Monthly Archives: December 2016
After ages of institutional disadvantages, women today are quickly gaining power in the workplace. Time and again, they’ve proven their worth in academic and professional settings, and in all tiers of business have made clear the importance of female representation — leadership included.
When I began as a secretary in the 1970s, I was among a minority of women in the real estate industry. With hard work and luck, however, I was able to climb the corporate ladder and build a successful business from scratch, forging the way for a new generation of female entrepreneurs.
The environment in which I did that — New York City — has always been a progressive microcosm. Here, where the country’s best-paid family-leave law was just passed, some of the nation’s finest female leaders and entrepreneurs are flourishing, thanks to a combination of ambition and diversity and growing cultural support for equality.
Still, as a born and bred New Yorker, I admit that the rest of the country remains a bit of an enigma to me. In fact, I have come to realize that my own success in the real estate industry may be an outlier. According to a survey of female members of the Urban Land Institute (ULI), a multidisciplinary real estate organization with more than 37,000 members, there exists a deficit of women in our industry’s executive roles.
Women in real estate
My wish is for all women to have the opportunity to advance in the workspace if they have the talent and desire. But, according to ULI’s survey, there is still a clear gender imbalance, especially when it comes to leadership.
The survey found that women make up about 25 percent of ULI members but represent just 14 percent of CEOs. Female leaders are also more likely to be at the helm of smaller firms than larger ones. ULI speculates that this is likely because roadblocks in larger organizations box them out of senior roles, leading them to either start their own businesses or leave for smaller firms where less bureaucracy prevents their advancement.
Fortunately, the women surveyed displayed great optimism about their careers: 70 percent said they felt they were on track in their career advancement, or else were moving even more rapidly ahead than expected.
Supporting women’s career growth
Clearly, women in real estate are ambitious, talented and hungry for advancement: Roughly 68 percent of those surveyed said they aspired to hold executive positions in their companies or own their own business. In New York City, I’ve found, conditions are right to encourage such female success.
But the fact is that many women still face obstacles in seeing their ambitions come to fruition. That is why I believe we need the right support to develop their talent, to carry them forward unhindered by “gender” limitations.
ULI makes some astute suggestions for real estate companies to help women in the industry not just succeed, but earn positions at the top of the totem pole. Here’s what they propose:
1. Accelerated learning
One of the most important requests by women surveyed was the provision of visible and challenging assignments to accelerate on-the-job learning. When high-profile assignments and job openings arise, organizations should think and act with an eye toward both talent and diversity, then challenge those with potential.
Giving female employees responsibility and testing their ability to act under pressure opens doors for those that might not be obvious choices, giving them the chance prove their worth and exercise their skills.
2. Culture creation
Another important factor is an inclusive workplace culture, within which both men and women have the tools to succeed. Inclusivity starts from the top, with leaders taking actions to include women as mentees and to demand the same quality from all, regardless of gender.
Already, many millennial women report being paid and treated as equals with their male counterparts. Since mid-career women are more likely to report their careers stalling, it is imperative that this culture extend to women of all ages.
3. Talent mindset
According to women in the industry, having managers who coach them on the job is more beneficial than formal female leadership programs. Programs as stand-off interventions — while potentially helpful — aren’t considered as important to career growth as internal attitude and mentorship.
For example, a senior-level executive advocating for a woman goes much further than a simple HR training session. Managers should practice objective hiring and mentorship to challenge those with raw skills and ability.
4. Flexibility for all
The ULI survey found that the women surveyed indicated workplace flexibility as a sign of trust by senior leadership. These women wanted to be trusted with flexible working hours while also being measured on results; in the survey, this goal was even more important than family leave.
Work flexibility allows both women and men to dictate their own schedules, to optimize work time and family time without sacrificing quality in either. As long as these offerings don’t put an undue burden on other colleagues or lower the performance bar, those able to take advantage of it will have ample room to thrive.
Internal mentorship can be crucial in allowing women to hone their leadership skills.. But challenges persist in regards to gender dynamics that may impede coaching’s efficacy: For example, a male superior may feel uncomfortable critiquing or bonding with a female inferior, and vice versa.
Women may want to turn to female superiors, then, for advice. But as long as men occupy leadership roles, they shouldn’t hold back from offering support. Organizations can also offer women the opportunity to form external networks fostering professional relationships with men and women outside their firm. Both outsiders and insiders can become future work connections and provide valuable feedback to working women.
Women in the real estate industry have reason to be both optimistic about and hopeful for the future. Progress comes when culture shifts, equity is sought,and respect is earned; every year, more women are earning advancements due to organic change. I’ve witnessed this first-hand, and am confident that women around the country are capable of the same success.
Investors in real estate are not quite the same as landlords. Investors take more business risks and often times get better results and profits. It’s the big leagues of property investments.
The good news is that anybody can join the big leagues. Real estate investment entails more risks than merely leasing and overseeing a house in the case of landlord ownership. But the risks are worth taking as the result of good investment far outweighs any risks.
A landlord is anyone who owns land – a house, apartment or what we generally call real estate. He or she generally rents those houses and apartments to tenants. Meanwhile, a real estate investor is much more – clearly you still own houses — but you don’t have to wear all the hats that come with being a landlord.
I have highlighted six different reasons why it is wise and expedient to metamorphose from being just a landlord to a real estate investor.
1. Investors avoid the hassle of being a landlord.
Marketing the property, vacancy showings, tenant screenings, lease negotiations, rent collection, tenant communication, repairs and emergencies, bookkeeping, coordinating insurance policies and more – these are the hats on a landlord’s head.
Investors exempt themselves from the daily grind and responsibilities and focus more on the business and profit making part. No need worrying how to make a plumber show up on Sunday afternoon. An investor would focus on constant research and smart decision-making.
To do this requires hiring a property management company (PMC) to advertise, negotiate with clients, maintain and generally oversee property and assets on her behalf. This in the short-term might seem like great expenses, but if only to rest from the hat wearing it is worth it, plus a few more advantages as you will see.
2. Investors have the benefit of focus.
Imagine having all the responsibilities above and doing it long-term — which is what many landlords do. It could get really exhausting, to avoid using a stronger word. Investors focus on one thing, and this increases their profit in the long-term and also in the short-term, depending on how quickly they can make a property more profitable.
3. Investors avoid indigent tenants.
Almost every landlord has to face this at some point, especially in economies that are dwindling. Let’s face it, so many people all over the world are living below the poverty line. Most of these people find it extremely difficult to pay their rent when it is due. And many times these tenants would not vacate the premise, which means you can’t get a new tenant. This usually leads to the issuance of quit notice, or even as far as using a court injunction, to get them to leave.
An investor can’t be bothered by such challenges. The firm manages all of that and reports to her. And in the event that a property is not profitable, she can sell it, and move on to better investments.
4. Time, leisure and early retirement.
Good investors acquire properties that have flexibility. This includes the cost of hiring a management firm in their cashflow assumptions so they can vet out any financial deal breakers.
Because of this early planning and wise decision making they can have more time to themselves. They can enjoy vacations and travel, and it won’t affect their jobs, because they limit themselves to about 20 percent of what they would have done as landlords.
Landlords might even be so restricted that they have to live in the same property with the tenants to keep an eye out. Investors on the other hand, keep charge of their time versus money balance.
5. The better end of asset appreciation.
The valuation of property tends to increase over the years as the net operating income of the same property augments as a result of increase in rent and reduction in the maintenance cost. The latter is assured through effective property management work. Investors need only to find the best management firm they can.
6. Investors are in it for the money.
Aren’t we all? Landlords and investors alike invest in property to make profit, but investment is a less tedious way of making money.
To be a real estate investor, you only need to have business at the forefront of your mind. You buy an asset with the intention to offload such property for good profit as soon as it is profitable. This canning ability is called flipping, and it is achieved by smart real estate investors by buying undervalued assets ,or those that are not in huge demand marketwise.
Securing a commercial lease — office, retail or industrial space — is a complicated process that requires much time and effort. As a business owner, there are several different types of property owners you may encounter in your initial search and even during your occupancy, ranging from small individual owners to multi-billion dollar REITs.
Working efficiently with each kind of owner requires a basic understanding of their preferences and priorities. Here, we’ll highlight a few key characteristics of each group:
1. Mom and Pops.
Mom and Pops are owners with smaller portfolios who obtained property as a primary investment. They are not as formal in business practices as other types of owners. Often personally vested in their space, they favor tenants who will treat their space well.
Usually straightforward and easy to deal with
Great for those who desire a close landlord/tenant relationship
May be flexible on terms for the right tenant
Best fit for smaller businesses with simple needs
Communicate with a personable and warm manner
Highlight what makes you a good tenant
Convey your willingness to take ownership of the space
Share creative ideas on how your business can indirectly benefit them
2. Family investors.
Unlike Mom and Pops, family investors are “real estate families” who have amassed a sizable portfolio over tens or even hundreds of years. The tenant/owner relationship may not be as intimate but nonetheless, family owners are still materially involved in the leasing and management of their properties.
Still operate with a personal touch and often handle leasing in house
Generally cash flow driven; prefer stable tenants over the highest possible rent
Have intimate knowledge of every building in their portfolio
Tend to have long term tenants that they have accommodated over many lease periods
Best fit for small to mid-size businesses who are looking for a landlord that is willing to build space and accommodate their short-term growth needs
Check out other buildings within their portfolio to get a better sense of what they have to offer
Be warm and personable because it’s not only the bottom line that drives these owners
Clearly communicate your needs and limitations; they will do the best they can to accommodate
Be prepared to put down a significant security deposit if you don’t have strong financials
3. Management companies.
While technically not an owner, management companies act on behalf of the owners that hire them. For the purposes of leasing and day-to-day property management, they are the de facto owners. Management companies typically have access to a large portfolio of properties with a wide variety of options to fit any business needs.
Very knowledgeable and can accommodate a wide range of needs
Allocated budgets for building improvements and capex
Offer standardized and less flexible lease terms, especially for smaller tenants
Best fit for businesses that have established credit, as these owners often have specific requirements and operating rules
Expect to sign a 5+ year lease
If you are a high profile tenant who’s well recognized or generating a lot of buzz, use this to your advantage, as these landlords like having notable tenants in their roster
4. Real estate developers.
As the name suggests, real estate developers develop and acquire office, residential, hotel, retail and mixed-use properties. The properties they construct are typically Class A buildings designed by award winning architectural firms and feature some of the best amenities offered by any landlord.
Extremely well maintained common areas and large lobbies with strong security
Looking capitalize on the quality of their buildings and generate the highest rents in order to maximize property value
Often limited to major markets such as NYC, SF, LA, Chicago and Houston
Usually more than willing to build space for long term tenants or provide a significant tenant improvement allowance
Best fit for companies looking for premium space
Plan well in advance as deals can take a long time to close
Ask for specific details and changes to the space that will help your business
Use time as a negotiating factor; many new buildings need to secure tenants even before new buildings are completed
5. Institutional investors (funds and REITs).
Institutional investors are money managers who invest in various asset classes, including commercial real estate. Of these investors, REITs (real estate investment trusts) invest solely in real estate properties but most funds will also invest in it as part of a diversified portfolio.
Most assets are Class B+ to Class A buildings that generate strong cash flows for investors
Driven by occupancy rates and margins, not personal preference
You likely won’t deal directly with these owners unless there’s a major dispute, you’re an anchor tenant and/or a large tenant improvement (TI) allowance is involved, but if you do, make sure you cross all your t’s and dot all your i’s. These are not your typical landlords so make sure all of the right paperwork and documentation is in order.