was it still a leftover from the lack of discipline for which I'd paid a price for many years?  More likely, it was just a stubborn act, a dumb act, done without any thought. I threw the letter out without reading it, without evening opening it.   But, maybe my mother would have understood as she and I shared some personality traits, some good and some harmful to ourselves.  I have always wondered what that letter said.  Sadly, I will never know but I'm pretty sure it had nothing to do with disciplining me.  She would have written about her love for me.

Happy Mother's Day Mom.

Happy Mother's Day to all you Mom's out there, somewhere over the rainbow.

Happy Mother's Day to my mother-in-law who is failing in a hospital in Montreal.

Happy Mother's Day.

My mother, Lorna and me