Episode 16: Ten Thousand Acres

Mike Mooney, chairman of MLG Capital and co-founder of MLG Companies, has spent decades “assembling” land. A land assemblage is the process of buying up parcels of land that are next to one another (also called “contiguous”) and merging them together into one larger piece. In Mike’s case, he needed that land for the 19 business parks and 43 subdivisions his company built, and for a four-square-mile parcel a large corporation hired him to put together.

Because land assemblages are risky, expensive, delicate operations, many people aren’t willing to chat about them on the record, so I was especially excited to meet someone who has so much experience and was willing to debrief me on decades of these land deals. He shared a number of war stories from rural land deals and also tips for urban assemblages that bring this complicated operation down to earth. Hope you get as much out of our conversation as I did!

Episode 15: The Master Builder

Jonathan Segal is famous among architects for not only designing but also constructing and owning buildings. He teaches a popular course on the subject and has, over time, consolidated his work so that he alone controls the process (design, financial analysis, construction management, and property management) from start to finish. That allows him, he explains, to control every detail of the architectural design, not having to cede those decisions to an outside developer.

In this very engaging chat, we discuss the idea of a “master builder,” how it all but disappeared, and how he’s working to re-popularize the notion through his own work. In a short breakout conversation, we discuss his strategy for building a new building — from conception to completion — every 18 months. Hope you enjoy this episode as much as I did!

Episode 14: We’ve Been Here Before

Dr. Andrew Baum, longtime professor at Reading and now at Oxford, co-wrote the book on real estate finance and investments. He has spent the majority of his career working with institutional real estate investors in developing global property investment strategies while maintaining a parallel academic career. He is executive chairman of Property Funds Research, a real estate consulting and research business, chairman of the investment committee for CBRE Global Investment Partners and non-executive chairman of Newcore Capital Management.

In this episode, we chatted about the all-powerful, all-important “real estate cycle”. To make sure this wasn’t too light, we also breezed our way through the theory of building a cap rate, one of the backbones of all real estate finance. We also touched a bit on Brexit.

This conversation about commercial real estate covers a lot of ground (pun intended). Hope you enjoy it and get a chance to pick up his fantastic book, co-written with David Hartzell from UNC.

Episode 13: It Pays to Be Historical

David Schwarz is a prolific architect based in Washington, DC. He designed the Dallas Mavericks basketball arena, a major children’s hospital, a downtown maximum-security jail, and has tackled many other such challenges, all while leaning heavily on historical traditions in architecture to make those places visually rich. He currently serves as Chairman of the Yale School of Architecture Dean’s Council and is a recent recipient of the Driehaus Prize for Classical Architecture.

Having been schooled in the modernist architectural approach, he later became convinced that there were a number of reasons that that approach lacked emotional insight. In our chat we discuss what those reasons were and what effect they have had on his career and designs. Along the way, we pick up the thread of several discussions I’ve had in previous interviews. This was a fantastic conversation and I hope you enjoy it as much as I did!

 

Episode 12: All in Good Fund

In real estate, you can either build new properties (what a developer does) or buy existing properties (what an investor does). Real Estate investors (i.e. “people who buy existing properties”) have a few options. They can 1) buy, manage, and sell properties themselves (we call these people landlords), 2) buy stock in a company that owns many properties (we call such companies “REITs”), or 3) give their money to a someone who buys and sells properties for them, much like a mutual fund company buys and sells stocks on your behalf. In that third scenario, the person who buys and sells real estate on your behalf is called a “fund manager” and the industry is normally called “private equity”.

Today, we are chatting with a fund manager, someone who will take your money — or better yet, the money that you and many others have somewhere in a retirement account — and buy and sell gigantic properties on your behalf. Although you may not have heard of this kind of figure, they’re actually responsible for the majority of the very large property sales (think groups of skyscrapers being sold together as a package deal) that happen all around you.

Dietmar Georg co-founded GLL Partners in 2000 in Munich, Germany, and has grown the company to a point where it now manages over $5 billion in real estate assets. Because of his experience in fund management, he was asked to teach a course on Global Fund Management, one of the only courses of its kind, at Georgetown University. Hope you enjoy our chat!

 

Episode 11: Making It Pop

Jim Baney is a principal at SchulerShook, one of the world’s leading lighting designers, and once the sun is down, the work he and his colleagues have done will determine much of the way you see a city. They were recently hired as Theatre Planner for the renovation of the Sydney Opera House’s largest venue, the Concert Hall, and that’s only the latest in a run of incredibly successful and significant projects, including Millennium Park in Chicago.

In our chat, we discuss basic lighting theory, his very interesting work in “daylighting”, and the way that he is involved in both new construction projects and creative reuses. At the risk of understatement, Jim shed a lot of light on a subject which fascinated me but which I had never understood before. Hope you enjoy our chat as much as I did!

Episode 10: Twenty Million and Up

Spencer Burton has knocked on farmers’ doors looking for land deals in the Pacific Northwest, and he has built over a hundred properties in Latin America as a real estate developer. But he realized that he would be happiest if he was doing complex analysis of multi-million dollar property deals. And for that, he made his way into institutional real estate.

As Spencer explains in our chat, pension funds, insurance companies, endowments, and others such institutions, have huge piles of cash which they need to invest, and they often allocate up to 10% of that cash for real estate investments. Then it falls to people like Spencer to decide what (gigantic) purchases, or even loans, to make with the money in order to get the best return for those whose money has been entrusted to the institution. So unbeknownst to many people, skyscrapers are often bought, or loans for skyscrapers made, by life insurance companies or teacher’s pensions funds looking to earn return for their investors.

His fantastic website, Adventures in Commercial Real Estate, has lots more details about the tools and techniques he uses to make these deals. Hope you’ll check out the site after you listen to our chat!

Interlude: A History of Berlin’s Real Estate

Several friends are headed to Berlin this week to study a few real estate development projects there, and that seemed like a good excuse to make a short video about the past century of commercial real estate in Berlin. This is a departure from my “interview” style, and won’t be the norm, but I think it’s a helpful introduction. The city has gotten a lot of attention lately and this is the background story to all that attention.

In case you’re headed there any time soon, here’s are a few things I also shared with them: my map of must-see, must-eat locations, a map of where the wall was, a somewhat cliché but nonetheless helpful article about Berlin in The Economist, a somewhat quirky video on the history of techno in Berlin (which reveals a lot about its recent history, even relating to real estate), my notes on some of the daily, surface differences one encounters in a first visit to Germany, and finally a hysterical article about their famed customer service. If you want to really deep regarding culture, pick up this tome, The German Genius. I’ve spent half a decade there and learned something new on every page. Incredibly well-researched.

Episode 9: The Market Calls the Tune

Ann Danner started her own real estate development and homebuilding company, something many people would be scared to do. She grew it to $100 million in revenue, something most entrepreneurs would simply be unable to do. And then she decided to retire from that company to join the board of St. Jude Children’s Research Hospital. She currently chairs the board’s building committee that will oversee a $1 billion dollar expansion program. I love everything about this story.

We start off by talking about her first projects, how she tried to grow simply by following the broader market trends (hence our title), then spent time discussing her company’s approach to construction management. We closed out by talking about the phenomenon of becoming a “deal junkie” and her advice on why and how to avoid that fate.

Ann’s advice offers an interesting complement to the fantastic conversation I had in Episode 8 with John Anderson, a small development coach. And next time, in Episode 10, I’ll be chatting with Spencer Burton who works in institutional real estate, on both the debt and equity sides, taking part in the biggest deals possible. We’ll talk about what that means, and a lot more, next time. See you then!

Episode 8: Before You Try Skyscrapers

Architects tired of being overruled, urban planners who feel like they’re on the sidelines, real estate brokers who want to create as well as sell properties, and normal people who like the idea of hands on work: these kinds of people often wind up contacting John Anderson. John coaches small development boot camps (here’s a bit of his main talk) which introduce people to the ins-and-outs of acquiring land, getting entitlements, constructing new buildings, and then operating or selling them. In Episode 8, we had a great conversation about the whys and hows of that process.

We began by talking about why John likes small development, as opposed to large development, and then focused on everything from what constitutes “small development,” getting capital partners (people who help you pay the down payment), risk management, and everything in between. This is really a catalog of “things you’ve always wanted to know but were afraid to ask” about starting your own development company, so I hope you’ll take time to watch it.

After our main chat, I spent time talking to him about the complexities of mixed use development and also did a lightning round, covering topics like whether to have a business partner and whether he likes any of the newer construction methods out there. Hope you enjoy this episode. As an interesting contrast, next time we’ll be talking to Ann Danner, a developer who started her own company, took it up to a huge scale, and then retired to work with organizations like St. Jude. See you then!

Episode 7: There Is No Theory

So you’re a real estate developer, but you want your work to be informed by the best that architecture has to offer. How do you do that? That’s what I wanted to know from Dr. Witold Rybczynski (pronounced “vee-told rib-chin-ski”). During his time as professor at the University of Pennsylvania school of architecture, he taught design to students at Penn’s Wharton School of Business. We dug deep into all he’d learned from 20 years of teaching that course, starting with a one-minute tour of how architecture has been taught over the years.

After we finished our main conversation, Dr. Rybczynski and I spent some time talking about the specifics of his design course for real estate students (other schools take note) and about the future of building materials and eco-sensitivity. I’ve posted those conversations separately in the links above to keep the main interview shorter, but these breakout conversations were fantastic as well.

Dr. Rybczynski is the author of 19 books and has written for The New York Times, The Atlantic, New York Review of Books, Architect Magazine, and many others. In addition, he served as Slate’s official architecture critic for several years and continues to blog regularly on his website. I read the past 5 years worth of posts on his fantastic blog and especially enjoyed his posts on architectural curricula, learning design, and the architectural theory behind height limits.  Our interview wasn’t very biographical, but here’s a link to a great interview with him about his own life from another podcast (interview starts at about minute four). Hope you enjoy our chat!

 

Episode 6: Architect or Developer?

In Episode 6, I caught up with Brandon Donnelly of the very popular blog Architect This City. Brandon has degrees in both architecture and real estate development and as such has a unique perspective on the two disciplines. In this episode, I was interested to hear about the rationale behind his decision to pursue development over architecture, his definition of “real estate developer,” and his suggestions for pursuing the kind of work in real estate development which he does (currently in Toronto). It was a great conversation and confirmed for me a lot of things I’d learned through reading his fantastic blog.

Later on in our chat, we did a little “lightning round” of very short conversations about zoning in San Francisco, land speculation in Detroit, wood-framed mid-rises, the future of crowd-funding in real estate, tearing down urban highways, etc, all stuff I knew Brandon had written about and which I found very interesting. I had some Skype connection problems in that section and it differed from the content we talked about for the first 11 minutes, so I’m just going to post that link here.

Next time, in “Putting Land on Layaway”, we will focus on purchase options and the predicament of how to reserve a piece of land for development before you actually have the financing to buy it. This can be an important but tricky part of getting a project on its way. To help us sort out the tangle of issues involved, we’ll be talking to Memphis-based John Paul Stevens, a veteran Real Estate lawyer who is rumored to be my cousin. Hope you all have a great Christmas and New Year.

Episode 5: To Hold or Not to Hold

I love talking to developers who value the contribution their work makes to the beauty of the city as much as they value the profits they make along the way. Obviously developers have to make profits to stay in business, but as “conductors of the orchestra”, they are uniquely able to take the insights of many talented people, and mountains of capital, and use them to permanently improve the towns they work in. Many seem to overlook that potential and responsibility in their work, but people like Brad Binkowski, co-principal of Urban Land Interests in Madison, WI, use it as a catalyst. Starting with no capital, as a real estate consultant out of school, his firm now owns over two-thirds of the Class A office space in Madison, including nearly 60% of the entire downtown square (a testament to his business success). But he has had this success even while investing in innovative architecture and design. He told me that, even when he can’t extract a return out of the extra improvements, he does them because he’s convinced they make the city greater.

I was fascinated to know where he got this bent and, even more importantly, how he has been able to make it work financially. He told me that the key to the firm’s success has been developing to hold. They only build things which are unique and hard to replicate, and because they’re unique and hard to replicate, they see no reason to sell them. In addition, they don’t use outside capital partners but, rather, leverage the equity in their other holdings. This mean they get to call all the shots. Because they hold on to all of their properties for the long-term, and are able to use their own equity to build, they feel comfortable making building and design decisions which others might see as extravagant or unwarranted.

We had a fantastic conversation on a wide range of subjects and I hope you’ll enjoy it as much as I did. Next time, in Episode 6, we’ll be chatting with Brandon Donnelly, proprietor of the immensely popular blog Architect This City, about his decision to study both architecture and business even though he knew he wanted to be on the business side, as a developer. Look forward to seeing you then! (Note: Urban Land Interests in Madison is not to be confused with the Urban Land Institute, a think-tank)

Episode 4: Building Cities to Suit

In Episode 4, I chat with Andrés Duany, father of the New Urbanist movement and architect-planner for many huge developments. Duany has helped design and develop entire towns like Seaside, FL, and most recently Alyce Beach, FL (see video), as well as many other great “smaller” projects. But because his work and general views have been so well explored in his lectures, which are available online, I took this chance to get off the beaten path a bit.

The original interview was over an hour, but in this edited version, we start off talking about gentrification and 19th century Europe’s accidental solution to that issue, his decision to focus exclusively on innovative affordable housing now, then move on to talk about his views of Big Box Retailers (a subject which people think can’t be reconciled with New Urbanism), how to build large communities that look aesthetically diverse, and his view of real estate developers. There’s a lot of good stuff in there and I hope you’ll enjoy it as much as I did.

Here, briefly, are a few resources which would provide helpful background to Duany. Part 1 of this lecture (and subsequent parts also posted online) is a great introduction to his general mission. A recent article from The Atlantic’s CityLab publication discusses “lean urbanism”, his campaign to make regulations surrounding development less cumbersome. Here’s a recent lecture on the same topic.  Here’s a bit on his hobby, a four-volume architectural treatise called Heterodoxia Architectonia. Finally, the article linked on this page considers many critiques of the New Urbanist movement he started.

 

Episode 3: Bus Routes and Cash Flows

In Episode 2, I caught up with Memphis-based Urban Planner Nick Oyler to talk about the relationship between transit planning (i.e. where highways, bus lines, rail, bike lanes go) and development (i.e. what gets built). Which comes first? Do developers go where the transit is developing, do transit people look to the developers for clues, or is it some mix of the two?

Nick is from Memphis, where I was born, and he has spent significant time in Germany, where I lived for 5 years, so we are definitely on the same wave-length about a lot of things. Hope you enjoy our conversation!

Episode 2: Our Dream is to Get Out of Here

In Episode 2, we catch up with architect Philip Engelbrecht, a friend from Berlin who played a pivotal role in helping me sort out my thoughts about a career shift. In one of our last chats before my move back, Philip mentioned an article in which the architects of Marzahn, a gigantic post-war public housing development in Berlin, were being interviewed. Their designs were very homogenous and as a result, tens of thousands of the apartments are now vacant in such buildings. I’ve seen similar results in huge public housing developments here.

So in our chat, we talked about how one goes about designing something on such a large scale without drifting into the kind of homogenous design which leads to fiscal disaster (thousands of empty apartments…). Along the way, we discuss German construction techniques, which I have always found superior, and also some of the industry’s current dilemmas. Apologies for the occasional freezes and low resolution. We had a poor connection that day. Hope you enjoy it!

Episode 1: The Best Urban Planning is Illegal

For our first episode, I caught up with Norman Wright, urban planner for Adams County near Denver and instructor of a great course on “Form-Based Code” which I took from Planetizen.com. In this inaugural interview, I asked Norman to help us wrap our mind around who planners are and how to work with them as developers and architects. It was a great conversation and you can find a table of contents for the video below or just watch the whole thing!