Show Notes
Studio portraits for RCLCO. Photo by Louis Tinsley/DC Corporate Headshots. Assistant – Briana Ince
Bio
Adam Ducker is Chief Executive Officer of RCLCO and oversees the firm’s Real Estate Economics and Management Consulting Practices. Adam joined RCLCO in the mid-1990s as an associate directly after graduate school and learned the trade with the firm. He is a recognized expert in strategic planning for real estate companies, investment analysis, market and financial analysis, and marketing of real estate assets. He has particular depth of expertise in high-density housing, retail/entertainment, and hotel development.
Adam is a member of the Executive Committee of RCLCO, which manages shared resources and oversees overall company strategy. He also sits on the board of the RCLCO Foundation.
Adam is a frequent speaker on topics ranging from place-making, urban redevelopment, retail trends, and in-town housing. His writing has been widely published and quoted in publications such as The New York Times, The Wall Street Journal, Urban Land, Real Assets, among others. He is an active member of the Urban Land Institute (ULI), vice chair of the Redevelopment and Reuse Council, and a board member of the Terwilliger Center for Housing. A native of the New York metropolitan area, Adam received Bachelor’s and Master’s degrees from Columbia University.
Show Notes
- RCLCO created RCLCO Fund Advisors (RFA) within RCLCO. Adam is CEO of RCLCO and Taylor Mammen is CEO of RFA- Needed to do this due to regulatory and other reasons (5:20)
- Gadi Kaufman is Chairman now and together with Adam and Taylor are the Executive Committee of the company (8:15)
- Adam’s role is 50% consulting work and 50% in new business development, overseeing operational aspects of the firm, and working with emerging leaders in the company as a mentor (9:00)
Background and Education
- Grew up in Rockland County, NY (not good transit options to NYC) (11:20)
- Looked like America in general (12:20)
- Dad was a Psychiatrist and Mother was a Nurse (13:00)
- Learned about helping people (13:15)
- Experienced an endorphin rush helping people (14:00)
- Learned about helping people (13:15)
- Strong emphasis on hard work (14:30)
- Sense of contribution to the community
- Public High School in Rockland County (15:30)
- Attended Columbia University in 1989 which was considered “avant garde” among his friends in high school (16:20)
- Attracted him as a quirky guy with his own interests (17:15)
- Had not spent time in NYC and fell in love with the city (17:50)
- History of the City of New York class that really was his tipping point about interest in cities and urban economics (18:10)
- Form Follows Finance, by Carol Willis (19:00)
- Books by and about Jane Jacobs and Robert Moses were inspirational (19:30)
- Majored in Urban Studies (20:30)
- After undergraduate degree he took a year off to travel in Thailand and then worked at a publishing company in NY (21:00)
- Decided to go back to graduate school at Columbia to further pursue Urban Studies toward a Masters degree, thinking about a PhD; however, realized he wasn’t an “academic” (21:45)
- Decided to work in the private sector (22:45)
- Became interested in the real estate profession via studies in urban planning and economics
- Was not interested in the transactional side of the business and noticed it was mostly in sales and leasing (23:45)
Career
- Began career at RCLCO in 1997 out of graduate school (25:15)
- A great fit for his skill sets to do research and learn about market trends (25:45)
- Was at RCLCO as an analyst for three years
- Attracted to the Concord Group, which was an offshoot of RCLCO in California and he was hired to run the San Francisco office from 2000 to 2004 (27:20)
- Tech boom and then bust while he was there
- The recession was deep in the Bay Area (29:00)
- Came back to RCLCO in 2004 (29:45)
- RCLCO was a bigger company and he was still networked with them
- Wanted to move back to DC for personal reasons
- Opportunity to take on a leadership role
- Evolution of understanding of consulting (31:20)
- Moving from being a doer to a manager to a business developer and then a leader (31:45)
- Still learning and growing knowledge (34:00)
- Duality of common threads with things, yet different product types (34:40)
- RCLCO’s services (35:30)
- First generation- residential land development and planned unit development advisory (35:45)
- Reston & Columbia were early land development project focuses (36:00)
- Working the multiple developers and stakeholders
- Second generation- Chris Leinberger and Gadi Kaufmann took the company toward urban development activities and advisory work (37:30)
- Navy Yard project- Forest City (Brookfield) was client and attempted to look at it from a land development perspective (39:30)
- Columbia, MD is still evolving from a suburban land development to now an urban evolution
- Tysons Corner evolution (41:10)
- Third generation- Real estate Company consulting (42:20)
- Organizational development & management consulting
- Fourth generation- RCLCO Fund Advisory (43:15)
- Strategy for Real Estate Companies, Charles Hewlett and Gadi Kaufmann (44:00)
- Organizational structure is top of mind now (44:45)
- Capital structure (45:15)
- Strategy for Real Estate Companies, Charles Hewlett and Gadi Kaufmann (44:00)
- First generation- residential land development and planned unit development advisory (35:45)
- Evolution of work affecting real estate (45:50)
- Apartment business needs to adapt to changes (47:20)
- Office has existential risks (48:00)
- Class B/C office buildings need to be reconsidered and redeveloped (48:15)
- Regional malls are evolving to land development plays as anchors close (48:40)
- Hotel business is a “winners and losers” business (50:45)
- Fundamentals of hotel are different then other product types due to daily demand/supply characteristics (51:30)
- RCLCO stays away from advising on hotel operations as it is not real estate (52:15)
- Risk adjusting via cap rates (55:00)
- Evolution from retail toward industrial (56:30)
- Challenges of office space need and use (58:20)
- Decisions about office space is slow as they are being delayed (58:30)
- Office space tied to lifestyle, communication and brand will be chosen (59:00)
- Quality office buildings will be used and attractive (59:30)
- Lesser buildings will not survive (1:00:00)
- Emergence of specialized buildings- health/lab space will continue (1:00:40)
- Capital intensive buildings (1:01:00)
- Industrial demand is moderating due to Amazon’s pulling back perhaps due to the pandemic’s end (1:01:50)
- Not too evident that this will continue (1:03:30)
- Influence of Gadi Kaufmann continues (1:04:00)
- Changes of services include recruiting real estate executives (1:05:00)
- Broadening the scope of services to help clients solve problems (1:06:50)
- Corporate real estate needs as a business is probably not a fit (1:08:15)
- Liminal needs in real estate- Hospitals and Universities are sometimes clients for excess land and their real estate footprint (1:09:15)
- Brokerage groups historically have helped companies; however, there might be a need for advice that is not as transactional (1:11:00)
- Uncertainty has caused some users to continue planning with flexibility (1:12:00)
- Have not seen radical transformation of office use (1:13:20)
- Cited Marriott case in 2020 when they moved to Downtown Bethesda when pandemic became evident (1:14:45)
- Starting to see razing of office buildings in Downtown DC into alternative uses including “trophy” office (1:16:50)
- Multifamily redevelopment (1:18:00)
- Hiring framework (1:19:10)
- Recent hire of a person in development business into consulting (1:19:30)
- Implicit that there is turnover (1:21:45)
- Investment strategy ideas (1:22:20)
- Structural shift- value will require more hard work, not cyclical trends (1:22:30)
- Opportunistic returns will come to people who process changing demand dynamics (1:23:30)
- Development or deep value add will be the drivers going forward (1:24:00)
- More risk will be required to achieve higher returns, not the capital markets (1:24:30)
- Rising interest rates impact on risk taking (1:25:00)
- Fresh MBA student to go into real estate today (1:27:15)
- New product pursuit- Data Centers, Healthcare, Self Storage (1:27:30)
- Not necessary to have an MBA yet Masters in Real Estate are more practical (1:30:00)
- DC has rebounded since the pandemic ended- people left temporarily (1:32:00)
- Lifestyle in DC has improved (1:32:30)
- SW DC government offices evolution will be slow (1:34:00)
- Washington has been a leader in putting land in production for change (1:37:00)
- Capital Waterfront
- NOMA
- Federal Government will eventually reduce its footprint in DC via GSA’s determination (1:38:00)
- What’s possible in DC is powerful and it is more of a transitional city than other “gateway markets” (1:41:50)
- Knowledge base has positioned DC well for the 21st century (1:43:00)
- Economic investment focused on places where change can be fomented (1:43:45)
- Talent is key to growth
- DC is affordable relative to other markets due to higher incomes relative to costs (1:44:20)
- Is National Landing replicable? Probably not, as infrastructure is challenging to replicate (1:46:30)
- Radical sustainability (1:49:30)
- Inflation should be under control in 6-12 months (1:51:15)
- Interest rates will not recede soon (1:51:40)
- Rents accelerated quickly yet there is now price resistance and more re-room-mating (1:52:15)
- Lumber has dropped in price- perhaps a leading edge (1:54:00)
- Low Unemployment
- Challenging to hire- inclined to meet people’s ask (1:56:00)
- Experimented with people in hiring (1:56:40)
- May need more formal training going forward (1:57:45)
- Being in the office was fun and engaging for him (2:01:30)
- Immense liquidity with rising interest rates (2:05:45)
- Very few investors on the sidelines as they want to invest despite more challenging environment (2:06:20)
- Negative leverage is challenging unless people believe that income increases will exceed expense increases (2:07:40)
- Political Entrenchment impact (2:11:00)
- Education needed for the public sector in real estate supply, demand and valuation (2:12:00)
- Citing Harlan Crow– Running a 3rd slate of bi-partisan activity (2:14:00)
- Trends
- Real estate becoming specialized and nuanced (2:16:00)
- Responding to changing needs and obsolescence (2:17:15)
- Not financial engineering- Be ahead of the curve in imagining the future (2:17:50)
- Bi-focularity– Work on immediate and practical needs with a longer view at the same time (2:18:30)
- Radical contrarianism- ask the big hairy questions (2:19:20)
- How to do both practical and imaginary? (2:19:45)
- What is transformational? (2:20:20)
- Real Estate Nerds with different flavors- Culture of RCLCO (2:20:45)
- Pooling clients research together (2:21:20)
- Technology- Pace of change is actionable (2:22:30)
Personal
- Tradeoffs- Family knew about his business obligations (2:23:00)
- Balancing family and work
- Giving back- Children’s school needs real estate perspective (2:24:50)
- Applying his skills to non-profit organizations (2:25:45)
- RCLCO Foundation (2:26:30)
- ULI (2:27:30)
- Dispensing information to the industry (2:28:00)
- Wins
- Number of career oriented people within RCLCO to mentor (2:29:00)
- Privileged to help clients create value for the community (2:30:15)
- Surprises
- Learning about change over time (2:31:15)
- Listen to what needs to be changed (2:32:00)
- Don’t go back to what one is good at, but to what really matters (2:36:00)
- Industry inspirations (2:37:00)
- Gadi Kaufmann
- Ron Terwilliger (2:38:00)
- Advice to 25 Yr. old self- Hold himself more accountable than what he did (2:38:30)
- Don’t fall into impostor syndrome (2:39:15)
- Not believing in oneself…go for it! (2:40:15)
- Billboard statement- Do what you love and if you’re not doing what you love, change it (2:41:10)
Postscript
- Colin Madden insights (2:43:15)
- Perspectives of Adam’s investment strategy
- Pricing discovery for development
- The End of the World is Just Beginning
- Challenging environment for the Fed
- Nuanced space to pursue
- Hard Work to develop and invest today
- Risk ranking- Hotel, Office, Retail, Industrial, Apartments, Single Family Housing
- Reference to Shopify founder Tobi Lutke
- Robotics influence on lab and industrial growth
- Emphasis on focusing
- MBA not necessary for him now, but might be good for people who want to pivot
- Radical contrarianism
