Origin Stories: Dreamscape CEO Eric Birnbaum On Being A Sponge
This series delves into the myriad ways people enter the commercial real estate industry and what contributes to their success.
Eric Birnbaum fell in love with commercial real estate development at first sight. He was a self-described "disgruntled investment banker" working at Bear Stearns when he saw his father-in-law, Alan Landis, working through a development deal.
He knew he wanted in, and in 2003, he got his wish with a job at Vornado Realty. He closed more than $1B in acquisitions, capital markets and development deals there and confirmed his love for the industry. Since then, Birnbaum has founded three companies primarily focused on hospitality and residential development: ELB Holdings in '08; Imperial Cos. in 2014 with the former CEO of Vornado, Michael Fascitelli; and Dreamscape in 2019.
Birnbaum is now all-in on Dreamscape — since its inception in 2019, he has raised $1B for its hospitality fund and has been buying multifamily and hotel properties across the U.S., including in Miami, New York, New Orleans and Charleston. Dreamscape recently acquired the 2,522-room Rio All-Suite Hotel & Resort in Las Vegas from Caesars for $516.3M. He said he sees the lines between multifamily and hospitality blurring and looks for deals with a lifestyle bend to them.
Birnbaum is a New York City native with a love for Tal Bagels and the Mets, and he said he believes the city, including its hospitality industry, will come back strong from the coronavirus pandemic. He has a Bachelor of Arts in history from the University of Pennsylvania, and he is an avid runner. He lives in Manhattan's Upper East Side with his wife, their three kids, and their Goldendoodle, Cooper.
Bisnow: How did you get introduced to CRE?
Birnbaum: I was introduced to real estate through my father-in-law, who was a developer focused on the New Jersey market. This was around 2001. At the time, I was working at Bear Stearns and was a disgruntled investment banker looking for a way out of the finance world.
I remember watching my father-in-law work on deals and really fell in love with the development process. I like to say it was love at first sight with development. I am passionate about every detail of the process — from finding a site to assembling a team and watching the building come to life, there is nothing more satisfying.
Bisnow: What was your first job in CRE?
Birnbaum: My first job in real estate was at Vornado. I started in the acquisitions and capital markets group. There I worked with my mentor and future business partner, Michael Fascitelli, who I knew previously. He was then the president of the company and he really took me under his wing. During my time at Vornado I worked on over $1B in transactions. It was a great education for me and I tried to be a sponge and soak up all the information that I could.
I knew that eventually I wanted to have my own company, so I really viewed my time at Vornado as a great opportunity to learn the ins and outs of the business at a very high level. I stayed at Vornado for almost seven years, and then in 2008 — right as the financial crisis hit — I went out on my own and founded my first company, ELB Holdings, where we deployed over $750M into a dozen projects spanning hospitality and residential real estate.
In 2014, Mike Fascitelli and I co-founded Imperial Cos., where we developed several high-profile residential and hotel projects including The Goodtime Hotel, which just launched in Miami this April. This is the last project Michael and I did together under Imperial. I recently launched my own company called Dreamscape, and we have been busy acquiring sites across the country, including The Rio Hotel and Casino in Las Vegas and a multifamily property in East Hollywood, LA, which we are very excited about. Dreamscape also has holdings in New Orleans and Charleston with more to come.
Bisnow: What kind of education, certification or official training do you have in CRE? How critical was it to landing your first big role?
Birnbaum: I really view my time at Vornado as the most impactful education that I got in the industry. Real estate is one of those hands-on industries that you learn the most on the job. I attended NYU’s Schack Institute of Real Estate when I made the transition from Wall Street to Vornado, just to make sure that I had the basics down, but I found that it didn’t really impact my opportunities or open doors for me.
I find networking is the best way to move up in the industry — people really value personal connections and trust is so key to building long-lasting relationships. When you’ve built trust with someone over the years, they’ll think of you for opportunities.
Bisnow: What is one skill you wish you had coming into CRE?
Birnbaum: Hands down, no question, I wish I had better ARGUS skills on Excel. Other than that, you just need to be a sponge — leverage every opportunity and soak up all the knowledge you can.
Bisnow: What were you doing before you got into CRE? If you changed careers, did you bring anything with you from your past career that has helped you thrive in CRE, or, on the flip side, anything you had to unlearn in order to succeed here?
Birnbaum: Before I made the transition into real estate I was working in finance at Bear Stearns. Most of the skills I developed in my seven years at Bear were transferable. The experience I got working on high-level, high-pressure deals prepared me for keeping a cool head when it came to launching my own company where I was chasing major acquisitions and fundraising.
For me, the toughest part about making the change was learning all the real estate vernacular. That took me a few months to feel like I really had a grasp on everything, and then I was off and running.
Bisnow: Can you remember a moment where you felt in over your head or you worried this industry wasn’t for you? Did you ever think about quitting? What changed?
Birnbaum: My time at Vornado was definitely the most challenging part of my career. I won’t sugarcoat it — it’s a tough place to work. It was very challenging and high-pressure, and there was a diverse cast of characters that I had to learn to navigate. Regardless of those challenges, I never thought about quitting. I never doubted my love of the real estate industry, I just knew that Vornado wasn’t the end goal for me. I didn’t love the day-to-day. I stuck it out for seven years until I knew it was time to move on and start my own business.
There were some very hard times during the financial crisis in 2008 when the world was collapsing. It was a good lesson for me that things don’t always go up forever, and simultaneously things don’t always go down forever. If you believe in your product and believe that you are providing value then in the end, you’ll be OK.
Bisnow: What were your early impressions of the industry, good and bad? How has your impression changed?
Birnbaum: I have loved the real estate industry since before I was actually working in it. Watching my father-in-law in action was inspiring and I knew it was a field I wanted to build a career in. While I started my career at a major real estate investment trust company, I have found that real estate is a very entrepreneurial business and I prefer working on my own, rather than being in a formal, bureaucratic setting. Founding Dreamscape is what I’ve been working towards my whole career.
Bisnow: Have you had a mentor or sponsor? How did that person shape your future in CRE?
Birnbaum: I’ve been very lucky to have two incredible mentors. Mike Fascitelli and my father-in-law, Alan Landis, have both had a huge impact on my career. I started working in real estate because of Alan — watching him in action showed me what the opportunities in the field were and really made me fall in love with the process.
Mike gave me my first opportunity at Vornado that afforded me the education in the field that I needed, and then partnering with him on Imperial Cos. really helped make a name for myself in the industry and validated me as a player. I’m forever grateful to both Alan and Mike for their confidence in me.
Bisnow: What is a key lesson someone taught you, either kindly or the hard way?
Birnbaum: Both Mike and Alan taught me that real estate is a long-term business and to succeed you have to have patience and perseverance. It’s not a get-rich-quick industry, which a lot of people think it is. I’ll never forget Mike telling me that everything ultimately comes down to the math. Don’t overleverage yourself, and take a long-term perspective.
If you’re dependent on timing everything to perfection, that can be challenging because if one thing is certain, it’s that the goal post always moves in real estate development. Schedules are rarely on time and you need to be sure that your business is not overleveraged and can carry you through downtimes. This has proven to be a recipe for success and this approach has served me well throughout my career.
Bisnow: What do you warn people about when they join the industry?
Birnbaum: I always stress exactly what my mentors told me — real estate is not a get-rich-quick business, and you have to be willing to sacrifice and work tirelessly to achieve long-term success. Also, don’t get into the business unless you are truly passionate about it. To be successful requires a lot of hard work and if you’re not passionate about it, that determination will fizzle and trust me, there’s always someone hungry for success who is waiting in the wings to take your spot.
Bisnow: If you could do your career all over again, what would you change?
Birnbaum: This may sound cliche, but I wouldn’t change a thing. The hard work and hardest days I went through got me to where I am now with Dreamscape.
CORRECTION, MAY 19, 4:56 P.M. CT: An earlier version of this article incorrectly said Birnbaum met Fascitelli at Vornado. They knew each other previously. The story has been updated.