Monthly Archive for: ‘May, 2011’

  • 10 Random Thoughts

    I don’t have time for a full post right now, so I’m putting some random thoughts down here today. Feel free to argue and disagree in the comments.

    1. We are behind the country average in employment and I still wouldn’t live anywhere else.

    2. Office properties have the bleakest 30-year outlook, in my opinion.

    3. Why aren’t there more women in our business?

    4. Over the course of may career, I think Lindbergh will become a very high-end neighborhood.

    5. No matter what he told me, I would trust Morgan Freeman.

    6. Since every single real estate transaction is unique and presents its own challenges, experience is overrated.

    7. I think the only way to assure you aren’t cutting corners on a deal or transaction is to treat it like you will own the property for 30 years.

    8. There are a lot of great people in our industry who have balanced their home and work lives. I hope that one day people think of me the way I think of them.

    9. Brookhaven is underappreciated.

    10. In twenty years, Chinese investors will own at least a dozen of Atlanta’s major office buildings.

    Chew on that.

    – Duke

  • Motivation: Part II

    In the last post, we talked about money as a motivation. Sooner or later, everyone is going to have to choose between a relationship and a paycheck. I want to work with the guy who chooses the relationship. So, don’t let money be your main motivation for this business.

    Now that we have established that principal, what should be our motivation? We all need a reason to roll out of bed every morning and sit in traffic. The most existential question you can ask is: Why should I?

    Here are (what I opine are) several good reasons to enter and stay in the CRE business here in the Big Peach:

    1. People. Most of the people in this business are genuine and honest men and women who want everyone to “win” in a deal. There are VERY few scam artists or jerks and everyone knows who they are and avoids them. If you are looking for an industry full of good people, you could do a lot worse that CRE.

    2. It aint that hard. Our industry is highly specialized and can be rather involved, but there is a difference between time-consuming and difficult. Commercial real estate transactions are time-consuming. They do not involve quantum mechanics, metaphysical relativity, or multivariate regression analysis. The hardest math is fractions & percentages (IRRs). Some of the financial modeling can be involved, but none of it requires a PhD in mathematics. If you want to skip the modeling all together, outsource it to India and they will do it while you sleep for 1/10 the cost of a local firm. I know several people who have been wildly successful in this business without a college degree. They specialize and succeed in their niche. So, in my opinion, CRE isn’t a braniac’s playground. Anyone is welcome.

    Having said that . . .

    3. You can find a challenge. There are some projects that require enormous amounts of time and effort. Sometimes the property has 6 liens against it, co-tenancy issues, and a host of rent clauses that have sabotaged your NOI (see Station, Atlantic). None of the problems by themselves are all that complicated, but issues can pile up on large deals. I like that. I welcome a challenge. If it were easy, anyone would do it. I have nothing against janitors, put the number of people who can mop a floor isn’t exactly an exclusive club. I tend to gravitate towards more complex and more involved transactions because I find that I learn more and I have to think more about them. You can certainly challenge yourself in the business, if you wish.

    4. You can front-load your career and enjoy your 40s. Put in 10 solid years of well-planned diligence at the first part of your career and you can coast to a healthy 6-figure income for the next 30. Don’t get me wrong . . . those first 10 years are a ton of work, but if you build the right momentum in the right niche with the right people, then you will get called by dealmakers. After the first years you can significantly decrease your focus on deal creation and enjoy life outside of the office. The best in our business never “coast,” but if you aren’t concerned with being the best in the business, then you have no worries. In many industries, you work 8 hours a day so that one day you can become a boss and work 12 hours a day. In CRE, you can bust your butt for a few years and rely on your network and support team for the rest of your career. Wanna play golf twice a week? Go for it. I haven’t found that to be the case in accounting, banking, IB, consulting, etc. I don’t know of many investment bankers who leave the office twice a week to golf.

    5. You can have impact. Developers change skylines, neighborhoods, and entire towns. Your career can have a real, tangible impact on the place you live. Once all the paychecks and politics are gone, I think people want to know that what they spent their life doing made a difference. CRE certainly has that.

    So those are five reasons that I think are good reasons to be in commercial real estate. The people are great. It’s not that complicated, but you can challenge yourself if you want. You aren’t chained to your desk until your turn 65 and you can positively impact the place you call home.

    Did I miss any? Feel free to fill in your own motivations in the comments below.

    – Duke

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