In this special edition showcasing a panel discussion from the 2019 National Multifamily Housing Council Meeting, we explore the centerpiece topic of recruiting and managing talent in today’s industry with four leaders in the apartment business: Bill Bayless, CEO of American Campus Communities; Chris Payne, President of SARES-REGIS Group; Cindy Scharringhausen, Senior Vice President of Human Resources at Camden Property Trust; and Julie Smith, Chief Administrative Officer at The Bozzuto Group. They are generous in sharing their honest challenges, valuable wisdom, innovative strategies, and time-tested tactics for success.Related LinksArticle on NMHC.org

You might say that innovation, passion, and real estate are in Lucy Billingsley’s blood. As the only daughter of real estate legend Trammell Crow, Lucy wanted to make her own name for herself and co-founded the Billingsley Company with her husband. The firm has been developing and creating spaces full of dynamic energy in the Dallas area for years.

In today’s round table discussion, Co-head of JLL’s Multifamily Capital Market’s platform, Christine Espenshade; CEO of Holland Partner Group, Clyde Holland; and Executive Director of Up for Growth National Coalition, Mike Kingsella explore the future of the Multifamily Housing Market and the policies shaping its trajectory.The FutureWhile Clyde, Christine, and Mike agree that the outlook is positive and the economy is picking up, the supply is already a problem for the increasing demand in the market.Clyde advises developers and builders to get start building now to get ahead of the projected buying challenges, with the knowledge that it may be slow in the beginning but will pay off as demand increases.Christine emphasizes that institutional investors are already interested and willing to support these long-term projects because they know that the investment promises steady, safe returns. The shift from home ownership to long-term apartment occupancy is also a clear marker that multifamily housing is a crucial option the market needs to focus on.Policies Slow ProgressionMike sees the issue of supply stemming from the exclusionary policies that are suppressing growth. At Up For Growth National Coalition, their mission is to advocate for a new approach to housing development, focusing on how growth benefits everyone in the community.Clyde, an original founder of Up for Growth, feels the push back from the city council against development regularly.“Even though there is a housing crisis my building housing is considered a negative… Cities have responded to housing not being affordable by introducing policies that made it more expensive.”He adds that developer’s voices are often not valued because people think their motives and projects are all about making money, not about improving their community. Up for Growth acts as the voice for this cause, advocating for more affordable housing close to jobs and transportation so employees can spend more time with their families.“If you have to commute for two hours each way in order to gain a job in the SF Bay Area, the breadwinner doesn’t have an opportunity to spend time with their spouse and their kids,” said Mike.Mike and Clyde see a combination of tax-exempt bond financing for affordable housing at the federal level combined with state-regulated opportunities for development as the solution to both traffic congestion and housing challenges.Christine also concludes that we need to think about housing as a holistic approach to growing our economy and mixing these government partnerships with private investments for a positive long-term plan.

Bill Stein, CEO of Digital Realty, one of the largest data center real estate companies in the world, entered the data center space just as the cloud was born.“We are fortunately right at the middle of all of this, we are at the heart of this revolution.”Pennsylvania and PrincetonBill grew up in Pittsburgh, PA, where relationships, friendship, family, and sports (specifically football) mattered above all else. He attended boarding school in Philadelphia, Princeton for his B.A. in the classics, and the University of Pittsburgh for law school.After working for his father’s law firm as an insurance defense litigator, he joined Duquesne Light Company as a lawyer and then Assistant Treasurer, and then Westinghouse Credit and Westinghouse Electric where he tackled deals before and during the S&L crisis.In 1994, Bill moved to San Francisco to work with one of his previous clients at Westinghouse, TriNet Corporate Realty Trust which was soon sold to iStar Financial Inc. He went on to serve as co-head of Venture Bank @PNC (a technology lending business) at PNC Bank in Pittsburgh with a satellite office in San Francisco.Building Digital RealtyBill joined GI Partners (Digital Realty’s predecessor private equity fund) in 2004 as the CFO and Chief Investment Officer of Digital Realty Trust and helped GI’s data center portfolio go public as Digital Realty.First, Digital Realty began expanding globally, acquiring properties in Europe and Asia. Their business was mainly leasing large chunks of space to financial institutions and technology companies until they bought Telex, an interconnection business which is crucial for data centers.Balancing Tech and Real EstateIn the beginning, Digital Realty was an asset-focused business, but now it is much more customer-focused. There are a lot of real estate details in their relationships with their customers, however, the service level obligations they offer would not be found in a typical real estate firm.“What we provide is a secure space, and we provide access to power. We provide connectivity. We provide power redundancy. So if power lines go down… we have initially batteries in our data centers that kick on to keep the servers running until the generators kick in.”Bill explains that their tenants, including Amazon and Microsoft, are quite loyal and secure because it’s an expensive proposition to leave. Digital Realty’s global footprint, trust, and certainty of delivery give them a tremendous competitive advantage as their customers are confident knowing they can expand their current campus if necessary.The FutureThe Internet of Things, sensors in your home, an Amazon device that controls your lights or searches the internet for you, motion detectors, autonomous driving, virtual reality, artificial intelligence… Data centers are crucial to the ecosystem of the technological advances happening now and in the future.“Innovation here is trying to figure out where the puck is headed, and get there before the puck gets there.”AdviceDon’t be afraid to take educated risks, be open to new opportunities, and value transparency, integrity, ethics, and relationships. You never know when a friendship might matter.

Daryl Carter is the Founder, Chairman, and CEO of Avanath Capital Management, LLC, a real estate investment firm that acquires, renovates, and operates affordable and workforce housing communities across the US. His dual focus on both investment returns and improving the communities where he invests is rare in this business, and we hear on this episode what drives Daryl to succeed in this balancing act.

John Stewart is the Founder and Chair of the John Stewart Company, a San Francisco-based owner, developer, and manager of affordable and mixed-income housing, founded in 1978 with three employees.Today, the Company has 1,400 employees in five offices in the state of California, managing 31,000 units with over 2000 units in its development pipeline.From Aerospace to Affordable HousingJohn grew up in California, graduating from Stanford in 1956 with a liberal arts degree and a focus on history and finance. When he was recruited by U.S. Steel, he moved from San Francisco to Los Angeles but found that the large corporate culture wasn’t a good fit for his entrepreneurial mindset. He switched to TRW as a young management trainee and moved in 1964 to Houston to join TRW’s new offices at the Johnson Space Center.“In careers, once in a while there’s sort of a choice point… we saw the astronauts and NASA up close and personal, but I was also interested in finding out about life in a Southern city.”John showed up as an out-of-towner at the Houston Council on Human Relations to see how he could help and get involved. He joined its low-income housing committee and soon became Chair. His activism quickly caught the Mayor’s attention, who requested that TRW fund a paid leave and lend John to the city for a year to chair the City’s Citizen’s Committee on Affordable Housing. TRW agreed.Founding John Stewart CompanyJohn became so interested in housing that when his year was up, that he headed back to Los Angeles with TRW and encouraged them to apply for HUD’s (the U.S. Department of Housing and Urban Development) Operation Breakthrough for manufactured housing.TRW was selected, and built nearly a thousand modular affordable housing units in Sacramento and New Mexico; however, manufactured housing was not profitable and John decided to make an offer to acquire 500 units of section 236 multi-family housing from TRW, and the John Stewart Company was born.“One of the few things I did right was plan for capital losses. Every start-up book I read said the dominant reason for failure in small businesses is undercapitalization, so I assumed two years of losses and that’s what it was.”John shares how he capitalized on other’s mistakes by buying and investing in properties that were about to go into assignment or foreclosure. In the process he built trust with HUD. When President Ronald Reagan implemented the low-income tax-credit program in 1984, he began using these credits as an alternative method of financing.“I’ve found that if you are just doing management, particularly low income, with a lot of challenging residents, you don’t last long… it helps to have another line of work, and that would be the development side, the acquisition, the rehab.”In the last 15 years, the company has gone beyond acquisition to also develop new construction projects. John shares that he especially likes working with non-profit corporations in joint ventures because they complement one another.And while he admits that he has had deals that go sideways – there is always a risk – everyone he works with wants to build products that are architecturally attractive and “pencil out.” This is what makes working in this industry fulfilling.After 25 years John sold his company to Southern California Edison. In another choice point, after 5 years he bought it back mainly due to differing views on the company mission. Now, John is proud to have partners that he works with who have been with him for years and who he trusts completely.Tackling HomelessnessWhile others may argue it’s a waste of money, John emphasizes the importance of creating good-looking, market quality housing for low-income people.“My argument is that form and function are connected. You build a schlock product, people will treat it like a schlock product. You build something elegant, they treat it well, with respect, and your turnover is less.”John has found this approach has also helped change the perspective of neighborhoods who are initially opposed to development. When they encounter this dynamic, they bring doubtful prospective tenants and neighbors inside other John Stewart Company Developments to give them a palpable sense of what the new residence will be. Once the tenants and surrounding residents talk to the management, see the quality of the space, the screenings of residents, and the security, it has a very positive effect.ChallengeIf you’re in the affordable housing business with a purely financial bent, then this isn’t your cup of tea. But if you’re comfortable with moderate, reasonable returns, and can accept the risk, this is for you. At the end of the day, you’ve created an attractive physical product that’s a difference-maker in society.

Sam Zell, one of the most storied names in real estate, describes his riveting journey from his parents’ escape from Poland in 1939 as Hitler invaded to how he built his real estate empire at Equity International, created the modern REIT, and lead the industry public.More about Equity Group InvestmentsForbes Magazine on Sam Zell’s successAm I Being Too Subtle?: Straight Talk From a Business Rebel

Colin Wiel is Co-Founder Chairman, and CTO of Mynd, a full stack, tech-enabled, property management company focused on small residential (single family rentals plus small multi-family buildings).AI and JavaColin grew up in Washington D.C., went to high school in Reno, Nevada, and went to UC Berkeley where he got his BA in mechanical engineering. Straight out of college, he landed a dream job at Boeing, where he wrote algorithms for automatic control systems and developed groundbreaking new software.He had a strong entrepreneurial spirit and soon struck out on his own as an independent software consultant working with giants like Hewlett Packard, Oracle, and Netscape, where he became one of the very first Java programmers in the world.He began developing and teaching the Java curriculum for UC Berkeley and while continuing his consulting with a new focus on Java. Eventually, his consulting grew into a full-fledged firm and he brought on many students he had taught. One of their big projects was transitioning Charles Schwab’s website from C to Java, which at the time it was the largest e-commerce website in the world.When he sold his business, a friend sparked his interest in the mobile home park marketplace, and he started investing in that corner of real estate.“If that idea is counter to what most people think, all the better because that’s where the opportunity lies.”WaypointAs he continued investing in mobile home parks and researching the single-family home market, he realized he could make more profit there. He connected with Doug Brien who had a similar idea, and they started buying homes and renting them out, with a long-term selling strategy.People thought they were going to cap out because of the sheer amount of management and upkeep, but their profits and vision said otherwise.17:00 “We said, ‘With all due respect, we think we can build a cloud-computing, mobile computing, infrastructure. A single system of record that our people use, but also the residents use, our vendors, we’re all connected… and then we can build systems on top of that to automate a lot of the functionality or just systematize what happens so that it all runs smoothly so that we’re not dropping balls.’”They raised a series of funds and continued to grow Waypoint (now Invitation Homes) as the pioneers in the space. Eventually, Colony Starwood and Blackstone entered the arena, and that’s when it really became a new industry. After 5 years, they went public as a REIT in a partnership with Starwood called Starwood Waypoint.“So when the big conservative, institutional investors saw that single-family rental is generating the same NOI margins as multi-family, then it was sort of ordained to be a legitimate asset class.”MyndAfter going public as Starwood Waypoint, Colin knew he wanted to strike out on his own again and be in an innovative, start-up environment.He saw how massive and fragmented it was, and how nobody was leveraging technology in the way that had revolutionized other industries. This reflection is what led him to start Mynd, and he quickly asked Doug to partner with him again.“It tends to be a full stack company that’s providing a complete end to end service that’s competing with the incumbents that disrupts an industry.”Property management is complex. From collecting rent, managing repairs and maintenance, to leasing vacant units, Colin saw that accounting and the flow of money were integral to the solution he wanted to create. With these priorities in mind, they began creating a software with an accounting platform from scratch, that gives a property owner a real-time transparent view of what’s going on at their property in a revolutionary way.Their strategy is focused on expanding into new markets like San Diego and Seattle, by acquiring property management principals and then shifting them into their own software. This streamlines the property managers job and improves their service while giving Mynd a spokesperson in that community.Looking forward, Colin is excited to use their data to offer new products and services, like owners insurance, vacancy insurance, and financing products to renters in a much more efficient way.For Colin, giving renters a better experience isn’t just about good business, it’s about human dignity. He is confident that by helping renters have a better experience, Mynd is helping society transition from a renters society to an owners society.When he’s not thinking of innovative new ideas, Colin has a philanthropic partnership with Wildlife Works Carbon to protect the Panama Rainforest.AdviceReal estate is known for being a slow-moving industry. However, if you are young, nimble, and willing to take a chance, there is a huge opportunity to innovate the space.

Art GenslerWhen Art Gensler started his firm in 1965, Gensler solely did interiors. Today, it is not just an interior or a design firm; rather, Gensler thinks of itself as a full-scale, client-focused design firm with a team of 6,000 in 48 offices around the world.He remembers knowing he wanted to be an architect from since he was 5 years old, and credits his ability to visualize things and communicate that vision well to his skill as a planner.After working in the service, he went on to work for a Shreve, Lamb and Harmon in NYC, spent time in the British West Indies, and created the entire architectural standards guide for Wurster, Bernardi & Emmons. At 30, he struck out on his own.EvolvingArt says that when he founded Gensler, it started slowly by focusing on producing high-quality work. The recognition Gensler received for these early projects led him into the consulting field, and soon Gensler was being tapped by Pennzoil to do more than just interior design. Now, their workload is about 50% architecture and 50% interiors, branding, graphics, product design, and consulting.“You’re designing space for people that they’re going to use, not just look at, but actually physically use which is the most important space that we’re going to do. So I’ve always felt that the interior is as important as the outside.”Creating an Excellent TeamArt emphasizes that at Gensler, it’s not just about the designer. The receptionist and the accounting department get just as much recognition as the designer. And ultimately, their clients are the priority.“Success for designers and people in our industry is not how big the pile of chips is in front of you. Success is a happy client and a successful project.”When Apple asked Gensler to create a brand new retail experience, Art was up for the challenge. While he says it was hard work and wasn’t easy, it was a project he will always be proud of.Riki NishimuraWhen Riki Nishimura, Director of Urban Strategies, joined the Gensler team, he was nervous and wondered whether his ideas would get lost in the big firm. However, he soon found that it was an empowering culture where design solutions were discovered through natural collaboration.He cites their current project of Cisco Guangzhou Smart City Master Plan in China as an exemplary piece of work that embodies Gensler’s culture.“It creates a platform for innovation and enables people to achieve their maximum potential.”ChallengesThere’s a balance you have to strike in development. Art shares the example of how Steve Jobs never did focus groups because he said they didn’t know what was possible.You have to push things and people out of their comfort zone to a certain point.“We have to now really build frameworks which are adaptable and modifiable, and the inside is going to be more modifiable than the outside, but they’ve all got to be changeable because the world is changing and people have to recognize that.”AdviceArt: Get a good, broad education. You need a breadth of knowledge to be a future contributor to society. Also, learn how to speak in public.Riki: You might not be able to solve all of the issues, but always leave things better than when you found them.

Liz Holland is now CEO of her grandfather’s over 77-year-old real estate business, Abbell Associates. She never imagined she would end up there, but she says it was amazing creating a relationship with her grandfather and becoming his colleague for two years before he passed away and continuing his legacy.“It’s such a challenging time in retail real estate because things are transforming so quickly and certainly there have been big retail disruptors in the past and there will be bigger retail disruptors in the future, so it’s been quite exciting for us both in our real estate business and our software business to anticipate those disruptors and ride the wave.”Early CareerHer early career in bond trading, law school, her time at Sekadden Arps, and then working in government for a congressional commission gave her a thick skin and taught her how to take risks. She also was quick to learn that she had a strong desire to be an expert in whatever field she was in and make sure that what she was learning today would benefit her tomorrow.The Family BusinessWhen her grandfather called her to run his business in 1997, she said yes. She started updating it with the new technology necessary for lease management and bringing a new energy to the efficiency. Her grandfather was very open to every change she proposed and she learned many lessons from him, including:   You have to be patient.   You have to have the long view.   Sometimes the best deal you do is the one that isn’t done. Don’t chase it.   The right deal for you will come along.Understanding the MarketAt Abbell, their portfolio is 75% is retail, and 25% office. However, they are looking to grow the office percentage specifically in Chicago and are excited to have Liz’s new app LayerCake assisting in guiding their development decisions.LayerCake is changing the way developers and retailers choose their location. It allows a detailed look at the new developments going on in and around the site, as well as how customers behave at the surrounding locations.“What’s so exciting to us about kind of the big data introduction into this analysis is any market study from the past was driving down the road looking in the rearview mirror because you were always looking at what happened in the census 2 years ago, 5 years ago, 9 years ago… but the predictive analytics component to it of knowing that what people are doing there today likely predicts what they’re going to be doing there tomorrow… is really cool.”What’s NextLiz reminds us that shopping is behavior and people are creatures of habit. With technology, we have so much more access to information and data on customers that stores are able to tailor what they carry in store according to their customer’s needs and wants.People used to say retail was dead, but over the last two years, that narrative has changed (despite what the papers may say).Businesses are discovering that there is a very narrow margin between online and storefronts, and if you want to make money, you need the customer to come into your store.What they’ve learned is that certain retailers can change the shopper profile. For example, at one mall they added a Target, and that changed the mall from a monthly destination to a weekly destination. Now, they’re focused on creating more of hybrid assets rather than traditional malls, adding external entrances rather than the enclosed mall retailers of the past.Liz also foresees the convergence of big entertainment venues with shopping malls as something we will see a lot more of in the future.FulfillmentFor Liz, seeing members of the community at a mall getting all of their needs met in a clean, safe, welcoming space is what fulfills her.AdviceBe willing to do the job that nobody wants to do.