Friday, May 4, 2018

Networking for Actual Human Beings


Thanks to my friend Brian Stoffers, Global President, Debt and Structured Finance at CBRE (and The Wall Street Journal) for this very interesting read. Not everyone is comfortable with networking.  In fact, I believe it's an over-used term.  However, many times, the start of a relationship begins at a networking event or during the official (or unofficial) networking time at an industry event.  The most important part of meeting someone for the first time, if you determine it's someone you want to stay in touch with, is to follow up with them and then stay in touch, in a meaningful way.  

The research is clear: People don’t mix at mixers, and don’t feel good about trying. But there are better ways to make meaningful connections

A significant body of research demonstrates that networking—making and strengthening connections to others—is vitally important for professional success. But there’s a problem: Most of us hate doing it. We dread the awkward small talk with strangers at a noisy cocktail party, the pressure to deliver our “elevator pitch” and to “work the room. “There are better ways to make these important connections, but it has to start with a clear understanding of what’s wrong with the usual mode of corporate networking and why we dislike it so much.

The fact is, such activities strike many of us as insincere and manipulative, even slightly unethical. A 2014 study published in Administrative Science Quarterly found that just thinking about job related networking made most people “feel dirty.” The researchers asked 306 adults to remember a time when they had made a professional contact, either for career advancement or for personal reasons. Both groups were then asked to do a word-completion task that is used to gauge subconscious feelings. Those who recalled a contact intended to advance their careers were significantly more likely to have subconscious thoughts of feeling morally tainted. The researchers got similar results when they tested memories of online networking.

One study found that just thinking about job-related networking made most people “feel dirty. “One result of this revulsion is that most of us don’t actually make many new contacts at networking events. In a widely discussed experiment, two professors at Columbia Business School held a gathering in 2007 for some 100 students in the executive M.B.A. program, all of them outfitted with electronic tags to track with whom they interacted and for how long. Even though almost all of the executives said that they wanted to attend such events to build new business ties, it turned out that they spent, on average; around half their time in conversation with people they already knew. As the study’s authors put it, people just don’t mix at mixers.

But networking doesn’t have to follow these stale formulas. In fact, it’s more likely to succeed in making meaningful connections if the activity isn’t so relentlessly focused on acquiring new business contacts. Herewith some tips: Spend more time reconnecting with friends than meeting new people. Since most of us are more likely to engage with people we already know than with strangers at networking events, skip such gatherings altogether and invest that time in renewing older contacts.

A wealth of research suggests that your less cultivated business acquaintances, or “weak ties,” have more information, opportunities and potential introductions to share with you than either your close contacts or total strangers. Seek out shared activities instead of unstructured events. The Columbia study suggests that we don’t really make good use of freewheeling social events with strangers. A productive alternative is to focus on an activity. The entrepreneur and author Jon Levy has built a strong network by hosting dinner parties with a twist: When guests arrive, they’re told not to share their names and occupations and are given assignments for preparing the group’s dinner.

Conference organizer Jayson Gaignard takes a similar approach with activities such as mountain biking or jeep tours. Ask better questions. If you’re stuck attending a traditional networking event, try to go beyond the standard opener of “what do you do?” when you encounter strangers. Instead ask questions such as “What excites you right now” or “What are you looking forward to?” Or else give them a chance to talk about themselves: “What’s the most important thing I should know about you?” Or be more playful, “Who’s your favorite superhero? “What makes most networking so unpleasant is the feeling that it’s all instrumental, a way for us to use other people to get ahead. So instead try a better approach: greet all those strangers as actual human beings.

This essay is adapted from Mr. Burkus’s new book, “Friend of a Friend: Understanding The Hidden Networks That Can Transform Your Life and Career.”

Fletcher Park, Fletcher, NC





Wednesday, May 2, 2018

A friend who has made a difference in the commercial real estate: Bob White



Robert M. White, Jr. founded Real Capital Analytics Inc.in 2000 to bring greater transparency to the investment markets by providing real-time data of capital flows and prices of commercial properties. He is a noted authority on the real estate capital markets who is frequently cited in the press and has authored numerous articles for industry publications and the firm’s own Capital Trends publications.

Bob is a Counselor of Real Estate (CRE), a Fellow of the Royal Institution of Chartered Surveyors (FRICS) and a Fellow of the Homer Hoyt Institute. He serves on the board of directors for the Pension Real Estate Association (PREA) and the advisory board for the Real Estate Research Institution (RERI). Before founding RCA, Bob spent 14 years in the real estate investment banking and brokerage industry. He is a graduate of the McIntire School of Commerce at the University of Virginia.

How Bob and I met:
Within the first year after Bob launched RCA, a NYC commercial real estate broker, who was working on finding RCA an office space to house their growing team, introduced me to him.  At the point we met there were four employees (including Bob). Today RCA team is more than 200 strong in their offices in New York; San Jose, CA; London and Singapore.

When Bob told me what RCA was doing I instantly recognized the need for it in the industry.  I also immediately liked and trusted Bob and then started spreading the word about RCA.  As they say, the rest is history but I’d like to write a little more.

I love that RCA has become an industry standard – for information, analytics and commentary based on their research. RCA has recorded over $18 trillion of commercial property transactions linked to over 200,000 investor and lender profiles and has earned a reputation of having the most timely and reliable transaction data and providing valuable intelligence on market pricing, capital flows and investment trends.

Bob is one of those special guys that come into your life very rarely. He is smart, a good businessman and generous with his people. He is also generous with his time – meeting with people who have ideas about launching a service to the commercial real estate industry – listening, sharing his experiences with starting and growing RCA or folks who are at an inflection point in their career.
Little known: Bob is an active member of the main group for miniature-building enthusiasts, the Souvenir Building Collectors Society. His collection of hundreds of buildings is displayed around the RCA’s New York City office.  It’s amazing.  Buildings from all over the world; many recognizable and iconic.  He loves to show people the buildings – if you’re in NYC and have a passion for buildings (hey, we’re in the commercial real estate business!).  Give the office a call. I’m sure you’ll be invited up for a tour.
As my career and life have gone through phases, Bob has always been there for me – as a mentor, a trusted advisor and most importantly as a friend. 

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

A.  Ever since I was a kid, playing with Tonka Trucks, I always wanted to be in real estate. When I was young I had a drafting board – I always figured I’d be a developer of some type.  After graduating with a degree in finance from The University of Virginia I got a job on Wall Street. I wasn’t doing real estate but got to break in to the industry when I accepted a job at Eastdil.  I didn’t know anything about real estate or the difference between a net or gross lease but learned a lot of what I know through my experiences there.

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?

A. Being well read is very important. There are so many aspects of real estate to know about and, fortunately, there’s so much information out there - especially in the articles written by industry ‘deal junkies.’

The second piece of advice: Network. Real estate is really a social industry. People love to talk. There are so many deals, so many things that happen because of relationships.   That probably happens across a lot of industries but I think even more so in real estate.

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

A. Not really.  There are certainly some regrets and mistakes but overall the trajectory and the growth was fantastic.  It’s nothing like there was a job I shouldn’t have taken at some fork in the road.  I’ve always loved being in real estate. At Eastdil I had so many different experiences.  Then, joining some of my former Eastdil colleagues, in the early days of Granite Partners and helping to grow that firm. That was probably my first entrepreneurial experience before RCA. 

Q. How long did you have the idea before you launched RCA?

A.  Actually it was years. I can still go back and visualize some of the early stages.  It really started at Granite partners. I made a decision to track down every deal; put every deal we knew about, heard about, read about in a spreadsheet and take a more cerebral, analytical approach. I was always interested in quantifying the industry.  All my friends on Wall Street, whether they were in M&A or bonds could quantify their industry. But, there were no stats on a national basis on how big the commercial real estate industry was - on the transactions. I knew it was significant and probably compared very well to things like M&A but nobody had a clue. I really had a quest to quantify that. 

Q.  Is it true that the genesis of RCA was an excel spreadsheet?

A.  Absolutely.  It was a crisis when we hit 64,000 rows of data, which was, at the time, the limit of Excel.   

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

A.  I’ve had many influencers.  You, Steve, came and found RCA at a very early stage when there were only a handful of us and we didn’t even have our own office space. You took us under your wing and gave us advice and made a lot of introductions. There have been certain people whom I consider mentors that gave me good advice along the way. Certainly my father, who was a real estate lawyer, has always been a big influence. His ethics, how he treats people, the right way to conduct yourself and how to run a business and, maybe most importantly, to honor your word.  He passed away 15 years ago but he lived long enough to see that RCA was becoming successful – I’m very glad for that. Throughout my whole career and especially since I started RCA so many senior people in the industry saw what we were doing, saw the need for it and appreciated what we were doing. Those folks were very encouraging and very helpful in the early days of RCA. 

Friday, April 27, 2018

RCA U.S. Capital Trends Report: Highlights Q1'18 >> Felix / Weiner Women on Board


RCA’s U.S. Capital Trends Report Q1'18 was released this week.  With the kind permission of RCA, here are some of the highlights:

The Big Picture
·      Deal volume is growing again with a change in attitude for certain markets and property types.
·      Deal volume is up sharply in Manhattan, for instance, after double-digit declines in activity in 2017. Buyers and sellers are simply coming closer together on price expectations. In Manhattan in particular, this change in seller expectations is helping to push a modest decline in prices.
·      A modest decline in prices is not the same as sellers capitulating to double-digit declines in prices as during the last downturn. Fear of that sort of activity had unnerved investors over the last five quarters when volume was dropping. With ongoing declines in volume, there was an expectation of a next shoe to drop. The nature of the volume decline was not some negative reaction to an external economic shock however, rather it was a cooling of deal volume following a surge when properties were underpriced.
·      The apartment sector was the largest, most liquid commercial property market in Q1’18 and even in this top spot apartment deal volume increased 25% YOY.
·      The strongest growth in deal volume came for the hotel sector which saw deal volume climb 63% YOY for the quarter. One factor these sectors have in common is a lease structure that resets frequently which may provide an inflation hedge.
·      Deal volume in the office sector fell 12% YOY in Q1’18 as buyers and sellers are still often too far apart on pricing expectations. The RCA CPPI for the office sector did grow on a YOY basis, but prices fell in Q1’18 relative to Q4’17.

RCA CPPI Price Trends
·       Price growth was not uniform across markets or market tiers over the last year. As a group the 6 Major Metros generally post stronger growth than secondary markets, but non-major market price growth has taken the lead in the past year.

Industrial
·       Investors continue to be enamored of the industrial sector. The level of deal activity seen in Q1’18 was the strongest the sector has ever seen for any first quarter. The strongest growth came from portfolio and entity-level deals.
·       Megadeals played an important role in the deal activity seen in Q1’18, but they were not the sole factor driving the industrial sector to record heights in the quarter.
·       Reflecting this investor interest, industrial property prices are growing at an accelerating pace.

Apartment
·       The apartment sector was the largest, most liquid commercial property sector in Q1’18. The scale of deal volume was such that apartment investment was 27% higher than office investment. Other sectors posted stronger year-over-year growth rates, but these were cases of small numbers growing quickly.
·       This late in the cycle few expected that the apartment sector would continue to show vitality in the way of transaction activity
·       Growth in apartment deal volume and prices in the face of uncertainty over future interest rate trends can be a sign of investment capital seeking out safer assets

Office
·       The headline figure of a sharp year-over-year decline in office deal volume in Q1’18 is somewhat misleading. Only certain deal structures face challenges. The story for Q1’18 is that office price growth is picking up steam as deal volume grows in key locations.
·       Portfolio and entity-level transactions fell 50% YOY in Q1’18.
·       It is harder to complete deals with high sticker prices in periods of uncertainty as the interests of buyers and sellers are less aligned.
·       The RCA CPPI for the office sector did post stronger year-over-year growth in Q1’18 than in Q4’17.

Retail
·       The headline figures for the Q1’18 decline in retail deal volume are somewhat misleading. One entity-level transaction in Q1’17 was too high a hurdle to clear in the past quarter. This said, investors are still cautious about the sector and the trend is towards falling deal volume.
·       The outsized impact of portfolio and entity-level transactions can be especially pronounced in periods when deal volume for single asset sales is lower than usual.
·       Looking at trends for the sale of individual assets is a way to get past the distortions of the megadeals. Here the signal is not one of strength, but the trend for the quarter is not as bad as the total market headline.

Hotel
·       The hotel sector posted the strongest growth in deal volume across major property sectors in Q1’18. There are reasons to be excited by the performance of the hotel sector, but do not get too excited by the headline figures. The growth was boosted by portfolio transactions.
·       In Q1’18 there was clearly investor interest in the hotel sector, though the portfolio deals overstate this interest
·       Looking at trends for the sale of individual assets is a way to get past the distortions of the megadeals. Here the signal is good, just not as good.

**
Thanks...
·       The feedback I have received on the 'Interviews' has been terrific!  I have a number more 'in the works' and will continue to publish them.  One of the wonderful, and unexpected by-products, has been several people telling me they've heard from people that they used to work with or be in contact with - that they haven't connected with in a long time.  Also, some wonderful 'side' stories - often relating to how very, very small our global commercial / institutional real estate industry truly is.

Felix / Weiner Women on Board
Following up on our recent announcement of the launch, we are just about ready to launch registration pages on our website for commercial real estate women to indicate their interest in and qualification for seats on boards of directors, advisory boards, investment committees and other places where female diversity is sought.  Also, firms will be able to register their interest in us connecting them with these women.  

This has been developed as a service to the industry, a give-back of sorts.  I was going to create an official 501c3 charitable entity until my accountant told me how much that would cost!

Liz and I will update you when the registration form are live.


Austin Texas - Liz and I were there recently. The amount of new construction going on is wild. Seems like between Austin and Dallas more new jobs are being created than anywhere else in America.  One of them a new home for Amazon?












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