35: Emerging Development with Toby Moskovits

Welcome. This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program you'll learn about the world of commercial real estate and find out why it is one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

Welcome to show number 35. This is James Nelson, your host of Real Estate Investing Live from New York. And if you did not catch last week's show with John Casametides, the self made billionaire and now New York City mayor hopeful, make sure and go back and listen to it. And while you're at it, take a look at all of our great shows that we have posted on itunes and Spotify. We are dangerously close to 50,000 downloads so we appreciate everyone's help. Spreading the word, telling your friends, making comments, rating the shows. I really, really appreciate it. So for today's show with us we have Toby Moskovitz from Heritage Equity Partners. She's going to be talking about venture real estate development in pioneering neighborhoods. And then with us we'll have a panel. It'll be the first of three parts with Lisa Flicker and Netta Levy from Rhodes Associates. They are an executive search firm. And for those of you who are looking to get into the business or make a move, they are going to give you some incredible advice there. And for those of you who more senior definitely catch some of the next episodes on that note because they are going to be also talking about organizational structure and how you can improve your business. So with that, we're going to have a quick word from our sponsors and we'll be right back with that interview with Toby.

When it comes to business, you'll find the experts here, Voice America Business Network. And now it's time for our Investor Spotlight. And with us today is Toby Moskovitz who is CEO and founder of Heritage Equity Partners. Toby was named the commercial observers top 100. She also before that spent time in venture capital in Tel Aviv and then was managing director for Ruby Schroan's Canvase Capital where she headed up tech investing and she also founded Cato Advisors and Gotham Angels, an angel investing group. Heritage Equity was founded during the downturn in 2008 with a focus on emerging neighborhoods. Today similar areas are enjoying the benefit of designation as opportunity zones. From 2008 to date, heritage played a significant role in driving the development and evolution of Williamsburg, Clinton Hill and Bushwick both on residential and commercial real estate. So Toby, welcome and thank you so much for joining us today.

Thank you for having me, James.

Perfect. So why don't you tell us a little bit about where it all got started, a little bit about your childhood and where you grew up.

Sure. So as you could tell from the accent that I've had difficulty kicking. But you know, really, when you hang out mostly in Brooklyn, it doesn't go away. Brooklyn girl, born and bred. I grew up on East 7th street and Avenue west in Flatbush, or today I think they called Gravesend, you know, to spend my childhood in that part of Brooklyn, South Brooklyn, riding my bike on the boardwalk in the days when they still allowed you to do it and end up. I studied at a Jewish private school, ended up in Turo College where I did pre med and discovered a little too late in my college career that I really didn't want to pursue a career in medicine and ended up Israel doing my master's in business at Bar Ilan University. And there, right at the end of my mba, I was introduced to a biomedical company that sort of allowed me to integrate my pre med training with the mba. And that was in the real, the first renaissance in the Israeli tech scene that was like in the 98, 99 timeframe. So I sort of ended up in the venture capital business because if you spoke English and you were semi intelligent, that's what was a hot career then at that moment. And it was sort of serendipitous and a phenomenal time to be living in Israel and in that industry.

Yeah. And they're certainly known for their venture capital space and all their advancements in medicine. So I mean, did your family have any experience in business or anything that you witnessed growing up that pointed you in this direction or did you know at one point that you wanted to go abroad to study?

You know, so I'm a first generation American. My dad was born in a German DP camp at the end of World War II. And we come from a long line of entrepreneurs. I actually, for my 40th birthday, took my kids back to the city in Poland where my grandfather was from, called Lodz, which was an industrial, heavily Jewish industrial city with a lot of entrepreneurs. So I'm a third or probably 10th generation entrepreneur, the first one to be born in this country. My grandfather came from Europe in 1953 when my dad was three. Originally settled in the Bronx and then moved to Philadelphia for a while and then landed back in Brooklyn, of course. And my dad, you know, when he was a teenager, the family was living on Avenue M in the heart of Flatbush. And as I mentioned in the past, when they started, my grandfather had started a business, which is called Schwartzmann Export Import Company. That was my maiden name. And like a lot of immigrants at the time, he would buy and sell what we call shmatas, which were just rags. And the rags that he stumbled into were actually army surplus. So in the, like, early 80s, my family had their business. It started in my grandfather's basement. Literally. I remember I used to go visit, and my grandma would show me the old typewriter that she used to use when she was a secretary, you know, in the early 1950s. And then when they opened up their first warehouse, they chose the neighborhood of Williamsburg because my grandfather was Jewish and Polish, and he employed Polish workers, and that was really where that immigrant community had settled. And where his warehouse, which he sadly never bought, was located was on the corner of North 10th and Kent, which is. Now. There's a gray building there, and it's a soccer field. And when I was growing up, we used to call that Greenpoint, but today, of course, the Williamsburg Hotel is right across the street, and we call that Williamsburg. So you see how the names of neighborhoods, you know, sort of shift. But, you know, so I grew up, really with an immigrant mentality, but even more so, my grandfather, famously. My grandmother used to tell us that, you know, grandpa was a failure. He started numerous businesses that, for different reasons, didn't work out. And then when he was in his 50s, he started the company that ended up, you know, succeeding. So I grew up reading this when we were. The most exciting thing to do when I was growing up was go with my dad to work, which was, you know, there on Kent and North 10th Street. And then he would take me to. I don't think it's in the same location, but there used to be a bakery called Greens that had, like, a. Like a luncheonette upstairs. And you'd smell the ruggelach being baked downstairs. They still exist, so they must be somewhere, but probably maybe not in Williamsburg. So that was sort of like, the highlight for me. You know, growing up, everybody loves to go to work with their. With their dad. And for me, it was a very different Williamsburg. Quite a dangerous one.

Wow, what an incredible story. And I'm sure spending a lot of time in that neighborhood and getting to know the area and, wow, how far it has come. But I do hear you. I'm sure, going back in time, if you've been able to buy some of those properties now, I mean, the. The value today is probably a hundredfold above what it was at one point. So you make the move to Tel Aviv and you thought, since you're now in venture capital, I guess the question is, did you pick up any skills or the way, whether you're valuing companies, would you say that was a good foundation for you then to become a real estate investor? What lessons did you learn from, from venture capital investing?

So, you know, I was, I think that there's a very famous quote, they quote Paul Reichman. He says I had 99% luck and 1% brains. If only God had given me 100% luck, I would have done really well. Right? I guess this was after the disaster at Canary Wharf, which was a big challenge for him. So, you know, I think that a lot of life is about luck. You have to show up. So I got really lucky in that I was introduced to a small fund when I finished business school. The name of the fund was Israel Seed Partners. And the founders of that fund today are some of the most notable people in the Israeli venture capital scene. One of them is a guy named Michael Eisenberg who runs a fund called Aleph. So he's famous for the investment in wework, but funded and grown some really amazing companies over the last the 20 plus years. And another individual named John Medved, who, you know, the two of them hired me. So John is one of the pioneers in the crowdfunding space. So I was like maybe 20 years old and the only woman not in the secretarial pool because the Israeli venture capital business had no women. There were very few women in the tech industry then. And I got really lucky that I was working for these two brilliant venture capitalists and they were my mentors. They taught me how to analyze companies. It was a pretty small world then. So I was able to hang out with people like Shlomo Kramer, the founder of Check Point, which is a multi billion dollar company. He was a co investor of ours. I used to go over at his house with these companies that we were vetting. And it was a really great moment. I traveled with some of the partners we had in our investor pool, so some of the wealthiest families in Europe, industrial families. So it really taught me and I give a lot of credit to John Medved, who was my mentor, was my first real job at a business school, really thinking out of the box. We're meeting these brilliant technologists who had an idea but didn't really understand an industry. And what our job then was was to figure out how to apply the technology and help these entrepreneurs grow their businesses. So the Way I like to think about it is as a venture capitalist in the late 90s, you know, into 2000 in Israel, we have to think 10 and 20 years ahead. And it sort of trained me to think about what happens next. So by the time I showed up in New York and in 2008 and I needed to think about real estate, you know, where I've been accused of being the venture capitalist, you know, in our industry, it's enough to be six months ahead. You have to just sort of see things as they're coming, see where things are unfolding. So that was sort of one critical piece. The other thing that was very helpful to me starting out was I got into the industry at a moment when all the traditional channels of funding and all the old deal structures were all gone, something similar to what we're seeing today. And a lot of people that I was dealing with in the industry, my potential competitors or others who might have went after the deals that I did right in the beginning, right after the crash, they were frozen because the lenders who had lent them money six months before, a year before, they weren't in the industry anymore. The deal structures they were using, leverage points, weren't relevant. And I came from the venture capital business, where every deal is a new day, every deal is a brand new invented structure. So I didn't know enough, and I didn't have any preconceived notions I was able to utilize that. You know, we're sort of coming up with a deal structure approach to figure out how to do business. Even though the traditional pockets, the traditional deal structures, the traditional metrics, none of them were relevant. And that's what I think what allowed me as an outsider, to move fairly early in the process. And I think we were doing among the first deals post the crash in the Williamsburg neighborhood.

So when you made the move back to New York and you're working with Ruby Schroan doing some tech investing, is that when you were first really introduced to real estate and you start seeing what was going on the other side of the floor? And did you suddenly kind of see this whole world that sparked your interest?

So it's a little bit of a different story, and it's a little long. But now that I know that we have 30 minutes, I'll tell you full glory. So when I was working, I was mostly with, you know, Avi Shrone, Ruby Son. We were focused on investing in operating businesses. And what I started to realize was that there were a lot of people in what I later learned was called a family office or family investment company with specific industry expertise. And every time we try to do a deal, I would reach out to the visuals, doing something similar to me in other industries to get their input, etc. And have the same thing happen with us. People would call me. It was early days of prop tech, we, you know, and clean tech and other technologies and businesses that wanted to deploy within real estate, the real estate environment. So I came up with this idea and the reason why I launched Heritage originally was to build what I thought was going to be a direct investment platform for family offices to co invest in operating companies where people could bring sort of cut out the private equity funds in this process. You know, I remember one of my early clients at Heritage would joke and say, you know, I invest in Blackstone. And they call me and say, what do you think about this newspaper? You know, he was in the magazine publishing business. So that was sort of the vision behind Heritage at the time. There was much less, in my experience, direct investing going on by family offices. And a lot of it was sort of these club deals where it was based on relationships and not as systematic. So it was a great idea. Really, really bad timing to start a new business. So I took my office, I shared. My first office was at 7:11 fifth, a building I still love. I shared some space with the family office who I had met through the metcircle, which is a family office group I was part of. And I started hustling for deals and of course within a couple months, you know, so we formally launched our business in the end of April of 2008. We had a conference. I hosted a conference at the University Club for the title of it was Family Offices and Direct Investment. I think it was one of the first such events. We had Alan Patricoff, who I'd met through Israel Seed Apax was an investor in the fund and aipax was the original family office. I mean that's how they started their business as our keynote and all these other families from around the world talking about co investment models. And within a couple weeks, of course, Bear Stearns collapsed. I remember the moment it was announced the family had a hedge fund. So I was like standing outside the bullpen watching like the world blow up and we had to pivot. So at the time I had a partner who had come out of the Italian family office world. He had worked for the Agnelli and, and the Wallenberg families. And he ended up going back to the private equity world and I started calling my clients family offices. That had come together and asking them what we could do to help, and basically ended up doing a whole range of restructuring work, starting with things like structured products. I like to say I live the movie, the big Short. It got to a point where I gave a speech at a structured products conference and had a one more structured products, something I'd never heard about until the world fell apart, me and many other people. And the last piece of it was real estate. So by the end of 2008, early 2009, I was helping some of these family offices who had found themselves with money stuck in development deals, figure out what to do. And it was very much a new universe. I mean, I remember the first time somebody called me and said, you know, I have a project here in Brooklyn, and the developers calling and asking me to send money for extension fees and to refund the reserve. And I just went online and I said, what do you know? This bank is on an FDIC watch list. I don't think if you gave them $100 million, they'd be able to fund you. So these were new worlds and new ideas that people didn't even think to ask questions about the viability of a bank and a bank's ability to stand behind a commitment on a construction loan. So I was there as an outsider and essentially sort of pivoted the business in the beginning. We started doing this restructuring work, and that ultimately led. Led me into real estate, where I was just seeing these opportunities that were, like, you know, too good to pass up. So the first deal that I did, where I was advising the develop, you know, the. The investors, and we ended up taking over the project. I went to my dad, I said, dad, you know, you're not in real estate, I'm not in real estate, but we just. You got to lend me some money. And he lent me $200,000, which I invested in a deal. So that's how I got started in this business.

Wow. Wow. Okay, so I want to hear more about this first deal. So you tie up a property, and you're going to be the developer now, and you're going to go raise money.

My first couple deals, basically, I sort of, you know, I was essentially doing, like, the restructuring work. And what was happening in, like, the. I'd say the five to, like, $30 million arena was the brokers were pretty much gone because, you know, there everybody was trying to figure out what was going to happen next. They didn't want to be involved in this situation. These situations with the banks, you know, no one's Going and hiring a major firm. And I had people that trusted me and I had, you know, built some credibility with other work that I had done. So I was, you know, call me a financial advisor to start helping people restructure debt. And there was another developer and I came in with some capital as an investor partner in the initial deals. It took me probably a year before I started calling myself a developer in what I thought was going to be an interim part of a business that was intending to go back to my original vision of the multifamily office direct investment platform for operating companies. But it's 10 years later and I'm still in real estate, so I'm still here.

Well, as challenging, I'm sure, as it was to start the company in 2008 after the financial collapse, I mean, you think about all the opportunities that then emerged, 2009, 2010, and so maybe tell us about some of those first few acquisitions because I mean, those were incredible, incredible years.

Yeah. So, you know, what was going on then was it's very similar to what we're going to see playing out now with the new sort of the new normal is, you know, there was no construction financing from traditional banks. A lot of what had happened in the New York market, particularly in the outer boroughs, was you had a lot of regional banks, you know, like Builders bank of Chicago, Imperial Capital, bank of California, who had come from other states, done these construction loans. A lot of things went wrong in terms of timing and the FDIC's pressure on them to price those loans. And slowly but surely these were the banks that collapsed and no longer exist. So you had the market full of semi built buildings, partially funded deals. And so that was a moment that I stepped into. So what I had to do was figure out, so there are no banks, you can't borrow from a bank. Where can you borrow from? And I had a whole network of family offices and in some cases people who knew a lot more than I did about real estate. And I, you know, looking back a couple years later, I came to realize that some of them thought that I wouldn't be able to pull it off. And I take it far enough and then they'd step in. But I, you know, succeeded in proving them wrong. And then they kept, you know, giving me the money that I needed. But I essentially found an alternate source of financing which was, you know, initially family offices, ultimately private funds. Because what I learned, step one was a construction loan and signed loan documents does not translate into availability of capital. The banks can't give you that money. So in some cases, the deals that we were doing that we came in and replaced the construction loans with private loans, where even though the interest rates on those loans were higher than you would have paid in the bank, you had two choices. One is do nothing. And at the same time, even though you were paying slightly higher pricing on the debt, the actual land cost was lower. I used things like seller financing on two, three deals and really just invented and convinced people to work with me on creative deal structures to bridge the gaps that existed in the market where there was a price of an acquisition loan. And if I could just put some of that money into my seller's pockets, in some cases they were cool, giving us financing and even allowing a private lender to go ahead of them on construction financing.

Right. So did you smart start then with some smaller deals? And then it just kind of kept growing because, I mean, thinking about some of your latest projects where, whether it's 25 Kent, a half a million square feet, the Williamsburg Hotel, I mean, these are massive, massive projects. So did you just keep every successful project, you just kind of built on that and just kept going larger, or was there kind of a quantum leap at some point in your development career?

So, you know, I like to think of myself as a neighborhood developer. You know, I didn't say I knew Williamsburg. You know, growing up was very familiar with the neighborhood, very comfortable developing there. My partner Michael Lichtenstein's family had been developing there for years. So he, you know, I remember the first time I walked the neighborhood, and things certainly grew and evolved a lot from the time that I joined and I started working with him there. So, you know, the way I see it, having played out is, you know, we started doing 50,000 square foot projects in the neighborhood. Residential projects, you know, grew a little bit. It went to 80,000. And then when I looked around, by the end of 2011, land prices on the residential side were very expensive. It was like pushing, I think at that point, about $300 a square foot. And I still was using private loans. You know, we had done a deal by that point with Madison Realty Capital. So I couldn't compete with developers that had, you know, banking relationships and were coming with cheap capital. So I have to, I'll call it find a new game. I had grown up, of course, in the former industrial area. So started, you know, my insight there was there'd been 30, 40, 50,000 rentals brought online in the North Williamsburg area. You know, from Greenpoint into North Williamsburg, South Williamsburg, and almost no commercial Development. So I started buying up those sites. Now in the beginning, people thought I was crazy because no one had bought anything there. So I think they sort of found me. It wasn't this, this major plan, let's go after a half a million square foot project. It was the insight that the neighborhood needed commercial development. I couldn't afford to continue buying these residential sites where I had established comps and everybody was nipping at my heels, buying and investing. And I remember the first deal that we did, I looked back at my notes and I spoke to 100 family offices and other funds lenders. So can you imagine that 10% of them came and were convinced and became my competitors. And that's really how it played out. Every deal that I touched, we had to speak to so many people to get the Capitol together that the floodgates were unleashed. And I think there's, you know, if you write the history, which I'm actually started working on a book of the sort of the story of Williamsburg, you know, when Sam Zell showed up and Equity Residential was the first institutional buyer. So, you know, you know what that established now all of a sudden people could point to an exit at a cap. And that really unlocked the floodgates. I think that was sometime in 2011. So by the end of 2011, I was looking in other areas. We bought a piece of Long Island City, started diversifying out of the core Williamsburg market on the residential side and was heavily involved in trying to buy up sites. And at one point I was hoping to buy the whole area. The Kent Avenue or the White Avenue district, whichever you want to call it, is not that big. But a lot of complicated ownership simply because of the fact that these were families who owned businesses where the land was worthless. And then everything went opposite, right. A lot of the businesses shut down and the land became extremely valuable. So complicated ownership structures and all those deals. But I'll add one little story. So when I was looking for the land loan on 25 Kent, which we used to call in the beginning, 19 Kent Taylor, great broker Chris Havens explained to me that 19 was a bad number and 25 people would love. So we changed the. You know, every good square block in New York has about 200 addresses. So we just chose a better address. So I remember I was sitting in the office of a potential like private lender introduced to me by a broker who I'm so close with. And the guy looked at me and said, commercial development in Brooklyn. He says in that point it was like an 80,000 square foot site. It was before we were 160,000 buildable, before we did the renown. He said, why don't you learn how to walk before you run? You know, when I don't know if you know the story of Pixar, you know, for 10 years he invested out of his own pocket. So I ended up, you know, luckily finding someone, another family office who came in and, you know, like I said, you know, life is more, is you got to show up. But there's a lot of luck involved. And with 25, 10, if you could, you can imagine, you know, nobody had ever bought land anywhere near what I paid, which is this huge price of $180 a square foot for waterfront facing property. Right. Unobstructed views of Manhattan. And it was a really long slog to get the site. There were like 15 trusts involved. And you know, then ultimately to get the money and, you know, in the last year or so, I actually had a meeting and I was introduced to Craig Solomon from Square Mile. And he said, he told me this great story, which I hope he doesn't mind if I share here. He said that when I was negotiating on the site, he actually was, I guess, high school buddies with the son of son in law, the owner, the one we we interacted with. And the guy calls him like, you know, my family owns this great site, waterfront facing. You got to come see it. It's right near this amazing neighbor to Williamsburg, and you should come by it. He's like, well, what? What's going on? Well, I have this crazy redhead woman, she's offering me $180 a square foot. He's like, $180 a square foot for industrial space in this shitty area. He says, just take it, just grab it. And I did. So, you know, real estate's like a diamond, especially commercial property. And, you know, and it was a new asset to me. It was obvious. Right, right. You know, but to other people, it wasn't as obvious. And that's the training that came from working at the. At the knees of some of the most brilliant venture capitalists that are out there.

That's really great. When I've heard you speak before, you talk about the importance of working with the community. And I think a lot of the developers get a bad rap and maybe appropriately so, we're just kind of going in and shooting for the moon and then just kind of using hardball tactics to negotiate, you know, getting the most density. And it really seemed to me that you went out of your way. In fact, you're on one of the community boards. Don't you sit on one of the community boards or.

I think I was one of the early developers to get on. I'm on CB1 in Williamsburg. And.

Yeah, so talk about what that means to work with the community. I mean, if you're going for rezoning, you know, a lot of neighbors, they don't want to see anything built, right? So how do you convince the community that this is a good thing and that you're not gonna destroy the fabric of the area?

So, you know, oftentimes what happens is that, you know, a developer shows up, they either have connection to the neighbor or not, and they start haggling and thinking about what they need and make a lot of promises. And to me, development is a much more natural process that where things evolve. So, for example, with 25 Kent, I was lucky enough to bring in Simon Dashinsky. He was my partner originally and learned a lot about the rezoning process from him and recognized that the project, to be viable, we needed to increase the zoning density. So I had a lot of friends in the neighborhood, and one of them was a really brilliant local artist named Bill Harvey, who, you know, believed in me. And he took me in to meet Joe Lental, who's the senior member of the Brooklyn delegation in the state assembly and been representing and living in Williamsburg for many years. And I walked in, and this is where the luck part comes in. So that showing up in the crazy was that I bought the site. Never having developed office building in my life. No one had ever developed on spec in Brooklyn. And, you know, I needed a plan. And I walked into Joe's office and I said, and Bill's like, this is a woman. She owns, you know, 2510. She has obviously a beautiful building. We had designed with the first office building I ever designed with the firm that I've now collaborated with many times, Matthias Hull, which from HW can. And Joe stood up and he kissed my hand, and he said to me, where did you come from? And what I learned from the conversations with him was that the neighborhood, when the rezoning had happened, you know, Bloomberg had carved out this little piece of industrial really brilliantly, thinking and recognizing that a great neighborhood needs a place to live, play, and work. And the owners kept going and saying, why weren't we rezoned residential? We want to be residential. And the city planning kept saying, come with a plan, come with a plan. And Joe had come and said, we want to upzone. And they're like, find us one developer who is willing to build on spec. Office on spec. And then, like a month later, I showed up. So, you know, that was a continuation of an effort to make friends with my neighbors, to really understand what their needs were. And in the end, the city turned us down many times. And I don't. I don't question why they did it. Purnima Kapoor was, at that point, the head of Brooklyn City Planning. Here was this unproven developer who had never built office before. I kept coming to them with this Contact Navy scheme, and they assumed that I was going to do a bait and switch and I would get the building approved and say, okay, hardship. We can't fill it with commercial tenants. Let us go ahead and turn it residential. So it took a lot of work on my part, and I got turned down three or four times by the Department of City Planning. And so, you know, not knowing that I shouldn't do it, I went straight to the community, and we actually presented in front of the community board and met with the committee. Before the rezoning process started, Joe helped arrange a series of meetings, and I really built a voice of consensus through this iterative process of understanding what the community would do. And I remember one of those meetings was a meeting he hosted. It was the first time at Jed Wallentas, who's, of course, done amazing things in the neighborhood, and we've all been to see his buildings, but also, you know, to spend time in Domino Park. And he looked at me, he goes, you're crazy. Like you're gonna build office on spec, but go ahead, you know. So really, you know, I met local bar owners. I got to know, you know, Felice Kirby, who runs Babar, which is the local bar association, longtime business owner who, you know, graciously did a management buyout to people, you know, all over the community and really, you know, learned a lot about activism. I ended up helping restart efforts. The neighborhood was working on raising the money to create a community center out of a local decommissioned firehouse. We ended up doing fundraisers. We raised a lot of money. I created a whole youth, you know, sort of a young generation behind it, and really got very involved in the community, not just for my projects, but also really trying to bridge the gap between the various generations. So there's a Polish community, there's the Hispanic community, there's obviously the Hasidish community, then the young hipsters who've come in and as part of that, you know, decided that I wanted to be on the community board to meet people and to really be engaged in the civic process. And I think it's taught me a lot about what it means to be a good developer. I've made friends with people that I wouldn't normally meet. I've learned a lot about the process. And through that, you know, as a company, we've become very community oriented. About five years ago, we started one of the first programs with a local public school that we literally adopted where we run a program half the year we do lectures. So we used to have people come to the school. Now the last two years we take, we take the kids out to hear from people at the Department of City Planning in government, the borough president's office, Richard Birak. We take them to meet architects, engineers, and then the second half we do a design competition. So this has been very successful. And this is a public school. The kids are literally two blocks from my office. The projects we work with them on are either Williamsburg or Bushwick. And it's allowed me to give back, but also to gain a lot of insight and really create an open door as a company to the members of the community and, you know, who really want to know and understand what's being built and how the process works. Even if it's an as a writerde project.

That's wonderful and really rare, I think, in this business. So it's great to hear what you've done working with the community. So we only have a couple more minutes left, so I want to, I'd love to hear what your advice is for aspiring investors and maybe especially for the women who are out there. I know you've been very outspoken and I know it's, you know, it is a male dominated business. You've talked about it before. Maybe talk a little bit about, you know, what it's taken for you to be successful in this business and then what, what advice you would give with that in mind.

Okay, so we have to do a separate podcast, you know, how to survive as a woman in this industry. So we don't have that much time. I'll give you the short bites. So I actually spoke to crew commercial women in real estate about before years ago and I gave a talk, I called it how to survive as a man in a woman's world. And I've given it a couple times since you can Google it, it's on, it's been videoed. And I basically talk about sort of owning your weakness, like what you are and who you are, learning how to turn it your advantage. And you see that that's really a theme in my career when no one wanted commercial I basically turned that into a thing and started buying commercials. So all I could say is as follows. I'm not gonna speak to the women in real estate. I'll speak to the men in real estate. This is a really rough industry. And the way I see it is that the people that have helped me move forward in my career, individuals like Josh Zegan, David Rubenstein, who funded me on 25 Kent, and very many others who open doors. Joe Lental is another example. It's, you know, I find that men who treat women as if they are, you know, make believe I'm your daughter, your sister, your mother, and think about the challenges that women face in the industry. You know, I have friends who are commercial brokers. It's a very specific environment, you know, not to get too colorful in this chat. And I think, you know, we as a real estate community have to work together to create an environment that's more hospitable to women, where deals are cut, how deals are cut, language that's used, the environment that's created. You know, a lot of the challenges that I've dealt with are things I think that if I was a different gender, lenders would have reacted differently to me. And you got to have really tough. So I'm lucky that I am, like I said, the daughter of an immigrant. My grandfather went bankrupt, I think, four times, according to grandma, before the business succeeded. You know, he picked himself up at the age of 45. He was living in a German DP camp. His entire family had gone to Israel, and they said, there's no money here. So my grand. My dad grew up without grandparents, without cousins. The first time he met a Cousin, he was 16 years old. When he was 7 and his mom gave birth, they sent him to summer camp all by himself. So, you know, it breeds tough, tough stuff. You got to learn to hustle, and you got to learn to believe in yourself. And I think, you know, that's my message to women. You know, you gotta. You know, the first thing I learned when I was working in that venture capital fund, like I said, I was the only woman there. I thought to myself, you know, why did the other secretaries not think that they could be an analyst, they could be a partner? So, you know, the world has come really far, but there's still industries that, you know, have a ways to go. And I think, you know, I throw that out there to everybody, you know, listening. And all the real estate firms, you know, a lot of women end up in residential brokerage. It's just, you know, feels less Competitive feels more welcoming. We need to put forth more role models like myself, Marion Gilmartin, you know, others in the industry. And we need to make sure that it's a hospitable environment. And we need to remind women that you gotta, like I said, you know, how to survive as a man in a woman's world. You know, when it wasn't cool today, you know, if your kid came knocking on the door, James, we'd all forgive you. When it wasn't a cool thing. I never hid the fact that I'm a single mom, that certain times I wasn't available. I always brought my kids to work with me. Every time I ever got an award or I spoke, my daughter's come with me many times. So, you know, we need to create an environment that's more welcoming, which I think, you know, post corona that are home now, having to juggle, are learning about how much it takes to be a working mom and to succeed. And I think women bring a very unique perspective. I mean, the things that I did were, because I wasn't from the industry, I didn't have an old boys network, and I have to create an invent. And I think those are skills that are critical now with the world in the moment that it's in. Everything we know about how deals are funded, that's over. Everything we know about how space is used, that's over. We have to be able to reinvent and recreate. And male or female, oftentimes outsiders see that before insiders. And there's hundreds of examples of entrepreneurs, you know, from an Airbnb to a Steve Jobs and, you know, bringing an outsider's perspective to a Tesla, you know, look at that. You know, everybody laughs first, but conventional wisdom is this is how things are and you got to sort of think out of the box. So. But I'll give you one last piece. So, you know, I did a zoom recently. I was asked about, you know, what I'm watching on Netflix. But I'll tell you, there's a great book, if anybody wants, you know, I know we're all in this mode of sort of being thoughtful and reassessing. So I don't, I don't know the exact title of it, but there's a great book that was written about Bethlehem Steel and the total destruction of that company, which is something everybody should read. And it'll teach you a lot about what it means to reinvent and the opposite of groupthink. And there was a city that was built on an industry that was innovative and everything fell apart for them. So I see James is taking notes. James, go ahead and go buy that book. You could probably get it online. You know, we're all overloaded on Netflix. I actually had a Netflix account. I have a Netflix account that I never logged into till like two months ago. You know, my cousin, my niece, everybody's busy using my account. But reading, you know, when I was growing up, we used to go to the library. They said reading is fundamental. It grows the brain. So that'll give you some insight on sort of what happens when you know what goes wrong, when things start changing and you're stuck in the way things were in the past. And I think that's a moment really across every industry, but especially real estate. Are we going to need more space? Less space, you know, how we sell real estate, how we develop it, how we use it is all going to change and certainly how we finance it.

Perfect. Well, Toby, this has been awesome. Wow. Really, really powerful stuff. Incredible advice. I'm looking up the book now. Crisis in Bethlehem, I'm going to add.

That's it. We got to meet. It's great. A lot of food for thought in that book. We got to reinvent everything, including how we welcome women into this industry. So I'm happy that you asked me that question.

Well, it's a great way to end. And thank you again for joining us today and I appreciate your taking the time.

My pleasure.

Good. This is James Nelson, your host of Real Estate Investing Live from New York. We're going to take a quick break from our sponsors and we'll be right back. Welcome back. This is James Nelson, your host of Real Estate Investing Live from New York. And now it is time for our expert panel and wonderful to have with us today. From Rhode Associates, we have Nada Levy, who is a partner, and Lisa Flicker, who are senior principals. And Rhodes is a organizational consultant and executive search exclusive to the real estate industry. So I've heard them speak before. They're an incredible resource. And for those of you who are listening, who are early on in your careers or even some veterans out there who are looking to make a move, they are a great resource. So thank you so much for joining us today.

Thank you, James, for having us.

Yes, we are very happy to be here.

Wonderful. Wonderful. Okay, so maybe to just set the stage and maybe we start for someone right out of college and then I want to build on this. Ok. So, you know, for me, I went to a liberal arts school, Colgate. We didn't even have a real estate specialty. And I know Your placements that you're usually doing are much higher up the ladder. But what advice would you give to a college student now to best prepare themselves for a future in real estate? Lisa, do you want to kick it up?

Sure, sure.

So I think that, and you're absolutely right, Neta and I do a lot of organizational consulting with companies as they're building and growing and placing senior level executives. But what that allows us to do is really understand what makes a good hire at the junior levels. So I would say if you're in college or in graduate school, or even just starting out your career in real estate and really want to excel, the biggest thing that I, we always recommend is getting involved in organizations, getting networked within the real estate industry, understanding the difference between the various asset classes. But at the end of the day, what, what really drives the hiring managers to look at the junior folks is a. The ability to underwrite. And so I was just on the phone with somebody the other day who had an opportunity, and he started out with a firm and they weren't really training him because a lot of the smaller owner operators don't have the programs that maybe some of the larger banks would have for training. So what they did, what this person did, was he went out and he took at the NYU Real Estate School, but you could take it anywhere, courses in underwriting, Argus, Excel, modeling. Because the number one skill that I think you need to succeed as an analyst or an associate is the ability to have strong modeling and underwriting skills. And then as you get a little bit more senior, it's the ability to interpret that and present it in a meaningful way.

Okay, so for our, let's say, English majors out there who might be panicked right now, and they're in their senior year and they're saying, oh, no, I've never had access to Argus and this and that. And it's funny because when I first came into the business, it's probably a lot, you know, definitely a lot easier to get a job back then. But I remember that, you know, real estate experience wasn't even required. They said, look, we look for leadership. And the fact that I was captain of the swim team, they liked the fact. They said, look, you know, these are the kind of skills that we're looking for. So, Neda, if you want to maybe elaborate a little bit more on that, as far as kind of looking at the all around candidate, what are employers looking for?

Sure, absolutely. And I think, look, I'm an attorney by training, so I think it's critical to Be able to understand the numbers. So you can be a psych major, you can be a liberal, you could be an artist. As long as you can understand numbers, how they relate to each other. That's the foundational skills that are required and you will need that as you advance through your career into leadership roles. And we always say, you know, you end up, you come into the industry acquiring those skill sets and becoming a pro at it. And as you advance through your career, you become a leader, you become a manager. And those are the leadership qualities that people develop over time. And they are cultivated by senior mentors within organizations, outside of organizations, and having the interpersonal skills to be able to drive a team forward and a vision forward. So at the highest levels of organizations, the CEOs, the COOs, the levels of EVPs, the C Suite executives, those leadership qualities and those interpersonal qualities and the knowledge is already, you have to have it. Because without those, without those fundamentals, it's really for those leaders, those are required, it's a combination. And those senior levels, you have to have those leadership skills and you have to have led a team in the past and have had key accomplishments that had, bottom line, positive impact, demonstrable track record.

Really well said. Really well said. Lisa. How about for the internships? If a college student or even grad students, they have time for either part time work or working over the summer, what kind of, and I'm sure it all depends on what you ultimately want to do, but is it better to get really specific with those internships on exactly what you think or try to go for broader opportunities?

So I think it's a little bit of both. And what I always say to people is work backwards. So start with where you think you'd like to end up in your career. Of course it's ever evolving and nobody has a crystal ball as to their final ending role. But if you think to yourself, okay, I would like to be an entrepreneur and run my own real estate company, Well, I always tell people think backwards. And what do you think that CEO did? And sometimes I've even gone through exercises with junior people where we've talked, we've looked at some of those backgrounds and we've said, okay, so this person is the CEO of XYZ Company. How did they start out? And I think to answer your question about internships, it does. I think getting your feet wet in real estate is always helpful. And I think that unfortunately, most of the time it's hard, most of the times it's hard to pick and choose exactly what you want, because those spots in the real for real estate interns are so coveted. So I think a lot of people kind of wind up by default at a company that may not be the company that they ultimately want to be in. So what I say is the specific company doesn't matter as much as what you're able to do while you're there. And I think this is where the mentor comes in, having somebody who can help you to decipher what skills you can be gaining while you're there. Because I've had people who've explained to me that in their internship they've done mainly filing. Well, that doesn't help anyone. Right. If you're working at a very large institution, but you're filing, you're not getting those innate skills that you could speak to in an interview. So to boil it down, I would just say the key really is to get a meaningful internship. And even if it doesn't, if you get in and they don't have a program and it's not, and it's freeformed, that you should be able to drive the folks that you're working for to let them, you know what, give me a chance to look at the pro forma and help you to kind of figure out some things. And I had one client, and he had hired some junior folks. And when we did the hiring, we had the person go through some old models and do a presentation to the investment committee. I think that being able to pick up those kinds of skills are going to be key to a person being able to speak at an interview about what they can bring to the table for their next opportunity.

Yeah, that's fantastic. And I really like how you put that. It's almost as the intern. It's not just being there to put something on the resume, but. But really be proactive. And even if there's not a formal program, create the opportunities. So a week or two ago, we had Marty Berger on the show talking about relationships, and it's all about relationships. Okay, so nada. Maybe talk a little bit about relationships. And I want you to answer this question two ways. One would be for someone who maybe they don't have any real estate contacts. Okay. So they're going into this culture. Okay. And then, you know, maybe someone who, you know, maybe they grew up in New York and their parents are already in the business and they've got connections. So what would you say to both of those people on, you know, the importance or maybe how to get an in?

Okay, I like that question a lot. So I come obviously from a non real estate family. I'm actually, I was born and raised in Iran. So I have no access to the real estate industry, you know, as a, as a, as a young child or anything outside of, you know, buying our own house or renting and so on and so forth. So this is a very interesting question. So for those individuals who are just starting out and have no connection to real estate, I mean, there is a lot that is out there. There's a lot of associations, there is a lot of groups, business groups and real estate groups that they can do some research and just join. That's how you start a network, right? And then just kind of piggybacking off of what Lisa said, as in the internship model, say your school does have an internship, right? When you're in your internship program, that is the prime opportunity with those folks to establish relationships and establish your track record of performance. That becomes your reputation, your brand value, and who you are as a professional in that industry. And that will carry you through, through your entire career, right? So it's as much how you're performing and how you're building relationships in your organization as it is outside. And then when you're doing those internships, and this goes for everybody at every level, right? If you're just at a senior level and you've been somewhere for a long time and you know, you just want to broaden your network or you're just starting out, take people out for coffee, ask them for information. People are very generous in helping others and giving their feedback and what they've learned. So, and then I would say this is one of my favorite things. As you come up through the Oregon, as you come up through the industry, pay it forward, do the same thing for others, right? Be a connector, be helpful. So I think if you approach it from that lens, then you'll achieve much, much more success than say, just. And this is not a knock on LinkedIn, just, you know, acquiring more LinkedIn, that is not effective. Networking and building relationships, right? Building relationships comes to the human element. And then with regards to the folks who have a basis of network through their parents, relatives, schools, what have you, the advice would be the same. And I would also say to those individuals, they also will need to establish their own track record outside of their connections and I think leverage those connections to gather information, to educate yourself, and then establish that network and relationships. So the relationships are where you identify your next step forward in your career path. One person will introduce you to three people and so on. And so forth. And one of my favorite sayings is every time you go to a networking lunch or an event or whatever. Well, actually putting the networking events aside, but let's say you ask someone to go out for coffee or lunch and it's just informational. And as you're learning about what they're doing and how they've done it and asking them for their guidance, ask for one more referral. Right. Who can you introduce me to? Who would be helpful for me to speak with and furthering some of these objectives that I laid out? And it's okay sometimes to say, hey, I'm taking you out to lunch because I'm interested in your advice and I want to network with you. That's okay. So I think those are the powers of relationships that people will be able to open doors and opportunities and perhaps Lisa mentioned have a plan and work backwards. Yes, we always say that. But then also be open to what someone else puts in front of you and think about it critically.

Fantastic advice. Thank you so much for coming on the show. Unfortunately, we're out of time, but I know you've graciously agreed to come back. And for those of you who are a couple years into the business or more, we'll definitely cover that on the next episode. But Nate and Lisa, thank you so much for joining. This is your host, James Nelson of Real Estate Investing Live from New York. Please tell your friends about the show and please leave your comments and ratings on itunes, Spotify or wherever you get your podcasts. And if you have not connected with me yet on social media, please don't do so at James Nelson NYC until next week. Thank you.

Thank you for tuning in this week to Real Estate Investing Live from New York. Please join your host, James Nelson for another program next Tuesday at 7pm in New York, 4pm Pacific Time on the Voice America Business Channel. All shows are rebroadcast Wednesday mornings at 7am Eastern Time, 4pm Pacific Time and, well, as always, on demand. We'll talk again next week.