Friday, March 30, 2018

A friend who has made a difference in the commercial real estate industry: Brad Hutensky

Brad is the Founder and CEO of Hutensky Capital Partners a fund manager that invests in value add retail real estate in large U.S. markets. He has extensive experience in the acquisition, management, leasing and redevelopment, financing and disposition of shopping centers.

Brad has been an active with the 70,000 member International Council of Shopping Centers (ICSC) on its Board of Trustees and served as ICSC’s 53rd Worldwide Chairman from 2012 – 2013.  Brad is also a Governing Trustee of the Urban Land Institute (ULI). He frequently speaks on retail real estate topics for the ICSC, ULI and other organizations.

He holds an M.B.A. from the Harvard University Graduate School of Business and an A.B. degree from Dartmouth College.

Brad and I met as a result of both of us being involved in ICSC. At that time we were based in the Northeast – he in Connecticut and me in New York City so we’d see each other more often than just at the annual convention, now called RECon where tens of thousands of our closest friends would gather.  I always respected Brad’s enthusiasm and drive – he was always thinking ahead.  Small world that our industry is, a number of years ago, a long-time friend, George DeMuth joined Hutensky Capital Partners and they are having a lot of fun together – as the business has grown and expanded.

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

A.  My first job out of college was working as a financial analyst for Winthrop Financial, a Boston-based real estate syndicator. I worked 80-100 hours per week modeling potential investments.  The great thing was that I really learned to understand the numbers of real estate.  I was taught about net present value and IRR and cap rates. More importantly I learned how critical it was to understand what is behind the numbers; what assumptions were made, etc. I learned that numbers can be manipulated and not to believe everything you see on a piece of computer paper. Understanding the numbers is critical to success in real estate and business in general.  As a result, today I have a healthy distrust of any numbers people give to me:  - where are they coming from and what is the story that is being sold?

After about a year and a half in that position, there was talk of potential change in tax law and the company reorganized.  I was shipped to New York City to lease office space.  I had visited New York but I’d never leased space and certainly didn’t know a lot about the office market in New York.  The first few weeks I was there the NYC brokers crushed me but, over time, I started to figure things out and soon made the transition from modeling office space projections to doing the leasing.  In the course of two years I learned financial modelling and how to lease space - two really important skills in the business.

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?

A.  I’d tell them a couple of things.  Most important is your reputation. You only have one reputation and once it is tarnished, it is very difficult to get it back. I learned long ago that operating in the ‘gray area’ is not acceptable; go above and beyond even when no one is watching. It’s a lot simpler to always be honest because you never have to remember what you said - it’ll be the truth. Second, I would definitely advise someone starting out to learn a skill.  Don’t initially try to be a developer or an acquisitions person.  Learn something about finance; about leasing or selling properties; about property management; about construction. Those are some of the foundation skills that will serve you well later and help you understand more about investing in real estate. A lot of people just want to jump ahead. I think it’s so important to learn the basics first. 

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

A.  You know with all my fancy education it took a while to realize that in a capital-intensive business like real estate, access to capital is really important.  I was in the business for 15 years before I started to raise my first fund, which gave me the capital to operate.  The great thing about capital is that provides opportunity. When you have capital you can seize upon an attractive investment. If you find an opportunity, and then have to raise the capital, it can be a lot harder.  Being with a company that has access to capital is key and allows you to focus on real estate without always being constrained by how you are going to pay for your investment.
Q.  Who have been the major influences on your career?  Why? How?

A.  I look at the thousands of retail real estate professionals I’ve met in ICSC. That organization has always been a big part of my life. I’ve had volunteer roles at from committees on the state level to serving on the Board of Trustees and being chairman from 2012 – 2013. I’ve learned something from every single one of those people that I’ve met.  They’ve become my friends and my sources of information. Some of the retailers have become tenants in my shopping centers, and some of the developers have become joint venture partners. I’ve always felt that each person I meet along the way is someone who could help me in my business or my life going forward. I believe in treating everyone as potentially the most important person you’ll ever meet.  It’s a good way to go about a people business and that’s what real estate is…a people business. 

In working with my father Allan for 22 years I learned a lot of important lessons. First of all I learned the importance of honesty and reputation that I mentioned before.  I learned by example – he taught me well.  Secondly I learned that in negotiation it’s more important to listen to what people mean than what they actually say.  Be a great listener. Those are important lessons.  It was wonderful to watch my father operate as both an entrepreneur and a good negotiator. Those of you who have worked with a parent may agree: it can be one of the most wonderful experiences, but it can also be difficult – you have to find a way to work things out that you might not agree with. We had a rule: never speak about business at the family dinner table.  If we needed to talk about something business related it would happen in another room. Working with my father was a wonderful experience for me.

Felix / Weiner "Elite" Behavioral Presentation Coaching Workshop
April 2 (next Tuesday) in New York City
4-hours; maximum 8 participants
Click here to learn more and register

Happy Holidays to all!


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