Leading Voices in Real Estate

In today’s episode, Ron Terwilliger, a great influencer in the apartment sector and dedicated philanthropist, shares part two of his story: his philanthropic and policy-driven role in affordable housing and education. This episode is made possible by our sponsor JLL. Learn more at jll.com/voices.

In today’s episode, Ron Terwilliger, a great influencer in the apartment sector and dedicated philanthropist, shares part one of his story: his leadership at Trammell Crow Residential and how he literally spawned the next generation of the apartment business. This episode is made possible by our sponsor JLL. Learn more at jll.com/voices.

Chip Conley started one of the country’s first boutique hotel chains, Joie de Vivre, when he was just 26 years old. After selling the company, he joined the startup Airbnb at age 52, despite the fact that the young founders were primed to disrupt his industry. Read more about Chip’s leadership Read more about Chip’s role at Airbnb Pre-order Chip's newest book, Wisdom @ Work: The Making of a Modern Elder Learn more about Chip's other books *This is a rebroadcast of our previous interview with Chip Conley.

Clara Brenner is the Co-founder and Managing Partner of the Urban Innovation Fund, a venture capital firm that provides seed capital and regulatory support to the tech startups addressing the challenges facing urban dwellers. Clara and I had a wide-ranging discussion about her career, business, and the startups and technologies in which her firm has invested.

As a successful musician, playing with Johnny Cash and others in Nashville, Karl Pollen could not have predicted the future of his career path. Today he is the Chief Investment Officer for the Arizona State Retirement System (AZASRS), where he manages investments for a $40 billion state pension fund.

In this episode, you will actually hear me being interviewed, rather than me doing the interview. Jeff Large is the editor of Season 2 of Leading Voices. He interviewed me on his podcast, The Jeff Large Podcast, where he talks about tech, podcasting, and running a business. I get to discuss how this relates to real estate from both a recruiting and leadership standpoint. Enjoy!

Andrew Kitchell and Joe Fraiman saw an opportunity in new developments that had vacant apartments or unsold condominium units. By master-leasing a portion of these units and subletting them to users on a short-term basis, they could fill a need for both the resident and the developer. Their company Lyric has thus transformed the future of rentals with their innovative vision, technology, and start-up culture.

Ken Woolley is the Founder and Executive Chairman of Extra Space Storage, the country’s second largest self-storage company. In this episode, Woolley shares his experience as a serial entrepreneur and how his background in the airline, mining, technology, and fast food industries shaped him as an entrepreneur in real estate.

Jane Graf has been a leader in the affordable housing industry for over 35 years and is now the President and CEO of Mercy Housing, one of the country’s largest nonprofit developers dedicated to revitalizing lives and neighborhoods. In this episode, we discuss the political stigma surrounding affordable housing, what we can learn from the Sisters of Mercy’s fearless business approach, and why local resources and organizations are crucial to the success of affordable housing models.

In college, John Rahaim was fascinated with the concept of how environmental and urban design affected human behavior. Today, he is the Planning Director for the City and County of San Francisco and arguably one of the most respected planning minds in the country. In this episode, we discuss how his planning and design experience in Pittsburgh and Seattle prepared him to tackle and transform San Francisco’s unique housing and development challenges, from battling sea level rise to stabilizing the hyper-popular Mission District.

A Technology Foundation Fred Tuomi was born in Minnesota, and went on to attend high school and college in Georgia, receiving a B.A. in Business Information Systems and a Masters in Business Administration from Georgia State University. While working for the Computer Sciences Corporation doing consulting, Fred connected with John Lie-Nelsen of Consolidated Capital and Johnstown Properties. This opportunity led to Fred creating the very first automated, apartment management system. “The idea was, let’s use these things called computers that make everything more efficient and increase productivity… Let’s put it where we have most of our people. To really get the benefits of productivity enhancement, you have to make as many employees as possible productive, not just a few back at the home office.” When the Tax Reform Act of 1986 killed the real estate limited partnership business, Fred connected with John Williams and John Glover of Post Properties, and then eventually was invited to join Equity Residential by Doug Crocker. Equity Residential Fred and his family moved from Atlanta to Chicago, where he became President of Property Management at Equity Residential. “We were trying to build two things. One was a uniform platform that was highly efficient… Second thing was to build a company culture.” Fred shares how Sam Zell, Founder, and Chairman of Equity Residential (see our interview with Zell in Season One of Leading Voices), influenced and shaped its culture. Under Zell’s vision for acquiring irreplaceable assets, the company’s goal evolved from a gross asset accumulation model to a highly refined portfolio and operational platform. Technology also played a critical role throughout the business, including in revenue management, allowing them to study the relationship of supply and demand in a way that hadn’t been possible before. Entering and Exiting Retirement It wasn’t long after Tuomi retired to spend more time with his grandkids and family, that he was approached by Tom Barrack and Justin Chang of Colony Capital. They wanted his advice on translating his apartment management strategy to the single-family rental business. While many doubted that a long-term ownership and management platform for the single-family market was possible, Fred was able to bring his experience from rolling up assets in the multifamily business and over time saw the business coming together with efficiencies and metrics comparable to the apartment industry. Each asset was bought with an eye on the long-term growth of stabilized income streams which meant that with the various mergers of the Waypoint, Starwood, Colony and Blackstone Invitation Homes portfolios, the footprint didn’t just get wider, it got more deep and dense, improving efficiency. Technology in the hands of the consumer and the front line employee also made these efficiencies possible. “We are now running 2,200+ homes from one centralized property management team similar to an apartment property office. In terms of headcount to assets, we are much more efficient than the apartment business. But we have to employ a lot more technology to bridge that gap.” The Future of the Market Fred sees Millennials entering the housing market society’s increased longevity as signposts for long-term market growth, and emphasizes the importance of developers stimulating the housing supply if we don’t want pricing to increase.

Gerald Hines founded his business in 1957 as a developer of office properties. His namesake company now has a presence in 201 cities and 24 countries, and manages over $110 billion in property. Hines is renowned for not only creating the highest quality buildings in the market, but for partnering with the world’s best architects. The Beginning: Born in Gary, IN in 1925, Hines was the child of parents who came on a boat from Nova Scotia. Growing up, he ran cross country and track and is proud to share that his team won the city championships. He entered college at Purdue early, completing 3 semesters of studies before joining the Army at 18. While in the service, he was part of the Army Corps of Engineers, and his travels introduced him to the inspiring architecture in Seattle and Tacoma. After the Army, Hines returned to school to complete his Mechanical Engineering degree and spent some time selling engineering equipment. He made the leap to development when his neighbor needed a building for 5,000 square feet and Hines said, “let me build it.” This catapulted his career and he began working with larger companies and properties. Growth: “We just evolved… the brokers seemed to get the fact that we had a very high hit rate and so that attracted the better brokers to us with their projects, and quality and good value sustained our entry into that.” The timing was perfect, as Texas was expanding and companies were moving there, so there was a lot of new construction. Hines’ reputation for quality and straight shooting helped them grow. Hines recalls his first big project for Shell, building their new headquarters in Texas. He worked with architect Bruce Graham of Skidmore, Owings and Merrill on it, and for the pitch, they used a fancy German lock set to denote the quality of the project they were going to create - and they won. He went on to work with architects like Phillip Johnson on Pennzoil, and create iconic buildings like New York City’s Lipstick building, The Galleria in Houston, and the Marche St. Germain in France. Business Culture: Hines emphasizes the importance of a strong business culture, rooted in integrity. “I think our (team) all realize what integrity means and we stand by our word. We treat people fairly and that’s very important to all of us.” Episode Links The Hines Website Raising the Bar: The Life and Work of Gerald D. Hines

Community Building Music was everywhere. We played music, we were encouraged to play music, we sang in the car. But that was also the 70’s. Dar grew up in Chappaqua, NY during the 70’s. It was developing and becoming more progressive as a commuter city to New York City. Her parents were involved in city politics but also enjoyed art, gardening, and music. Through volunteering and fundraising, her parents exemplified community building, her father specifically holding an instrumental role in bringing their local library to life. Dar emphasizes the importance and beauty of libraries as community gathering spaces. Growing up, she has a clear memory of listening to Judy Collins and connecting with the seriousness and poetry of the songwriting. She pursued playwriting and theater until she moved to Boston where she began doing open mics and writing songs in its supportive, vibrant music community. Taking Off As Dar began traveling and performing, she shares how she fell in love with watching the small towns evolve with each performance, time and time again. She credits this cultivation of culture to the people and the community builders who bring the artists into the town. I watched towns grow up as the venues grew up. Understanding Positive Proximity Positive proximity is the experience of living side by side with people and knowing that your life is better because there are other people, not despite the fact that there are other people. Dar shares a personal example of this from her life of a man who tilled the herb garden while sharing differing political views. Although she disagreed with his politics, she was grateful to spend time with someone who was so different from her but shared a common vision for their community. Some of the Towns That Dar Loves: 1. Her hometown, Beacon, NY. 2. Phoenixville, PA. 3. Gainesville, FL. 4. Moab, UT. Based on her 25 years of touring the country, Dar wrote the book “What I Found in A Thousand Towns,” which highlights her unique perspective on how communities evolve. As a bonus, Dar plays her song, “February.” You can find more of her work on her website.

Jim was born and raised in the Detroit suburbs. He has positive memories of the dynamic neighborhood full of families raising their kids and a strong public school environment. Also clear in his memory is a downtown visited on special occasions or to shop at Hudson’s, once America’s largest department store. Transit: Jim attributes Detroit’s early lack of public transportation to the fact that it was the hub for automotive companies, making car ownership king. He wonders how different things might have been, had public transportation been implemented. Many companies have maintained their presence in downtown Detroit through thick and thin, however, during this time of new investment, attracting and retaining top talent is the priority. Bedrock’s success has sparked competition and investment by others in downtown Detroit, helping bring young people and new businesses to the Central Business District. Roots: Jim went to Michigan State College of Law and laughs about how many of his work colleagues now, were old neighbors and classmates of his when he was younger. Specifically, his friend Dan Gilbert, Founder and Chairman of Quicken Loans. As Quicken Loans grew, Jim and Dan deepened discussions about moving the mortgage lender’s headquarters downtown from its suburban location in Livonia, MI. From there, they began to lay the foundation for major change. Transition: Although Jim shares that he was not quite sure what the future held, he also wasn’t afraid of failure. He believed that as long as they never had a plan B and only focused on plan A, this was something that could be successful. By the end of 2010, Jim and Dan had formed their company, and by January 2011, they had their first acquisition. Just seven years later, Bedrock’s portfolio includes more than 100 properties, mostly concentrated within Detroit’s Central Business District and downtown Cleveland. Now, downtown Detroit is home to tenants like Google, Facebook, Twitter, and Microsoft. Jim shares proudly that the residential, retail, restaurant, transportation, and arts scene have all been growing steadily. If a developer calls me up and says I’m interested in Detroit, I’m like ‘Great, let me tour you through everything we’ve done, let me teach you what we know, and let me help you to acquire something and compete with me.’ ...The more you help people, the better it is. Advice: Jim’s parting advice is that it’s okay to fail because that’s how we all learn and get better. Links: Bedrock Detroit

Creating and Building: Born in McComb, MS, Keith says he could have written the book “Hillbilly Elegy,” about his own life. Since his parents weren’t really in the picture, his grandmother raised him from a young age in Pasadena, TX. He went on to graduate from the University of Texas, receiving his MBA with a concentration in real estate shortly thereafter. “I was just intrigued always with the idea of creating and building things.” After working as a management consultant at Deloitte, he interviewed at Century Development and joined the team. This is where he met Ric Campo, who became his long-time business partner. During that time, they realized that considering Houston’s economic recovery status, short-term leases were going to do the best, so they focused their business on apartments. From there, Keith and Ric began buying apartments in Houston and working with investors, until the RTC came along and the one-off asset game didn’t work anymore. They struck a deal with investor Louis Ranieri, which allowed them to play the RTC game, and their portfolio grew to 7,000 apartments. When Ranieri wanted to sell, Ric and Keith didn’t want to give up this company they had created. They crafted a plan and kept the business, taking the company public in 1993. Camden Milestones Keith has several highlights that he says were “Watershed” moments for Camden’s trajectory. * When they went from private to public, this became a huge watershed moment because they weren’t spending time raising capital. Keith says that raising capital is now less than 5% of his time. * They went through three public-to-public mergers, which grew the geography of their company beyond Texas. * They created the first revenue management system for the multi-family business with the software firm, RealPage. This solved the problem of pricing apartment rents in real time. * The first year they made it on Fortune’s 100 Best Companies to Work For was in 2007, and they’ve been on it for 11 consecutive years now. He says it’s the benchmark, not just for Camden, but of how far the apartment industry has come. * Keith and Ric, as President and CEO respectively, continue as partners and collaborators to this day, essentially as co-heads of the business. This type of collaboration is unique in the REIT industry. Creating Company Culture During a facilitator meeting where they discussed the importance of taking a stand, everyone in the meeting had to stand up and pitch their goal for the company. Keith stood up and said that in five years, Camden Property Trust will be recognized as one of the best companies to work for in this country. Two years later, they made Fortune’s 100 Best Companies to Work For. This company culture wasn’t born in that meeting however, it was there from the beginning. “It’s just setting up an environment where people can do their best work, where they’re rewarded for it both financially and emotionally… and then just being unyielding in terms of good and bad behavior.” Industry Keith says Camden’s company culture is not a spectator sport, but an inclusive, respectful, integrity-driven environment. Keith's Advice: Make it your mission to improve people’s lives, and you measure your success by that. Contact: Website: Leading Voices Podcast Email: matt@terrasearchpartners.com Videos: Camden Property Trust - 2013 "We Our Workplace" Video Camden's Gotta Feeling! Website: Camden Living