October 15, 2021 • 44 mins
Join host Ari Firoozabadi In this episode of GreyCast, where he welcomes Steve Lamberti, President of Highmark Residential, and Jack Stone for an insightful discussion on entrepreneurship and life. Steve shares wisdom from his 40-year real estate career, emphasizing the significance of empowering your team to foster business growth and support one another. The conversation explores the impact of COVID-19 on the industry, the value of college degrees in multifamily, challenges of remote work, and nurturing future leaders. Tune in to gain valuable insights from Steve's journey in real estate.
Don't miss this intersection of entrepreneurship and life on GreyCast
Takeaways
College Degrees in Multifamily Real Estate
Rising Salaries and Job Prospects
Managing Apartment vs. Standalone Businesses
Advancements in Real Estate Technology
Emphasizing Diversity in Hiring
Importance of Daily Interaction
Empowering Hires to Take Risks
Cultivating Accountability and Opportunities
Impact of COVID-19 on Real Estate
Future Work Models: Hybrid Remote and Office
Quotes
"In well-run companies, there's constant interaction, accountability, trial and error, and a learning culture that embraces mistakes."- Steve Lamberti
"The real estate industry will evolve, remaining a top choice for investors seeking returns."" - Fletcher Hultman - Steve Lamberti
Featured in this Episode
Steve Lamberti
President of Highmark Residential
Website: https://www.highmarkres.com/
Linkedin:https://www.linkedin.com/in/steve-lamberti-22283966
Chapters
00:04 - Introduction
02:42 - Real Estate Career Journey
07:14 - Pivotal Moments and Successful Career Choices
10:33 - Switching Careers: From Law to Real Estate
13:23 - Embracing Change for Continued Success
18:09 - Remote Work Challenges and Opportunities During COVID
21:52 - Future of Remote Work and the Importance of Office Camaraderie
26:23 - Hiring for Diversity and Emphasizing Accountability
30:48 - Empowerment and Asset Management for Success
32:09 - Salaries Rise, College Degrees Matter Less
37:06 - Prioritizing Success and Winning Strategies
39:13 - Housing Investment in an Evolving Industry
42:32 - Broadening Focus and Expanding Knowledge
Don't miss this intersection of entrepreneurship and life on GreyCast
Takeaways
College Degrees in Multifamily Real Estate
Rising Salaries and Job Prospects
Managing Apartment vs. Standalone Businesses
Advancements in Real Estate Technology
Emphasizing Diversity in Hiring
Importance of Daily Interaction
Empowering Hires to Take Risks
Cultivating Accountability and Opportunities
Impact of COVID-19 on Real Estate
Future Work Models: Hybrid Remote and Office
Quotes
"In well-run companies, there's constant interaction, accountability, trial and error, and a learning culture that embraces mistakes."- Steve Lamberti
"The real estate industry will evolve, remaining a top choice for investors seeking returns."" - Fletcher Hultman - Steve Lamberti
Featured in this Episode
Steve Lamberti
President of Highmark Residential
Website: https://www.highmarkres.com/
Linkedin:https://www.linkedin.com/in/steve-lamberti-22283966
Chapters
00:04 - Introduction
02:42 - Real Estate Career Journey
07:14 - Pivotal Moments and Successful Career Choices
10:33 - Switching Careers: From Law to Real Estate
13:23 - Embracing Change for Continued Success
18:09 - Remote Work Challenges and Opportunities During COVID
21:52 - Future of Remote Work and the Importance of Office Camaraderie
26:23 - Hiring for Diversity and Emphasizing Accountability
30:48 - Empowerment and Asset Management for Success
32:09 - Salaries Rise, College Degrees Matter Less
37:06 - Prioritizing Success and Winning Strategies
39:13 - Housing Investment in an Evolving Industry
42:32 - Broadening Focus and Expanding Knowledge
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
To me, it's about building teamsand accomplishing goals and objectives. Hello,
this is Ari Fuza Body. Iam the CEO of Gray Steel. Gray
Steal is a national boutique top fifteencommercial real estate capital market services from I
want to welcome and also thank youfor joining Gray Casts today. This show
(00:23):
is an open and light conversation aroundentrepreneurship, life and the lessons we learn
along the way. When I wasyounger, I was always looking for folks
I could find inspiration from and toinform my path. And I hope that
the young people that are listening toGreatcasts today find value in hearing the experiences
our guest share. I would loveto hear from any of you that are
(00:43):
listening in. Feel free to reachout to me on LinkedIn, my social
media channel of choice. Hey,folks, this is Ari Furusa Body.
Thank you for joining today. Joiningme on the Great Cast is Steve Lamberti,
a graduate of the University of Nevada. Steve is the president of high
Mark Residential, a Dallas, Texasbased operator of multi family property throughout the
(01:03):
United States. We had a greatconversation with Steve around his life, career
and the lessons he's learned along theway. Thank you again for joining us,
and hope you take something away fromour conversation with Steve. My takeaway
and talking with Steve about his lifeand his career is that he has had
great success in building a business aroundhis people and really the strength of his
(01:25):
team and his ability scale his businesshas been around empowering those folks to help
the business and each other do so. And I, for one, I
share that experience with Steve greatly interms of how I've been able to scale
great deal and my business, andso I hope you enjoy the conversation.
Lastly, if you ever want toreach out to me, feel free to
do so on my social media channelof choice LinkedIn. Look forward to connecting
(01:48):
with you. Talk soon, Steve. Appreciate you joining us today on Greatcast.
This is already throws a body CEOof Grace Steal. As our listeners
know, Grace Steals a national commercialreal estate transaction services firm. We handle
investment sales and capital markets transactions throughoutthe United States. Today we have Steve
(02:13):
Lambardi as well as Jack Stone joiningme today and the topic of the conversation,
as always, is a conversation aroundentrepreneurship and hopefully hopefully this you know,
there's some takeaways here for our listeners. So Steve, you know,
kind of starting with you in yourbackground, you know, maybe you can
introduce yourself more briefly and kind ofgive give our listeners a little flavor for
(02:35):
you know, where you grew up, where you went to school, and
then just kind of walk us intoyour career a little bit. If that
works. Sure, First and foremost, thank you for having me. It's
an honor to participate in these conversationsand you know, give insight and ideas,
and I think it's important for acollective range of opinions out there.
(02:59):
My name is Steve Lambertie. I'mcurrently the president of Highmark Residential, a
Star Woars Capital owned company, andwe're based in Dallas, Texas. I've
been in the real estate business,oh my god, I have to say
this close to forty years, soI've done it for a long period of
time. I grew up in asmall town in Nevada called Sparks, Nevada,
(03:23):
which is outside of Reno, whicha school there. Attended the University
of Nevada Reno to see multiple degreesfrom there, and I was about twenty
three twenty four years old and tryingto figure my next step. I always
like school and was looking at amaster's program and also thought about going to
(03:46):
law school. My father was ajudge for thirty plus years in the state,
so I wasn't quite sure what Iwanted to do. An opportunity came
available to me. Through some yearsI knew out of San Francisco, and
one it was a district attorney andanother guy was in private practice, and
(04:08):
they had the idea to move toDallas, Texas and getting the real estate
business right. And this was aseventy nine and eighty so they moved and
then they talked to me and said, come join us. You know,
real estate business in Texas is goinggangbusters and you'd be perfect at it,
and off I went. So Imoved to Dallas, Texas in nineteen eighty
(04:30):
and we acquired about four different apartmentbuildings. We were all novices at it,
so we did everything from you know, go look at them, finance
and buy them, and operate them. And I guess I got the short
end of the stick because I wasin assigned to operate them. So that's
kind of how I learned the operatingside of the business. Was not my
(04:54):
intent to stay there, but Iwas always pretty good at it. Some
of my skills identifying areas of problemsand concerns, putting plans and programs around
them to resolve those, and thenputting teams together to go tackle those objectives.
(05:14):
So stayed in the business for obviouslya number of years. Professional background
is Syndicators, worked with Subsyndicators,two public leeks, one on the New
York Exchange, one on the TorontoExchange, and then our con Goldman Sachs
for a few years. An opportunityfund Hicks mus Take Olympus was the real
(05:39):
estate arm with two other gentlemen startedMilestone and early two thousands, and subsequently
we took that public on the TorontoStock Exchange, were a publicly traded reek.
We were the number one performing USbased assets on the Toronto Stock Exchange
(06:00):
and subsequently sold that platform to StarwoodCapital in April of seventeen, and at
that point Starwood asked me to stayon board and operate the platform, and
subsequently that's where I am today.So I hope that wasn't too long of
a career. I thought that wasSteve. I just wanted to take a
(06:24):
step back because you and I havetalked about choosing career paths in life and
sort of entrepreneurship in a sense andfalling into your right niche you know,
I went to law school like anidiot in my opinion, although I think
you think it was a great valueand we'll pay off. But you know,
I laughed because you know, Iwish I had seen sort of the
(06:47):
real estate side of the business andreal estate ahead of time and when I
was in college. And it seemslike you kind of just fell into it
a little bit, but not reallylike can you kind of exploit like tell
us a little bit, like I'mcurious. I know we have kind of
talked about this before. But youknow, you ended up not going to
law school and it ended up workingout just fine for you. So did
(07:08):
you ever have any regret not goingto law school? And what made you
know and continue down the path youwere going. It's funny there was two
pivotable points. One was, youknow, when I was talking to my
dad about law in law school andI said he was a judge, he
said, you know, there's tonsof lawyers. He said go go get
some work experience. You'd been inschool a long time. So they came
(07:29):
out with a two degrees two Bachelorof Arts, and he said, go
to work. And that was kindof a pivoal point. And then I
had the opportunity to spend about amonth at Stanford in the early nineties,
and I was I was considering stayingthere. The deans of school at the
time, so why don't you stayand get one of our executive NBA programs.
(07:50):
Here At that point in time,we were just taking a republic called
Walden Residential, which we took publicon the New York Stock Exchange right when
all the reachs were taken off atninety four. So I had a choice.
I was either going to do thator that and and I went and
took the company public as the COO. And today I'm sixty five. In
(08:15):
two thousand and this was ninety four, so I was in my thirties,
and you know, you're in yourthirties and you're taking a company public.
It was all luck. No.I was with four o four other really
bright guys, and you know,again, I had always fallen into the
operating side of the business. Youknow, it's management, and what you
(08:37):
know and learn about multi family managementis everybody knows how to do it,
but nobody really wants to do it. So so it was kind of like,
well, let Steve do it.And I was pretty good at it.
So that's where you know, Igot type casts. I wouldn't say
typecasts, but it's been fortunate forme. I've made great friends, great
(09:01):
professional relationships. I've had the abilityto get people to a really great opportunity
in life, and you know,to give them the ability to be successful
has been really important to me.So that's what's happened. And I was
(09:22):
lucky. I mean, to me, it's about building teams and accomplishing goals
and objectives and things of that.And on the management side, I've been
blessed to be able to do that. And I worked with some great people
in the industry and wouldn't trade it. So I'm happy. I was content,
had a good career. Yeah,what I'm curious about, So I
would say this, I actually similarto you. I had prepared to go
(09:45):
to law school. My folks werepushing me to go get a secondary education
as well, and I elsa's anddone all those things that I found the
real estate business as well. Soyou and I, you and I share
that, but I wouldn't say this. I don't think that Jack was dumb.
I think there's a lot of alot of skills that you can learn
going through that. Absolutely, yeah, I think I think. I think
it makes Jack a much more Andthat's what I said to them right across
(10:11):
the table. I said that itgives you the ability did it gives you
the ability to read, understand,dissect solve problems. Wouldn't take that education
away from anybody. And if youlook at education, no education is bad
because it teaches you stuff you don'tknow and also shows you stuff that you
do know. I think there's alwaysthat opportunity costs. I mean, you
(10:35):
know, and I have a lotof people reach out to me as well
and ask me about getting into realestate, and a lot of them are
actually attorneys. In fact, wemight be bringing someone on board the team's
tune. Who is a guy whoreached out to me who's practicing at a
big law firm and asked me,hey, how did I do it?
How did I get into it?And you know, essentially just wanted out.
(10:56):
And I think it I think itbecomes tough because I do think you
invest a lot of time and moneyin a certain career path, and your
whole life has been training to dothat and to kind of pivot and go
into an industry where you know youdon't necessarily need that higher education. I
mean, frankly, you know,in our industry, for example, there
(11:16):
are you know, there are brokersout there who you know, they have
a high school education, maybe more, but you don't need more. So
that cost benefit of analysis of takingout student loans or working through school and
kind of delaying your career start.I graduate college in two thousand and eight,
graduate law school in twenty twelve.So a lot of my friends that
(11:37):
got into real estate, they gota you know, a nice ten year
head start on me ultimately. Butyou know, I think obviously there's different
trajectories and paths, and you know, so far it's worked out fine for
me. But you know, Ialways laugh and I see see guys like
like you, guys who just youknow, thought about going to law school,
and you know, I think yousaw the ring on the wall as
(12:00):
far as what would be better forthem, you know, what would suit
their strength may be better, andwhat they were passionate about Yeah. I
mean for me, I look,I took meetings with successful people as a
young lad, and I at thesame time as building my real estate career,
if you will, I was runninga tandem course until you know,
until which time, candidly, Ihit a milestone of success. And simultaneously,
(12:24):
the council that I got was,hey, if you're not passionate about
it, I wouldn't spend the timedoing it because it's a lot of work.
And candily, the lawyers that Italked to said, it's much more
interesting on the business side, Sobe on the business side. And so
I took that advice. You ranwith it. But Steve, let let
me ask you this. As anoperator, I mean clearly you're you're the
definition of an operator. And Ihave had the pleasure, you know,
I kind of break up business peoplethat are leaders in three categories. It's
(12:48):
the entrepreneur, it's the operator,and it could be you know, the
hired gun operator, if you will, and the air someone who runs a
family business. It sounds like you'reyou're a hybrid between the entrepreneur and the
hired gun. Based on the notionyou stayed on with the transaction too.
How do you approach operating your business? Do you what you're operating philosophy?
(13:09):
Do you you manage according to youknow, there's there's different management styles,
there's different management programs, like trueprograms that people run. What is your
approach to operations of your own styleor do you subscribe to someone else's It's
a combination. I think to besuccessful at whatever you do, you've got
to continue to grow and evolve andchange. And that's hard changes, and
(13:31):
especially when you're in charge, it'shard to change. And if somebody says
it's not you know, I say, look in the mirror, because it
is. And what makes it evenmore complicated is if you're very successful,
then you're even more resistance change.But you've got to be cognizant of always
trying to change. And I haveto talk to myself about that. I
(13:52):
have to say, well, youknow, let's make sure we're embracing new
ideas and that and that's at timesis a challenge. So my style is
I believe of empowerment. I learnedthat a long time ago. Hire good
people, empower them to do theirjob, and give them an arena to
be successful. Okay, and inmanagement. You know, I tell kind
(14:16):
of a crazy story, but ifyou understand management and people, the story
I say is I never want tobe standing outside next to the manager of
an apartment building and the building ison fire. And I turned to the
manager and I said, you calledthe fire department, right, And she
turns to me and she said,no, nobody told me to. So
(14:41):
you know, you've got to empowerpeople. You've got to let them make
decisions. And you know, Ithink the greater good comes out in people
when you create that structure. Domistakes happen, absolutely, Instances occur,
absolutely, but your back fell in. But when you look across landscape and
(15:01):
you've got people that are excited abouttheir job, they're empowered, they know
that they can make a difference andmake things happen. My opinion is you
get better performance. So that's kindof how I'm wired and kind of you
know how I've always tried to leadorganizations I've been involved in. Yeah,
(15:22):
you seem like you're kind of moremore that CEO type right where you're you
kind of understand people's strengths and weaknessesand you kind of empower them to run
with it. I'm just assuming youkind of have your your hands in different
buckets, just enough to kind ofknow what's going on and be on top
of things, but not all theway into to where it's not being.
(15:46):
You've got to, Yeah, you'vegot to let people know that they've got
some latitude because you know, youlook at yourself in the mirror and say,
what, I like to work inthis environment, but I like to
work for me. Sometimes you gotto ask that question. You know the
answer is no, Well then yougot to look around and say, okay,
well then who do I blame?Well, you're as you continue to
(16:06):
look around, you're still the onlyguy standing in front of the mirror.
Yeah, we we like what Iwas what I was going to contribute was
on the front end of when webring folks onto the into the gray steel
business. We have a kind ofa training manual that we run and I
open you know, I do theopening session, and the bulk of the
opening session is around resourcefulness. Andthat's what you alluded to, Steve,
(16:27):
is you you need your operator,which is your manager of your buildings,
to be resourceful. And then Iwould also add I've been listening to a
book called Top Grading it's a philosophyon how to hire, recruit, and
retain top talent. And you know, that's the overarching theme there as well,
is that the highest performers and businessesare the ones that are the most
(16:48):
resourceful. And I think ultimately that'swhat we need in order to get the
scale as you need, you know, you need to be able to trust
your team, to execute on yourbehalf and to be resourceful to make you
know, to make decisions that arein line with the culture and practices of
the business. That makes a lotof sense to me. So going through
your kind of the as you've you'vehad a variety of roles here in your
(17:11):
life, and but but all ofthem in the real estate business. What
are some of the most challenging timesin your career? What would you if
you were to point to one ortwo? And I know this COVID situation
is pretty challenging and it used tobe. But you know what, in
your view, based on the youknow, the trials and tribulations of being
in business for forty years, what'sthe most challenging experience that you've had as
you can think back in your inyour business career and why, oh,
(17:33):
great, question. You know,if because of the extended period of time,
you know, eighty five downturn,financially, hiccups in nineties, two
thousand in the economics and tech,and then oh seven the housing, But
all of those four five blips inthe market have been around you know,
(17:57):
finance and self designed maybe self designedfailures is too harsh. And then their
capital, their capital man made failuresexactly, and we were able to identify
them, put structures around them,and come out of them. The COVID
(18:18):
is it's kind of untouchable, andit's a challenge because it is untouchable,
and it's fresh, it's here,it's now. So as I'm trying to
look in retrospect each you know,eighty five was really really hard. I
mean eighty five the financial savings,a loan crisis, and I was younger,
(18:41):
you know, and then the youknow, tech and two thousand and
then you know two thousand and youknow, seven to ten with the the
housing market collapse and financing and thingsof that. But but I think what
we're in today is probably and it'sit's kind of the cliche because it's here
(19:02):
right now, but it's probably thetoughest to really manage around because of the
disparity of people. So when allthose other events happen, you could sit
in a room with ten or twelveother people and say, Okay, how
do we dissect this, How dowe manage this? How do we manage
this down? What are we doingfor capital? What are we doing to
preserve equity dollars that are there?You know? What are we doing to
(19:26):
cut expenses? How do we incentivizepeople? How do we keep our best
people? Those were all tangible thingsthat you could have a strong organization through
putting plans and processes in places andgoing forth. Where we sit today with
COVID is a big different situation,and I think it's challenging. I think
we're all astounded and surprised how wellwe've all worked remotely, and I think
(19:52):
it's you know, it's all ofus are going wow, whoever thought that
would have happened? And I thinkthat's extremely positive. I think we have
to take a step back and lookat those positive things of it and then
say, how do we implement thosein better structures going forward? And I
think we will do that, ButI also think we have to be cautious,
(20:14):
you know about the human spirit.What I mean about the human spirit
is we can do all this productionremotely, but you know, let's not
get too remote where we're taking awaythe ability for young professionals to develop and
grow in leadership and management roles.The way that happens is immersement into a
business culture. So we've got tobe cognizant of that. It's not going
(20:37):
to hurt us for one or twoyears. But how do you identify that
next level of leadership if they've neverreally been in the arena. Yeah,
they're at home, don't you think. I mean, this is something that
everyone's been talking a lot about rightnow and just just like getting back to
the office, and I mean Ithink we are you know, we're all
social creatures and have to be aroundpeople to some extent, and zoom calls
(20:59):
are great, it is that asubstitute completely. I mean, are we
gonna I think we go to amodel where and I know already has thoughts
about this as well. I mean, do we go to a model where
maybe you know, people aren't goingin five days a week, but certainly
maybe three days a week or youknow, yeah, I think there's a
modification there, you know, andwe adapted at the property level. You
know, most properties were open sevendays a week in the multi family,
(21:21):
very assertive. Well, all ofa sudden, now you know, a
lot of properties opened between five andsix days a week. Performance is still
good. So there's things that youcan learn, you know, and I
think a balance as you alluded to, about two days a week, three
days a week, and then abalance of when you are together, how
you change the culture and the behaviorat that time to grow, you know,
(21:48):
young individuals in professional management roles.So one, what you said a
moment ago about your reflection on previousyou know, challenges into recession in this
situation is exactly the way I hadpreviously explained it, which is like I
was really prepared for another seven,eight, nine, ten, however long
(22:11):
that was. I was, Iwas really prepared for another financial crisis because
you know, I work for aliving, so I was prepared to roll
up my sleeves, go sit inthe conference room, you know, room
it out. But you're right,you can't, you know this one,
you know, like there was nowar rooming it out. And so it's
such an interesting experience, and candily, one that was pretty sobering in March
(22:32):
and April. Because for guys likeyou and me and Jack that run one
hundred miles an hour, and foryou, a guy that's been a business
for forty years, you know,tell you you can't go to work and
figure it out and you have tostay home, you're kind of looking at
and scratching your head like what isthis? And so so it's very very
interesting. And then I would alsocontribute that I think that the former CEO
of Yahoo, you know, shetried a remote work business. It failed
(22:56):
because you said, because it's verydifficult to maintain culture, to identify talent,
you know, and see through yourorganization if it's fully remote, and
so, you know, I dobelieve a hybrid is probably the path forward,
but more likely than not. Soso similar to what happened in nine
to eleven where we were kind ofafraid of tall buildings and getting on planes.
(23:19):
There will be a period in timewhere people choose to work from home.
But I believe businesses over time willget back to the old normal and
a majority work from the office environment. But I think it's going to take
time to get there. So Ithink the remote work and the work from
home is is here. To stay. But I don't think it replaces the
(23:42):
camaraderie of you know, officing withpeople. I think about these poor kids
who are you know, they're notgoing to school and neither like those formative
years of learning how to socialize,and you know, are we going to
have a whole generation? I'd laugh, But yeah, I kind of kid,
I kind of o kid, Arewe're gonna have a whole generation of
people? It was already gained toughenough, you know for millennials, you
(24:03):
know, and technically I'm still amillennial to get on the phone and call
someone. Are we going to bein this this place where now they you
know, kids won't even know whatit's like to be around someone in person.
So I certainly hope we get backto what we know of as normal
sooner than later. For sure.Yeah, I struggle. I struggle with
(24:23):
one, you know, a lot, especially for the really young kids,
the ones that are home and youknow, and then of course parents who
are required to teach them. It'sit's just such a very, such a
complicated situation. But I do believewe can see through this one. I
believe there will be an end tothis with fishing vaccines, it's just there's
gonna be some pain in the interim. Good take time, take time.
(24:47):
Yeah, it's gonna take time.You guys are all spot on. And
if you look at if everybody takesa step back and you look at every
well run organization you've ever had theexperience too to touch your feel or have
knowledge, and you look at whyit runs as it does, and you
know, those are the key componentsof how those people run those organizations.
(25:11):
You know, it's it's it's theirpolicy, it's their procedures, it's it's
how they want their people to interact. So if you look at really well
run companies, there's a lot ofinteraction there, and there's accountability there,
and you know there's trial and errorthere, and you know there is you're
not blistered for mistakes. You learnfrom your mistakes. So all those little
(25:34):
building blocks of great organizations, fromyou know, fast food restaurants to you
know, corporate banking America. Therethere's building blocks in there of how people
excel in those systems which are justvital. And you're not going to learn
many of those things sitting at homeat your desk on your computer. Let
(25:59):
me ask you. Let's talk abouthiring, So hiring and retention and how
you approach that. So I liketo you know, since you're an operator,
I'm always intrigued in asking these questionsto guys and gals that operate big
businesses and interact with a lot ofpeople. What's your hiring approach? How
do you view talent management as youryour business? I like to hire different
(26:23):
people. I like to hire differenttypes of people, you know. I
use the weeble model. We'll allgo down the road. One guy takes
a left, how many you're goingto go off the curb until somebody says,
hey, why are we going offthe curb? Hopefully it's one or
two and not twenty two. Sowhen we hire, I like to hire
(26:45):
different people. And you know,if you look at my executive staff,
there's not a clone in the bunch. They're very different, different skill sets,
different history and backgrounds, different exposuresin life. And I think that's
very important because that's what we dealwith every day in life, and especially
in my business. Where my businessis ninety nine percent people action and activity.
(27:12):
Probably ninety five percent is going tobe bookkeeping and operating, but the
majority of my business is interaction withpeople every day, good and bad.
So I'm a proponent of hiring differenttypes of people. I like people that
take some risk. Now I giveboundaries and the other thing that I give
(27:33):
because everybody wants to be in charge. Everybody wants to make a decision.
But one of the things I alwayssay when I hire people is say,
Okay, here's the playing field,pretty good sized playing field. And I
look at them across and I say, but here's the deal. I'm going
to hold you accountable. It's theother side of the sickle. Everybody wants
to be in charge, but youknow, not always When that things go
(27:56):
bad, the accountability. So you'vegot to have accountability. When you're going
to create an environment of opportunity anddecision making and empowerment, there's got to
be accountability that comes with It makessense to me. I agree with that
wholeheartedly. I tell folks that I'mI'm open to and I seek mutually accountable
(28:18):
relationships because I'm also open to beingheld accountable to what I commit to.
And so I think, you know, I'm a leader that I like to
lead by example. I can leadfrom the front and I can also follow.
But at the end of the day. It's it's I agree with you
wholeheartedly. It's around accountability. See, one of the strongest things you said
is you'll follow. If you havethat mindset to follow, you will create
(28:41):
leaders in your organization. What youjust said there's extremely powerful because for a
leader to be able to say I'llfollow, he creates a culture where others
will step up and start to lead. And that is really important. Yeah,
I like to called being a positionplayer. I'm willing to play the
(29:02):
position that I need to play inorder to, you know, in order
to maximize, you know, theresults that we're looking to achieve, either
on a platform basis or for anindividual client or engagement. I'm here to
play whatever role I need to playin order to make it happen if you
will. And so, yeah,I feel like we do that pretty well.
I mean, I feel like everyonedoes feel very much empowered. I
(29:23):
feel like in the organization and wantsto contribute and step up and and there's
roles for that and positions for that, and yeah, and probably you know,
ultimately, I think as as aleader or as a CEO type,
it also makes your life easier,right under. I mean, so it's
it's a win win for everyone.You guys have grown extensively. You know
(29:47):
how many years you guys been inexistence now eight years? Eight years?
And how many office has you gotto open? Now? We're coast to
coast, so I think we're atlike fourteen offices where over a hundred we're
one hundred people. I mean,that's that is in a competitive industry today
where you've seen significant consolidation. Yourbusiness model has worked, and you hired
(30:08):
smart young lawyers that didn't want tobe a lawyer. But but that business
model's working. You've you've created thatenvironment to see that. You just rolled
right off your tongue. We're nationalfourteen officers. That's powerful in eight years
in an extremely competitive business. We'reonly it's got to be really proud of
(30:30):
that. It will look I verymuch, am, but and I would
say that, you know, it'sa top fifteen firm in the US and
the field that we're in, absolutely, and we're very proud of it.
And I would agree with you thatwe're only, but I would say this,
we're only as good as as theplayers that we have on the field.
And absolutely, it's to the pointyou've already made, which is it's
(30:51):
all about the people. It's allabout empowering the people, you know,
and really getting out of the wayso that they can they can do what
they need to do in order tomeet the needs of our clients. And
so I think you share that philosophy. It's just a little different angle,
if you will. Your client isyour end renter and or your investor,
and the goal here is to providemaximum service to the two. And so
(31:14):
you know, when I think aboutthe apartment business, and so this is
a little touchy saw, but I'mgonna touch it because I think it's interesting
to me when you think about athree hundred unit apartment complex, depending on
where it is in the country,is worth. You know, it's anywhere
between a thirty million to one hundredand fifty million dollars asset. It could
be a little less valuable depending onthe quality of asset location, but just
(31:36):
it's a very sizeable asset. It'sa big business, you will, from
total dollar value. When I thinkabout the property manager, the individual manager,
very few businesses do you see yousee that dynamic where a manager manages
an asset that's fifty million dollars,but the compensation is different. When you
think about a fifty million dollar businessand a fifty million dollar asset the manager
(32:00):
of the business, and I knowyou're an operator, so I know it's
a little touchy, but I'm goingto ask you, I don't about what
your feelings around there because I lookat it. I said, it's confusing.
A good question. Yeah, it'sa great question, and it's you
know, I mean if you lookat the business today, I mean because
what you said years ago, itwas basically the high percentage or not college
(32:23):
degrees, high percentage of the multifamilyindustry, maintenance office administration are not college
degree individuals. When you got outof college and somebody offered you a real
estate job, they showed you inan apartment building, and then they showed
you a you know, twenty storybeautiful office tower that you could lease,
(32:45):
and then they point to the apartment, say you want to clean toilets?
You know, and everybody who gotout of school when Jesus I'm going on
the office a ro ounte look atthat. So that's what it was.
Now, what has happened the lastfive to seven years. Salaries have moved
up. You know, you've gotmanagers probably a blended average through the United
(33:06):
States on a three hundred unit propertyor close to forty five to fifty five
thousand a year base salary plus bosses. That's pretty good today. And then
there's boundaries. Okay, So sowhen you talked about managing the business,
so the apartment building, it isa thirty million dollar business, but it's
(33:28):
got different boundaries around it. Sothose are some of the safety nets you
may call it if you're comparing itto a standalone operating business on the corner
of Maine and seven. But thegood thing is salaries have moved up and
people haven't recognized that the quality ofthe personnel, and now that technology is
(33:52):
so you know, perverse through theindustry. It's really coming to a level
where people compensated at a much betterrate. Yeah. I mean, because
I look at it and I say, if you have, I mean,
think about it. Your your manageris the operator on staff that's managing that
asset. They're in charge of customersatisfaction, customer surface, customer retention.
(34:15):
If they're unhappy, then the environment'stoxic and yours and your yeah shows yeah,
So I mean they're the president ofthat business, they're the CEO,
of that apartment building, and andthey set the tone there, you know,
as an average of you know,you want to use an average one
employee per fifty units, you know, throughout the property for maintenance and for
(34:38):
office personnel, and one on theoutside, one on the inside. That
was the old ape. Yeah,average numbers. Yeah, So that goes
back to hiring the right person.If they don't have the skills, give
them skills, give them the opportunityto learn those skills, you know,
give them a mentor and things ofthat nature. And at times you'll be
(35:01):
flabbergassed how well those people will seedon that opportunity and just excel. Well
said. So, so as youlook through them, you're close to fifty.
You know, in another ten years, you'll be fifty years in this
business. By twenty thirty, itwill be. So that's that's funny.
(35:21):
You got to say that now,I do because because I mean, it's
an amazing achievement to to have.I'm going, I've been in this business
for almost twenty years, Okay,I am very I'm very proud of that,
and I'm a relatively guy and lookforward to celebrating my forty year and
fifty year milestone. I think it'sa great business. But as you as
(35:44):
you look forward, you know,you just talked about opportunity for you and
your business, where do you seethe greatest an well for us? I
mean, I mean, I'm veryfortunate that I'm employed by probably one of
the smartest guys in the industry.I mean, sternlick is as a brilliant
man, but but on top ofthat, he's an incredibly nice man,
(36:06):
and he's probably you know, he'she's probably the smartest guy that I've worked
for in my life, but justan incredibly nice man. I mean,
first time I met him, youknow, and he just says, what
do you want to do? AndI explained it and he said great.
The utmost respect for him and theyoung culture that I work with. So
(36:29):
for me, I'm comfortable in myskin. Okay, I'm given the opportunity
to run the platform. We've grownit significantly, We've put numerous units in
and out of it, and alwaysmaintained our key focus of performance. And
I've gotten great support, and youknow, I'm I'm incredibly lucky and blessed.
(36:53):
So for me, my next numberof years are I want to continue
to operate at the high levels ofperformance that we have. I like winning.
I mean, I'm not a goodloser. I wasn't a good loser
at ten and I ain't a goodloser at sixty five. So I don't
like losing. I like winning.And what even makes me happier is when
(37:16):
I win with others. So forme, it's to continue to stay the
course, continue to develop, andsee people grow within our organization. You
know. And a funny thing aboutme. When I lose people, you
know, people can take it all, Oh god, I can't please that
person, quit or whatever. Notme, I think it's great. I
go to them and I say,tell me about your new opportunity. Do
(37:37):
you have the you know, haveyou found something that you can better yourself?
Because if they bettered themselves through mywork environment, that's a win.
I don't you know, I'm notrunning around happy. Oh John's leaving,
Betty's leaving. But but you know, if they can go better themselves financially
(37:57):
and career wise because of the environmentthat we've given them, that's really cool.
Now. You know, some peoplecan be and O god, that's
just weird. But you know,you got to look at those people.
You got to celebrate their successes oftheir bettering themselves. And I've also had
a fair amount of people leave andcome back and that's okay. I'm blessed.
(38:19):
They'll call and say, hey,can I come back, and you
know, I say, well,I got a spot absolutely, So over
the next oh god, I gottasay ten years, over the next extended
period of time. I want tocontinue to do what I've done and Starluck
has allowed me to do that,and you know, I'm appreciative. I
got two other great guys again namedMark Deeson and Chris Graham that I get
(38:45):
to work with. It are greatindustry guys. So we're I'm fortunate and
blessed and that's what I want tocontinue to do. Steve, I know
we kind of have to wrap thisup, but like on that same note
with where you're going and the greatteam that you work with, I mean,
where do you where do you needthe industry going? It's it's kind
of a vague broad question, butit's changing a lot, and you've seen
(39:07):
it change a lot. Like I'vekind of been talking about where do you
see it ten years from today?Well, if you always look at downturns
and going back to all those downturnsthat we mentioned. Flight is housing,
okay, and we've seen it againtoday. Flight is housing. Why don't
I say flight investment, flight andin placement of money of housing. So
(39:28):
I think that's gonna Housing will stillbe paramounted development, but just existing housing
by the masses of our country isconsistent, will remain consistent, and will
always be in need. So Ithink the industry will continue to evolve.
I mean debt markets. Did weever think that we'd see, you know,
(39:49):
interest rates at the level that theyare the ten year and things of
that nature. But all this willcontinue to evolve and change. But I
think the investment cycles will will certwe continue to be paramount. I think
we'll still see international capital from hereto there and from there to here and
everywhere like that will be consistent.The real estate industry will still be at
(40:12):
the forefront of investment and returns forinstitutional investors and smaller investors. I really
do agreed. I did two thingsthat I heard you say in between what
you said, which is necessity breedsingenuity, and then too, I view
multi family real estate to be atrue alternative to other fixed income investments.
(40:34):
Because of the continuity the cash flows, say, the security of the yields
I mean in that demonstrator here inthe pandemic very well in fact, and
I actually believe caprits have gone downand are reflective in current trades. Actually,
the CEO of Camden and he wason his earnings called recently said he
believed there's a based on his portfolio, he's seeing like a three and a
(40:57):
half cap on asset trades based onof his portfolio and his operations values that
are trading on the street. He'ssaying on my numbers, it's I think,
he said, as a three anda half cap. So it's a
very dynamic camin has got good assets, good locations and one percent right.
But a big component of that threeand a half though, is let's not
(41:17):
fool ourselves. It's your borrowing attwo point eight because yeah, it's hucent.
So it's all it's all a functionof the of the three to four
legs on the stool, and we'vejust got to be cognis into that.
You're right, You're right. Sobefore we wrap up, I'm gonna ask
you just kind of you know,we have some listeners that are you know,
(41:37):
relatively young and in informative years comingout of college, things like that.
So if I were to ask youa question, the question being if
you look back, the young versionof you, the twenty year old version
of you is standing before you,and you have and you have a few
minutes with yourself, what advice wouldyou give yourself, you know, after
you've attained the wisdom that you havenow. I would probably say, where
(42:00):
some of the mistakes that I madewhen I was when I was young,
I was maybe too funnel focused beingyoung and being in the world today with
technology, keep your focus broad,Okay, don't just be myopics and singularly
focused. Keep your focus broad andcontinue to learn not only what you're focusing
(42:22):
on the doing, but other things. I think that's that's extremely important because
sometimes those other yeah, and sometimesthose other things will shift and be your
focus at some point in your career, and to having knowledge around that put
you a step ahead. So beyou know, if you're going to be
(42:44):
myopic and driven and focused, keepyour focus a little broader, don't just
be single siloed. That's what Iwould say is keep the focus wide.
Learn, you know, keep otherbis. It's of information coming in from
other areas. Then you're just youknow, soul job and initial focus.
(43:12):
Keep broad keep knowledge. So ifyou're a masonry once in a while,
go paint. You know what I'msaying. Yeah, yeah, keep that
broadness, keep that broadness. Andif you if you, if you don't
have it, instituteed make yourself doit. And at times I wish I'd
have done that at a younger age. Well, I uh, look,
(43:36):
I think I'm speaking on behalf ofmyself and Jack, we appreciate you graciously
joining us. You guys are greatguys. I probably learned more talking about
this than than people will because weyou know, it was a good exchange
of ideas. I understand what yourguys focus is. Hearing what you said
just kind of solidifies the knowledge.And what I know about your company is
(44:01):
how you guys are doing it,how you guys are driving it, and
the results are extremely positive and someof the things that I've done, if
people can learn from that, absolutelyit's about helping people. And if this
exchange helps some young guys say,you know what, I want to take
a left, I want to takea ride, I want to stay straight.
(44:21):
That's a good thing. Well,we appreciate it. The tide rises
all boats, that's at least thephilosophy absolutely, so that sounds like we
should. We share a lot ofphilosophy and absolutely and views. So again
on alf the Jack and I andthe team at Grace Deal, we appreciate
you and we look forward to youknow, continue to add value what we
can in your business and learn food. Thank you,
To me, it's about building teamsand accomplishing goals and objectives. Hello,
this is Ari Fuza Body. Iam the CEO of Gray Steel. Gray
Steal is a national boutique top fifteencommercial real estate capital market services from I
want to welcome and also thank youfor joining Gray Casts today. This show
(00:23):
is an open and light conversation aroundentrepreneurship, life and the lessons we learn
along the way. When I wasyounger, I was always looking for folks
I could find inspiration from and toinform my path. And I hope that
the young people that are listening toGreatcasts today find value in hearing the experiences
our guest share. I would loveto hear from any of you that are
(00:43):
listening in. Feel free to reachout to me on LinkedIn, my social
media channel of choice. Hey,folks, this is Ari Furusa Body.
Thank you for joining today. Joiningme on the Great Cast is Steve Lamberti,
a graduate of the University of Nevada. Steve is the president of high
Mark Residential, a Dallas, Texasbased operator of multi family property throughout the
(01:03):
United States. We had a greatconversation with Steve around his life, career
and the lessons he's learned along theway. Thank you again for joining us,
and hope you take something away fromour conversation with Steve. My takeaway
and talking with Steve about his lifeand his career is that he has had
great success in building a business aroundhis people and really the strength of his
(01:25):
team and his ability scale his businesshas been around empowering those folks to help
the business and each other do so. And I, for one, I
share that experience with Steve greatly interms of how I've been able to scale
great deal and my business, andso I hope you enjoy the conversation.
Lastly, if you ever want toreach out to me, feel free to
do so on my social media channelof choice LinkedIn. Look forward to connecting
(01:48):
with you. Talk soon, Steve. Appreciate you joining us today on Greatcast.
This is already throws a body CEOof Grace Steal. As our listeners
know, Grace Steals a national commercialreal estate transaction services firm. We handle
investment sales and capital markets transactions throughoutthe United States. Today we have Steve
(02:13):
Lambardi as well as Jack Stone joiningme today and the topic of the conversation,
as always, is a conversation aroundentrepreneurship and hopefully hopefully this you know,
there's some takeaways here for our listeners. So Steve, you know,
kind of starting with you in yourbackground, you know, maybe you can
introduce yourself more briefly and kind ofgive give our listeners a little flavor for
(02:35):
you know, where you grew up, where you went to school, and
then just kind of walk us intoyour career a little bit. If that
works. Sure, First and foremost, thank you for having me. It's
an honor to participate in these conversationsand you know, give insight and ideas,
and I think it's important for acollective range of opinions out there.
(02:59):
My name is Steve Lambertie. I'mcurrently the president of Highmark Residential, a
Star Woars Capital owned company, andwe're based in Dallas, Texas. I've
been in the real estate business,oh my god, I have to say
this close to forty years, soI've done it for a long period of
time. I grew up in asmall town in Nevada called Sparks, Nevada,
(03:23):
which is outside of Reno, whicha school there. Attended the University
of Nevada Reno to see multiple degreesfrom there, and I was about twenty
three twenty four years old and tryingto figure my next step. I always
like school and was looking at amaster's program and also thought about going to
(03:46):
law school. My father was ajudge for thirty plus years in the state,
so I wasn't quite sure what Iwanted to do. An opportunity came
available to me. Through some yearsI knew out of San Francisco, and
one it was a district attorney andanother guy was in private practice, and
(04:08):
they had the idea to move toDallas, Texas and getting the real estate
business right. And this was aseventy nine and eighty so they moved and
then they talked to me and said, come join us. You know,
real estate business in Texas is goinggangbusters and you'd be perfect at it,
and off I went. So Imoved to Dallas, Texas in nineteen eighty
(04:30):
and we acquired about four different apartmentbuildings. We were all novices at it,
so we did everything from you know, go look at them, finance
and buy them, and operate them. And I guess I got the short
end of the stick because I wasin assigned to operate them. So that's
kind of how I learned the operatingside of the business. Was not my
(04:54):
intent to stay there, but Iwas always pretty good at it. Some
of my skills identifying areas of problemsand concerns, putting plans and programs around
them to resolve those, and thenputting teams together to go tackle those objectives.
(05:14):
So stayed in the business for obviouslya number of years. Professional background
is Syndicators, worked with Subsyndicators,two public leeks, one on the New
York Exchange, one on the TorontoExchange, and then our con Goldman Sachs
for a few years. An opportunityfund Hicks mus Take Olympus was the real
(05:39):
estate arm with two other gentlemen startedMilestone and early two thousands, and subsequently
we took that public on the TorontoStock Exchange, were a publicly traded reek.
We were the number one performing USbased assets on the Toronto Stock Exchange
(06:00):
and subsequently sold that platform to StarwoodCapital in April of seventeen, and at
that point Starwood asked me to stayon board and operate the platform, and
subsequently that's where I am today.So I hope that wasn't too long of
a career. I thought that wasSteve. I just wanted to take a
(06:24):
step back because you and I havetalked about choosing career paths in life and
sort of entrepreneurship in a sense andfalling into your right niche you know,
I went to law school like anidiot in my opinion, although I think
you think it was a great valueand we'll pay off. But you know,
I laughed because you know, Iwish I had seen sort of the
(06:47):
real estate side of the business andreal estate ahead of time and when I
was in college. And it seemslike you kind of just fell into it
a little bit, but not reallylike can you kind of exploit like tell
us a little bit, like I'mcurious. I know we have kind of
talked about this before. But youknow, you ended up not going to
law school and it ended up workingout just fine for you. So did
(07:08):
you ever have any regret not goingto law school? And what made you
know and continue down the path youwere going. It's funny there was two
pivotable points. One was, youknow, when I was talking to my
dad about law in law school andI said he was a judge, he
said, you know, there's tonsof lawyers. He said go go get
some work experience. You'd been inschool a long time. So they came
(07:29):
out with a two degrees two Bachelorof Arts, and he said, go
to work. And that was kindof a pivoal point. And then I
had the opportunity to spend about amonth at Stanford in the early nineties,
and I was I was considering stayingthere. The deans of school at the
time, so why don't you stayand get one of our executive NBA programs.
(07:50):
Here At that point in time,we were just taking a republic called
Walden Residential, which we took publicon the New York Stock Exchange right when
all the reachs were taken off atninety four. So I had a choice.
I was either going to do thator that and and I went and
took the company public as the COO. And today I'm sixty five. In
(08:15):
two thousand and this was ninety four, so I was in my thirties,
and you know, you're in yourthirties and you're taking a company public.
It was all luck. No.I was with four o four other really
bright guys, and you know,again, I had always fallen into the
operating side of the business. Youknow, it's management, and what you
(08:37):
know and learn about multi family managementis everybody knows how to do it,
but nobody really wants to do it. So so it was kind of like,
well, let Steve do it.And I was pretty good at it.
So that's where you know, Igot type casts. I wouldn't say
typecasts, but it's been fortunate forme. I've made great friends, great
(09:01):
professional relationships. I've had the abilityto get people to a really great opportunity
in life, and you know,to give them the ability to be successful
has been really important to me.So that's what's happened. And I was
(09:22):
lucky. I mean, to me, it's about building teams and accomplishing goals
and objectives and things of that.And on the management side, I've been
blessed to be able to do that. And I worked with some great people
in the industry and wouldn't trade it. So I'm happy. I was content,
had a good career. Yeah,what I'm curious about, So I
would say this, I actually similarto you. I had prepared to go
(09:45):
to law school. My folks werepushing me to go get a secondary education
as well, and I elsa's anddone all those things that I found the
real estate business as well. Soyou and I, you and I share
that, but I wouldn't say this. I don't think that Jack was dumb.
I think there's a lot of alot of skills that you can learn
going through that. Absolutely, yeah, I think I think. I think
it makes Jack a much more Andthat's what I said to them right across
(10:11):
the table. I said that itgives you the ability did it gives you
the ability to read, understand,dissect solve problems. Wouldn't take that education
away from anybody. And if youlook at education, no education is bad
because it teaches you stuff you don'tknow and also shows you stuff that you
do know. I think there's alwaysthat opportunity costs. I mean, you
(10:35):
know, and I have a lotof people reach out to me as well
and ask me about getting into realestate, and a lot of them are
actually attorneys. In fact, wemight be bringing someone on board the team's
tune. Who is a guy whoreached out to me who's practicing at a
big law firm and asked me,hey, how did I do it?
How did I get into it?And you know, essentially just wanted out.
(10:56):
And I think it I think itbecomes tough because I do think you
invest a lot of time and moneyin a certain career path, and your
whole life has been training to dothat and to kind of pivot and go
into an industry where you know youdon't necessarily need that higher education. I
mean, frankly, you know,in our industry, for example, there
(11:16):
are you know, there are brokersout there who you know, they have
a high school education, maybe more, but you don't need more. So
that cost benefit of analysis of takingout student loans or working through school and
kind of delaying your career start.I graduate college in two thousand and eight,
graduate law school in twenty twelve.So a lot of my friends that
(11:37):
got into real estate, they gota you know, a nice ten year
head start on me ultimately. Butyou know, I think obviously there's different
trajectories and paths, and you know, so far it's worked out fine for
me. But you know, Ialways laugh and I see see guys like
like you, guys who just youknow, thought about going to law school,
and you know, I think yousaw the ring on the wall as
(12:00):
far as what would be better forthem, you know, what would suit
their strength may be better, andwhat they were passionate about Yeah. I
mean for me, I look,I took meetings with successful people as a
young lad, and I at thesame time as building my real estate career,
if you will, I was runninga tandem course until you know,
until which time, candidly, Ihit a milestone of success. And simultaneously,
(12:24):
the council that I got was,hey, if you're not passionate about
it, I wouldn't spend the timedoing it because it's a lot of work.
And candily, the lawyers that Italked to said, it's much more
interesting on the business side, Sobe on the business side. And so
I took that advice. You ranwith it. But Steve, let let
me ask you this. As anoperator, I mean clearly you're you're the
definition of an operator. And Ihave had the pleasure, you know,
I kind of break up business peoplethat are leaders in three categories. It's
(12:48):
the entrepreneur, it's the operator,and it could be you know, the
hired gun operator, if you will, and the air someone who runs a
family business. It sounds like you'reyou're a hybrid between the entrepreneur and the
hired gun. Based on the notionyou stayed on with the transaction too.
How do you approach operating your business? Do you what you're operating philosophy?
(13:09):
Do you you manage according to youknow, there's there's different management styles,
there's different management programs, like trueprograms that people run. What is your
approach to operations of your own styleor do you subscribe to someone else's It's
a combination. I think to besuccessful at whatever you do, you've got
to continue to grow and evolve andchange. And that's hard changes, and
(13:31):
especially when you're in charge, it'shard to change. And if somebody says
it's not you know, I say, look in the mirror, because it
is. And what makes it evenmore complicated is if you're very successful,
then you're even more resistance change.But you've got to be cognizant of always
trying to change. And I haveto talk to myself about that. I
(13:52):
have to say, well, youknow, let's make sure we're embracing new
ideas and that and that's at timesis a challenge. So my style is
I believe of empowerment. I learnedthat a long time ago. Hire good
people, empower them to do theirjob, and give them an arena to
be successful. Okay, and inmanagement. You know, I tell kind
(14:16):
of a crazy story, but ifyou understand management and people, the story
I say is I never want tobe standing outside next to the manager of
an apartment building and the building ison fire. And I turned to the
manager and I said, you calledthe fire department, right, And she
turns to me and she said,no, nobody told me to. So
(14:41):
you know, you've got to empowerpeople. You've got to let them make
decisions. And you know, Ithink the greater good comes out in people
when you create that structure. Domistakes happen, absolutely, Instances occur,
absolutely, but your back fell in. But when you look across landscape and
(15:01):
you've got people that are excited abouttheir job, they're empowered, they know
that they can make a difference andmake things happen. My opinion is you
get better performance. So that's kindof how I'm wired and kind of you
know how I've always tried to leadorganizations I've been involved in. Yeah,
(15:22):
you seem like you're kind of moremore that CEO type right where you're you
kind of understand people's strengths and weaknessesand you kind of empower them to run
with it. I'm just assuming youkind of have your your hands in different
buckets, just enough to kind ofknow what's going on and be on top
of things, but not all theway into to where it's not being.
(15:46):
You've got to, Yeah, you'vegot to let people know that they've got
some latitude because you know, youlook at yourself in the mirror and say,
what, I like to work inthis environment, but I like to
work for me. Sometimes you gotto ask that question. You know the
answer is no, Well then yougot to look around and say, okay,
well then who do I blame?Well, you're as you continue to
(16:06):
look around, you're still the onlyguy standing in front of the mirror.
Yeah, we we like what Iwas what I was going to contribute was
on the front end of when webring folks onto the into the gray steel
business. We have a kind ofa training manual that we run and I
open you know, I do theopening session, and the bulk of the
opening session is around resourcefulness. Andthat's what you alluded to, Steve,
(16:27):
is you you need your operator,which is your manager of your buildings,
to be resourceful. And then Iwould also add I've been listening to a
book called Top Grading it's a philosophyon how to hire, recruit, and
retain top talent. And you know, that's the overarching theme there as well,
is that the highest performers and businessesare the ones that are the most
(16:48):
resourceful. And I think ultimately that'swhat we need in order to get the
scale as you need, you know, you need to be able to trust
your team, to execute on yourbehalf and to be resourceful to make you
know, to make decisions that arein line with the culture and practices of
the business. That makes a lotof sense to me. So going through
your kind of the as you've you'vehad a variety of roles here in your
(17:11):
life, and but but all ofthem in the real estate business. What
are some of the most challenging timesin your career? What would you if
you were to point to one ortwo? And I know this COVID situation
is pretty challenging and it used tobe. But you know what, in
your view, based on the youknow, the trials and tribulations of being
in business for forty years, what'sthe most challenging experience that you've had as
you can think back in your inyour business career and why, oh,
(17:33):
great, question. You know,if because of the extended period of time,
you know, eighty five downturn,financially, hiccups in nineties, two
thousand in the economics and tech,and then oh seven the housing, But
all of those four five blips inthe market have been around you know,
(17:57):
finance and self designed maybe self designedfailures is too harsh. And then their
capital, their capital man made failuresexactly, and we were able to identify
them, put structures around them,and come out of them. The COVID
(18:18):
is it's kind of untouchable, andit's a challenge because it is untouchable,
and it's fresh, it's here,it's now. So as I'm trying to
look in retrospect each you know,eighty five was really really hard. I
mean eighty five the financial savings,a loan crisis, and I was younger,
(18:41):
you know, and then the youknow, tech and two thousand and
then you know two thousand and youknow, seven to ten with the the
housing market collapse and financing and thingsof that. But but I think what
we're in today is probably and it'sit's kind of the cliche because it's here
(19:02):
right now, but it's probably thetoughest to really manage around because of the
disparity of people. So when allthose other events happen, you could sit
in a room with ten or twelveother people and say, Okay, how
do we dissect this, How dowe manage this? How do we manage
this down? What are we doingfor capital? What are we doing to
preserve equity dollars that are there?You know? What are we doing to
(19:26):
cut expenses? How do we incentivizepeople? How do we keep our best
people? Those were all tangible thingsthat you could have a strong organization through
putting plans and processes in places andgoing forth. Where we sit today with
COVID is a big different situation,and I think it's challenging. I think
we're all astounded and surprised how wellwe've all worked remotely, and I think
(19:52):
it's you know, it's all ofus are going wow, whoever thought that
would have happened? And I thinkthat's extremely positive. I think we have
to take a step back and lookat those positive things of it and then
say, how do we implement thosein better structures going forward? And I
think we will do that, ButI also think we have to be cautious,
(20:14):
you know about the human spirit.What I mean about the human spirit
is we can do all this productionremotely, but you know, let's not
get too remote where we're taking awaythe ability for young professionals to develop and
grow in leadership and management roles.The way that happens is immersement into a
business culture. So we've got tobe cognizant of that. It's not going
(20:37):
to hurt us for one or twoyears. But how do you identify that
next level of leadership if they've neverreally been in the arena. Yeah,
they're at home, don't you think. I mean, this is something that
everyone's been talking a lot about rightnow and just just like getting back to
the office, and I mean Ithink we are you know, we're all
social creatures and have to be aroundpeople to some extent, and zoom calls
(20:59):
are great, it is that asubstitute completely. I mean, are we
gonna I think we go to amodel where and I know already has thoughts
about this as well. I mean, do we go to a model where
maybe you know, people aren't goingin five days a week, but certainly
maybe three days a week or youknow, yeah, I think there's a
modification there, you know, andwe adapted at the property level. You
know, most properties were open sevendays a week in the multi family,
(21:21):
very assertive. Well, all ofa sudden, now you know, a
lot of properties opened between five andsix days a week. Performance is still
good. So there's things that youcan learn, you know, and I
think a balance as you alluded to, about two days a week, three
days a week, and then abalance of when you are together, how
you change the culture and the behaviorat that time to grow, you know,
(21:48):
young individuals in professional management roles.So one, what you said a
moment ago about your reflection on previousyou know, challenges into recession in this
situation is exactly the way I hadpreviously explained it, which is like I
was really prepared for another seven,eight, nine, ten, however long
(22:11):
that was. I was, Iwas really prepared for another financial crisis because
you know, I work for aliving, so I was prepared to roll
up my sleeves, go sit inthe conference room, you know, room
it out. But you're right,you can't, you know this one,
you know, like there was nowar rooming it out. And so it's
such an interesting experience, and candily, one that was pretty sobering in March
(22:32):
and April. Because for guys likeyou and me and Jack that run one
hundred miles an hour, and foryou, a guy that's been a business
for forty years, you know,tell you you can't go to work and
figure it out and you have tostay home, you're kind of looking at
and scratching your head like what isthis? And so so it's very very
interesting. And then I would alsocontribute that I think that the former CEO
of Yahoo, you know, shetried a remote work business. It failed
(22:56):
because you said, because it's verydifficult to maintain culture, to identify talent,
you know, and see through yourorganization if it's fully remote, and
so, you know, I dobelieve a hybrid is probably the path forward,
but more likely than not. Soso similar to what happened in nine
to eleven where we were kind ofafraid of tall buildings and getting on planes.
(23:19):
There will be a period in timewhere people choose to work from home.
But I believe businesses over time willget back to the old normal and
a majority work from the office environment. But I think it's going to take
time to get there. So Ithink the remote work and the work from
home is is here. To stay. But I don't think it replaces the
(23:42):
camaraderie of you know, officing withpeople. I think about these poor kids
who are you know, they're notgoing to school and neither like those formative
years of learning how to socialize,and you know, are we going to
have a whole generation? I'd laugh, But yeah, I kind of kid,
I kind of o kid, Arewe're gonna have a whole generation of
people? It was already gained toughenough, you know for millennials, you
(24:03):
know, and technically I'm still amillennial to get on the phone and call
someone. Are we going to bein this this place where now they you
know, kids won't even know whatit's like to be around someone in person.
So I certainly hope we get backto what we know of as normal
sooner than later. For sure.Yeah, I struggle. I struggle with
(24:23):
one, you know, a lot, especially for the really young kids,
the ones that are home and youknow, and then of course parents who
are required to teach them. It'sit's just such a very, such a
complicated situation. But I do believewe can see through this one. I
believe there will be an end tothis with fishing vaccines, it's just there's
gonna be some pain in the interim. Good take time, take time.
(24:47):
Yeah, it's gonna take time.You guys are all spot on. And
if you look at if everybody takesa step back and you look at every
well run organization you've ever had theexperience too to touch your feel or have
knowledge, and you look at whyit runs as it does, and you
know, those are the key componentsof how those people run those organizations.
(25:11):
You know, it's it's it's theirpolicy, it's their procedures, it's it's
how they want their people to interact. So if you look at really well
run companies, there's a lot ofinteraction there, and there's accountability there,
and you know there's trial and errorthere, and you know there is you're
not blistered for mistakes. You learnfrom your mistakes. So all those little
(25:34):
building blocks of great organizations, fromyou know, fast food restaurants to you
know, corporate banking America. Therethere's building blocks in there of how people
excel in those systems which are justvital. And you're not going to learn
many of those things sitting at homeat your desk on your computer. Let
(25:59):
me ask you. Let's talk abouthiring, So hiring and retention and how
you approach that. So I liketo you know, since you're an operator,
I'm always intrigued in asking these questionsto guys and gals that operate big
businesses and interact with a lot ofpeople. What's your hiring approach? How
do you view talent management as youryour business? I like to hire different
(26:23):
people. I like to hire differenttypes of people, you know. I
use the weeble model. We'll allgo down the road. One guy takes
a left, how many you're goingto go off the curb until somebody says,
hey, why are we going offthe curb? Hopefully it's one or
two and not twenty two. Sowhen we hire, I like to hire
(26:45):
different people. And you know,if you look at my executive staff,
there's not a clone in the bunch. They're very different, different skill sets,
different history and backgrounds, different exposuresin life. And I think that's
very important because that's what we dealwith every day in life, and especially
in my business. Where my businessis ninety nine percent people action and activity.
(27:12):
Probably ninety five percent is going tobe bookkeeping and operating, but the
majority of my business is interaction withpeople every day, good and bad.
So I'm a proponent of hiring differenttypes of people. I like people that
take some risk. Now I giveboundaries and the other thing that I give
(27:33):
because everybody wants to be in charge. Everybody wants to make a decision.
But one of the things I alwayssay when I hire people is say,
Okay, here's the playing field,pretty good sized playing field. And I
look at them across and I say, but here's the deal. I'm going
to hold you accountable. It's theother side of the sickle. Everybody wants
to be in charge, but youknow, not always When that things go
(27:56):
bad, the accountability. So you'vegot to have accountability. When you're going
to create an environment of opportunity anddecision making and empowerment, there's got to
be accountability that comes with It makessense to me. I agree with that
wholeheartedly. I tell folks that I'mI'm open to and I seek mutually accountable
(28:18):
relationships because I'm also open to beingheld accountable to what I commit to.
And so I think, you know, I'm a leader that I like to
lead by example. I can leadfrom the front and I can also follow.
But at the end of the day. It's it's I agree with you
wholeheartedly. It's around accountability. See, one of the strongest things you said
is you'll follow. If you havethat mindset to follow, you will create
(28:41):
leaders in your organization. What youjust said there's extremely powerful because for a
leader to be able to say I'llfollow, he creates a culture where others
will step up and start to lead. And that is really important. Yeah,
I like to called being a positionplayer. I'm willing to play the
(29:02):
position that I need to play inorder to, you know, in order
to maximize, you know, theresults that we're looking to achieve, either
on a platform basis or for anindividual client or engagement. I'm here to
play whatever role I need to playin order to make it happen if you
will. And so, yeah,I feel like we do that pretty well.
I mean, I feel like everyonedoes feel very much empowered. I
(29:23):
feel like in the organization and wantsto contribute and step up and and there's
roles for that and positions for that, and yeah, and probably you know,
ultimately, I think as as aleader or as a CEO type,
it also makes your life easier,right under. I mean, so it's
it's a win win for everyone.You guys have grown extensively. You know
(29:47):
how many years you guys been inexistence now eight years? Eight years?
And how many office has you gotto open? Now? We're coast to
coast, so I think we're atlike fourteen offices where over a hundred we're
one hundred people. I mean,that's that is in a competitive industry today
where you've seen significant consolidation. Yourbusiness model has worked, and you hired
(30:08):
smart young lawyers that didn't want tobe a lawyer. But but that business
model's working. You've you've created thatenvironment to see that. You just rolled
right off your tongue. We're nationalfourteen officers. That's powerful in eight years
in an extremely competitive business. We'reonly it's got to be really proud of
(30:30):
that. It will look I verymuch, am, but and I would
say that, you know, it'sa top fifteen firm in the US and
the field that we're in, absolutely, and we're very proud of it.
And I would agree with you thatwe're only, but I would say this,
we're only as good as as theplayers that we have on the field.
And absolutely, it's to the pointyou've already made, which is it's
(30:51):
all about the people. It's allabout empowering the people, you know,
and really getting out of the wayso that they can they can do what
they need to do in order tomeet the needs of our clients. And
so I think you share that philosophy. It's just a little different angle,
if you will. Your client isyour end renter and or your investor,
and the goal here is to providemaximum service to the two. And so
(31:14):
you know, when I think aboutthe apartment business, and so this is
a little touchy saw, but I'mgonna touch it because I think it's interesting
to me when you think about athree hundred unit apartment complex, depending on
where it is in the country,is worth. You know, it's anywhere
between a thirty million to one hundredand fifty million dollars asset. It could
be a little less valuable depending onthe quality of asset location, but just
(31:36):
it's a very sizeable asset. It'sa big business, you will, from
total dollar value. When I thinkabout the property manager, the individual manager,
very few businesses do you see yousee that dynamic where a manager manages
an asset that's fifty million dollars,but the compensation is different. When you
think about a fifty million dollar businessand a fifty million dollar asset the manager
(32:00):
of the business, and I knowyou're an operator, so I know it's
a little touchy, but I'm goingto ask you, I don't about what
your feelings around there because I lookat it. I said, it's confusing.
A good question. Yeah, it'sa great question, and it's you
know, I mean if you lookat the business today, I mean because
what you said years ago, itwas basically the high percentage or not college
(32:23):
degrees, high percentage of the multifamilyindustry, maintenance office administration are not college
degree individuals. When you got outof college and somebody offered you a real
estate job, they showed you inan apartment building, and then they showed
you a you know, twenty storybeautiful office tower that you could lease,
(32:45):
and then they point to the apartment, say you want to clean toilets?
You know, and everybody who gotout of school when Jesus I'm going on
the office a ro ounte look atthat. So that's what it was.
Now, what has happened the lastfive to seven years. Salaries have moved
up. You know, you've gotmanagers probably a blended average through the United
(33:06):
States on a three hundred unit propertyor close to forty five to fifty five
thousand a year base salary plus bosses. That's pretty good today. And then
there's boundaries. Okay, So sowhen you talked about managing the business,
so the apartment building, it isa thirty million dollar business, but it's
(33:28):
got different boundaries around it. Sothose are some of the safety nets you
may call it if you're comparing itto a standalone operating business on the corner
of Maine and seven. But thegood thing is salaries have moved up and
people haven't recognized that the quality ofthe personnel, and now that technology is
(33:52):
so you know, perverse through theindustry. It's really coming to a level
where people compensated at a much betterrate. Yeah. I mean, because
I look at it and I say, if you have, I mean,
think about it. Your your manageris the operator on staff that's managing that
asset. They're in charge of customersatisfaction, customer surface, customer retention.
(34:15):
If they're unhappy, then the environment'stoxic and yours and your yeah shows yeah,
So I mean they're the president ofthat business, they're the CEO,
of that apartment building, and andthey set the tone there, you know,
as an average of you know,you want to use an average one
employee per fifty units, you know, throughout the property for maintenance and for
(34:38):
office personnel, and one on theoutside, one on the inside. That
was the old ape. Yeah,average numbers. Yeah, So that goes
back to hiring the right person.If they don't have the skills, give
them skills, give them the opportunityto learn those skills, you know,
give them a mentor and things ofthat nature. And at times you'll be
(35:01):
flabbergassed how well those people will seedon that opportunity and just excel. Well
said. So, so as youlook through them, you're close to fifty.
You know, in another ten years, you'll be fifty years in this
business. By twenty thirty, itwill be. So that's that's funny.
(35:21):
You got to say that now,I do because because I mean, it's
an amazing achievement to to have.I'm going, I've been in this business
for almost twenty years, Okay,I am very I'm very proud of that,
and I'm a relatively guy and lookforward to celebrating my forty year and
fifty year milestone. I think it'sa great business. But as you as
(35:44):
you look forward, you know,you just talked about opportunity for you and
your business, where do you seethe greatest an well for us? I
mean, I mean, I'm veryfortunate that I'm employed by probably one of
the smartest guys in the industry.I mean, sternlick is as a brilliant
man, but but on top ofthat, he's an incredibly nice man,
(36:06):
and he's probably you know, he'she's probably the smartest guy that I've worked
for in my life, but justan incredibly nice man. I mean,
first time I met him, youknow, and he just says, what
do you want to do? AndI explained it and he said great.
The utmost respect for him and theyoung culture that I work with. So
(36:29):
for me, I'm comfortable in myskin. Okay, I'm given the opportunity
to run the platform. We've grownit significantly, We've put numerous units in
and out of it, and alwaysmaintained our key focus of performance. And
I've gotten great support, and youknow, I'm I'm incredibly lucky and blessed.
(36:53):
So for me, my next numberof years are I want to continue
to operate at the high levels ofperformance that we have. I like winning.
I mean, I'm not a goodloser. I wasn't a good loser
at ten and I ain't a goodloser at sixty five. So I don't
like losing. I like winning.And what even makes me happier is when
(37:16):
I win with others. So forme, it's to continue to stay the
course, continue to develop, andsee people grow within our organization. You
know. And a funny thing aboutme. When I lose people, you
know, people can take it all, Oh god, I can't please that
person, quit or whatever. Notme, I think it's great. I
go to them and I say,tell me about your new opportunity. Do
(37:37):
you have the you know, haveyou found something that you can better yourself?
Because if they bettered themselves through mywork environment, that's a win.
I don't you know, I'm notrunning around happy. Oh John's leaving,
Betty's leaving. But but you know, if they can go better themselves financially
(37:57):
and career wise because of the environmentthat we've given them, that's really cool.
Now. You know, some peoplecan be and O god, that's
just weird. But you know,you got to look at those people.
You got to celebrate their successes oftheir bettering themselves. And I've also had
a fair amount of people leave andcome back and that's okay. I'm blessed.
(38:19):
They'll call and say, hey,can I come back, and you
know, I say, well,I got a spot absolutely, So over
the next oh god, I gottasay ten years, over the next extended
period of time. I want tocontinue to do what I've done and Starluck
has allowed me to do that,and you know, I'm appreciative. I
got two other great guys again namedMark Deeson and Chris Graham that I get
(38:45):
to work with. It are greatindustry guys. So we're I'm fortunate and
blessed and that's what I want tocontinue to do. Steve, I know
we kind of have to wrap thisup, but like on that same note
with where you're going and the greatteam that you work with, I mean,
where do you where do you needthe industry going? It's it's kind
of a vague broad question, butit's changing a lot, and you've seen
(39:07):
it change a lot. Like I'vekind of been talking about where do you
see it ten years from today?Well, if you always look at downturns
and going back to all those downturnsthat we mentioned. Flight is housing,
okay, and we've seen it againtoday. Flight is housing. Why don't
I say flight investment, flight andin placement of money of housing. So
(39:28):
I think that's gonna Housing will stillbe paramounted development, but just existing housing
by the masses of our country isconsistent, will remain consistent, and will
always be in need. So Ithink the industry will continue to evolve.
I mean debt markets. Did weever think that we'd see, you know,
(39:49):
interest rates at the level that theyare the ten year and things of
that nature. But all this willcontinue to evolve and change. But I
think the investment cycles will will certwe continue to be paramount. I think
we'll still see international capital from hereto there and from there to here and
everywhere like that will be consistent.The real estate industry will still be at
(40:12):
the forefront of investment and returns forinstitutional investors and smaller investors. I really
do agreed. I did two thingsthat I heard you say in between what
you said, which is necessity breedsingenuity, and then too, I view
multi family real estate to be atrue alternative to other fixed income investments.
(40:34):
Because of the continuity the cash flows, say, the security of the yields
I mean in that demonstrator here inthe pandemic very well in fact, and
I actually believe caprits have gone downand are reflective in current trades. Actually,
the CEO of Camden and he wason his earnings called recently said he
believed there's a based on his portfolio, he's seeing like a three and a
(40:57):
half cap on asset trades based onof his portfolio and his operations values that
are trading on the street. He'ssaying on my numbers, it's I think,
he said, as a three anda half cap. So it's a
very dynamic camin has got good assets, good locations and one percent right.
But a big component of that threeand a half though, is let's not
(41:17):
fool ourselves. It's your borrowing attwo point eight because yeah, it's hucent.
So it's all it's all a functionof the of the three to four
legs on the stool, and we'vejust got to be cognis into that.
You're right, You're right. Sobefore we wrap up, I'm gonna ask
you just kind of you know,we have some listeners that are you know,
(41:37):
relatively young and in informative years comingout of college, things like that.
So if I were to ask youa question, the question being if
you look back, the young versionof you, the twenty year old version
of you is standing before you,and you have and you have a few
minutes with yourself, what advice wouldyou give yourself, you know, after
you've attained the wisdom that you havenow. I would probably say, where
(42:00):
some of the mistakes that I madewhen I was when I was young,
I was maybe too funnel focused beingyoung and being in the world today with
technology, keep your focus broad,Okay, don't just be myopics and singularly
focused. Keep your focus broad andcontinue to learn not only what you're focusing
(42:22):
on the doing, but other things. I think that's that's extremely important because
sometimes those other yeah, and sometimesthose other things will shift and be your
focus at some point in your career, and to having knowledge around that put
you a step ahead. So beyou know, if you're going to be
(42:44):
myopic and driven and focused, keepyour focus a little broader, don't just
be single siloed. That's what Iwould say is keep the focus wide.
Learn, you know, keep otherbis. It's of information coming in from
other areas. Then you're just youknow, soul job and initial focus.
(43:12):
Keep broad keep knowledge. So ifyou're a masonry once in a while,
go paint. You know what I'msaying. Yeah, yeah, keep that
broadness, keep that broadness. Andif you if you, if you don't
have it, instituteed make yourself doit. And at times I wish I'd
have done that at a younger age. Well, I uh, look,
(43:36):
I think I'm speaking on behalf ofmyself and Jack, we appreciate you graciously
joining us. You guys are greatguys. I probably learned more talking about
this than than people will because weyou know, it was a good exchange
of ideas. I understand what yourguys focus is. Hearing what you said
just kind of solidifies the knowledge.And what I know about your company is
(44:01):
how you guys are doing it,how you guys are driving it, and
the results are extremely positive and someof the things that I've done, if
people can learn from that, absolutelyit's about helping people. And if this
exchange helps some young guys say,you know what, I want to take
a left, I want to takea ride, I want to stay straight.
(44:21):
That's a good thing. Well,we appreciate it. The tide rises
all boats, that's at least thephilosophy absolutely, so that sounds like we
should. We share a lot ofphilosophy and absolutely and views. So again
on alf the Jack and I andthe team at Grace Deal, we appreciate
you and we look forward to youknow, continue to add value what we
can in your business and learn food. Thank you,
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Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!