The Insider's Edge To Real Estate Investing with Rob Naso

Welcome everyone. Thrilled to have with us today Rob Nassau, who is Managing Partner and Head of US Asset Management. I had the chance to spend some time with Rob down at our AY Industrial Summit in Nashville. So thank you so much for being a part of it. And Rob, I'd love to start with your Daily Dose. It's, for those of you who do not follow Rob, please do it right now on LinkedIn. You'll have to tell us how long you've been doing this for and the inspiration, but the header is always "Your Daily Dose: The Glass is Always Half Full." So, I'd love it— love if we could start there.

So, it's funny. There's no real method to the madness. I probably started, I think, 4 years ago. And I inherently always loved positivity and great quotes and inspirational quotes. And then I just started doing it. And then I just kept doing it. And so it's funny, I think we talked about this down in Nashville. I don't know why, it just became something that I actually kind of gravitated toward and really liked doing it. Did it for a while, and then I was shocked that people asked me if I did my own social media. And I said, if you actually look what I do, it's not that complex, right? It's a quote a day. And if it's something that resonates with me personally, then I might expand on it and write something a little bit more long form. But no, I've loved every part about doing it. I've been— I like to say, I think in my life I've only had a couple awful days ever that were pretty horrific. But other than that, I mean, life's treated me very, very well.

Yeah, I was going to ask, have you always been a glass half full kind of guy, or was there a moment where you were like, I really need to do a mindset shift?

No, look, and it's funny, I think we talked about this too when we were together. I think for me, I was the kind of kid like Again, my dad was a Vietnam vet. He was hard as nails. He had a volcanic temper. So I started off in a lifetime where I just didn't want to piss him off, right? I kind of, I told the straight line. And then, you know, he was not an overly affectionate guy, but he had our backs on everything. He drove us to every single practice, was at every game, and kind of when I got benched, he yelled at my coach and all the kinds of things that, that you would love to see a dad do. And then my mother was an immigrant from Liverpool, England, and came over to the U.S. and became a nanny from a dirt-poor family. And I always laugh when I think about historically, you know, her parents were both separately orphaned, grew up in orphanages, and just met haphazardly.

Right.

And so my relatives that are still in Liverpool are kind of salt-of-the-earth people, the nicest people you ever met. And then I look at, you know, we had a middle-class upbringing. My dad was an Italian immigrant family and got booted out of college and went to night school to become a teacher and delivered mail during the day. And so we kind of grew up, you know, very blue-collar, very easygoing, and loved every part about it. And so I think, you know, I'm kind of blessed in how I grew up. And, you know, when you look at your kids and what you want to get them. I mean, I always laugh because I said, I never got, went on a plane for vacation. He's like, a 7-hour drive to Vermont might have been, you know, the once a summer or something like that. But I think the ability to now provide something different for them has been exceptional for me and my wife.

Yeah. What's amazing is the consistency to do something like this daily for 4 years. And you, I don't know how it comes to you because it could be something you're thinking. It could be a quote from anyone from Tom Brady to Keanu Reeves. And I'll read a recent quote that you posted because I love this. "To be successful, you don't have to be special. You just have to be consistent, determined, and willing to work for it." So maybe that's a Tom Brady quote. Talk about why it's important to have that consistency to be successful, as well as this glass is half full approach to be successful in life and in business. Sure.

So I come from a place where, again, I'm very blessed that I fell into a job and a career that really lent itself to someone that struggled with ADHD.

Right.

And, you know, I worked my ass off. I didn't fool around in high school. And I probably was maybe around a B+, maybe a little bit less than that. Great point. I didn't really think about college too much. I just didn't really know what I wanted to do. I ended up getting to— the University of Scranton, which was kind of a— you know, I went to St. Anthony's High School in Long Island, and that school was really kind of a feeder to Scranton. And I had two guys that were a year older from me that ended up going to Scranton. And I went up there, had a great weekend, and I was like, all right, I'm going to go here. And I always laugh because I remember when I went to tour the University of Maryland with my dad. My dad was an incredibly extroverted personality. And he took me, and I'll never forget walking around campus with I don't even know how many, 30,000 kids that are there. And he went up to every pretty girl and said, "Oh, how do you like it here? Oh, this is my son." It was just so cringy. And, you know, I just, I was, I couldn't believe he was doing this to me. But it was kind of, it was hysterical. And the one thing, you know, again, I graduated in '92, which was a horrific job market. I think I sent out 300 resumes and I got one offer. Wow. I was an accounting major that hated accounting and I did, you know, back office accounting for 2 years. Didn't really like it. Luckily at the time, you know, that was with Prudential Securities and they had a phenomenal— Prudential had a phenomenal real estate analyst training program. And so I interviewed for it. Every— I think almost every person that I interviewed with had gone to Rutgers. So it was a great, easy entrée. And then it kind of became pretty clear to me that there were a lot of really good people in real estate. Not a lot of rocket scientists, which is great. And again, later in life, probably later, 20 years later, I met a partner of mine, Bill Garrity, who's out on the West Coast. And Bill told me, he's like, "You know what I love about real estate, Rob?" And I said, "What, Bill? What is that?" And he said, "It's the land of the B students." Except for Kim.

Kim is summa cum laude, but I'm right there with you.

I applaud you. But no, it was true. And again, to me, And you don't know this when you're starting out in the business, but the people that you interact with and that you deal with and that you have connectivity with, 20 years down the road, they're all going to be MDs and CEOs and SVPs. And the relationships you make with people, the bond is incredibly powerful. It doesn't really matter how smart you are. And nobody ever asked me how I did in school. And then I was lucky to parlay, you know, Prudential into them sponsoring me for my executive MBA at NYU. And the story I love to tell on that is, if you ever read the book Barbarians at the Gate, it was one of the best books I ever read, loved it. And when I went to tour Wharton, they were actually doing the M&A case study of the takeover, RJR Nabisco. And I sat in that class and I was blown away. And I was like, oh my God, this is kismet, that this is where I belong. And then I ended up having my interview with the admissions person, the woman who ran admissions. And the first thing she said to me was, if you think you're going to come here, you need to take the GMAT again. And I got into an argument with her. I was just— that test is— no, I'm not taking it again. I said, I did fine. I didn't do great. I did fine. But that test is not an indicator of how I'm going to do in life and my career. It's no way am I going to do that. She made it very clear that if I didn't take it again and do better, I wasn't getting in. So I just never applied. Went to NYU, my visit day there a couple weeks later, and loved it. I mean, I met the most eclectic group of people that I was ever so lucky to spend 2 years in class with. But again, a lot of that is about just being consistent, doing what you need to do every day, you know. And it's some of the basics. I love it when I look at my kids. I mean, they're great. They say thank you and may I and please and, you know, just very well-mannered. And now, I mean, I feel bad for kids today with all the technology they have to deal with. It's about looking somebody in the eye and shaking their hand and just trying to engage with somebody, you know, Call 'em, don't send a text, you know, stuff like that. Kind of along with that, I'm not sure if I even answered about being consistent.

No, it's—

You know, it's, I think your ability to be consistent, somebody that people know that they can rely on, that they can trust, that, you know, it's not in this, you're not just in it for yourself. I mean, all that stuff kind of resonates.

No, that's great. And it's amazing, you've got 30 years working in institutional real estate and you spent over a decade—

Thanks for reminding me.

Working in Hong Kong, Shanghai, Singapore, Walk us through those experiences and how you got there and what your role was living in those places, and then how working in Asian real estate markets, like what has taught you about US real estate markets?

Sure. So it was funny. So on the back of having spent 10 years at Pru, I kind of got to the point where I just, I felt it was time for a change. I got a call from a headhunter, asked if I was interested in interviewing at a bank, and it was Morgan Stanley. So I went there and the head of asset management for the US was another Rutgers I ended up interviewing with John Buse, who again is still a close friend to this day. And I worked for him for a couple years. And then one of the persons that I worked with in the New York office, I got transferred to Hong Kong, St. Fancy. And I kept in touch with him. And after a while he said to me, he's like, "You have to come out here and take a look at what we're doing. We could use somebody like you. We don't have any asset management type people here." Okay. So I asked my wife, and my wife— we lived in Hoboken at the time. My wife was working for Toll Brothers. And so I said, hey, they asked if we had any interest in going to Asia. What do you think? And she said, yes. She said, why don't we take a look? And because they flew us out there, we spent a week there, and just, we took it all in. And it's funny, shortly after, Toll Brothers actually asked her to stay. Because we lived at the Hudson Tea Building and they were converting that to condominium. And she is wicked smart. She's a phenomenal salesperson. So we talked about it and we were actually engaged at the time. So this is August of '04 when they kind of came through and said, we'd like you to go. And I went to her and she said, yes, you should do it. She said, why don't you go? I'll finish up selling here and then I'll come join you. And so I did that. And so when I got to Hong Kong, I didn't know anything. I had been there on a school trip with my MBA class, but I didn't ever spend time there. And it was the most electric city in the world. I mean, it was, the pace was incredible, vibrant, energizing. The food and beverage scene was crazy. Everybody knew about real estate. You know, the handover to mainland China had only happened in '97, I believe. And so I was there 7 years later. So there was still a huge British influence and we were busy as hell. Like we invested so much money there. All of our partners were great and we ended up starting to recycle and we ended up making a lot of money there. Mm-hmm. And then we took a trip over to Macau, and Macau at the time had just started talking about revitalizing the gaming industry. And so we actually had a meeting with Sheldon Adelson when he was there. And Sheldon Adelson's head of construction, Matthew Pryor, actually still remains one of my closest friends from my Asia days today. And Matthew oversaw all the building in Macau and then oversaw everything that they did in Singapore. And so you kind of just saw, like, as you got more involved, the pace of activity there was incredible. And this is when I think, you know, it was one of the busiest construction periods ever. And then in February of '06, they asked us to move to China, to Shanghai, to open up Morgan Stanley's first mainland Chinese office. That was before they had investment banking licenses. We didn't have a nice office. Like, I laugh because we took space in like a Grade B building adjacent to a mall that we had bought that we were going to renovate. And we started with 10 people, and then we grew that to 80, I think, within 18 months. I had a translator that sat next to me and would help me with documents and with people, you know, were speaking. And it was funny, culturally, one of the things I found amazing was I would get these perfectly written emails in English, and then the Chinese colleague would come in, and they would just not be confident to speak English. And I said, "Well, why don't you take a deep breath, speak in Mandarin, I'll have the translator translate, and don't worry about it." And so we kind of did that a lot over and over. And so we had a mainland Chinese team. We did not have— I think there were a handful of Western people that were in the office. Everyone else was mainly Chinese or from Hong Kong. So it was a very Chinese-driven business. And then after my daughter was born, my wife said, "Well, I don't really think I can go back to Shanghai. I mean, Shanghai might look great on the TV, but it's tough living there day to day as a foreigner. And she was a traveling spouse, had given up her job. And so I told them, "Well, I don't think we can come back." And then they said, "Well, give us a little bit." And they thought about it and they said, "Well, what if we move you to Singapore?" And we had not spent any time in Singapore. And I asked her, I said, "Well, what do you think?" And she said, "Let's go." And I said, "Well, don't you even wanna go see it?" And she said, "You know, it can't be any worse than Shanghai." And we ended up in Singapore. The thing that, again, the baseline for me is regardless of if you're in any city in the US or anywhere that I worked in Asia, like, relationships governed everything. And I laugh too, because when I left mainland China, when I was moving back to the United States, I had gone and said goodbye to a lot of people. And I got these big bear hugs from a lot of our Chinese developer partners, and the Chinese are not big huggers.

Mm-hmm.

And so the ability to have constructive relationships with people that didn't speak English, it was just, it was incredible for us. I mean, the team was phenomenal. And again, you're running at a very high pace, right, with a New York investment bank parent. So I was literally one of the only people that could do all of the conference calls with New York and all the business plan summaries. The top guys would always be together, but you'd be on these marathon calls for, you know, 3 hours going through all the assumptions. And it was in every different currency. It was in every different metric, whether it was square foot, square meter, or whatever it was. And I look at— I did that as a very young man. I could not do that today. There's no way. And that was all pre-video. So that was like having these laundry lists of cheat sheets that you would speak on these conference calls, which was just mind-blowing. But I think culturally, it was, it was incredible. It was, you know, the most personally and professionally intoxicating period of my life. I mean, I added the other day, I was going through, I think I've been in 30 different cities in mainland China.

Wow.

Which sounds really interesting. But it's also a bit scary when you look at the things that you've seen and the infrastructure investment, the airports, highways, that's all in place there, right, which the normal American just doesn't have any idea. And so I think getting business done there was also, you know, hugely interesting. I think one of the persons, and I forget who told me this, but they said when you're in a board meeting in mainland China, you should never challenge the chairman in that meeting because if you make them look bad in front of their underlings, like you will blow up that relationship forever. They said, "It's OK not to agree, but ask them for a one-on-one meeting post the board meeting." And so you literally go into a side room, and you would have this one-on-one. And I didn't really agree with what you said there. This is what I think. And as long as you did that, like it was fine, right? Absolutely fine. And so I had this phenomenal immersion experience, you know, all over the region. We were in every country ex-Japan. Ex-Japan kind of read, or was led in-country by mostly Japanese colleagues with a few Western people as well. But, but I covered almost everything else. So it was, you know, like drinking through a fire hose all the time. It was absolutely incredible.

Wow. So I spent 2 weeks in mainland China. This was back in the EB-5 days where, you know, we were going from city to city, you know, raising tens of millions of dollars and just So I have an appreciation kind of for your time there, because you're right. Some of these cities you go into, I mean, just the scale, you know, an average-sized city for them is like 20, 25 million people. And wow, what an incredible experience to see the development of Macau. If I'm not mistaken, I think I heard somewhere that they do more gambling revenue there than Vegas. I mean, I've never seen so much money piled up on tables.

And it's a fraction of the size.

Yes.

And it's funny, I'm not a gambler. I mean, I've been, I've played blackjack in Las Vegas, and Las Vegas is fun. Like the aura there is people are having a good time. There's a lot of laughter, there's a lot of drinking. In China, there is no drinking at the tables. I mean, they literally drink tea.

Right.

It's like a sport out there. And I remember in Macau, they put in kind of what you would see in Las Vegas with a Cirque du Soleil show, all these high-end restaurants. And I think within 12, 18 months, they literally ripped the restaurants out to put in more gaming tables just because nobody wanted to spend all that money in a restaurant. They'd rather be, you know, at the table gambling. So again, to see that as a Westerner and to see what they did. And I remember also Stanley Ho, who was the longtime magnate of gambling in Macau, kind of had a monopoly. And then Las Vegas Sands opened up their first one. And we always used to do the pre and post. And when you walk through what Stanley Ho originally had, It was dingy, it was old, it was smoke all over the place. It just wasn't a great environment. Las Vegas Sands was clean, all the lights were on, all the filtration systems were amazing. Within months, Stanley Ho had painted everything, put in new systems. It was incredible what competition did for gaming in Macau, but it was just absolutely insane to just watch that explode and develop.

Unbelievable. So fast forward to today with BGO and that global experience. So BGO, $89.5 billion AUM, multiple vehicles around the world. Maybe for our audience, talk about the BGO holdings, maybe even the BGO story of how that came together and then what that looks like in the US.

Sure. So when I, it was funny, when I first came back in July of 2017, started with a phone call to Sonny Kelsey. And Sonny, who is the global CEO now, or co-CEO of BGO, but also the president of the broader affiliate roll-up. So when I was coming back, Sonny had run the Asia business for Morgan Stanley, got promoted to run the global business. And I was coming back, my parent, my dad had passed, my mom was on her own, and my in-laws were getting older and my kids were their only grandchildren. And so it kind of got to the point where we had enough in Asia and it was time to come back. I reached out to Sonny and Sonny had said, and this is when it was only GreenOak, so pre-merger. And Sonny said, look, I'm working on some interesting things. We just raised our second fund in the US. He's like, why don't you come in and meet everybody? Which I did. And then on that basis, they, he's funny. He said, he's like, well, I got good and bad news. The good news is we're going to make you head of asset management. The bad news is you're the only asset manager. And I work— because back then a lot of the team was cradle to grave. So they were, you know, buying, managing, selling. And so then I was starting to assimilate into that construct and work with everybody there. And then Sonny said, look, just be patient. We're a little bit small, but I'm talking to a couple of people about some cool things that might end up, you know, being really interesting. And one of those was the discussion with Bento Kennedy. And so that merger ended up happening July 1st of '19. So roughly a couple years later. And that really, and when you look at it on paper, was kind of incredible because they did not have a European or Asian business and they also didn't have a value-add business. So they really had a core US business and a Canadian integrated development management, investment management operation. Mm-hmm. So it was really complementary. And so that was my entrée into kind of bigger AUM in the US. I think back at the time, the total merger, I think we were at $47 billion. And it's funny, I think your numbers are even a little understated because we announced recently the acquisition of Bell Partners, which is an integrated multifamily business, which I think will take us over $100 billion AUM. We haven't closed on it yet, so that'll happen sometime in the third quarter.

Mm-hmm.

But to be part of that growth was phenomenal. I mean, it was again kind of like drinking through a fire hose, putting the two teams together, and it's ultimately ended up in a phenomenal output. I think if you look at kind of how we're set up today, we manage across every return series, whether it's core, core plus, or value add. There's some big separate account clients. I'm involved in the equity business. We also have a debt business now that, that's global, but then the US business is taking off. And then we also have a secondaries business as well. So the business has been kind of put together and has been expanding and growing. And if you look at thematically, I think the focus has been around industrial, cold storage, and multifamily and housing. And, you know, we did or were a big office landlord kind of pre-COVID. And you've seen that those holdings kind of come down over time. I mean, the office markets are tough generally across the US. And again, I always reflect when you said how old I am. I remember being a kid and underwriting every model to 95% stabilized occupancy. And that's tough to do today, right? I mean, you might have a flight to quality on the super trophy type office buildings, and that's likely to stay. But everybody else, it's tough, right? There's a lot of blocking and tackling to try to get to 70, 75, 80% occupancy. And then you have to worry about keeping the tenants that you have because it's an incredibly expensive proposition to kind of not only keep what you have and then lease new space. So it's a super interesting time, I think. You know, we're also very focused on medical office. So we have a good-sized portfolio of medical office, which has done very well. And the other thing I would say is on the relationship side, you know, One of the early discussions that the core fund had was talking about self-storage. And, you know, for me, I had gone and kept a long-time relationship with Joe Margolis, who is the CEO at Extra Space. And our head of the core fund was very close with Extra Space's head of acquisitions. So the timing, you know, I called Joe and I said, hey, our core fund would love to engage about self-storage. You know, what do you think? And he said, "Actually, your timing is great. We just filled an allotment that we had from a capital source and we could use more." And so on that basis, we kicked it off. And I think we've funded over $300 million of equity now into a joint venture with a best-in-class operator. And again, if you don't know Joe, Joe is one of the nicest guys that you ever met, dry sense of humor, you know, very pointed, very direct, but just a great guy to do business with. And what's actually great is when you listen to his story, he was a portfolio man or an acquisitions person at Prudential when I was there and did the first deal with Extra Space when they had 11 stores just starting out. I think they have over 2,000 now.

Wow.

Right? And so he has been part of that company's fabric since the beginning almost. And he was, you know, I think he was a board member for a long time. They brought him in-house as the Chief Investment Officer. And then ultimately became the chief executive. But again, just what a great guy to work with and be friendly with and good story to tell.

Yeah, that's great. And we'll definitely want to dive into some of your recent projects and asset types and markets that you're active in. But before we get into that, I'd love to hear about what skills are most important to have and develop when being an asset, to be successful in asset management, and what's your favorite part about being in asset management? What do you like about it?

It's funny, I'm a very introverted personality. And my wife, it's funny when we go to these, you know, back-to-school events, or if we go to my kids' class and we meet other parents, like I tend to be on the quiet side and my wife will kick me and say, "Why are you acting so weird?" And that's not somewhere that I thrive. I can picture that. No, I don't thrive in kind of situations like that. I mean, this is great. Like we could talk about this stuff all day.

Right.

But I think what again resonates with me with real estate is you don't have to be a rocket scientist. Like, you have to understand math and you have to understand numbers. But if you can also engage with people, like, you actually have an ability to be pretty good. You know, you can't be an idiot. Like, you can't, you know, heads I win, tails you lose. And I think if you can find a common ground in terms of how you operate and what you want to do. And we're very transparent, again, in the office markets. Like, we push pretty hard, but, But we're transparent about, you know, where we can do deals and where we can. And depending on the capital you have will dictate kind of the levers that you can pull, right? The core fund might own a bunch of assets with no leverage. And so that was one of the huge things when we went to Newport Tower, which is a million-square-foot tower in Jersey City. We had a big gaping hole of vacancy, and Bank of America was around with a 550,000-square-foot requirement. And the fact we didn't have to deal with a lender, like, we went out of the box at a low rate with a big TI package with free rent, and then we let them know we really wanted this deal.

It's like one of the most basic—

I would have—

You can't deliver Wi-Fi. All right, we are back. We are live thanks to a hotspot. So yes, but it's working. So Rob, I'm sorry, you were on a roll. Sure.

So we were talking about PropTech. And so we went out and we talked to anybody and everybody, whether it was VC fund managers, whether it was consultants, whether it was educators, CEOs, competitors of ours. And it was funny, we came back to something. We said, look, It doesn't really make sense for us to tell you that we can invest into these companies because that's a different animal than investing into bricks and sticks. And so we thought that the best way forward was to invest into a few VC funds that focus on PropTech investing. And so we did that. And by us being able to do that, really opened up their book of portfolio companies that we can then work with. And we knew that they were proven and we knew that they had already raised money, that they actually were out engaging with competitors like us. And so on that premise, we kind of got engaged with a whole bunch of these different companies. We had a bunch come in. We set up a bunch of pilots. And it was funny, we told Sonny, we said the other thing that we learned is what we did not want to do was kill this with bureaucracy. And so we did not want to set up all these subcommittees about who had opinions and thoughts and veto rights on how and what we should be doing. We said, why don't we annul around with it? And then if it doesn't work, we can always just cut it and kill it. Like, it's not, we're not We're not gonna commit anything too draconian that would hurt the P&L or anything like that. And so we started doing that. And, you know, years later now, we've actually done very well as an investor into the funds. And then we've also done really well with the companies that we've been working with and using and leveraging. So it's actually, that kind of environment for me was phenomenal. And again, I, you know, would say thanks to Sonny for having kind of created the ability for us to do that. And so we've endeared ourselves now to all these different fund managers now. So we have, I think we're invested into 4 funds, 5 funds. The most recent one we did was up with MIT Ventures up in Boston, a small investment, but they do very early stage stuff, which is not really proven, but it's a nice complement to the other companies that are a little bit further along. And it was, you know, we were there not that long ago, and he brought in a young guy who was working on a technology that, if you know solar panels, you know, all these big bulky panels, he was working on a super thin film that you would then be able to roll out on top of rooftops, which was incredible. Not anywhere near commercial viability yet, but again, it was really cool to just be in the room and listen to him and how he thinks. Again, he is a rocket scientist, but, you know, he's thinking about things very differently than kind of how we would. So our ability to get exposure to people like that has been phenomenal for us.

Yeah.

So Rob, it sounds like, and I've got to imagine from your days of starting as the only asset manager, today clearly you have a team, you have, dozens and dozens of assets. So how do you oversee the properties? It sounds like cutting through bureaucracy. What does that look like? What is your day-to-day?

Sure. So one of the things we did shortly after the merger was we consolidated on the property management side. And so we consolidated down on commercial, retail, and resi— and office and industrial. And then we also did the same thing on multifamily. And what that did is it started to enable us to get consistency and efficiency across the entire country, which has worked out phenomenally well. And so we get, you know, preferred pricing because of bulk, but then we also get, you know, one point of contact. So if we have a problem, if we have an issue, it gets addressed immediately. And those two counterparties have been phenomenal for us to work with. So we know that the blocking and tackling at the property level is pretty well taken care of. You're always going to have misses here and there, and maybe you have to move on people or bring in other people. And that happens around the country. But, but I'd say directionally, they get it right most of the time, which is a great place to start. And then if you look at the team we have, again, it's all— they're all over the country. And what we kind of try to tell people is like, you have a pretty big remit to build up your kind of own little business here. And again, we try not to micromanage. when you need the help, ask for it. I think one of my superpowers is knowing what I don't know, right? I think I'm great at that because I don't know a lot. But I think, you know, your ability to be able to get to the answer or to find out how to get to the answer is incredibly important. And I always— my overlay too is coming from a place where if you spend a lot of time in mainland China, where the legal structure is probably gray at best, or India, where it might have been black and white, but but again, maybe negotiable. Like, those were really tough times to navigate as a manager, as an— and as an operator. I always say, like, in the US, you can figure all this stuff out. Like, this is not that difficult. It might take more time. It might take more cost. But there is a path for you to figure out what you need to do here. And you have to deal with all the different municipalities and government regulations and all that kind of stuff. Mm-hmm. But it's fixable. Try doing that over there where you don't know what's happening, or, you know, something might be entirely negotiable regardless of what's on the books in terms of what a statute is. So I think, you know, make sure that you're responsive. I think that's the other thing when we engage with the brokerage community. I think we try to make sure that people know that what we can do, what we want to do, that we don't want to jerk people around. I think focusing on the tenant rep side of the business, whether that's office, industrial, whatever, is hugely important because I think you want the tenant rep community to know that they have a credible landlord that's not going to jerk them around. Like, we always tell the tenant reps that our goal is to make you look great, right? And if you need to beat us up a bit to look good for your client, like, we're happy to take the punches to kind of get to the finish line. And we really want to know that we have a shot, so we're happy to try to be as commercial as reasonable. If you need us to get on a plane and go see anybody, if it's in California, if it's in Oregon, Dallas, like wherever it is, like we'll go see them. Some of the other thing too is on the asset management side, like there's been times where tenants are pissed, right? And something's wrong and they have slab sweat and they're not happy with how the floor works. And you have to take those punches, right? I mean, we've gone to plenty tours, property tours where I've sat and got yelled at. I remember we walked into one and the guy who ran the facility said, oh, you can talk to my attorney. I was like, oh, that's not a great way to start, right? That's awful. And then I loved it because we just sat with him and we talked about, we're going to do this, we're going to try this and this and this. And then my colleague, Anil, when we had left, went back to kind of talk to him about, well, maybe we can move you to another suite in another building and expand you because he had constraint, size constraint problems where he was. And so I think we actually got to an extension with him in a different space. Right. Which started out awful. Like, those meetings are terrible.

Terrible.

And I don't enjoy that. I don't know anybody that would enjoy going in and getting punched in the face like that. But I think, you know, at the end of the day, they say pressure is a privilege. And that's, you know, it starts at the top. And I think I always tell the younger team, like, it's nice when you embrace what you have to work on and that you love it and you're stressed about this. But stress goes uphill. Like, you know, this will be my problem. Problem. So just get it off your chest. Like, you're not expected to deal with all this stuff. If somebody's yelling at you, or like, I will deal with that. Like, that you shouldn't need to. But if you don't tell me, I don't know. And so I think trying to be overly communicative on stuff like that is incredibly important, not only for the day-to-day asset management team, but then we also put in more periodic meetings with our portfolio managers. And so we have biweekly meetings with all of them, and we go through Now, we can't go through the entire portfolio in one sitting, but we take an hour, we go through whether it's multifamily in this portfolio, office in this portfolio, because then we know the portfolio managers have their eyes on certain assets, because if you're big and you have a vacancy problem, then you're creating an issue in the fund. And so it's been super interesting working with the team, blocking and tackling, and then also then the direct line to the portfolio managers, making sure that you're listening to kind of what they need and what they want. And so It's been a work in process. I think we're directionally, you know, going the right way and we don't always get it right. But I think the quality of engagement is fantastic.

It's so great that you bring that up because it's a really, really important point is that culture piece. I'm curious, how do you go about building a culture where junior people actually feel safe raising their hand and saying, I don't know what I don't know? Like, what are some tips that you'd recommend for making people feel comfortable with that?

So I always tell people, personally, I was the world's worst self-advocate until much later in my career. And I think, again, we've hired all of these really great people that are very solid, very smart, very switched on. I think when we talk to them, it's like, I can't help you with things I don't know about. Now, it's up to us to make sure that we are providing an environment that keeps you challenged, excited, feel that you're well compensated, that you're on the right path. And I always tell people, like, I'll never knock back an expense report for you to go out and meet your colleagues or at your level at these different firms. Like, information is hugely important, right? And you need to know what's happening. And when you're negotiating with somebody that is also a friend, right, that is a much better place to be than cold calling somebody asking for a favor.

Mm-hmm.

And I think if you play the long game in kind of the discussions, how we've kind of set a lot of this up, that that's the expectation. So, and I always tell people, it's like, if we don't provide an environment that makes you want to stay, guess what? This Rolodex that you built up— and a lot of kids probably know what a Rolodex is, right?

Right.

But this, this whole connection of contacts that you've built up is yours to take. Like, you can take that and monetize it and do whatever you want wherever you end up. Obviously, we don't want you to leave. Like, we want to create an environment that makes you want to stay and feel like you're valued and plugged in. And And we also try to make sure that the younger team is given runway, right? Again, I think there's not a lot of things here that you can blow up by yourself. Like, you know, VP would have signature authority. So an analyst who's super smart, that might be great. They can't sign a lease. Like, they can negotiate a lot of it and do all the economic analysis and then help provide that upward. But I think as long as they have a seat at the table and if you're taking them to construction meetings, you're taking them to walk development sites, you're taking them to meetings at the site. I just went through— we met up a young guy who came from the UK who we brought on, and I asked him once, he was going to Dallas, and I said, well, let's go through your itinerary. Like, who are you meeting? He said, well, we're meeting the property manager for lunch, and then we're going to meet the leasing agent for dinner. I was like, you're going all the way to Dallas and you're at— that's where you're meeting? I'm like, you need to go out and meet 3 different tenant rep guys. You need to go out and meet a couple of market— like, you need to understand what's happening across Dallas. And again, you come from a big brand name, so all those guys are going to take your meeting. Right? It's incredible. Like, you don't forget where you are. And again, believe me, I'm somebody that I understand how that might be very uncomfortable, like pushing yourself to go meet with people you don't know. But that's part of what you have to do. And when you're 25 and 26, like, all of these people that you're going to meet, they all accrue to your benefit. Like, they don't accrue to my benefit. I'm way past, you know, my shelf life. But I think, like, if you have a forward-thinking way about kind of engaging with people, and if you realize how important relationships are, like, this is a phenomenal place for you to thrive. Again, if you're a go-getter, and also I would tell you, when I left Morgan Stanley in January of '12, and I went on my own, and so I created my own company in Singapore, and I was trying to raise capital for development companies. And I did that on my own for 5 and a half years. So when I talked to brokers or intermediaries, like I always tell them, like, I was in your shoes, I got screwed a couple times, like, I will never do that to to a broker. And even when we talk about tenant rep engagement, and I think when you bring the junior team to some of these meetings, like, you want to make sure that you establish a relationship with your tenant, right? And sometimes you kind of sit behind the property manager and let them kind of engage. And we've kind of been more front-thinking in terms of wanting to create a relationship not only with the tenant, but then also making sure that that tenant rep knows, I'm not doing this to cut you out of anything. Like, I will never do that. You're always going to get paid. And we always say, If we sign leases now, we're gonna pay 100% on signing. Like, I'm not gonna do 50/50. The credit has to be there. So, if there's a credit issue, that might be the only reason why we would do a 50/50. But again, we want to get people paid. We want to make sure that they know we're gonna treat them right. We're not gonna jerk them around. We want to make them look good in front of their client. So, if you can kind of keep doing that stuff repetitiously, I think your junior team kind of buys into that. And I think they've been, we kind of grab them, take them to meetings, and we tell them, "Look, I don't need to be at every meeting. You can have this portfolio in Boston, go to Boston." go, go up there for a day and a half, 2 days, kind of meet everybody you need to meet with, walk every property. And the other thing too is when you walk these properties, it's, you know what, send a quick email to the portfolio, not to me. So you can copy me on it, but, but send it to the portfolio manager and tell them what you saw. Is the tenant using its space? Like, are there problems there? And one of the things, again, very basic is, you know, I love when you go into warehouses and you grab the facilities manager and you just walk. And you just— and again, we do— I love this because we ended up doing a whole bunch of warehouses up in Northeast Pennsylvania. You know, I went to the University of Scranton. I never thought that we would own millions of square feet there. And we have a million-square-foot Lowe's facility. And I've become friendly with the facility manager. And every year we go up there once a year and we just walk. And when you walk a million-foot building, it takes a while to kind of walk. And, and again, it's not grilling him, like as a or a public markets analyst, it's, "How's life? Like, how is it to find people? How do you find managing kids out of college?" And to see the eye rolls, right? Yeah. 'Cause again, like, it's a very different animal having to manage the younger generation today versus what it was when I was a kid. You were lucky you had a job. You shut up and you came in early, you left late. Thank you very much. Here, people have opinions and they want to take their sick days or they need time off or, Like, that's a different— I'm not saying it's good, bad, or indifferent. It's just different. And I think when you are my age, and you've done this a long time, like, you have to adapt to manage kids that think and act differently than how you did, right? Because I was afraid of the belt with my dad doesn't mean kids today aren't, right? And I know my kids aren't, but, but it's just, it's very different, you know.

Some incredible advice there. So I hope our audience is taking notes, a lot of great things in there about, you know, the importance of building those relationships in person. Rob, I was going to ask, because I know you also sit on multiple of the investment committees. So, I would assume what's happening is not just acquisitions finds a deal and then it ends up on your lap. Yeah. I mean, I would imagine you're getting involved in those conversations upfront when you're thinking about an acquisition where you're saying, okay, well, I see your pro forma, I see the leasing assumptions, how much are you involved in that process to underwrite a deal to make sure that the assumptions are actually accurate so it can be a successful investment?

Yeah, so I would tell you that the team has done a phenomenal job. If you look at the collaboration between acquisitions, asset management, I think there's a lot of collaboration at the property level to talk about what each respective team is seeing and then how they ultimately underwrite. I think when it gets to investment committee, it's a higher level and it's already been through pre-committee. So you've kind of had the opportunity to kind of provide feedback and ask questions along the way. So I think when it gets to that point, it's become phenomenal because I think the working teams have gotten to know each other very well. And then there's certain things that are super important. Again, depending on what property type it is, we have people that work on industrial that are industrial experts. And I like to say I'm a generalist and I'm an expert in nothing, right? And I think When you have people that live, eat, and breathe buildings, and they can talk about truck turning rooms and truck courts and slab width and different divisions of the bays and inflow and outflow, like, all of those things are incredible when an expert is speaking to it. So they can pick out problems and issues at the property anytime. Then there's a bunch of collaboration with our construction design development teams. And so we actually have the ability to do ground up if we need to. We consider ourselves very flexible capital, so we can be a capital provider, we can take the lead on development, we can just be a provider of capital and let the, the developer do the development. And then we have an in-house team that handles a lot of the construction, CapEx, renovation, repositioning type work. So anything that comes in, again, we're pretty comfortable in terms of that we think we can get our arms around kind of what the what the numbers look like. And then we have a chief economist who's phenomenal, who was with us down in Nashville. Yeah, he was fantastic. And so he is, again, arguably one of the smartest. What I love is he actually was an analyst for me at Prudential and was way smarter than me and ended up going off to become an economist. And again, every couple times a year when he was a chief economist, I would have him speak our team. And after one call, he said, you know, if you ever needed somebody, I wouldn't be that expensive. And it kind of caught me by surprise. And I talked to him the next day and I said, well, what did you mean by this? Like, look, you guys are doing some really interesting, cool stuff. He's like, I've known you for 20 years. He knew Sonny from Georgetown. He's like, if you ever needed a chief economist, like, I'd love to be considered. And I took that and ran with it to management committee. And shortly after, we were able to hire him. And then he went out and now he's on the PERE, you know, top 100 real estate people, I think, along with Sonny and John and Amy and a whole bunch of others, you know, that are there. So again, he's just, he's one of these guys where, and what I've loved to see his growth has been not only in what he puts out. So I would tell anybody, like, if you haven't subscribed, he's got a free newsletter on LinkedIn that you can subscribe to. Subscribe to. But then I've been on investor calls with him and where he shines is in the Q&A, right? But obviously he has his prepared remarks, which are phenomenal, and he's obviously super gifted and talented. But then the ad hoc Q&A that comes in, that you can see him, and again, his mind is like, it's incredible, right? And he kind of goes through stuff where I wish I could be that smart.

Mm-hmm.

But that'll never, that ship has sailed. But again, just having somebody like that on your team, That gives you a tremendous amount of confidence. You know, it's incredible.

Before we wrap up, I'd love to hear more about some recent projects you all have worked on. We know you've been very active in the medical office space and over the past year or so you've bought medical office in Austin, Boston, Durham. And then we also saw that you bought an R&D park in San Jose as well. There's a lot of amazing activity going on out there. So walk us through some of these projects and your overall outlook of the medical office Space space. right now?

Yeah.

So we have a couple, again, a couple people on our team that have been doing this forever, right? Clint Hines, one of our portfolio managers, has been heavily engaged in medical office maybe for 20 years, 15, 20 years. Kevin Yen, who oversees acquisitions for us, has been doing this in concert with Nate Riley, who does it from the asset management side. So again, these guys have been well focused on medical office for a long, long time. They established a JV relationship with Anchor, which again, Anchor's got a huge portfolio and they've become a super important partner for us. I think the other thing too, we got into some of the life science investing years back and that market got crushed when funding kind of got hit. At the end of last year, we actually, in San Carlos in California, we got to the point where we ended up with a humanoid manufacturer. Mm-hmm. Which again, if you look at that business, that's kind of scary because I think they said, you know, that business in the US is interesting and they're basically building these humanoids to take over a lot of household tasks in addition to other things that they'll eventually do. I think they said there's like 1,000 different companies in China focused on humanoids, which is not only super interesting from an efficiency standpoint, but like if that was ever militarized, That's incredibly scary, right? When you think about that. And again, that's glass half empty. So I wouldn't necessarily go there, but no, it's a thesis that's worked out for the long term for us that I think is just going to continue to be a core part of what we do.

So Rob, last question, and you've given such incredible advice for our listeners. So thinking about whether it's a college student or maybe it's someone who's going to get their master's degree, or maybe it's someone who wants to change professions. You know, the idea of if you want to become an asset manager as opposed to acquisitions— I mean, a lot of young professionals come in as analysts, but what would you say to someone who might want to have interest in asset management? How would they know and how would they get started?

Yeah, look, again, I'm very lucky that I fell into this. I couldn't tell you that I wanted to be an asset— I didn't even know what commercial real estate was when I was a kid. I had no idea. That being said, like almost everything we touch is real estate related, whether it's if your kid goes to a school, if you go to a restaurant, if you— you have student housing, retirement village living, office buildings, warehouses. So there's so many different components to work on. I think if you look at all of the different operating components, and again, we have a couple of hotel investments. Like the hotel business is super hard. And when you kind of peel back the onion and you look at all of the different sub-businesses that run under a hotel umbrella, again, it's a rooms business, it's a marketing business, it's a food and beverage business, it's a sales business, it's entertainment. You have to have people that know what they're doing in each of those different departments to end up with a product that resonates with people that want to ultimately end up staying there. And again, I'm not a cool guy. I just— I'm not at all. I'm a very down-to-earth normal person. But I think for people that are interested, and again, I talked to a bunch of kids, because I think the job market's been pretty tough now for a while. Like, be prepared for a lot of rejection, right? That, again, I sent out 300 resumes, I got one offer. Like, I had a lot of nos, right? And that's going to happen over and over again. I also think that wherever you end up going to undergrad does not dictate the rest of your life, right? And again, to me, you know, the University of Scranton was the right place, the right time for me. I loved being there. I pushed my kids because they are way smarter than I was. They did way better on their standardized tests than I ever could. So their opportunities are much broader than what I probably had. So I would say, like, go to the best place that you can, because people do look at your CV. And I always laugh too, because I said, if you saw my CV coming today, like, you idiots wouldn't even give me an interview, right? I wouldn't even get an interview today. But what can you do? You take whatever job you end up ultimately getting, and then maybe you focus on business school. And, you know, maybe that then creates other opportunity depending on where you can go. Because it's not— failure is not final, right? I think it's— and it's not even failure. It's just, I think when you look at all the different things that you have to worry about, like you want to end up with a great partner and you want a comfortable life, and you have to think about the things that make you happy. Be. And I always tell kids too, on the reverse, is if you're in asset management, you don't like it, leave. Like, you spend way too much time here to not like what you're doing, right? And if you don't like it, and you don't like the people you work with, and you don't like the work— and again, there might be a different role somewhere else. And I always say, if you kind of bust your ass and you do great, but it just isn't for you, I will help you go anywhere else. Like, if you want to do something else. We've had kids in asset management that ultimately wanted to be on the acquisition side, which is, you know what, good for you. And we've lost people internally that wanted to be— we had a great young guy that was on asset management who really had an interest on the debt side. The fact that we were able to keep him, I mean, he's an absolute workhorse. But the fact that we could keep him internally, it was a big loss for us, but the firm ultimately ended up winning. And so I think if you can kind of be like that and think like that, be a voracious networker, right? I mean, when you talk about that, and if you connect with people on LinkedIn, if you're going to connect with people, and if you're going to ask people for time, make sure you put a suit and tie on when you get on a Zoom call and take it seriously. You know, I just, I can't tell you how many people like just show up half-assed and it's like, come on, like your competitors, like the competitive set for you is huge. Yeah. Like, show somebody how to differentiate yourself. And I don't know what that is, right? But, but like, you have to look the part and look like you want it. Follow up and send a handwritten thank you note, right? How many kids do that today? Probably not that many. I mean, I know my kids do it all the time. But it's kind of getting back to basics and being an actually decent, normal, you know, rational human being, and show people that you care. And I think if you can kind of do some of those basic things, like like, you're going to set yourself up better than, than a lot of other kids that just don't think like that, you know. And so I kind of laugh with my, with my guys, because I do make sure, you know, when they've gone through and they've taken tours at university, or they've had interviews, like, they always send follow-up notes. And actually, I don't even have to tell them, like, man, I think I tried it the first couple times, but, but they do that on their own now, which is great.

I do have one final question before we wrap up. It seems like a common theme here between your work in Asia, the US, and managing this national platform is the importance of relationships and transparency and trust. So that being said, how do you deliver bad news to your tenants and your capital partners? And how do you use those moments as an opportunity to actually strengthen the relationship rather than hurt the relationship?

So I think bad news is going to happen, right? It just, it's a matter of when. How you deal with that means everything, right? You've hit it head on. You not only have accepted that there is bad news, what are you going to do to fix it? Like, this might have happened. It can never happen again, right? And so what are you doing to make sure that never happens again? The other thing is like for the junior team is can you use that as a learning moment or as a teaching moment in terms of what they should be thinking about doing? If you elevated it earlier, would it have changed, right? If you had a relationship with somebody, would that have given you a different outcome? Again, I think a lot of this is just dealing with stuff when it happens. And I laugh because my wife will probably tell you I'm conflict avoidant at home, but here it's different because, I mean, you're managing other people's money and it's incredibly important, right? It's what you do and how you do it. And, you know, you want to make sure that you position yourself for repeat business. And I would tell you, even with bad news can come opportunity. Yeah. And, you know, it's funny, we had at 685 Third, we were going through a lease negotiation expansion and renewal with a company. That was a tough negotiation. And we also at the same time were negotiating with the lender, right, to make sure that the capital structure was going to be okay. And after all that, the teeth gnashing and getting to a final agreement that was, I'd say, hard won for both parties, I had lunch last week in Chicago with the president of the firm, and it was great. Right. It, it just, it was a phenomenal outcome because again, none of this was personal, right? It's all business and they can do a market study and they know what other landlords are gonna give them. And, and this is where kind of you guys are, I think. But the relationship component is, means everything, right? I mean, and we, we not only with that tenant, but with their broker again, making sure that they understood kind of how we were gonna take care of them and, and not jerk 'em around. So that they knew that they were going to get the outcome they wanted. We also separately had a discussion where we had a tenant that we were ready to get done, and then we had to punt for months or 6 weeks because we just didn't have the loan sorted. So I kind of had to fall on the sword with the broker and kind of walk them through why. And, you know, we asked them to stick with us and they ultimately did. Right. I mean, they could have gone somewhere else and they extracted a little bit of flesh for doing that.

Yeah.

But because we did have a relationship with them, he was less likely to blow up and just scream and yell and nuke our deal and go somewhere else because we just talked to him, right? And again, we didn't necessarily tell him what he wanted to hear at the time, but the fact that he knew that we were going to do everything we could to make it right, not only for him but for his tenant, right, for having stuck with us, like, that meant everything. And so again, knock on wood, we ended up in a great end result.

With him.

Wow.

Well, Rob, this has been amazing. Thank you so much. Truly with you, the glass is half full. It might be full. So we really appreciate your sharing your insight and joining us today.

Thanks for having me. I really appreciate it.

And as always, want to thank all of our listeners. And the best thing you can do, I mean, so much actionable advice here. Make sure you put that into practice and share this episode with a friend. That's really the best thing you could do is share this knowledge. So until next week, this is your co-host James Nelson here with Kim Troller. Thank you for joining.