Weekend Interview: Midwood Investment & Development CEO John Usdan
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.
John Usdan is the CEO of Midwood Investment & Development, the real estate company his grandfather founded in Brooklyn over 90 years ago. The company now owns more than 130 retail, residential and office properties across the country, including the luxury condominium at 150 East 78th St. and the office property at 430 Park Ave. in New York City. In Boston, the company is building the city's first carbon-neutral building at 11-21 Bromfield St.
Usdan told Bisnow that the success of a long-term real estate owner is now linked to how a building interacts within its environment. Usdan took over running the company when he was 23, and he is speaking here about early missteps he made as a leader and the changing role of a company CEO.
The following has been lightly edited for style and grammar.
Bisnow: Tell us about your leadership philosophy and what experiences, words of advice or mentors shaped it along the way.
Usdan: I learned at an early age from my mother that making mistakes teaches us to problem-solve and overcome adversity through doing. As a CEO my job is to help our team to get better at what we do every day as a company, and I look at myself and the business as a work in progress. To run a business, you need to be progressive and think about challenges ahead of time, so you’re not surprised when they come, and in turn, you can confront them and have the required tools to deal with those challenges.
Bisnow: How has the role of CEO/business leader changed over time — especially when considering the early days of your career to now?
Usdan: I had a unique start because when my grandfather passed away, I was his succession plan for our family business. He knew my mother was not interested in the real estate business, and my grandfather never wanted his responsibilities to become our burdens. I had no idea how to manage people, but I learned the hard way by making every mistake possible. The real estate business is very humbling, and you learn something new every day. I also try to hire people with diverse backgrounds and points of view. At Midwood, we have tried to create a nurturing environment where people can collaborate and learn from one another.
Bisnow: What will the role of CEO look like in 10 years?
Usdan: It is rapidly changing every day, thanks in large part to analytics and data that are now available to us to help evaluate different measures of how your business is performing. The role of a CEO is to apply all of this information in a constructive way. The challenge will be to assess the value of this avalanche of information and determine what decisions need to be prioritized.
Bisnow: Was leading a company always a goal for you? If so, why?
Usdan: I took over our family business at 23, and I learned the importance of making decisions with courage and conviction. You have to be able to take responsibility and accept responsibility. What is most toxic to a group of people and a business is a member of your company not taking responsibilities for their decisions.
Bisnow: What has been your biggest mistake as a leader?
Usdan: The importance of hiring the right people. Early on I definitely made some missteps; hiring people that didn’t contribute to our growth. In time, I learned that we needed a more rigorous vetting process, determine ways to better evaluate job performance on an ongoing basis, and make sure every member of the team pulls their weight.
Bisnow: Has your thinking changed about the workplace between 2019 and today? How? What will your office strategy be moving forward?
Usdan: We're in a competitive environment for hiring the best and brightest, so we have had to become flexible with our rules. Recently we went to a four-day workweek and one day work from home. Every business is different, but when you have a fully integrated real estate investment and development company, you have to be able to discuss problems and work through issues in person. It does not work well virtually. We want our employees to be in the office, but our priority is the health and welfare of the people here.
Bisnow: 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?
Usdan: This has long been an important topic at Midwood. We see tremendous value in diversity of people and perspective, so we naturally have sought to hire a wide array of talent. At Midwood, our goal is to elevate women to senior positions of leadership so they can be key decision-makers. One of our frustrations is the challenge of finding women in senior positions.
Bisnow: What do you think about the recent focus on sustainability and climate change? Is it overblown? Insufficient? Is your company tackling climate change in any way or taking it under consideration in your planning?
Usdan: We are building the first carbon-neutral building in Boston, and there is an opportunity to make a statement and set the standard. The workplace habitat needs to change and adapt. We are starting as an initiative on all of our new buildings as well as older buildings — to design and retrofit battery storage, solar energy and EV charging because we think that there is an opportunity to be both socially responsible and reduce dependence on carbon fuels. If you want to build state-of-the-art buildings that are adaptable, you have to consider sustainability. When you are a long-term owner of real estate, your success is correlated to how your building interacts within the environment in which it is located.
Bisnow: What is something CRE gets wrong in your eyes?
Usdan: Because the majority of the capital invested today is on behalf of third parties, there is a misalignment of the sponsor goal of maximizing profit versus making the investment in quality of design and construction. As a result, the quality that could and should be the product of sound decisions made for the long term does not often occur. There is not enough long-term capital flowing into the real estate business, so profit is based on fees and incentives, and that is a misalignment of interests.
Bisnow: What asset class or location will perform best over the next five years? Why?
Usdan: The two asset classes we focus on are retail and residential. There are places around the U.S. where innovative development and research have created jobs opportunities that will lead to dramatic income growth. As a result, these places are the center of intellectual capital and social capital.
Bisnow: What is your all-time favorite TV show? Why?
Usdan: I watch Anderson Cooper because I think he is heartfelt.
Bisnow: How do you spend your Saturdays?
Usdan: I am passionate about growing things. I plant flowers and vegetables in my greenhouse starting in February and my garden in April so that is where you will find me this time of year.