Friday, August 24, 2012

RCA's July Report / Choose Wisely / Letting People Help You

RCA (Real Capital Analytics) released their July 2012 U.S. Capital Trends reports the other day.  In reading through the property specific reports here's the commentary that  jumped out at me:

Hotels: "The private sector is the sole capital group that has increased acquisitions in 2012 and the average price paid by them is up as well."  

Apartments:  Sales of significant properties slowed to their lowest level in almost 18 months.  

Retail: July transaction volume barely topped $2.0Bn in July, less than half of June's total and 20% lower than a year earlier.  

Industrial: Like retail, July transaction volume was $1.8Bn; less than half of June's total and 15% lower than last year. 

Office:  July volume of $5.4Bn down 10% from last year and the third consecutive month of decline. 

So, we're still in a funk and in an effort to not use the word "uncertain" as the cause again I consulted my trusty Thesaurus.  "unsure, vague, doubtful, hesitant, undecided."  In the conversations I continue to have with the institutional investors themselves and the investment managers this is a constant over-riding theme.  And yet, there are those who have been able to raise money, considerable amounts, usually from investors that have had good experience with them before.  So, things are not bad, it's just that, like any situation, they could be better.  The problem is that things are different and we all need to decide what we're going to do differently that will allow us to achieve the goals we've established for ourselves and our firms.  

We are at a huge inflection point in many ways and I keep harkening back to the line near the end of Indiana Jones and the Last Crusade when the knight says, "you must choose, but choose wisely, for as the real grail brings eternal life, the false grail brings death." Well, maybe death is a bit severe but you know what I mean.  

This paragraph caught my attention in an article called "Bankers Gone Wild" about the LIBOR scandal and what can be done to 'rein them in.'  ".....we need to admit that fraud is a crime and throw some people in jail.  That shouldn't be so hard in the case of LIBOR, which involves no complicated debates about who knew what when.  Bankers were asked a simple question, and they lied in response.  Most important, though, we need an attitudinal shift on the part of regulators, who need to recognize that their gentleman's-club ethos is ill-suited to today's financial world and who need to be aggressive not just in punishing malfeasance but in preventing it from happening.  (For some tips on how to do this, they might look to the way that American police forces have dramatically lowered big-city crime rates).  This new approach would be intrusive and overbearing, and would make it harder for bankers to do what they want.  In other words, it's exactly what the financial industry needs."  

I've always liked helping people.  A good day is when I'm able to help someone.  For most of my life I was not able to accept or seek help. Then, a few years ago, I read a book that said that if you don't allow other people to help you they don't get the chance to feel the joy of helping someone that you feel when you help someone (That's a terrible sentence isn' it?).  So, I broke through my barrier and, as you probably know already, it's a wonderful feeling when someone really wants to help you; no strings attached; just help.  You guys are included in that group of people whether you know it or not.  Being out there every week, reading or at least glancing at what I write and sometimes writing back to me.  That's huge!  And for those that have gone above and beyond to reach out to help most heartfelt thanks.

Phrase of the week:  "Wake up every morning with the thought that something wonderful is about to happen."

Daffy Dan's is a discount clothing store that bills itself as "Clothing Bargains for Millionaires."  Well, I should say "billed" as the entire chain is closing.  There wasn't much media fanfare considering that Daffy's founder, was a pioneer in 'off-price' retailing.  I thought you'd find this excerpt from Mr. Shulman's obituary  interesting.  He died in 2011 and the chain lasted just a little more than a year after that.  

"Irving J. Shulman, who founded the Daffy’s clothing store chain and brought discount fashion to Fifth Avenue through quirky marketing and a promise of “clothing bargains for millionaires,” died on Friday in Houston. He was 96 and lived in Manhattan. Mr. Shulman died just short of the 50th anniversary of the founding of the original store, Daffy Dan’s Bargain Town in Elizabeth, N.J. When Daffy’s opened its first New York City location in 1986 on 18th Street and Fifth Avenue in Manhattan, it was seen as the “coming of age of the off-price apparel industry.” Mr. Shulman used personal charm and eye-catching marketing to build his business. Dressed in a suit with a handkerchief tucked into a breast pocket, he was a familiar sight helping customers on the sales floors, mostly at the 57th Street store in Manhattan. At one store he posted a mannequin on the roof to attract passers-by, who would rush in warning that a woman was about to jump. At another outlet he parked a Rolls-Royce outside to underscore the “bargains for millionaires” slogan. In 2009, Daffy’s, which also sells household goods, held a promotional contest  offering a $700 monthly lease for a year on a furnished West Village apartment that normally rented for $7,000."

I met Irving many years ago in my early days in the outlet/off-price shopping center industry.  His original store in Elizabeth, NJ was not far from one of the great record (as in LP) stores ever, Vogel's, where my brother and I used to be regulars.  What can we learn from Mr. Shulman's marketing style?  Can some of his ideas be used in our staid investment world? Well, maybe his stuff would be considered over-the-top (actually no maybe about it!) but it does remind us that we need to differentiate ourselves.  If you put yourself in the seat of an active pension fund, endowment, foundation or consulting firm person who meets with who knows how many investment managers and gets information from how many more, it's clear that if you're looking to get the time of day from them, you need to be memorable.  

In the process of building lasting relationships, what you'd like to be known for are the basics: (1) You did what you said you were going to do with their money and (2) You were open and honest about everything.  I don't think it's all that more complicated although, as a someone recently said to me , "When they look under the hood, we want them to see a clean engine."  What is required, to build a business, any business, is the patience and wear-with-all to see it through.  There have been very few, if any, overnight sensations in the institutional real estate world.  You will be rewarded if you take the time to listen to what people want and then work hard and do your very best to deliver it.  Capisci? 

Simply Too Cute!

The Felix Consulting Group: Update
Listening to the kind of help people have been telling me they need has helped me refine and clarify the coaching and other services that we're offering.  

  • Presentation:  Improve your delivery & materials
  • Company Strategy:  What highway should your firm take?
  • Personal/Career:  Which road should you travel?
  • Raising Institutional Capital:  How to do it
  • Events:  Increasing the audience experience

"Workshop Day"- A unique educational/training experience held in your office 

  • How to network
  • How to build lasting relationships
  • How to get the most out of attending an industry event
  • How to leverage your trade association membership
  • How to be a good panelist
  • How to be an effective moderator
  • How to get meetings with people who don't know you

Please reply to this email or call me at 707.260.4233 to talk about what would be valuable to you and your team. Thanks.


On the road...
Aug. 27-Sept 11:  New York
Sept:  13:  Los Angeles to host the RCA Breakfast Briefing
Sept. 14:  San Francisco to host the RCA Breakfast Briefing
Sept. 17-20:  New York
Sept. 21:  Boston to host the RCA Breakfast Briefing
Oct. 1-3:  Amsterdam to host the first Dutch/U.S. Real Estate Trade Mission
Oct.  8-12:  New York
Oct. 14-16:  Chicago to attend the NAREIM Fall Executive Meetings
Oct. 17:  DePaul University, Chicago for a discussion with real estate students called "Careers in Real Estate: Connecting the Dots."
Oct. 18:  University of Chicago for a discussion with real estate students called "Careers in Real Estate:  Connecting the Dots."
Oct. 22-24:  Los Angeles to attend the PREA Fall Conference
Oct. 25-26:  Amsterdam to attend and moderate a panel at the PERE Global Investor Forum
Oct. 29-Nov. 6: New York
Nov. 7:  Johns Hopkins University, Washington, DC for a discussion with real estate students called "Careers in Real Estate:  Connecting the Dots."
Nov. 8-9:  New York to attend and be a chair at the PERE Summit

Blog Archive