Wednesday, July 22, 2020

Interview with Mike Clarke - A friend who has made a difference in the global commercial real estate industry

Mike is a Senior Advisor to Accord Group Holdings, a Capital Advisory and Principal Investment firm.

Mike Clarke also runs his own consulting company, Mike Clarke Consulting Limited, advising property related businesses and fund managers on their business strategy, capital raising options, product architecture and product development. He also acts as a Non-Executive Director and Independent expert in litigation.

From March 2014 to December 2018, Mike was the Head of Investor Services EMEA for CBRE Global Investors where he was responsible for investor relations, equity raising, targeting of new investors and the delivery of creative investment solutions to clients in the EMEA region. Mike was a member of the Global Leadership Team, EMEA Executive Committee and EMEA Operations Committee.

Mike joined the global real estate industry in 1987 and has extensive experience both as an investor in and manager of real estate vehicles. Before joining CBRE Global Investors he was Senior Managing Director and Head of European Real Estate for Mesirow Financial. At Mesirow he was co-portfolio manager of a global fund of funds program with specific responsibility for sourcing, undertaking due diligence, executing and managing value add and opportunistic strategies in Asia and Europe.  Prior to this, he spent 18 years at Schroders where he grew assets under management from £160 million to over £8 billion through the development of a multi-product real estate strategy.

Mike is an active industry participant. He is a member of the INREV Management Board and is a regular speaker and trainer at INREV and other industry events. He is an external examiner at Oxford Brookes University for their Masters in Real Estate Investment Finance.

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

Growing up in Norwich, approximately 100 miles North East of London in the UK, the only opportunity for work experience whilst at school, other than strawberry picking, was at the insurance company, Norwich Union (Now Aviva). I was lucky to be offered a summer in their estates department when I was 16 and realised what an exciting sector real estate was. I took the opportunity to meet members of the team who had entered the profession from different routes and decided that I would try and secure a place at University to study Estate Management which was a fast track to becoming a chartered surveyor.

I graduated from Oxford Polytechnic (now Oxford Brookes University) in 1987 with a BSc in Estate Management and secured my first role as a graduate broker with a small firm who had recently opened a London office.  Early on, I realised that we were not a natural fit so quickly moved to Liverpool Victoria Insurance as a Valuation Surveyor. Many of my friends were working in the large broker firms and dealing with Grade A developments. Meanwhile I was getting my hands dirty managing a mix of crappy residential and commercial assets in suburban London. It was a wonderful way to learn the complete food chain of real estate and the art of negotiation!

In 1989 my former valuation lecturer at University called me and persuaded me to join Hillier Parker May & Rowden (now CBRE) to do portfolio valuations. Due to the recession that hit a year later, I was able to concentrate on valuations for insolvency advice which gave me wonderful insight into how investment decisions can go so horribly wrong. These years were perfect training in risk management.

Q. What advice would you give to someone who has been in the industry for a short time or a student looking to get her or his start?

Focus on gaining in depth experience rather than working for purely a big - name employer. Those big-name employers will eventually find you if you have the right experience and attitude. From my experience, the larger firms do not give the best experience as recent graduates are such a small fish in a large pond. The smaller boutiques can give a lot more responsibility and face time with inspirational clients at an earlier stage once you gain the trust of your boss.

Look to the future of the industry rather than the past. I recall one mentee of mine from Oxford Brookes saying that his ambition was to work in Hong Kong like his Uncle had many years before as the lifestyle was awesome. I had to point out that a third of his classmates were now from Asia and they had language skills, culture and networks in Asia on their side. This was not the case when his Uncle had trained as a surveyor 30 years earlier. Going forward, I am convinced that global occupier services will be one of the best training grounds of any firm. Historically, this has been the graveyard slot for graduates. However, data and understanding how occupiers use real estate, is going to be so valuable.

While the current pandemic continues, internships and graduate jobs will be harder to come by. I am encouraging all my mentees to not get disheartened but to focus on how they can use their holidays to obtain relevant skills which will enable them to stand out from the crowd. A big frustration of mine is that real estate graduates often lack the basic skills needed in today’s financial environment. In particular, advanced financial modelling skills.  It is not surprising that many of the global firms recruit people from non-real estate courses to ensure they have the most financially literate personnel. This is so easy to fix given the plethora of training courses available and would show employers that the candidate has ambition and determination to succeed.

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

I have been so lucky in being able to travel globally talking about the industry I love and meeting some wonderful and talented people. I have no regrets as such. However, I would try and do two things differently if I was starting all over again.

First, I would try and learn to speak more languages so I could immerse myself in more of the cultures. I am not convinced that my brain works that way, but I would encourage any readers who do have any language skills to maintain them and cultivate them at every opportunity. I am envious of my sister in law who tries to learn some of the language of every country she visits. Approaching 100 at the last count!

Second, I would have looked to work abroad early in my career. Living and working in a foreign country definitely provides a greater depth of understanding of the local market and how it operates. It also provides the opportunity for a broader network of relationships to be developed than when flying in and out on periodic business trips. Once one has family and commitments it definitely becomes a lot harder to take the step so these type opportunities need to be sought out as early as possible.

Q. Who have been the biggest influences on your career? How? Why?

I have been very honoured to have worked with and met some amazing people during the last 33 years. I have learnt so much from so many, for which I will forever be thankful.

The one mentor that I will never forget is Gideon Hudson, a former partner of Allen & Overy in London. Gideon was the lead partner and legal counsel for the Schroders real estate business which I joined in 1992. I was definitely wet behind the ears at this stage and suddenly found myself negotiating development funding agreements, investment acquisitions and joint venture agreements. Gideon sat by me in all key meetings and had a wonderful way of preventing me from agreeing to anything stupid whilst allowing me to appear in total control of the meeting. His guidance in advance of, and presence during, negotiations with some big players in the UK industry built my confidence and I will forever be thankful. Gideon kindly led the prayers at my wedding in 2002 and we still meet for lunch as he enjoys a well-earned retirement.

Whilst not a person, I would say that INREV has been a huge influence in my career. I have been involved with INREV since inception in 2003 and for the last 5 years have had the privilege of being a member of the management board. INREV has brought together some of the best talent in the unlisted real estate industry to improve working practices and improve the professionalism and transparency of the sector. In recent years INREV has spread its wings creating a global alliance with ANREV, NCREIF and PREA.  Throughout, they have created a great sense of community where all the participants have a collegiate approach and know how to have fun

Q. How will the real estate industry evolve post COVID-19, what is the biggest opportunity and the biggest challenge that will come out of it?

The COVID 19 pandemic has allowed the world to press the pause button and assess what we want the future to look like. At the same time, it has had, and will continue to have, a significant impact on the economies of all developed and developing countries which we will take a long time to recover from. I am convinced that we will all recover more quickly if all countries work together rather than individually.

I am hopeful that the inevitable higher unemployment will encourage re-training programmes which will allow us to speed up the transition to a net zero carbon environment.  A huge amount of work has been done by many real estate investors, managers and operators over the last 10 years and I believe we now have the opportunity to turbo boost the initiative. If we rise to this challenge, we will hopefully give our younger generations a future to look forward to.

Whilst global capital markets definitely influence real estate returns, local factors such as supply, demand and regulations have a greater impact. Local economies will react differently to COVID 19 depending on their reliance on public transport, concentration on individual employers or industry sector etc. Given this, I believe it is essential that investors ensure their portfolios are well diversified both domestically as well as internationally.  Those Real Estate Investment Managers who have a diversified product range should also be well placed to navigate the storm providing they provide great client service and reasonable relative investment returns.

One thing I am sure about is that people will want to return to holidays and socialising as soon as possible – I sure will!

Blog Archive