7 Keys To Success From D.C.'s Top Real Estate Leaders
People looking to break into the highly competitive commercial real estate industry are always looking for a leg up, a way to separate themselves from the pack and build successful careers.
Whether trying to climb the ladder at a big firm or create and grow a new company, real estate professionals often look to successful industry leaders for advice on how to make it. Over 200 people, from aspiring young professionals to experienced veterans, came together Wednesday for Bisnow's How To Make It In Commercial Real Estate event, where several of the most accomplished figures in D.C. real estate shared their tips for success.
1. Constantly focus on building a brand
Tens of thousands of residents live in apartments owned or managed by Bozzuto, one of the largest multifamily real estate companies in the Mid-Atlantic. Bozzuto Chairman Tom Bozzuto, who founded the company in 1988, said the key to building such a large portfolio has been a constant focus on maintaining a positive brand.
"I think of brand as fundamentally your reputation," Bozzuto said. "Reputation is not something you own, a reputation is something you earn every day. If you think about the brands that are successful, they are successful because there is an authenticity to them in the consistency about the way they make you feel."
Bozzuto said reputation is just as important with investors and lenders as it is with tenants, and it helps to have a brand that is consistent among everyone with whom a company does business.
"When you're building a company, you think about what is the culture of the company itself and what is the product, and at some point you want those to be the same," he said. "You don’t want to have a different reputation to your investors than you have to the general public."
MRP Realty Managing Principal Bob Murphy, who founded his company in 2005 after years working for Trammell Crow, said it is important for each person to develop their own individual brand in order to create a positive companywide reputation.
"Over time you build your own personal brand and it’s really important to be thoughtful on that," Murphy said. "It makes a big difference. When we started my firm, I already had a personal brand, some of my partners were developing theirs, and it was helpful at building the brand for MRP."
2. Spend your spare time building relationships
For those who want to make it to the top in real estate, it is important to make the most out of every moment of the day. Jarvis Commercial Real Estate Managing Principal Ernie Jarvis said attending events in the evening such as industry association gatherings or philanthropic functions can be an important piece in growing one's network.
"Do your business during the day, but find it at night," said Jarvis, the former D.C. market leader for CBRE who founded his own company in 2016. "Develop relationships because those relationships will serve you well as you progress in your career."
Jarvis said scheduling lunch meetings can also achieve this relationship-building goal, and he recommended a book about that idea called "Never Eat Alone" by Keith Ferrazzi. Charger Ventures founder Jessie Henry, who started her own company last year after working for large developers, agreed that taking meetings with people in the industry is critical.
"Your network will be priceless," Henry said. "Take an extra half-hour of the day to have coffee with someone and your network will grow."
3. Put your own skin in the game
Raising capital can be a daunting challenge for a developer working to build their first projects and build a reputation in the industry. In order to earn the trust of investors, developers say it is important to put their own equity into a deal to show that they have skin in the game.
"Put your own money in so you can say, 'If I've lost your $100K then I've lost my own $200K, or whatever it is," Neighborhood Development Co. CEO Adrian Washington said. "You've got to align your interests and say, 'If you're not successful, I'm not successful,' and then work your ass off. And if it doesn't work out, you can say I did everything I can and I'm sorry."
"Even if you have very little, being willing to put what you have in is important," Menkiti said. "Nothing will gall me more than an investor who says 'I want you to invest in my business, but I’m putting in nothing and taking a salary.' What you have should be at risk."
4. Diversify your business
In order to build a company that will be stable through ups and downs in the cycle, developers say it is important to diversify by working in mutiple business lines.
"In our model, we're managing and leasing other people's property," Rappaport said. "That adds stability to the company so our employees know, in good or bad times, we can survive without having to do another deal. The management company is a vehicle to protect the real estate."
Bozzuto pursued a similar strategy in growing his multifamily real estate company to include management, construction and homebuilding. He said it is important to diversify by not just adding business lines to a development company, but by pursuing a mix of short-term and long-term projects.
"I believe in diversification of everything we do," Bozzuto said. "In our approach to creating real estate assets, we want to have properties we’re going to own forever and properties we’re going to own for a relatively short term and then sell."
5. Manage expectations
While projecting confidence in success can be a positive quality, it is important not to overpromise and create unrealistic expectations.
Savills Senior Managing Director Wendy Feldman Block said it is critical to communicate clearly throughout a process so if something is running late, it won't come as a surprise to people right before the deadline.
"People ask what I do, and I feel like I'm in the business of managing expectations," Feldman Block said. "If I do a good job of managing them, then people will be happy."
Washington said it is important to balance optimism in a deal with a clear communication of the risks involved so investors understand that nothing is a guaranteed success.
"The key is you’ve got to be honest with people," Washington said. "As entrepreneurs, you’re always optimistic. You want to convey that optimism, but be honest and say, 'Here’s why I think it’s going to be successful, but here are the risk factors and it could blow up. If this is your entire investment portfolio, don’t do this deal.' You want to be transparent with people and tell them what’s going on."
6. Love what you do
Every time Washington, who has built apartment projects all over D.C., passes by a development his company completed, he said he gets a smile on his face. Having that passion for building real estate is key for someone to build a successful development company, he said.
"There are easier and less risky ways to make money," Washington said. "If you're all about the money, you shouldn't be an entrepreneurial developer ... You've got to have that love and that desire to see it through."
Ditto said when someone is doing something they are passionate about, they will feel a natural excitement about going to work, and it is important to find a job that creates that energy.
"It comes down to energy and how we find tasks that are energy-producing versus energy-sucking," Ditto said. "In the beginning of my career, I was doing things that were energy accretive, but as the company grew, I found myself in positions where I was burdened with things that were not producing energy, and that caused a major shift for me. When I talk to young people about getting into the industry, my focus is on what creates the best energy for you."
7. Be patient
Even if an aspiring real estate professional follows all of the advice they are given and does everything right, success still does not happen overnight.
Blake Real Estate President Owen Billman, whose company hosted Wednesday's event at its 1425 K St. NW building, said it is important to be patient and be ready every day because it can be hard to know exactly when an opportunity for advancement will present itself.
"Patience is something that's lost on us now," Billman said. "The opportunities come and you have to be ready for it. That's the biggest thing, being ready every day with consistent effort."
Murphy also said patience is important because, just as real estate projects can take a long time to come to fruition, advancement in the real estate industry takes time.
"The biggest thing is perspective," Murphy said. "This is a get-rich-slow business. There’s no fast forward button. You have to keep that in mind as you’re looking at your career."