42: The greatest capital broker in the nation, Simon Ziff
Jan 2, 2025
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Simon Ziff, President of Ackman-Ziff and a key player in over $100 billion in real estate deals, shares his remarkable journey through the evolving landscape of commercial real estate. He reflects on navigating market cycles, the shift from family-run firms to institutional dominance, and the rise of CMBS and private equity. Ziff also addresses current market challenges due to rising interest rates, financing struggles, and emphasizes the importance of relationships and transparent compensation in driving success.
Simon Ziff's successful career in real estate highlights the critical importance of strong ethics and relationship-building amid market challenges.
The evolution of the capital markets with CMBS has transformed financing practices, demonstrating the need for adaptability in changing economic conditions.
Deep dives
Career Journey and Early Insights
Simon Ziff shares his career beginnings in real estate, highlighting his entry into Ackman Brothers and Singer in 1989 amid the savings and loan crisis. He recalls how landing at this company allowed him to learn and grow during a turbulent time when many were leaving the industry. Ziff emphasizes the importance of strong business ethics taught by his mentor, Larry Ackman, which contributed to his development in a field that values relationships and trust. His firsthand experiences illustrate how navigating through challenging market conditions informed his understanding of the capital markets landscape.
Evolution of Capital Markets
The podcast discusses the significant changes in capital markets from the late 1980s through the 1990s, particularly with the advent of commercial mortgage-backed securities (CMBS). Ziff notes how CMBS revolutionized financing, allowing for more liberal underwriting practices that equated income from lower-grade tenants to that from higher-grade ones. He reflects on his rise in the industry during this transformation and his pioneering role in financing shopping centers, showcasing the shift toward securing funding from international lenders. This transition not only impacted financial structures but also laid the groundwork for how real estate deals are conceived and executed today.
The Importance of Relationships
Ziff emphasizes that despite the more advanced mathematical approach to modern real estate transactions, relationships remain crucial in securing deals. He explains that trust and history with lenders can significantly influence loan conditions and approvals, contrasting with today's highly competitive bidding environments where even minor differences in rates may decide outcomes. Ziff points out that his firm continues to prioritize relationship-building, which has remained a core tenet of their success. This focus on human connections is essential, even as technology and analytics play larger roles in the industry.
Current Challenges and Market Outlook
The conversation touches on the cyclical nature of the real estate market, noting recent challenges such as rising interest rates and a shift in investor attitudes towards riskier assets. Ziff reflects on how these factors have created a freeze in the market, impacting new developments and financing opportunities. He suggests that while the short-term outlook remains uncertain, regions experiencing a slowdown in construction might see a subsequent recovery driven by increased demand. This anticipatory view underscores the importance of adaptability in an ever-evolving sector influenced by broader economic conditions.
Over his 36-year career, Simon Ziff, President of Ackman-Ziff, has overseen more than $100 billion in transactions and witnessed the dramatic evolution of the real estate industry brought about by the Savings and Loan Crisis. Simon shares his journey from joining Ackman Brothers in the 1980s to seizing the opportunities created by the rise of CMBS and private equity in the 1990s. From personal anecdotes to expert insights, this episode is packed with an insider’s experience navigating market cycles.
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Onward is hosted by Ben Miller, co-founder and CEO of Fundrise. Podcast production by The Podcast Consultant. Music by Seaplane Armada.
Have questions or feedback about this episode? Drop us a note at Onward@Fundrise.com.
About Fundrise
With over 2 million users, Fundrise is America's largest direct-to-investor alternative asset investment platform. Since 2012, our mission has been to build a better financial system by empowering the individual. We make it easier and more efficient than ever for anyone to invest in institutional-quality private alternative assets — all at the touch of a button.
Please see fundrise.com/oc for more information on all of the Fundrise-sponsored investment funds and products, including each fund’s offering document(s).
Want to see the specific assets that make up and power Fundrise portfolios? Check out our active and past projects at www.fundrise.com/assets.
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