PERE Global Investor Forum / RCA U.S. Capital Trends / People Stuff

I was truly on the road this week as I chose to drive from my home to Los Angeles where the PERE Global Investors Forum was being held (about 7 hours).  I've always loved driving long distances and don't get a chance to do it much anymore.  It gave me time to be by myself and think and I came up with a few good ideas and also remembered some things that I had been meaning to do but had forgotten.  The PERE Forum was, in the opinion of many, one of the best events they've been to and I don't think they were just saying that to me because I played a couple of roles during the event!  Zoe Hughes of PERE, currently on maternity leave, put the program together and it lived up to the advance billing.  

Ted Leary interviewed Mike DiRe of CalSTRS and Ted Eliapolous of CalPERS who were genuine in describing their challenges and their successes.  Robin Marriott interviewed Steve LeBlanc of Texas Teacher Employees Retirement System who announced that Eric Lang will be taking over as head of real estate in June when Steve leaves.  Terri Herubin of The Townsend Group gave an excellent presentation and then answered some very direct questions very directly.  There were about 220 attendees and many people told me they thought that it was that size that gave them the chance to really get a chance to have substantive conversations.   Here are a few takeaways from some of the LP's:

-"We've shifted our investment to more income opportunities." 

-"More focus on doing business with women and minority owned investment advisors."  

-"We're working on keeping down the number of managers we invest with."  

-"We had good success with the idea of "develop to core" and think it can still work with good local operating partners."  

-"If one of our 'partners' plans to do something outside of the box they need to give us a heads' up."  

-"We've learned from the mistakes we've made in investing but if we sit on the sidelines we won't learn anything."  

The panel I moderated was on investing in distress and had five very experienced people.  Some of their thoughts:

-"Safety is expensive.  Risk is cheap."

-"We steer away from the herd and avoid bidding wars."

"We like 'out of favor' markets and will take bankruptcy and construction risk where there is less competition for the deals."

-"It's important to match up distressed investing with your management capabilities."

-"We want to sell to someone who is overpaying for safety."

One of the great things about the event was the number of younger (than me) people in attendance.  Many of them are in marketing/capital raising/client services/investor relations there was a lot of lively conversation.  One suggestion I make in my "How to get more out of attending a conference" training sessions is this:  If you're attending an event with a colleague, don't hang around or sit with them; divide and conquer; that way you're getting to interact with twice as many people (Note:  An exception to this rule is if your colleague is new to their job or has not been to too many other events.  Then, taking them around with you and making introductions is acceptable!).  Another suggestion is that when you've decided to take the time and spend the money to attend an event you should "be there"; be present.  Sitting in a panel discussion and working your emails is not only rude it doesn't make sense.  If you're bored or just have so many urgent things going on, leave the session and do your work.  

This reminds me of something I wrote about a long time ago.  I had fought getting a BlackBerry.  No one had ever accused me of being 'slow to respond' or 'out of contact' and, with all the travel I was doing on most days it was limited to when I was on my computer early morning and early evening.  So everything was cool.  But I was at an event and walking in the 'trade show' part and come upon a booth there was this guy on his Blackberry.  I asked him, "So, how do you like that thing?"  "Don't know how I ever lived without it," he said.  "You know, I just don't have that many urgent things going on every day to feel I need one," says me.  I'll never forget his tongue-in-cheek response, "You know, until I got this I didn't realize how many urgent things I have going on each day!"  Hey, I know that many of us are expected to be 'on' 24/7 and to respond immediately to each and every text/email/call we get.  And believe me, I appreciate it.  But remember that sometimes, when we respond or react too fast to something we make mistakes; we write something we wish we could retract but it's too late.  Anyway, enough preaching for this morning.  If you'd be interested in having me come in an conduct a class for your team on "How to get the most out of attending an industry event" or "How to network" or some of the other eclectic skills I've helped people develop just let me know.

INREV Annual Meeting:  Due to a conflict I wasn't able to attend their meeting this week in Vienna (Austria vs. Virginia) but spoke with a couple of friend who were there and the one word theme they agreed on was "Caution."  As I travel around and talk with the sources of capital (pension funds, endowments, foundations, family offices, sovereign wealth funds and plain ol' rich people) I am hearing two different stories:  caution on the one hand and assertiveness on the other.  Not everyone has the same tolerance for risk, nor should they.  So while not 'throwing caution to the wind' those folks with an appetite for opportunity and fire in their bellies are certainly out there in force.

Some headlines from RCA's 1Q12 U.S. Capital Trends Review published this week:

• Sales of commercial properties totaled $50.3b in Q1’12, up 40% from a year earlier. Positive momen­tum has returned from the slowing experienced in the second half of 2011 when CMBS conduits and other lenders reigned in their origination activity.

• Sales of retail properties surged ahead 89% from a year earlier on strong portfolio volume. Hotels were the sole exception to the positive volume trends and transaction activity has been declining over the past two quarters.

• Cap rates continued to trend lower for CBD office, apartment and retail properties and were rela­tively flat for suburban office, industrial and hotel properties.

• Although the pricing disparity between the Major Metros and the rest of the US narrowed somewhat during 2011, it appears that trend has reversed, at least temporarily, in the office and apartment sectors.

• This pricing premium differs significantly across, and even within, each of the six Major Metros. A trend noted across several property types is that the Chicago and LA metros have not rebounded as strongly as the other four. In addition, the pricing disparity in a number of markets within each Major Metro is very wide compared to historic averages.

Congratulations to Andrew Dietz who just joined ASB Real Estate Investments as Head of Marketing and Client Services, Leah Dillion who (not too long ago) joined ProLogis as Vice President/Global Client Relations, Patrick Kanters of APG who was named chairman of INREV and Jon Dishell who recently joined American Real Estate Partners as Managing Director of Fund Management and Investor Relations. 

Yes, I do lead a sheltered life.  I didn't know until just the other day that there is a professional basketball player in the U.S. whose name is Metta World Peace! (And I only know about it because of the headlines about him being 'barred' for seven games:  He hit an opposing player in the back of his head with an elbow causing a concussion). So much for peace!. 

Happy Birthday Kev!

New:  "You looking for me?"  OTR Job Aid

If your company is looking to fill a position and you are doing it yourselves (i.e. have not engaged a recruiter) I'll be happy to post a very brief job description and an email link.  Please send it to me by replying to this email.  (Also if you've got opportunities for summer interns.)Thanks.  

On the road....

May 3:  San Francisco for client meetings and other stuff.

May 14:  Please join me at the West coast celebration of the launch of my new management consulting firm, Solutions by Steve Felix at Blanc et Rouge Wine Bar, Two Embarcadero Center/First Floor.  I'll be there starting at 5:30pm and will stay with the last one standing!  Dutch Treat.  I hope you can join me and feel free to invite your industry friends.  

May 16-19:  North Palm Beach, FL to attend the annual meeting of The Hoyt Fellows

May 28-June 8:  New York for client meetings and to attend IMN's U.S. Real Estate Opportunity & Private Funds Investing Forum where I'll be moderating an interesting session on GP Mergers.

Sept. 11-12:  Paris to attend the GRI Europe Summit 2012

Levon Helm / Defining Distress / Bob's Model Building Collection

In the summer of 1968, me and my brother and some musician friends of ours discovered a group that used to be Bob Dylan's backup band.  Eric Clapton said, "Music from Big Pink changed my life."  A second album, "The Band" (known as the 'The Brown Album') is considered one of the true classics and includes "The Night They Drove Old Dixie Down", "Up on Cripple Creek" and one of my very favorites, "The Unfaithful Servant."  The group was called The Band.  Yesterday, I got a call from Tom Bruno, the drummer/singer in the Jersey City, New Jersey based band I was in in the late 60's/early 70's called "Everyone."  "Did you hear?  Levon Helm died."  I had known that Levon, the group's drummer, mandolinist and one of the lead singers, had had throat cancer but didn't realize he was close to the edge.  Tommy and I reminisced about the songs that we did from the catalogue of The Band.  My extended group of music loving friends have for years sang, without any encouragement needed, one of the great singalongs of all time "The Weight" (Take a load off Fanny, Take a load for free....). Richard Manuel committed suicide in the early 80's and Rick Danko died in 1999.  The Band was and is one of the significant influences to me and on my music and I got to see them perform numerous times.  Losing Levon is another reminder of just how fragile the whole darn thing is.  Levon was 71.

I'll be at PERE's Global Investor Forum in Los Angeles next week and hope to see some of you there. On the second day, I'll be the host, filling in for Zoe Hughes of PERE who is on maternity leave and had a baby girl just a couple of weeks ago.  At the last minute, I was also recruited to moderate the panel called "Defining Distress."  The panelists are experienced investors who suggest that the opportunity lies in finding value at the bottom of the cycle.  They also question the wisdom of investing in core today as, perhaps, investors may be 'paying up for safety.'  It will definitely be a lively session.  Stay tuned!

Things beyond business:  Bob White is known throughout the global real estate industry as the founder of RCA (Real Capital Analytics).  He also has a reputation for throwing the best rooftop parties in New York where movers and shakers in the commercial real estate world converge a few times a year.  But something that you may not know about Bob is that he is an avid collector of scale model buildings and has has an extensive display of these, from all over the world, in RCA's headquarters in New York.  

Every picture tells a story.  There's a great service out there called Life History Books which will help you document you family's history or that of a particular family member or person.  I've always been sentimental and as the repository of many of my mothers' photos and my fathers 8mm movies I've done some things to make sure this stuff is passed around and down and will survive the ages.  Also, at the request of one of my daughters-in-law, I've been documenting my recollections of different experiences growing up.   But, this company can make it easy for you to preserve and protect the legacy of your family.  Check it out/pass it along.

"We are not just living through a financial crisis but a moral crisis."  A good friend of mine spoke recently with a group of university students about where we are today and how we got here from a financial and real estate perspective.  But he told me that the topic of the discussion just prior to him was Ethics!

On the road....

Apr. 23-26:  Los Angeles to attend the PERE Global Investor Forum

May 14:  San Francisco. Please join me in the west coast celebration the launch of my management consulting firm, Solutions by Steve Felix.  Blanc et Rouge Wine Bar, Two Embarcadero Center/First Floor.  I'll be there starting at 5:30pm and will stay with the last one standing!  Dutch treat.  I hope you can join me.  Feel free to bring industry friends.

May 16-20:  North Palm Beach, Florida to attend the annual meeting of The Hoyt Fellows.

May 22-25:  London to attend the IP Real Estate Awards Event and catch up with some of my London friends.

May 29-June 1:  New York for client meetings and other stuff

Sept.  Paris to attend the GRI Europe Summit

Money, money, money, money/presentationgym/Playful Social Media?

Where are institutional investors putting their money these days?  (As reported by PERE magazine)

1.  Prudential raises $568m for senior housing fund

2.  Cornerstone collects $515m for debt fund

3.  Aberdeen hauls $472m for Asia Fund of Funds

4.  Hemisferio Sul (formerly Prosperitas) to hold $650m close on latest Brazil fund

5.  Westport Capital Partner Fund III has closed on more than $571 (Distressed debt and assets)

6.  Angelo Gordon & Co. has closed on nearly $2.3 billion through two commingled vehicles targeting real estate assets (distressed commercial and residential properties or debt from owners and lenders &  high-quality, in-fill assets where sub-performance can be corrected and which are likely to appreciate over time)

7. Brilla Group has completed its first round of fundraising for the Colombian Beachfront Hospitality Private Equity Fund, which will invest in luxury hotels and resorts in the South American nation.

And these are not even all of those reported within the last 45 days.  Funny, I don't see the word "core" in any of these strategies.  From this can we infer that the gush of money that was only recently talking 'core, core, core' and 'safe, safe, safe' has sanctioned a more ambitious direction?  But, wait a minute, last I heard there were still substantial, make that huge, queues to get in to some of the large core open-end funds with some investors buying positions in those funds at a premium. So, I'm confused a little.  Maybe all this means is that there's a bunch of money flowing into commingled funds again, even with the outcries of wanting more control, separate accounts and club deals.  And, that there are more independent thinkers amongst the public pension funds particularly who may have decided that they've put enough money into core and now want/need to kick things up a notch.  Whatever is going on, it plays directly into my comments recently that there is change afoot and we are in the midst of it, right here, right now.

Cool find of the week:  presentationgym.  "We are passionate about practice, feedback and really exercising your skills so that you can deliver creative, authentic presentations which tell stories and win audiences over."  This is a terrific service which I intend to use myself.  Rather than ramble on about them I suggest you contact Clare Yang at (clare@presentationgym.com) to set up a "Presentation Checkup" and learn about how they can help.  

One more job-hunting tip:  "Don't send a form letter!  I get tons of them and nothing turns me off more than a form letter which is obviously going to a hundred or more similarly situated companies.  Personalize the letter, know about the company and why you are a (well-researched) particular fit for them, what it is about you that will ad value to their enterprise and why you are (likely to be) passionate about their business and their products.  Why you can "Make a Difference."  But, having said that...

There is a very interesting piece in the current issue of Knowledge@Wharton called "Hold That Password: The New Reality of Evaluating Job Applicants."  "...some employers have asked for direct access to the Facebook accounts -- including user names and passwords -- of people applying for jobs at their firms; the identity that individuals create in the world of social media is quickly becoming an important factor in hiring decisions and in people's broader professional lives...A 2011 survey found that 91% of recruiters reported using social networking sites to evaluate job applicants...the request for access to login information, however, raises serious legal questions. For one thing, Facebook has stated that sharing or solicitation of rights and responsibilities..."I worry that there is already a sense right now that our participation online may come back to haunt us," says an Internet attorney, "it inhibits our ability to express ourselves. If we can only express public relations-like statements, it takes away a good bit of the utility of the Internet. I think it would be a shame if we were to lose the playful aspect of this new technology." 

My two cents:  Sadly and pretty quickly we have lost the "playful nature of this new technology" (presumably social media).  We've all read about abuses and simply untrue postings and incriminating or phony photos of people.  There is nothing playful about that and given that the Internet is an open medium I believe it will only get worse.  The more open we think things are the more closed they really become.  (Please email me if you'd like a copy of the whole article).

  

Things beyond business:   Michael Giliberto is known to many in the industry.   As the co-creator of the Giliberto-Levy Commercial Mortgage Performance Index or as the now semi-retired former managing director at JPMorgan.  But some  know him as the lead guitar player in two, that's right two bands:  The Derivatives whose marketing tag line "....less than a legend, more than a garage band" who have been entertaining audiences in the greater NY/CT/PA area for more than 10 years with their classic rock and soul music and The Winston-Wolfe Band which plays rockin' blues. I've been trying to Michael's act for many years but my schedule never seems to jive with theirs.  But, one of these days....

Take Them Out to the Ballgame:  Here's a link to a good piece about how holding regular outings and get-togethers is one of the most effective and inexpensive ways of building employee loyalty.  I got it from my long-time accountant and good friend, Jerry Shanker.

Just for fun:  Watch this video of the duet between Tony Bennett and Lady Gaga.  She is terrific!

Congratulations to my friend Carl Schwartz who has joined the law firm of Hunton & Williams.  Carl is one of the leading real estate attorneys in New York and a class act.

On the road....

April 17-20:  New York for client meetings and other stuff

April 23-26:  Los Angeles to attend the PERE Global Investor Forum

May 14:  Please join me in the west coast celebration of the launch of my new consulting business, Solutions by Steve Felix.  It'll be in San Francisco at Blanc et Rouge Winte Bar, Two Embarcadero Center, 1st Floor.  I'll be there starting at 5:30pm and will stay with the last person standing!   

May 16-20:  North Palm Beach, Florida to attend the annual meeting of The Hoyt Fellows

May 22-25: London to attend the Annual IP Real Estate Investor Forum & Awards 

May 28-June 1:  New York to attend the IMN Opportunity & Private Real Estate Fund Investing Forum and client meetings

Sept 11-12:  Paris to attend the GRI Europe Summit

Change...Good to Great...Finding a Job

For quite a while, when anyone asked me what I see going on in the commercial real estate industry the answer was easy, "Uncertainty."  If you ask me today, I'd suggest adding another word, "Change."  While commercial real estate remains basically and old-fashioned business the world around it is continually changing.  Retail shopping habits and channels change.  Where people want to live changes.  Where companies choose to locate their offices, warehouses and factories change.  What hotels people stay in change.  How people like to get around (i.e. mobility and transportation) is changing (with regular gas now at $4.39/gal and likely to continue going up, we're thinking about where we want to live...city or on a self-sustaining farm (with excellent wireless service, of course!).  

The consulting sessions I've been having with my clients, "3-hours with Steve," result in getting people thinking differently about their businesses; about what changes they need to be considering; about whether they can grow their company doing the same things they've been doing.  Thinking about the book, "Good to Great," suggests that vital to a company being great vs. simply good are (1) Having the right people on the bus; (2) Sitting in the right seats; (3) With the right bus driver; (4) Driving the bus in the right direction.  Simple right?  Or maybe not so.  Those companies that welcome change and stare it right in the eye are the next generation of great companies.  And, I can assure you that there are a lot of younger people out there who remind me of my generation, questioning the status quo and looking at things differently.  Like this quote I've always liked which is attributed to several people:  "There are those that look at things the way they are and ask 'why'?  I dream of things that never were and ask 'why not'?"  

After spending time with a bunch of soon to be graduating undergraduates last week at the Villanova Real Estate Case Challenge (btw, the winning team came from Lehigh University followed closely by University of Pennsylvania, Monmouth University and Drexel University)  there was much conversation about finding jobs.  A good industry friend offers these tips that he gives to students or perhaps anyone seeking a job.  

1)      Do your homework! Have a good reason why you want to work for a firm in a particular role. Companies don’t really have jobs to fill; they have problems to solve; products/services to deliver; customers to serve; etc.

2)      Fill out all the company web site/internet job posting requests. This is the baseline data set.

3)      Find out who the senior executives/HR contact/hiring manager might be. One/all. The more the merrier. This is a combination internet research/networking activity.

4)      Write a cogent, thoughtful letter describing why you are interested in the industry/company and want to learn more. Ask for a short meeting where you can seek advice about how to get started; take the next career step, etc. (Yes, this is real work.)

5)      Visit the office supply store and get really nice paper with matching envelopes.

6)      Use the US mail to send it. Give the post office a little time. (They’ll tell you how long it takes your letter to be delivered.) We don’t receive much regular mail, so this improves the odds your information will be read.

7)      Follow-up. Diligently, Persistently, Politely. By phone/email/etc.

"New" (to me) music term:  Dubstep:  'Sounds like your computer and your lawnmower dying at the same time.'  But from Wikipedia 'is a genre of electronic dance music that has been described (by another person) as "tightly coiled productions with overwhelming bass lines and reverberant drum patterns, clipped samples, and occasional vocals".'

New Trends?  De-friending on Facebook.  De-connecting on Linkedin.

One more comment regarding the results of the survey I mentioned recently that was conducted with one 2011 Bachelor of Science graduating class.  "What was missing was the category, "Employed and happy with what they're doing."  Thanks for pointing that out John.  Like with a lot of 'headline news' it's only the bad things that are sometimes highlighted.

Congratulations to my friend, Betsy Pultz, who took a senior position at s2 Financial Marketing.

Congratulations to the team from Lehigh University for winning the 2nd Annual Villanova Real Estate Case Challenge Competition.  

Music update:  Thanks to so many of you who have asked me what's going on with my music.  Well, there is some news.  After three years in the making, we will be releasing our second CD of original material by the end of April.  It's called "Wait for Me" and is a collaboration with my sons Brian and Kevin and a team of fabulously talented Chicagoland musicians.  There are so many new channels to distribute music these days and we're going to tap into a bunch of them.  But you'll also be able to buy it the old-fashioned way:  Order through me or buy one from me as I'll be walking around with a bunch of them wherever I go!  Stay tuned.

On the road....

April 17-20:  New York

April 23-26:  Los Angeles to attend the PERE Global Investor Forum

April 30:  San Francisco.  Please join me in the west coast celebration of the launch of my new consulting business, Solutions by Steve Felix.  It's at Blanc et Rouge Wine Bar, Two Embarcadero Center, 1st Floor.  I'll be there starting at 6pm and will stay with the last person standing!   Drinks are on you!

May 16-20:  North Palm Beach, Florida to attend the annual meeting of The Hoyt Fellows

May 22-25: London to attend the Annual IP Real Estate Investor Forum & Awards 

May 30-31:  New York to attend the IMN Opportunity & Private Real Estate Fund Investing Forum

June 6-7:  New York to attend and moderate a panel a the ULI Capital Markets Conference.

Party / Jobs, jobs, jobs / Al Capone & Willie Sutton

The highlight of the week was the 50+ people who stopped by Joe G Restaurant on Monday night to help me celebrate the launch of my new consulting firm, Solutions by Steve Felix.  It was very heart-warming and thank you to everyone who was there and to those who wanted to but were unable.  I didn't really know who would be there so it was a nice surprise when three of my former employers, dating back to the early 1980's, were there.  It felt, I bet, a little like those people who appeared on the classic TV show, "This is Your Life."  'Well Mr. Felix, to start with, we have tracked down one of your favorite grammar school teachers.  (Voice only) "Steve, I thought one day you would be mayor of New York."  'That's right Steve, it's Goldie G. Russakoff, your fourth-grade teacher from P.S. 175 in Forest Hills.'  (Applause as Mrs. Russakoff is escorted out to where I am sitting).  'Now, Steve, here's a voice you may recognize.'  "All middie boys and middie girls outta the water."  'Yes, it's one of your favorite people from your years at Camp Walden near Bolton Landing, NY, waterfront director Billy Gallin."  Normally stone-faced Billy walks out and gives me a hug.'  Anyway, you get the picture.  As with any of these type get-togethers where everyone works in some part of the commercial real estate industry, I know virtually everyone and I love seeing people who don't know each other talking away, learning about what each other does, sharing stories and connecting.  I may hold one of these in Chicago and San Francisco this spring.

If there was a theme to my week it was conversations about jobs.  I spoke personally with people who have (1) retired from jobs; (2) gotten new jobs; (3) are looking for jobs; (4) don't like their jobs.  Does that pretty much cover it all?  And, as the week winds down I'm in Philadelphia where in a couple of hours my role as a judge for the Villanova University Real Estate Case Challenge begins.  But last night, at the dinner, I spoke with a number of the students (whose real school affiliation will only be known after the competition ends later today).  This is a group of undergraduates (vs. the UNC Kenan-Flagler Challenge which is for real estate graduate students).  A number of the 'kids' I spoke with are ready to go out into the workforce now and two of them have lined up jobs, both in the banking industry (as in commercial real estate lending).  But others were pumping me for ideas.  So I'll let you in on a suggestion I gave them:  have a business card.  You don't have to be working for a company to have a card.  If your school doesn't provide a template simply go here and order 250 cards and pay only postage.  All you need to have on the card is your name, your phone number and your email address.  My dad taught me the importance of having a business card and I have carried them throughout my life, no matter what I was doing.  I was surprised that so many of the students hadn't been taught this (although I have also observed and provided feedback at other university event situations that the art of networking is also not really being taught or perhaps not being taught as well as it could be (Note:  My new company will be doing something to help cure this deficiency in the near future).

While there is some hiring going on in the industry it's not across the board.  But, I was talking with a friend this week who is one of the more well-known real estate recruiters some advice was offered to job seekers:

-Don't just rely on the Internet or emails.

-If you want to work for a particular firm, be bold.  Call the HR people.  Contact senior executives.  Market yourself. 

-Employers respect those who show respect for themselves by 'going for it.'

-Some of the best jobs people get are not those that are posted or necessarily through recruiters.  Present yourself.  Give a prospective employer the opportunity to think about what value you can bring to their company.

And to finish beating up the topic of jobs, I read about a survey that was conducted on the 2011 B.A. graduating class of a respected East coast college.  17% of their sample is unemployed. 39% have full-time jobs, including six who have both full and part-time jobs. 35% of students who are employed part-time have two or more jobs. 74% of students who are interning are unpaid. 22% of students are in graduate school. 34% of jobs involve food service, retail, customer service, clerical or unskilled work. Here's one quote that I found pretty interesting...until I read the 'hanging out' part:  "A lot of it just came down to networking skills. I knew it was going to be hard, so I did a lot of internships. The best thing to do is to have them like you, to keep in contact during the year and hang out with them. I knew the job was there before I graduated. It comes down to networking well and knowing who you need to maintain relationships with when you’re not there."  Hmmmm.  So there you have it:  "Hang out with them."  I guess it's just that simple!

Feedback from a friend of mine who is a professional career and life coach:  "There are three C's that go into making a hiring decision:  Competence, credibility but, and most important, compatibility."

Final item:  I want to share with you the copy in an ad in the hotel room magazine:  "Eastern State Penitentiary.  Former home of Willie Sutton and Al Capone.  Eastern State Penitentary was known for its grand architecture and strict discipline."  This just struck my funny bone.  Can you see it:  Sutton and Capone are standing in the exercise yard looking up at the tower where the guards are standing with rifles ready to take them out with one shot if they so much as give them a sideways look.  Sutton says, "Al, look at the way that tower makes this place look like a moor castle.  Don't you think."  Capone:  "Listen Willie, I know this place is known for it's architecture but I'm more concerned with the strict discipline part of it although, as you know, I'm pretty much operating the same inside as I was outside thanks to knowing the right people.   But, you're right and look over there and that beautiful gate.  When I was a kid, my mother read me a book called Little Lord Fauntleroy by Frances Hodgson Burnet and...."

On the road...

Apr. 24-25: Los Angeles for the PERE Global Investors Forum where I've been asked to host day two.

May 17-20:  North Palm Beach, Florida to attend the annual meeting of The Hoyt Fellows.

May 23-26:  London and to attend the I&PE Real Estate Awards event (Thanks for inviting me you guys).

June 6-7:  New York to moderate a panel at the ULI Real Estate Capital Markets Conference Real Estate Finance and Investment 2012

NAREIM/Springsteen/Better Resume/2012 Deal Flow

Tuesday morning, 7am: There is still a small sliver of the new moon in the sky early as I stand in the brisk breeze overlooking the Atlantic Ocean before the last day of the NAREIM conference started.  I've always loved the ocean and the beach (especially in the winter when there is no one there).  It started when I was very young and our family used to go to Atlantic Beach in Queens on the weekends.  My grandfather, Herman Silverman, taught me to swim in that ocean and there are black and white movies and still photos of us, at ages before we swam, holding the hand of an adult and jumping around in the surf.  It's "Spring Break" (is that known internationally?) where tens of thousands of young people converge on South Florida to party.  During a break in the event I took a little walk on the beach.  It was crammed with people versus the vacancy I'm looking at now as the sun just starts to reflect over low-hanging clouds, the early morning beach walkers and joggers pass by and the hotel staff starts setting up the beach chairs for another busy day for those on holiday (or goofing off).  This part of South Florida has become the hot spot for fun and nightlife although my nightlife was confined to the event dinner, after dinner keynote and then turning in early.  But we at this event are in the vast, vast minority and just being here, alone, reminds me that we haven't been on a vacation since the first quarter of 2009.  Way too long and some plans need to be made although there always seem to be reasons that get in the way.  The sliver of the new moon is gone now, given way to the light of a new day but it struck me as a symbol of the new adventure I've just started and that there is opportunity as the old makes way for the new.  

Thanks to NAREIM President Gunnar Branson for inviting me to attend their Spring Executive Conference as a consultant.  I will be providing them with my "Event Report Card", one of the services I offer through Solutions by Steve Felix and will give them my feedback on what I thought they did well and suggestions for what I think they could do better next time.  Over the years, my clients have told me that this type of feedback is very valuable and helps them offer a more powerful experience to their attendees in the future.  

This was my third NAREIM event.  The attendees are very senior people representing investment management firms and there was some very interesting dialogue.  One of the beautiful things about this particular event is the openness with which the attendees share.  Perhaps it's because the group represents a homogeneous part of the industry.  For example, other than on a panel, there are no pension funds, endowments, foundations, rich people (other than those who have created wealth through real estate investing), sovereign wealth funds or consultants there which lends itself to unconstrained conversation.  While there are other times during the year when "Investor Only" sessions are held, this may be the only event of it's kind for the manager and other service provider side of the business.  It reminds me that years ago, when I was in the factory outlet shopping center business, the tenants (i.e. manufacturers) would hold private meetings during an industry event and I was told that during those sessions they voted on which centers would be blessed with their tenancy, basically determining the success or failure of any particular project (there were lots of centers that got built during those days and some that didn't!).  Anyway.....  

More on the subject of risk.  From a long-time OTR reader:  "One of the great value investors of the last 20 years, Seth Klarmen of Baupost says, 'Risk is not volatility or some simple risk metric.  Risk is the likelihood of permanent loss of capital.'

Bruce Springsteen gave the keynote at the SXWS (South by Southwest) convention (a four-day music-business convention bringing more than 2,000 acts-songwriters, bands, rappers, D.J.'s and more to perform all over Austin, Texas):  "We live in a post-authentic world.  The elements of what you're using don't matter.  Purity of human experience and expression is not confined to guitars, to tubes, to turntables, to microchips.  There is no right way, no pure way of doing.  There is just doing."

Thanks to my good friend, Ted Leary, for forwarding me these eight 'rules' on how to make your own 'brief bio' from the Financial Times:

1. No bio should ever contain more than five positions or achievements. 

2.   No one should include sentences like this: “I had responsibility for driving the success of marketing capabilities across many geographies”. Not only is it not English, no reader could care less. 

3.  Keep the bragging down. Adjectives should be forbidden. The philosopher Roger Scruton tells us in his bio his thinking is “powerful”. Which I knew already, but him saying so makes me start to doubt it.

4.  Spice up success with a bit of failure. The one thing that all bios have in common is that everything everyone has done is always a great achievement. To admit to difficulty can make you braver, more interesting and more open. So Howard Davies might consider amending his bio to say that he resigned from the London School of Economics in tricky circumstances involving the Gaddafi regime. It would be a lot more revealing than telling us, say, that he is an honorary fellow of Merton College. 

5.  Honorary degrees have no place on bios, and neither do awards. Surely Jeff Immelt doesn’t need to tell us he has been voted among Barron’s “worlds best CEOs” three times? To do so is coarse, and an invitation to the GE chief to fall on his face. (I’m uncomfortably aware that a couple of ageing and piffling awards are mentioned on my own page on ft.com. There is no excuse.) 

6.  A little personal detail is quite acceptable especially if it sounds exotic. The trouble is bios routinely pretend home life is blandly blissful – “x has one, perfect, daughter”, says the bio of one top businesswoman; another reads: “Married with three children and spends most of her time outside work on various sporting touchlines!” One man I know includes on his bio: “Married, two children.” It would have been so much more interesting had he told a fuller truth: Married for the fourth time; one child each by wives #1 and #3. 

7.  Hobbies are perfectly acceptable. In the bios I’ve been studying I’ve found “likely to be found with her nose in a book” and “enjoys extreme gardening, reckless skiing and grouse shooting”. These are useful as they tell me who I might like to meet – and who I might not. 

8.  Most cringe-making of all is to say you are “in demand on the speaker circuit” or “make regular appearances on radio and TV”. Such claims are ubiquitous and flabby. 

What's interesting (and entertaining) to me about this and about resumes and CVs' (I didn't know they were technically different until recently) is that everybody has a different idea of the right thing to do.  Some universities have formats that students must use.  But when I'm asked for advice on how someone's resume should look to get the most attention I say that I look at each one with a different pair of eyes.  Some people have work experience that I believe should be highlighted (especially today and particularly if it's really relevant to the job you're applying for).  For some, their education is their calling card.  The difficult ones are where someone is making a career change and wonders how to get the resume reader to see their potential. The risk with putting too much emphasis on a resume is that there is much, much more to every individual.  My hiring style is to look at the person holistically and, while having a certain amount of specific experience is necessary for some jobs, perhaps other things like attitude, personality, chemistry with your existing team, etc. should be given at least equal weight.  

Congratulations to my friends Doug Neal who has launched Neal Capital; Ubbe Strihagen who joined Catella as Head of Property Funds in Stockholm; Adelaide Polsinelli who joined Eastern Consolidated as Senior Director and Claiborne Johnston who has joined Invesco.  

Privcap, the brainchild of former PERE Editor-in-Chief, David Snow, has posted a video interview about deal flow in 2012.  Among the interviewees are Todd Henderson of RREEF and Sonny Kalsi of GreenOak Real Estate.  Registration at Privcap is free. 

On the road....

March 26:  New York for a celebration of the launch of my new consulting business, Solutions by Steve Felix at Joe G Restaurant, downstairs from the DaVinci Hotel at 244 W. 56th Street (bet. B'way and 8th).  I'll be there starting at 6pm and will stay with the last person standing.  Joe G pizza, made famous on The David Letterman show is on me.  Drinks are on you.  Hope to see you.  And, feel free to bring your industry friends.

March 27-29:  New York

March 29-30:  Philadelphia to be a judge at the DiLella Center for Real Estate Case Challenge at Villanova University.

April 24-25:  Los Angeles for the PERE Global Investors Forum.

May 17-20:  North Palm Beach, Florida for the annual meeting of The Hoyt Fellows.

May 22-26:  London and to attend the I&PE Real Estate Annual Awards Event on May 23.

A very romantic PREA Conference/Fareed Zakaria/Things Beyond Business

People have already started asking me, "So what was the mood at the PREA conference this week?"  "Romantic", I tell them.  Let me explain.  On Tuesday evening, as most attendees had already arrived in Boston,  a transformer fire knocked out power in the area which included both the event venue Westin Copley and a good-sized surrounding area.  A friend and I were just finishing an al fresco dinner at Piatinni on Newbury Street when everything went black.  It got quiet and then harsh blue flashing lights and loud announcements from passing police cars began.  A helicopter appeared overhead and I said, "They must be shooting a movie!"  Of course, the weren't but the experience had some movie-like surreality to it including, as I walked back to my boutique hotel, seeing thousands of people briskly walking in the same direction, towards me, which was, as you would imagine, away from the location of the fire.  It was a modern day Exodus.  But there was no panic, not that night, when I had to use the light from my phone to climb the four flights to my room or the next morning when the PREA team, led by Gail and Amy, teamed up with the staff at the Westin to pull off an amazing feat:  the show went on!  Congratulations you guys.  

So, about the romantic mood.  Picture 850 industry people at PREA.  There was some low light in the general meeting room and the area outside it where people hung out but it worked just fine.  However,  there was no power in the restrooms so the hotel put candles in those facilities.  As you can imagine, it was all that people were talking about starting from 7am on Wednesday morning when I walked to the Westin and was told that the event would be taking place and then ran into some of the early risers and joggers in the industry who were comparing experiences, mostly about walking up and down massive amounts of stairs and whether or not people chose to (a) take a shower (cold) at all and/or (b) wash their hair.  And these kinds of conversations took place all day.  (Btw, the power was out for more than 24 hours!).  

However, the most amusing scene for me was when I 'walked' up an escalator and saw a group of about nine people standing around.  I took a look and saw that someone had run an extension cord from an emergency generator in the back room and had hooked up a couple of power bars and these folks were all standing around watching their phones charge!  The first image that jumped into my mind was that of cavemen standing around the first fire, making caveman noises and jumping up and down, pointing at this remarkable thing.  So this group developed it's own revolving klatche and, as they are talking with each other, or more more likely someone who was not 'plugged in', they continually kept an eye on their phone.  At one point, a young man bent down to make a call, "Wait", said a woman standing next to me,"  that's my iPhone!"  Anyway, you should have been there.

Okay, so the business mood?  I'd say it was inconsistent rather than uncertain.  My takeaway is that there is a lot going on and there is also a lot that people would like to see going on.  There seems to be more money coming out of the pension funds, although the majority of the talk is not so much about commingled funds but about other investment options (separate accounts, JV's, club deals).  Endowments and foundations are generally considered to be on the sidelines for the most part and there was more talk than at any other PREA event about family offices, rich people (formerly known as High-Net Worth individuals) and private wealth management firms as sources of 'institutional' capital for private equity real estate funds.  Capital raisers are getting more and more creative as they look outside their historic comfort zone for fresh funds for their investment vehicles.

There are going to be a few new hires reported within the next week. I spoke with two of my friends who are starting new jobs and heard about a third (I'd love to announce them here but I don't want to piss anybody off!).  Hearing about those hires, for both brand name firms and also one in particular that aspires to be a brand name, is encouraging, especially to those who are looking to change jobs or find a job.  

One of the highlights of the event for me was being able to meet keynote speaker, Fareed Zakaria, just before he went on stage.  Freed is a well-known and well-travelled editor and columnist and commentator on international and domestic affairs.  He also has a good sense of humor and shaking his hand and looking him in the eye (which I believe is the total amount of time it takes to get a first impression of a person), he seems like a regular guy.  A few of his comments:

"It all comes together in the end."

"Everyone is trying to play the same economic games by the same economic rules."

"One key trend today is the death of inflation."

"We forget that there are people who have a very different world view than ours."

"It will take 5 1/2 years for jobs to come back in the U.S."

And a few other random comments from the stage:

"A U.S. recovery, without housing, is pretty compelling."

"The rewards to being creative and energetic are increasing while the rewards to being ordinary are dropping."

"Is inequality a macro-economic problem?"

"Advisors develop substantial admiration and respect for those Presidents who seek their advice."

Income producing real estate remains an old-fashioned business and, perhaps, when we let it, a relatively simple business ("A good friend of mine used to say, 'This is a very simple game. You throw the ball, you catch the ball, you hit the ball. Sometimes you win, sometimes you lose, sometimes it rains.' Think about that for a while." Ebby Calvin Laloosh (Tim Robbins) in Bull Durham.). But there are more and more creative ideas being used to make things happen.  Stay tuned!

Some of my industry friends have encouraged me to use this space to keep you abreast of how my new company, Solutions by Steve Felix evolves.  So, yesterday, for the first time, I actually was in an elevator with two industry friends and gave them my 'elevator pitch.'

Solutions by Steve Felix provides three "guaranteed" services that I have been delivering for many years to a variety of satisfied clients:

1.  Industry Shrink:  A three-hour session with one or two senior people in a firm where we discuss those burning issues that are 'top of mind.' The benefits to my client?  (a) More clarity on priorities to growing their business (b) Ideas on how to improve marketing presentations and materials (c) Discovery of other solutions I can provide.  

2.  Guaranteed Event Enhancement:  A menu of services for events like an internal strategy session, where I facilitate the discussion and am able to get things out on the table that might not come out otherwise to a client conference, where I can play a number of roles to enhance the attendee experience to simply an Event Report Card:  You invite me to your event. I observe and deliver a memo to you "Here's what you did good.  Here are some suggestions on what you could do better next time."

3.  Presentation Coaching:  Everyone admits they need it.  Makes both 'physical' and material presentations more effective.

Tip for anyone speaking in front of a group:

When someone in the front of the room asks a question remember:  the people behind that person often cannot hear it so before you start answering it please repeat it so everyone can hear it.  

Final thought:

When I meet someone, I'm really much more interested in who they are than what they do.  Well, actually, in a business setting, asking a person what they do is the normal and polite way to start a conversation.  But depending on the circumstances, that conversation can morph into two people talking about things beyond business. It's with this in mind that I'm starting a 'recurring' part of OTR called "Things Beyond Business."  For example, this week, I'm mentioning Ken Barnes.  Ken and I randomly (or not so) at the recent NCREIF conference.  We happened to share a table eating our delicious buffet dinner and got to talking.  Ken is a principal of a Seattle-based appraisal and consulting firm called, McKee & Schalka. But, beyond business, Ken is a brilliant sculptor.  He has done a number of commission pieces for both residential and commercial consumption.  And, he's a very nice guy.  Stay tuned for more in "Things Beyond Business."

On the road....

March 18-20: Miami (South Beach) to attend the NAREIM Executive Conference

March 26-28: New York

March 26: Please join me in celebrating the launch of Solutions by Steve Felix at Joe G Restaurant, 244 W. 56th Street (bet. B'way and 8th), downstairs in the DaVinci Hotel (stairs are outside).  6pm-whenever the last person leaves.  I'll provide the Joe G pizza made famous on the David Letterman Show.  You provide the drinks!  The more the merrier.

March 29-30: Philadelphia to be a judge at the DiLella Center For Real Estate Villanova Real Estate Challenge

April 24-25:  Los Angeles for the PERE Global Investors Forum.

May 17-20: North Palm Beach, FL to attend the annual meeting of the Homer Hoyt Fellows.