Weekend Interview: Picheny Founder Matt Picheny
This series gets into the heads of the decision-makers of CRE, the people shaping the industry by setting investment strategy, workplace design, diversity initiatives and more.
There are many pathways to a career in real estate, but few are quite as unusual as that of Matt Picheny, founder of Picheny, the eponymous New York-based real estate syndicate that has invested in more than 10,000 multifamily units nationwide.
As a young man, Picheny, a native of Orlando, Florida, was a professional actor. More recently, he and his wife have been producers, winning two Tonys as co-producers of the Broadway shows Moulin Rouge! The Musical and American Utopia. Picheny spent nearly two decades in digital marketing, working for some of the largest ad agencies, before turning to real estate, long a subject of fascination, more than a decade ago.
His focus is syndication, which he emphasizes as a way to develop passive income streams that enable investors to choose how they want to spend their time — a point he detailed in his book Backstage Guide to Real Estate.
The following has been lightly edited for style and clarity.
Bisnow: Baron Rothschild once said "the time to buy is when there’s blood in the streets.” Where is the blood today?
Picheny: While I understand the metaphor, I don’t view real estate as a zero-sum game where somebody has to lose in order for us to win. To answer the question using Rothschild’s terminology, I see some minor wounds out there, but I’m not seeing any blood yet. Investors are starting to pull out of real estate, especially on the institutional side. Maybe that’s a foreshadowing of carnage yet to come, or maybe this is the time to be — in Warren Buffet’s words — “greedy when others are fearful.”
Bisnow: What is your most controversial CRE opinion and why are you right about it?
Picheny: At the moment, it seems as though a lot of my colleagues believe there will be tremendous buying opportunities, especially in the multifamily space. The thought here is that those with debt (or rate caps) that expire in 2023 will be under duress and need to sell their assets.
It seems like everyone I speak with is thinking this way. On the other hand, I'm just not seeing it. I see pent-up demand for these assets and expect this to lead to competition in the future. Investors will need to factor in the new cost of debt, so properties certainly won’t be trading at the same prices they did at the beginning of 2022. However, I don’t see the dynamics in play for a treasure trove of tremendous discounts that so many are predicting.
Bisnow: If you weren’t in real estate, what path would your career have taken?
Picheny: My career path has been unique and not what you might expect. I moved to New York City in 1992 to pursue a career in theater. I went to a musical theater conservatory and after graduation spent the next five years as a working actor, performing in 15 productions across the country.
I started exploring website development in the late '90s and found those skills very much in demand, so instead of waiting tables at the Hard Rock Café in between acting gigs, I started freelancing in the “new media” world in NYC. So much work was coming in that I eventually opened the doors for my own small boutique digital marketing shop.
After the tech bubble burst in 2001, I started working as an employee for a client, the cable channel Showtime. This is what started my “corporate” career and for a total of 18 years in the digital media world. The last 10 years of that, I started investing in real estate as a hobby and eventually it became my full-time job.
If it wasn’t for real estate, I think I would still be working in the digital media arena. While I’m still a little involved in the theater, the thought of lining up on the street at 7 a.m. for a cattle call audition in the dead of winter has somehow lost the appeal it once had.
Bisnow: If you could make one change to the industry, what would it be?
Picheny: Property ownership has a stigma attached to it. Quotes about blood and greed don’t help, and the media seems to have an unending stream of evil landlords acting terribly to their tenants.
Do landlords really have to be the bad guys? Can’t we make investments that are good for everyone? Can’t property owners put investment dollars to work in order to become the change they want to see in the world? Can’t landlords be heroes?
I think the answer is yes. A concept called purposeful investment — making a difference with your investment dollars — is one of the ways we as real estate professionals can help rewrite the narrative.
Bisnow: What is one thing you would do differently from early in your career?
Picheny: Being that I am now in my “third act” (actor, digital marketer, now investor) I don’t know that I’ve had a time that was very much earlier in my real estate career. But all of my experiences definitely influenced my approach to real estate investing now.
There are definitely lessons learned that apply both to real estate but also life in general that would have been great to know earlier. Finding ways to generate income with my investment dollars, rather than simply trading my time for money, is something that I would have done differently had I understood the concept and possibilities.
Bisnow: As a leader, how do you decide who is worth mentoring and who is simply not a good fit?
Picheny: It’s a great challenge and a difficult question to answer — in some ways because I genuinely enjoy working with all kinds of different people. When I think about all the folks I’ve mentored throughout my career, though, there are a few qualities that the most successful mentees seem to have had in common.
I like to help people who are passionate about the goals they are trying to achieve; they need to have that fire in their belly, that drive that gives them motivation.
I’m most impressed by those who are not just doing this for themselves. Someone trying to figure out how they can improve while helping others along the way is a really important trait I look out for. One who doesn’t say, “What can you do for me?” but who says, “What can I do for you?” is the kind of person who is worth spending time on.
Bisnow: What are your thoughts on the metaverse? Does it have any relevance for CRE?
Picheny: The metaverse, and new technology in general, is something that can propel our business forward in ways we can’t even conceive of today. Proptech companies are starting to disrupt the industry, and I’ve even had the opportunity to advise a couple of them. I am especially curious to see how technologies like VR and AR are going to be applied to real estate in the future. These technologies, and things like volumetric capture, have practical applications for new development and design initiatives.
I'm also interested in watching how tokenization makes an impact. How will Smart Contracts/NFTs/DAOs impact ownership along with the transfer and tracking of things like property titles. I’m looking forward to following the innovation in this space.
Bisnow: What do you see as the lasting impacts of the pandemic on CRE?
Picheny: Traditional office space was already having a slow but steady movement away from where it was. It was going away as more businesses were allowing their employees to work remotely. This was led by the more progressive and tech-based companies, and the pandemic was a major catalyst for this trend. It encompassed everyone — not just the younger, more progressive companies.
We are seeing more people come back to work, but many companies have gone completely virtual. I am not debating the merits of these decisions and do believe that in-person human contact and collaboration are important. But I don’t think the office market is going to ever be what it was before the pandemic.
Bisnow: As you know, there is a massive conversation underway regarding advancing more people of color and women into the C-suite. What are you doing to address those voices and that movement within your own organization?
Picheny: I am a big believer that diversity and inclusion are extremely important. My company is small and nimble, and I look to conduct business with others who share these same values. Most of our properties’ day-to-day operations are run by a third-party property management company that is a woman-led organization. The general partners that I do business with are of different backgrounds, including many people of color.
Bisnow: So, this is the weekend interview. What’s your typical weekend routine?
Picheny: Weekends are family time for me. I can be found coaching a soccer game or getting into epic tickle fights with my two little girls. We often cook a nice meal and have a movie night and lots of play dates. My wife works on the business side of Broadway, and we’ve worked together co-producing some Broadway shows and even won a couple of Tony Awards. So, we can frequently be seen at Broadway shows.