This may seem a little harsh, but I am going to say it anyway.
Besides, this is just my opinion and I will readily admit that I may be wrong.
So, having prefaced my theory with that warning, here is my advice:
Stop complaining about the market.
I know it’s tough. You know it’s tough. Anyone who reads the paper knows it’s tough. My grandma even knows it’s tough and she is a 90 year old homemaker.
So, by telling me how bad the market is you don’t really add any value or knowledge to the conversation.
Maybe you are looking for sympathy or commiseration. Well, I am in the same market you are, so sympathy will be tough to come by. And like I just said, we all know how tough the market is and that this is a once-in-a-lifetime type of recession. I don’t need to hear it from you and I don’t really want to commiserate.
I’m the kind of stubborn guy that wants to find a way to make money in spite of the market. Any fool can make money when the market is blistering hot. It takes creativity and inventiveness to make it when the chips are down.
Another way to say it, is I don’t want to focus on the problem. Let’s focus on the solution.
Let me tell you a little secret:
Lots of people are still making lots of money. Even in this tough economy, people are still KILLING it.
So when you tell me that you haven’t closed a deal or that all of your deals are falling through because of the tough market, what you are really saying is “I haven’t figured out a way to make money in this market.” Fundamentally, there is opportunity in every market cycle. It isn’t always obvious or easy, but it is always there.
Just look around. Several of the companies in Atlanta and elsewhere are still actively pursuing deals and are closing. Developers are developing. Properties are selling.
The world is still moving. What you have to do is figure how to move with it.
That may mean you shift strategies slightly. Or, you may change directions completely. You may have to change property types or location. Whatever you do, get in the way of the money.
In fact, most people would say that is the main difference between this recession and the S&L crisis. There is still a ton of capital chasing deals today. There was none in 1991.
So, deals are closing. Money is chasing property. There is still a fortune to be had in this market.
Don’t tell me how bad the market is. Tell me how you are going to shift your strategy in order to get involved with the deals are happening.
That type of creativity and resilience will distinguish you from your competitors and I will be calling you first when the market returns to full strength.
Since I have committed to writing a book about careers in CRE, I have started to work pointed research questions into my networking meetings.
Other authors may call these research interviews, but I prefer to think of them as just well-directed questions between friends.
So, from time to time, I will post these interviews on here for your reference. I will be keeping the interviewee confidential unless he or she specifically requests otherwise.
Check back daily to see the updates.
Today’s meeting was with a senior officer with a local office acquisitions firm. His responses are below.
Three crucial characteristics to possess in order to be successful in CRE are: Work Ethic, A Small Ego, and Vision (with Luck).
The best learning and training grounds for CRE are: anywhere that allows you to run numbers and do analytical work and anywhere you can find a good mentor. Work-outs are great experience.
Generalists can be successful in our business, but focus is always better.
Three things that the best in office acquisitions do that no one else does: Work with speed, make the sell easy for the seller, and execute with “laser” focus.
The one habit young people should pick up in their career: hard work.
The people you respect the most are: well-liked, well-respected, disciplined in the buy AND the sell, and are understated.
A word of caution to beginners: be patient! Have high career expectations, but don’t set them to high too soon.
A great book to read for CRE pros: Good to Great by Jim Collins.
Favorite part of the CRE business: the people and the fact that I can get out of the office and see property.
Don’t chase the Money!
Sounds simple enough, right? Don’t chase the money.
Simply put, developers have the POTENTIAL to make the most money in our business. I say “potential” to make money because I have found that while they can make heaps of money, they don’t always succeed in doing so. Quite the opposite, they usually end up losing the most money.
Anyone who has been around the block for a while will tell you this. It’s no big secret. Developers win big and lose big.
I once heard of a developer who went to a convention in Vegas. All of his contemporaries were at the blackjack tables, slots, and roulette wheels while he stayed aside and sipped his cocktail. A friend came up and asked “Jim, why aren’t you gambling. We’re in Vegas buddy!” Jim looked at the guy and said “Son, I’m a developer. I gamble every single day of the year with my money. I don’t need any more gambling in my life.”
While this anecdote may be a slight exaggeration, the basic point rings forcefully true.
Developers can bet the farm and come up with gold or come up with lead. Even the best of the best have struck lead a time or two.
So, how does this apply to you and your career in CRE?
Well, young fella, as you are deciding which direction your career path will take you, I am sure you will end up considering development at one point or another. I don’t blame you. The money is great, the lifestyle is good, and the deals are interesting and fun.
But a word of caution from the front lines: Don’t chase the money.
Just because developers make the most money doesn’t mean that everyone in CRE should aspire to be a developer. Development isn’t the pinnacle of CRE transactions. It is a crucial piece of the pie, but it isn’t necessarily the biggest or most important piece. Certain people are cut out for it and others are not.
As I mentioned in Part I and Part II, you have to decide for yourself what fulfills you and what your skills most directly support. For instance, if you are risk averse, dislike networking, and thinks SALES is a four-letter word, then development probably isn’t for you.
I know, I know. The paychecks can be huge and it certainly seems like all the best developers have Aston Martins and G6s. But for every one developer who has achieved great success, there are 5 who tried to be something they weren’t, chased the big paycheck, and ended up losing tons of their money and their client’s money. Frankly, several of the big name developers in our city have had to give up their G6 and file for bankruptcy. And these guys have been doing it for 30 years!
So put it out of your head that commercial property development is some walk-in-the-park with huge paychecks, a fast lifestyle, and your name in the paper. It is tough work with high rewards that is suited for a certain type of person with a certain personality.
We will get into the specific skill set of the developer later, but for now just look around. Are the best developers in the city similar to you in terms of personality and inherent skill? Do they walk, talk, and act like you do?
If not, don’t chase the money. Do something else that you enjoy and that you can be exceptional at. That really is the only way to a truly rewarding career.
This is a huge industry and there is room for all of us. We just can’t all be developers.
So, know yourself and what motivates you. If you find that your talents are uniquely suited to development, go for it. If not, don’t force it.
Trust me. You will thank me later.
Random Thoughts to start the week:
1. I purposefully avoid Midtown and Downtown for lunch meetings because of the hassle (and cost) of parking.
2. If I could only buy one office building in the city, it would probably be 191 Peachtree. That building is just beautiful. Then I would make parking free . . . .
3. Has anyone else noticed the pick up in investment sales activity across the board? Property is moving regardless of debt and market concerns. That seems like great news to me. Investors are less skiddish.
4. I like that John Portman is being honored with a street name. His projects truly defined the Atlanta skyline and he deserves some recognition.
5. The Atlanta police never make me feel safe. Instead, they make me feel watched. It’s not like I am some major felon or criminal on the rampage. I have gotten two speeding tickets in my entire life and they were both on the last day of the month (aka quota day).
6. If Cobb and Gwinnett will not vote for rapid transit, then I will have no sympathy when their housing markets and local economies are in shambles in 20 years when all the boomers retire and move to their condo in Florida. Of all the people I know under the age of 35 who own their own home, less than 2% live in the suburbs. My generation lives in the city and if you want access from the suburbs, you need rapid (mass) transit. Figure it out or pay the price in 2035.
7. Is there any way other than CoStar to find out who owns a particular piece of property? I mean the true owner and not the LLC that holds title who you find through the Fulton/Dekalb Sec of State website.
8. What is the greatest innovation in the last 20 years in commercial real estate? Don’t say sustainability because it hasn’t affected a large enough proportion of commercial buildings, yet.
9. If he is anything like he seems, I bet I would like Jason Bateman.
10. Every man I meet is my superior in some way. He may know more than me about fly fishing, taxidermy, or martian terrain, but every man I meet knows more than me about at least one thing. Keeping that in mind, it is difficult to develop too strong of an ego or sense of self-importance.
Happy Monday and look for another article on careers in CRE tomorrow.
In my last post, we discussed the importance of knowing yourself and what truly fulfills you. If you aren’t doing something that fulfills you, then you probably won’t be very good at it.
Today let’s talk about (what Jim Collins calls) your hedgehog concept. In Good to Great, Collins tells the story of a proverbial fox stalking a hedgehog. The fox is very clever and sneaky. He is stealthy and silent as he eyes the tasty hedgehog. Without warning, the fox sprints out into the open and speeds toward the innocent hedgehog.
Sensing danger, the hedgehog does what hedgehogs do. It rolls itself into a tightly-wound little ball of spikes. When the fox arrives at the “ball,” he pokes and prods, kicks and snaps, but no matter what he does he cannot force the hedgehog to unroll. The fox can’t fit the ball in its mouth and could only get a bite out of the sensitive hedgehog flesh enclosed inside the “ball.” So, after several minutes of frustration, the fox gives up and trots away looking for an easier meal. Realizing that the danger has passed, the simple hedgehog unrolls itself and waddles away unharmed.
In Collins analogy, we want to be the hedgehog, but to many people try and be the fox. People who are the fox are a little too clever for their own good, try and outguess the market, always dart back and forth trying this and that, always trying to be the smartest, quickest, and best around.
Hedgehogs are people who know what they are best at and stick to THAT. The hedgehog didn’t try to outrun the fox. He didn’t try and fight the fox. He didn’t dig a hole. He just did what he does best, curled into an impenetrable ball.
That is what you want to be.
In CRE, if you try and be all things to all people, attempt to outguess the market, try and out-quick or out-think everyone else, you will end up chasing your tail and biting yourself often.
If, on the other hand, you stick to what you are best at and focus on staying great at that, then you will find as much success as you need in this business.
Maybe you are best at salesmanship and need to find your career in investment sales.
Maybe you are best at handling tenants and need to pursue property management.
Maybe you are best at recognizing value and how to add it and need to own property.
Maybe you are best at creation and vision and need to develop properties.
Maybe you are best at solving problems for clients and need to become an asset manager.
I should mention that you can be talented at more than one thing. You may be very skilled at several things, but chances are fairly high that you are GREAT at one thing. You are better than anyone else you know at __________.
Whatever that _______ is, do that. That is your “hedgehog” concept. You don’t have to out-quick or out-smart everyone. You just need to play to your strengths.
It sounds simple, but you would be surprised how long it takes most people to figure out what they are best at.
Think about it: How many people do you know who have set their career path and are currently working in the field that they will retire in?
Now, how many of those people would you say have figured out exactly what their greatest strength in business is and have used that skill in all of their business deals?
What percentage of your contacts is that?
10% maybe . . . .?
Whatever the number is, it probably isn’t very high, right?
So do you see what a HUGE advantage you will have if you just figure out 1) Your hedgehog concept or skill and 2) how to best use that in every deal? You will be light years ahead of your competition.
And I would bet that you will find your career more fulfilling and rewarding. People who are trying to be something that they are not will always struggle and feel as if they are swimming upstream. People who are doing what they were made to do will find that deals and relationships come quickly and easily.
So, again I say that you have to know yourself before you even start in CRE. You should not only know what you find to be personally fulfilling, but you should also what you are uniquely capable of doing better than anyone else.
If you can figure those two concepts out, all that’s left is the application. Put those two concepts into motion and watch your career take off in ways you never imagined.
I mentioned a couple days ago that there is serious lack (in my experience) of writing on careers in commercial real estate.
I should mention that I like The Real Estate Game by James Poorvu. Check it out on APJ Recommends.
Like tREG, most CRE books focus on the idea of “how I did it” or “how the landscape is changing with green-building.” That isn’t really what I am looking for. I want a comprehensive guide on the industry, how to get started, where to focus, how to build a skill set, how to become the best in your field, etc.
So, here is my shot at it.
Let’s start with where you should start if you are considering a career in commercial real estate.
Fundamental Success Principal 1: If you are going to excel in the field of commercial real estate, you have to know yourself.
When I say “know yourself,” I don’t mean that you should know your height, weight, and eye color. I am talking more about your core motivations, goals, and fulfillment.
I want you to think about what excites you most about business. What is the most exciting thing you could think of to get you out of bed at 6 am?
Is it money? If it is, that’s ok because you can make plenty of that in CRE. But allow me to offer an opinion.
If you make $100 million tomorrow, you will have plenty of money right? Then what? Then do you buy a house on Bora Bora and live on the beach? Ok. I bet you go 6 months MAX before you are bored out of your mind and need to find something fulfilling to do with your time.
That’s why I ask about your motivation. You need to figure out what type of business venture will be most fulfilling to you.
Extreme competitors can often end up in brokerage in our business because they love the rush of the deal and the challenge of competing against rivals for listings, sales, leases, etc. These “deal junkies” find fulfillment in the rush of the deal process and like closing as many deals as possible as often as possible.
The down side to this part of our business is painfully evident right now. Brokerage is the ultimate “eat what you kill” compensation plan, and if closings are light and deal flow is a mere trickle, you may be hungry for a couple years.
Some people feed off of that tension. They NEED that sense of urgency every morning to get them up before dawn. Sometimes the idea of your family going hungry if you don’t bust your butt today is the greatest motivation anyone could ask for.
Other people prefer to have a steady income every month and a predictable schedule. They want to know they will be home for dinner with their family every night and that they will have steady income for years to come.
These types off people tend toward lending and asset management roles.
Lenders are a unique breed and tend to be fairly conservative. They always try and find ways to mitigate risk on the loans they originate but also tend to like doing deals. They too enjoy the rush of the deal, but don’t need the compensation as much as the broker. Lending is a good career for anyone looking for (relatively) stable income, average compensation, no deal risk, and a predictable schedule.
Asset managers are similar, but tend to be more “contract-deal” personalities. That is, asset managers are always handling deals and portfolios of deals. They handle the issues and help guide the owners toward to best solutions for their property. Since deal lives are finite, every asset manager is essentially working herself out of a job. But, like bankers, they have no deal risk, have a relatively steady flow of income, and tend to have a fairly predictable schedule.
The most risk tolerant among us tend toward ownership and development. Owners and developers tend to be good problem-solvers and risk managers. They are always going to have hurdles to overcome, fires to put out, and risk to deal with. They need to be skilled in acting on imperfect information and need to have solid leadership to guide a team through each transaction. These men and women are putting their own money on the line and need to be able to deal with the personal risk involved in each transaction.
I will touch on service-providers (appraisers, engineers, etc) later and I consider architecture and construction to be separate fields from CRE.
So, for now, let’s just assume that CRE pros include brokers, owners/investors, developers, and lenders. Given those four main categories, I say that the only person who can tell you where you best fit in is YOU.
If you are a deal-junkie extrovert, brokerage may be your best move.
If you are a gambler and salesman, I’d recommend ownership or development.
If you highly value your schedule and a steady paycheck, asset management or banking is probably right for you.
Whatever the punchline is, you have to know what your core motivations are. If you do not know who you are, what you like, and what priorities you have, how can you expect to have any direction in your career?
So, back to my advice.
Before you have a single networking meeting or start a single deal, sit down and figure out what type of person you are and what your core motivations are.
We’ll go from there.
Here are 10 Random Thoughts to start the week off right:
1. That interchange at Hammond and 400 has taken about 6 months longer than I thought it would. I don’t work at the DOT or anything, but I expected that to be done after a couple months.
2. I heard someone say last week that CRE is 30 years behind residential RE in terms of technology. I have had trouble coming up with reasons why I disagree.
3. Speaking of which, I wonder if there is an effective way to generate leads on commercial property through the internet . . .
4. I am impressed with Jacoby. They seem to be very innovative in a field that doesn’t always reward innovation.
5. How difficult is it to write a book? There seem to be a lot of people that strike me as . . . let’s say. . . not the academic-type, that write moderately successful books. I am sure it is harder than it looks, but I still can’t help but notice the number of Kardashians that have written books.
6. Do you think Atlanta is a home for innovators and entrepreneurs? Do we attract creative, intelligent, young-professionals with ambitions to reshape their industry or lifestyle? I don’t really know.
7. I think Food carts and food trucks are a genius idea. I heard something like 80% of new restaurants fail within the first year. You have to think that with the low overhead of renting a little cart or truck the downside of that food-service business model is much less than a brick-and-mortar restaurant. Seems like an organic way to grow demand for your product before you invest in a shop, factory, or huge food-production machinery.
8. I haven’t gotten a read yet on Kasim Reed or Nathan Deal with regards to their relationship with the CRE community. I am sure they have bigger fish to fry right now, but I would be interested to learn about their stance on new development in and around the city.
9. I recommend joining the Buckhead Heritage Society. My wife and I are members and you would be amazed how much cool history there is in that little section of our city. Beyond Sherman’s March, there are several crucial and interesting periods that my wife and I have learned about in these old neighborhoods. I don’t get any money or anything if you join. Just take it as a friendly suggestion.
10. Maybe I am just looking in the wrong Barnes & Noble, but I have noticed a serious lack of books on Commercial Real Estate careers. There are thousands of general business books and a few keepers on CRE, but the section is usually tiny and is mixed in with the residential RE books.
So, perhaps it falls to me to write about careers in CRE.
Fine, society. You asked for it. Tomorrow, a primer on careers in CRE.
A couple days ago I offered an opinion that the flight to experience is going to lead to a lack of leadership in our industry (and in many industries) at some point in the future. Young people simply are not being given the opportunity to fully develop into industry leaders because they are being passed over or ignored in favor of their more experienced competitors.
The full article is here: http://www.atlantapropertyjournal.com/?p=148
Well that’s a fine theory and it is probably true, but so what? What is a young man to do about?
You probably aren’t going to change much by arguing that things should be different or asserting that NOW is the most crucial time to be developing young leaders.
And whining about is just going to annoy everyone around you.
So what should you do?
Well, I like to think I am a fairly bright young fella, but to suppose that I have the right solution for everyone that faces my same challenges strikes me as arrogant and presumptuous. So, to be fair, all I can really tell you is what I am doing about it.
Let’s start with what I am NOT going to do:
I am not going to whine, complain, and moan about how unfair life is and how everybody is an idiot, blah, blah, blah.
I’m not going to ask someone else to fix it.
I’m not going to go around blaming the world for letting this happen to me.
I have learned that there are two types of people in the world and I will illustrate those two types with the following hypothetical scenario:
Two guys are crossing the street together without really paying attention to the traffic. The first guy is crossing the street and suddenly looks up and sees a Mack Truck bearing down on him at 60 mph only a few yards away. This man promptly freezes, pees in his pants, reviews his entire life, bemoans his cruel fate, screams for help, and then . . . . BANG.
The second guy runs the freakin truck over.
I wanna be that second guy. Life can kick you around if you let it. I’m gonna kick back.
In this case, kicking back or fighting back has nothing to do with size or strength or ability. It is simply a choice. Choose to take the kicks or choose to fight back. Most people will just take their lumps and mindlessly complain about the market or politics or whatever. I am making the choice to just ignore all that and do something about it. It may hurt me financially and it may even ruin me financially, but you better believe that I am going down swinging.
So, that brings me back to my current course of action. Yes, I will be passed over for positions that I would be great at in favor of someone with more experience. Yes I will be looked down upon because of my age. Yes my phone calls will be ignored or go unreturned because of my age and relative “importance” in this industry. All of that will happen to me over and over and over again. It’s gonna happen. I’m fine with that. Like the two guys and the bus, there is going to be a collision. Take the blow or deliver the blow.
So my plan is to go out and try several things on my own. I am trying to buy a couple properties. I am looking into developing an apartment complex. I am finishing my license and taking some listings. I am working on a land assemblage for a retail deal. I am driving the market. I am looking at a mixed-use deal in the mountains. I am analyzing hospitality deals in Europe. I am looking at land in Central America. I am talking to everyone who will meet with me. I am listening to what they say and trying to learn from their wisdom. I am reading every book I can get my hands on that deals with business practices, leadership, and CRE.
Quite frankly, I am sure that I am going to screw some things up and make some bonehead moves, but that is all part of the process. I would much rather go ahead and take my lumps and learn lessons the hard way now than have to learn those lessons or make those mistakes when there are a few more zeros at the end of my deals.
Actually, messing it up is half the education. I heard someone say that an expert in any given field in just the person who has already made all the mistakes you can make in that particular industry. So, through this process of buying, building, selling, and financing property, I am going to acquire tools like modelling for acquisitions and for development, county building codes and policies, community politics, handling the construction process, hiring property managers, dealing with problem tenants or problem properties, obtaining debt and equity financing, and I am sure there are dozens of other lessons that I will learn that I cant even think of right now. That is the beauty of the process; I don’t have to make millions and become independently wealthy. I just need to learn the process and its pitfalls and be ready when the big paychecks and investors start rolling my way.
I believe my most fundamental advantage in this market is simply time. I know what I want to do and where I want to do it. Now I am just figuring out the “how to do it” part. If I start now, then I have 40 years ahead of me to figure it out. So I am sticking my nose in deals, hustling after potential investors and basically just feeling my way through the process of creating a successful CRE platform.
If it turns out that I am best at owning property, then that’s great news and I will charge off in that direction.
If it turns out that I am best at building properties, then that’s great too and I will start developing that platform.
If I am best at selling property, then that is splendid and I will start my brokerage platform.
Whatever the outcome ends up being, the only way I am going to truly discover that answer in this market is by doing it myself. How many CRE companies could you see saying, “Son, I want you to help us develop this deal, I want you to help us buy that deal, and I want you to help us broker the other deal.”? Probably not many. So, that’s why, in my spare time (evenings, weekends, holidays, etc), I am just running head first into my own deals.
I am not going to sit back and hope for the perfect job or just pray to get lucky and find someone who will load me up with tons of responsibility. I am just taking the knowledge and contacts I have now and trying to figure out how to work CRE transactions.
Should you do the same? That’s not a question I can answer, but either way there is a Mack Truck bearing down on all of us. The question you need to ask yourself is what are you going to do about it?
Has anyone else noticed the lack of young people in our business?
By young people, I don’t really mean the under-40 crowd. I’m talking more about the under-30 crowd.
Since 2007, I can think of fewer than 10 young people I know that have been hired into the commercial real estate business either straight out of college or out of their first job out of college. And when I say “hired,” I don’t mean huge brokerage shops giving the proverbial desk and phone book to enterprising young youth who then go “Dial for dollars!” I am talking more about salaried, full-time CRE positions.
I have also noticed that, almost without fail, open job positions are going to the candidate with the most experience. If a company is looking for a relationship manager, they always seem to go with the fella with 30 years of experience versus the up-and-comer with 10 years of experience. As I have mentioned before, experience seems to be the cure-all for what ails the struggling CRE firm. (As if going through the S&L crisis or the little dot com blip in 2001 somehow makes you able to outsmart the market in the greatest and most unique recession our country has seen in 80 years.)
Anyway, I am not here to complain about hiring practices or strategy. I just want to point out the long-term implications of what seems to be a lack of young people in our business.
Let’s have some fun with numbers for a minute . . .
Let’s assume that this Great Recession is going to last at least another year and will adversely affect the graduating class of 2012. That will make 6 graduating classes of college students who have been unable to find unemployment in the CRE industry. They are the classes of 2007, 2008, 2009, 2010, 2011, and 2012. How many thousands of potential employees is that?
I don’t really know, but let’s assume that workers pour into our industry at an even pace. So, in the long run, the class of ’76 has the same number of CRE employees as the class of 2012.
Let’s also assume that the basic work force consists of 22 to 65 year-olds. Divided by age, that makes 43 groups of workers in our field.
I am going to assert that 1/5 of the CRE world is being underutilized and it will create problems for us in the future.
My assertion is based on the observations I mentioned above; that basically everyone in CRE under 35 is being passed over or ignored for crucial positions. That is, if you are 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, or 35 years old, chances are that you will be given little to no real responsibility in CRE transactions. That isn’t to say that you will not see transactions or be involved in deals, but championing a deal and leading a deal across the finish line are very different than just simply being involved.
Most people would say, “So what?” or “Pay your dues!” or something to that effect. I say otherwise. Statistically, that means that 21.5% of the CRE workforce (14 age groups out of 43) is being underutilized and is not fully experiencing the down-slide and corresponding upswing in the market.
I say that is going to lead to under-developed industry leaders down the road. Let me illustrate why:
There are two young children in a house. Child A is told “don’t touch that hot stove or you will burn yourself.” Child B goes up and slams his palm down on the hot stove, burns the hell out of his hand, and cries all night. Which of those two boys would you say is more likely to make the mistake of touching that hot stove in the future? The exact same principal applies to business. He that watches learns for now, but he with scars learns for good.
The young CRE professionals in our city can go around town, listening to the horror stories, watching their bosses try to keep struggling companies afloat, seeing family friends losing their homes, and generally seeing the despair and destruction in the market. But it is an entirely different experience when YOU personally have to keep the company afloat or figure out how to pay the mortgage and the kid’s private school tuition. Feeling the pain for yourself always leaves a deeper and more lasting impression than just listening and watching from the sidelines.
So, I have a small prediction.
Since we are not fully developing the next generation of CRE professionals, there will be below-average leadership in our industry at some point in the future. Assuming that the peak leadership ages are 45 years-old to 55 years-old and that my numbers are roughly correct, that means that from the year 2021 (when today’s 35 year-old turns 45) to the year 2044, we will see some serious leadership challenges, mistakes, and growing-pains that would make the current generation of leaders cringe in disgust. All of those 22-35 year-olds are either under-employed or unemployed right now and are therefore effectively out of the game. All of the experienced guys are making the deals happen and plotting the course and the young guys are collecting data and running ARGUS.
Maybe the simplest way to put it is: If the next generation of leaders are only in the game or allowed to make decisions once things are easy and we are in the economic clear, how can we expect them to know how to lead companies when the inevitable downturn comes again in the future?
I say that now is the most important time to utilize, train, mentor, and involve the next generation of leaders in our business. If we can teach them how to lead and make tough decisions in tough times, then the future boom-bust cycles that accompany CRE may be much less severe than the current downtown. At the very least, we will then have better equipped leaders to handle the adversity.
I should mention that I don’t think this phenomenon is unique to commercial real estate. It seems like most industries have had multi-year hiring freezes and also have voids to fill in terms of the younger work force. I work in CRE, so I see this pattern most directly in my end of the business spectrum.
So, this isn’t a call to arms or a record of wrongs against HR departments or hiring managers. I just noticed a trend that may lead to some trouble for us down the road. I will not presume to tell you about what you should do or how you should react to this if you are (like me) between the ages of 22 and 35, but I will write an article tomorrow about what I am doing.
If you disagree with my observations or think I am making too big a deal out of it, feel free to comment or enlighten me in the comments below.
As you may or may not have noticed, I’m a fairly avid reader. I think reading is one of the best ways to obtain meaningful knowledge from others.As Mark Twain put it: “The man who does not read good books has no advantage over the man who CAN’T read them.”
Recently I have been reading about entrepreneurship and best business practices. I have come across several wonderfully written books and I wanted to share them with you today.
Here are my top 4 books for real estate entrepreneurs (everyone does a Top 3 or Top 5, so I am going to be different):
1. The Compound Effect by Darren Hardy – This is a wonderful little book about the power of positive habits in your life. Hardy gives several useful tools and practices to help you make sure you are creating the best habits to maximize your success.
2. The 4-Hour Work Week by Timothy Ferris – Cheesy title notwithstanding, this book really does have some great tips on how to maximize your output while minimizing your input. I like that he sees the 80-hour work week as a badge of shame rather than a badge of honor. My two favorite things about this book are that he speaks from personal experience and that he will give you real, tangible ways (i.e. websites and real companies to call) to implement the processes he suggests.
3. The Monk and the Riddle by Randy Komisar – Komisar is a venture capitalist/angel investor in Silicon Valley and the way he breaks down business models and ideas is genius. He will give you a great perspective on how and why to build a business within the context of still enjoying your life. Great read.
4. The Intelligent Investor by Benjamin Graham – This choice may seem a bit out of place on a real estate list, but this classic investing book about value and long term strategy is a must-read for any entrepreneur. Graham is an old-school investment guru who gives sage advice on the way to invest money and I think the same principles apply to buying, selling, or developing commercial property. Check it out.
So, those are my top 4 book recommendations for the CRE entrepreneur (or any entrepreneur for that matter). Feel free to argue with me, tell me I’m an idiot, or suggest your own books in the Comments.