Gary Rappaport, Tom Bozzuto, Wendy Feldman Block And More On The Breakthrough Moment In Their Careers
Building a successful career in commercial real estate is not easy. Going from a young, inexperienced developer or broker to a leading figure in the industry does not happen overnight.
But most industry leaders can remember a moment when they knew they had made it, a breakthrough in their career that gave them confidence in their future success. From the first pool of investment partners for an acquisition to selling condos at the height of the Great Recession, many of today's D.C. real estate leaders can point to pivotal moments that helped elevate their career to the next level.
Bisnow asked several top developers and brokers, who will speak at Bisnow's How To Make It In Commercial Real Estate event June 12 in D.C., to describe a moment in their career when they knew they had made it. Here are their answers:
Rappaport CEO Gary Rappaport
I think the acquisition that confirmed to me that I could have a seller consider me a bona fide buyer, that a lender could accept me as a borrower — especially on a nonrecourse loan — as someone who will perform as promised, and that investors believed in me and would invest their money with me was my acquisition of the 300K SF Towers Shopping Center in Roanoke, Virginia, in November 1985.
I remember the structure of the deal very well. Equity — $5.5M — 40 units of $137,500, in which I sold half-units as well for $67,500. All in all, I raised the $5.5M and ended up with about 50 partners.
Debt — $9.5M — five-year loan, nonrecourse, with Aetna Life Insurance Co. I had to fly down to Norfolk to deliver a certified check to the broker, who was representing Aetna, for $475K at the Norfolk airport. The broker and I then walked over to a phone booth, the broker confirmed to a trader he had the check in hand and then the trader set the rate on the loan and I was able to finish my Offering Memorandum and continue selling and start closing with my investors.
My first acquisition, May 31, 1984, I raised $495K from 14 partners; in November 1985 I raised $2,250,000 from one investor, but when I raised $5.5M from 50 investors on the Towers Shopping Center acquisition, while still working in a shared office, Regus/WeWork type of space, I knew I was on my way and could survive.
Today, I still own the property, but unfortunately with deaths of some of my investors since our acquisition almost 34 years ago, today I have over 100 investors as partners of mine on this property.
Bozzuto Group Chairman Tom Bozzuto
When we founded the company, our primary goal was to eat and keep the lights on. It was a good six to eight years before we felt confident that we were going to succeed as a company.
Once we had been in business for five years and we made money each year, just the fact that we did that convinced us that we would probably be able to survive and that we had really created something that we now had to figure out where we were going.
This would have been around 1994. We had successfully completed our first projects in the Kentlands and were working on a couple more. 1992 was a tough year in the business in terms of the availability of capital yet we had started a couple projects one of which was in the Kentlands. We had experimented with a couple design things and it was a very successful project. I’d say it was the combination of that, getting involved with a couple projects on the Baltimore waterfront and being given the assignment of a management contract on a beautiful project in downtown Washington on 19th and M.
Menkiti Group CEO Bo Menkiti
If you think about my critical moment in the growth of the company, I think one of those early on was when we completed our first sizable condo project right in 2007 as the market crashed. In October 2007, we delivered 21 condo units in Brookland. I think the pivotal moment in the organization was the way our team responded to that shift in the market. Part of it was we were new enough and young enough, and in some ways probably dumb enough, to believe anything could be possible.
We had never done anything more than a house, and all of a sudden we were doing a 21-unit building. All of our money was levered into it. We would have these retreats at our company, and at the retreat I said, 'If we don't sell this building, we won't be here in six months.'
We pushed through and got that condo building sold at the height of the crash. It actually ended up being a project that did well.
On the brokerage side, at that time everybody was running for the hills as the market was tanking, and most of our competitors were shutting offices and pulling back, we were a young upstart and were able to really grow through the downturn.
In brokerage, we expanded from starting out to growing into multiple markets. And from a development standpoint, we were able to take on larger projects and execute them and build a portfolio, partially because we were able to lean in. Part of that was the mentality of 'We can get stuff done.' It may be difficult, but if you stick with it and persevere, you can get stuff done. That was a big moment for us in the organization.
Savills Senior Managing Director Wendy Feldman Block
There is not a specific moment where I had an epiphany that I had 'made it.' At times I am still wondering when it might be. But if I had to reflect on when I have felt that I'm on the right path, it would be when I was sought out by younger people to share my narrative.
I recall many years ago when a young woman at my company looked to me for guidance in her career. She wanted to know how I was able to not only survive but succeed in a hard-charging industry with few female role models. It forced me to look inward to ponder as well as formulate what it was that helped shape me and provide the drive to thrive. I am energized by being a resource and sounding board to many in the commercial real estate industry.
Additionally, I have also been a guide for women who are striving with the delicate balance of a hard-charging field and motherhood. I have many lessons (and war stories) on what I learned while raising two children.
MRP Realty Managing Principal Bob Murphy
The first one was in 1996 when Spencer Stouffer noticed how quickly things were leasing up on the Dulles Toll Road (after the downtown) and suggested to me that we look at the Commerce Exec 6 land which South Charles Realty was selling, and then my boss at the time supported and encouraged me. It was the first spec office development after the 1990-ish downturn in Northern Virginia and we broke ground with Kennedy Associates as our partner in 1997.
The second was in 2009 when we bought the Hartford building at the trough in the market and sold it 18 months later for 50% more than we acquired it for and reinvested the proceeds to set up the growth of our company from 12 to over 160 teammates today.
Neighborhood Development Co. Founder Adrian Washington
One of our breakthrough moments was the closing of our Lamont Street Lofts project back in 2003. It was our biggest project by far at that time (38 units, plus two outparcels which were later developed as another 100 units), and our first project on Georgia Avenue, which at that time was considered no-man's land. It was also our first project working with an institutional equity provider.
It was touch-and-go for a while, and we were 24 hours away from the deal collapsing when our difficult seller refused to extend the closing deadline. But we made it to closing, and the project turned out to be a great success, paving the way for almost everything we did going forward.
Ditto Residential CEO Martin Ditto
I first felt like I'd made it in real estate in the final year of my first job in real estate at Bozzuto. I was working with a team of developers that I respected and who were all competent. I was proud of my projects and proud of our team.
My first project at Bozzuto and in my professional life was Spinnaker Bay in Baltimore. This was a 600K SF building and still the largest project I have ever worked on. The team was conscientious and hardworking and was a great introduction to how a good owner/developer/team should work together.
Charger Ventures Founder Jessie Henry
Pivoting from a corporate path to an entrepreneurial one has been very rewarding personally for me. I 'made it' when I realized I was ready to take that leap, that I could look into my daughter’s eyes and tell her that I had tried.
Since then, I have been intentional about enjoying the path I’ve created. I am fiercely passionate about what I do and believe the results will speak for themselves.
Rappaport, Bozzuto, Menkiti, Feldman Block, Murphy, Washington, Ditto, Henry and other D.C. real estate leaders will speak June 12 at Bisnow's How To Make It In Commercial Real Estate event.