Sink Or Swim: Industry Leaders On Surviving The Grueling Early Days In CRE
The first few years in commercial real estate are notoriously tough, and many brokers and developers don’t make it through those brutal early days. You need to be willing to fail, industry veterans said at Bisnow's first-ever How To Make It In CRE event Wednesday, and then get up and fail again.
“Your failures are your best learning opportunity,” JLL Chairman of New York Investment Sales Bob Knakal said. “Almost every time, when I pitch and don’t get it, I will, a couple of weeks later, call the client and ask them specifically why I didn’t get hired. And I’ve learned more from asking that one question than anything else.”
Knakal, who joined commercial real estate after taking a summer position at Coldwell Banker in 1981 (he applied after mistaking it for a bank), co-founded Massey Knakal Realty Advisors in 1988 with partner Paul Massey.
They sought little advice from those who had done it before, he said, which ended about how one would expect.
“We made thousands of mistakes,” he told the audience.
Silverstein Properties Chairman Larry Silverstein said being prepared to handle risk is key to surviving in the business.
"If you have a level of confidence and you have conviction behind what it is you want to do, don’t wait, go out and do it," he said. “But recognize there is risk."
Panelists stressed that being genuine, trustworthy and not “bullshitting” are the keys to carving a career in the commercial real estate business. There is enough work to go around in the city, Knakal said, and it is best to take that perspective when trying to make a name for yourself in the brokerage world.
“That allows you to develop real friendships,” he said, adding that schools should teach classes on developing likability and making friends.
Others panelists co-signed Knakal's message that adapting to failure is a crucial part of developing as a broker.
“For me, the best thing that could have happened was that I had zero success in the first five years," Cushman & Wakefield Vice Chairman Ethan Silverstein said. "There’s a real sense of being humble when the Great Recession comes along and you literally don’t make any money."
Newmark Knight Frank Tri-State President David Falk said in his first few years as a broker, he was just happy and grateful for the opportunity to make a presentation.
Eventually he said, there comes a transition point in a broker’s career where actually scoring the job is the endgame. And while missing out on a job can be really frustrating, Falk said he has come to see it as a learning experience.
“It’s not scorched earth if you don’t win it,” Falk said. “You are getting a chance to make an impression.”
Some of the most successful members of the industry have had gradual levels of success — missing that 30 Under 30 list is not a career-defining sleight. Commercial real estate is a business that rewards not only ability, but also diligence and dedication.
“As long as the broker is focused on improving … getting better and acquiring clients one at a time … The success just continues to come and build over time,” said Meridian Capital Group’s Brian Flax, whose introduction to the business was arriving at Ralph Herzka’s office every morning at 6:45 a.m. and listening in on calls.
“There are a lot of brokers at Meridian that weren’t very successful numerically in probably their first five or even seven years, but now that they are 12 or 15 years into the business they have a great book with loyal clients,” Flax said.
Meridian has a strategic training program for new brokers, aimed at helping them develop the skills they need before they hit the phones and start talking to clients.
Flax said that, when looking for candidates, Meridian seeks out people who have a love and passion for commercial real estate, not merely people who are hardworking and smart.
“I think one of the things that has made some of these guys successful is how much they live, eat, sleep and breathe real estate,” Flax said.
Working hard to find the right sort of candidate, and then supporting those successful candidates through the early days of their career, is crucial to building out a successful and prosperous team.
“For the previous roles in real estate there was no onboarding,” Industrious co-founder Justin Stewart said. "And it set the tone right away that it is a sink-or-swim environment."
The first month at Industrious is all about getting the new hire acclimated, he said, and the coworking firm's leaders are realistic that employees will not be with the company forever.
“We know they will leave eventually … [And] if we can help them go onto something bigger and better when they leave, then we have done our job right.”
Massey, who launched his new firm, B6 Real Estate Advisors, earlier this year, said he has developed an intense training program that some candidates do not survive.
“We make the new agent know everything about their geographical territory. And that includes a picture of every building, zoning, tenancies and all the sales comps. Last week, we had one of our new agents out on the street, four or five days straight averaging 15 miles a day walking the streets,” he said. “You might think that is harsh … But that agent is so excited, and now knows their market so well, they are just dying to get on the phone.”
Still, he believes learning and training is not just for novice brokers, and that developing skills is a lifelong commitment.
“I volunteered to go through our training program for the new company,” he said. “You've got to sharpen yourself up ... You can’t take this stuff for granted.”