Show Notes
Bio
As President and CEO of The Bozzuto Group, Toby Bozzuto provides strategic and day-to-day leadership for more than 3,000 employees across the country and guides future growth of Bozzuto’s homebuilding, multifamily development, construction and management divisions. Celebrating 35 years in business in 2023, Bozzuto manages 88,000 apartments and three million square feet of retail space across the U.S., has $1.2 billion in its construction pipeline and averages three development starts per year. Bozzuto has been nationally recognized as a Great Place to Work and named a Top Workplace by The Washington Post for seven consecutive years and a Top Company for Executive Women by Seramount for four consecutive years.
An active contributor to his community, Toby serves as a member of the Board of Trustees for Colgate University, a member of the Board of Visitors for the Shock Trauma Center at The University of Maryland Medical Center and an executive committee member of the Policy Advisory Board for the Joint Center for Housing Studies of Harvard University. He previously served as a member of the Board of Trustees for The Gilman School and Kennedy Krieger Institute, on the National Advisory Board for ULI’s Terwilliger Center for Housing, as a member of the Young Presidents’ Organization and as a gubernatorial appointee to the Maryland Health and Higher Education Facilities Authority. A regular guest lecturer at Harvard Business School, Harvard Business School Executive Education program, Harvard University Graduate School of Design, Georgetown University, Cornell University, the University of Maryland and Johns Hopkins University, Toby strives to share his insight and passion for creating community.
Toby is happily married and the proud father of three beautiful children. He is an avid musician, a rare book collector and enjoys cooking for his family.
Show Notes
Origins & Parental Influences
- His Father, Tom, was selfless in handing over the reins to him. He became President a few years before taking over as CEO in 2015 to learn the broader perspective of the company. The company still has the same culture as it was 35 years ago. (8:40)
- Born in Baltimore and lives there now. (10:00)
- His Dad started the company in 1988 when he was 14 yrs. old (10:25)
- He attended Gilman School in Baltimore (10:15)
- His Mom was a profound impact on him in a business sense- she was valedictorian of her HS class (11:00)
- He’s involved both in business and philanthropy in Baltimore (11:30)
- He was taken on site visits when he was very young (11:45)
- Worked as a laborer on a construction site when he was 16 yrs. old (12:00)
Education & Brief Music Career
- Attended Colgate University and loved it (12:45)
- Served as a Trustee and is the incoming Board Chair of the Trustees there (13:15)
- Several building projects (13:45)
- Liberal Arts education was multidisciplinary (14:45)
- Music minor (15:15)
- Context to humanities (15:45)
- His Mom passed on her music passion to him (16:15)
- Played in a band every weekend while in college (17:00)
- Guitar and vocals (17:30)
- Own music
- Recorded a CD while in college (17:45)
- Wanted to be in the music industry for a career
- Interned at Sony Music and then was hired there upon graduation (18:15)
- Worked for a Time Warner subsidiary after graduation in the music business and realized that it was not for him (19:30)
Real Estate Career
- Came home to meet with his Dad and partners to say he wanted to start in the real estate business (20:15)
- His Dad recommended that he start in mortgage banking and he joined Columbia National to learn the business (20:30)
- Subsequently, he attended NYU Graduate Real Estate program to get a Masters in Real Estate. Learned from NY practitioners in real estate (21:00)
- Interned at JP Morgan while there
- Discussed mortgage banking industry and experience (24:00)
- Practitioners of real estate presented and taught classes (27:00)
- Jane Jacobs had an influence on Bozzuto Group philosophy (29:00)
- Robert Moses (30:00)
- “Survival of the Fittest” mentality (31:15)
- Network from grad school is smaller than it would be if he went to school locally (32:00)
Bozzuto Career
- Joined the Bozzuto Group right before 9/11/2001 (32:45)
- Met his wife while at NYU and she worked at American Express near the World Trade Center and she was “late” to work the morning of 9/11 and she was 20 blocks north of the WTC when the 2nd plane hit (33:00)
- Went to get a TV to watch the 9/11 crisis and see what was happening (37:15)
- Started as a Development Associate (38:30)
- Learned business with “senior developers” and shadowed them (38:45)
- John Slidell was the head of the development group (39:00)
- Detail oriented, thoughtful and deliberate (39:30)
- Relationships overcome business frequently (42:15)
- Beauty of development world- remember the creative side of his personality (44:45)
- Cool hotel approach to multifamily design and implementation (45:30)
- Hired hotel designers to innovate design (46:15)
- People paid 15-20% more in rent to live in their apartments (46:45)
- Balancing the costs with design in amenity spaces (47:30)
- Extra $1M-2M costs in amenities yielded a considerable difference in returns (48:00)
- Steve Strazella, who had led the Development group- had an engineering background (49:45)
- Complementary skill set with him to develop projects (50:30)
- Creating a stage set (52:15)
- Uses a restaurant analogy (52:45)
- A theatre experience in building to feel like you’re in a show
- Proprietary scent (54:00)
- Worked with art consultant for art selection (55:30)
- Music suited for the experience, as well (56:15)
- Reference to Tom Bozzuto and Julie Smith (57:30)
- Julie is the “cultural leader” of the company (58:15)
- Humble servant- Leadership is a service journey (58:50)
- “We create sanctuary” (59:30)
- Several 2nd generational leaders in the market including Willy Walker, Cameron Pratt, and Kelly Shooshan
Avoiding Nepotism
- Harvard Executive Education Program- Families in Business (1:03:20)
- Family members and partners (1:04:00)
- Tom, Toby and John and Duncan Slidell participated (1:05:00)
- Foulgers told Tom and him about it (1:07:15)
- How does a Father and family members work together? (1:08:15)
- Now, Tom and he are the co-owners (1:08:30)
- Needed to learn how to be humble enough to prove himself to treat everyone the same way (1:10:00)
- Gives him fire to prove that he wasn’t given something (1:12:15)
- Became very close to Rick Mostyn (Co-Founder with Tom) (1:14:00)
- Reference to site in Bethesda, MD that has a CVS Drug pad and parking (1:15:45)
- Ground lease requiring negotiations with both owner and CVS Drug (1:16:15)
- Citation of Fitzgerald project in Baltimore on the UMBC campus and took years to negotiate the ground lease and development (1:18:15)
- No business plan for PPP deals (1:19:20)
- Quincy, MA project– MBTA project (1:19:45)
Company Structure and Culture
- Bozzuto Group- 4 Business lines (1:21:00)
- Development company (1:21:15)
- Construction company (1:21:30)
- Property Management company- 91,000 units (1:21:45)
- For Sale housing business (1:22:00)
- Wye River Insurance Co. (1:22:15)
- 3,000 employees (2,500 are in Property Management) (1:22:30)
- Learning in Leadership (1:23:00)
- Want to be the “best” not the “biggest” (1:23:15)
- Insure the culture is kept intact (1:23:30)
- Declining Property Management assignment (1:24:30)
- Integrity issues (1:24:45)
- Treatment of Bozzuto employees (1:25:15)
- Decided not to manage Class B and C projects (1:25:50)
- Doesn’t want to evict tenants that cannot afford rent (1:26:15)
- Manage buildings where people rent by choice (1:26:30)
- Affordable housing (1:27:00)
- Partner with a nonprofit (MCHOC) (1:27:20)
- Provide highest level for people that qualify for affordable housing subsidies (1:28:00)
- The Laureate Apartments in partnership with EYA (1:28:15)
- Affordable units were “life changing” for tenants that can’t afford (1:28:45)
- Chevy Chase Lake Project
- Treatment of owners or tenants at HOC project there and Ritz Carlton project should be identically high quality (1:30:00)
- Treatment as a “host” (1:32:15)
- Ritz Carlton training program- Standards as long as a telephone book (1:34:00)
- Learn little things by watching experiences (American Express story) (1:35:10)
- Retail experiences- Apple example (1:36:30)
- Brand evangelist- Building brand in apartment business (1:37:15)
- “Living in a Bozzuto building” (1:38:15)
- Investment Committee- Manage risk taking (1:39:30)
- CEO, CAO, COO, CFO, Board Members (1:39:45)
- OneBozzuto– Flywheel of opportunities to work together (1:41:00)
- Decidedly conservative in their thinking- Won’t take “disproportionate risk” (1:41:30)
Investment Philosophy
- Access, Visibility, and Environment for a site (1:43:00)
- Right now even the best site may not be financeable (1:44:30)
- Land can’t go below zero- free land now doesn’t work
- Interest rates and/or costs are too high to justify new development starts
- Will land bank if there was a “covered land play” (1:45:45)
- Few starts in 2023 or 2024 (1:47:00)
- Tishman Speyer’s starting Mazza Gallerie site extraordinary (1:47:15)
- Current resident is the best resident (1:49:00)
- Pre-pandemic the building would have been completely vacant during the week (1:50:00)
- Now, buildings are much more intensively used- like a hotel (1:50:30)
- On new developments, add more amenities and other features for the “work from home” tenants (1:51:30)
- “Alone together”
- Technology has impacted leasing and management of projects (1:52:45)
- Chatbot is named “Ivy” is loved by some tenants (1:54:00)
- High touch will never replace high tech (1:55:15)
- At some point convenience is overcome by quality service (1:56:00)
- Infinitely transformative (1:56:20)
- Unknown future with AI alternatives (1:57:45)
- Health care implications in buildings (1:58:50)
- Will a building make someone healthier? (1:59:15)
- Service or product that will help people be healthy (2:00:30)
- Why be here? (2:02:30)
- Safety in numbers in cities (2:02:45)
- Cleanliness and Dignity (2:03:40)
- Action and light
- Procreation- Meet other like minded people- Companionship (2:04:15)
- Example of Hudson Yards project in NY (2:05:00)
- Flight to quality in office and in less space (2:05:45)
- Looking at their own space he will contract and maybe move toward higher quality and amenities (2:06:30)
- Three days a week requirement in his office (2:08:45)
- DC real estate markets
- Pre-pandemic he was bullish on Amazon HQ2 location…now not so sure (2:09:45)
- Bullish about DC area long term (2:10:00)
- Value of interpersonal interaction (2:11:15)
- CBD DC does not have quality places to live (2:12:15)
- Arlington is cooler (2:12:30)
- As office lease expires, why not go where your employees want to be (2:13:00)
- Urban/Suburban environments (2:14:00)
- Metro locations- Silver Line (2:16:00)
Personal Philosophy- People and Life
- Employment characteristics
- Kindness, humility, intelligence (2:17:30)
- Reference to Tom Bozzuto’s book, Reflections of an Ordinary Man
- Washington Post Top Workplace for 8 straight years (2:18:15)
- Good behavior pays off significantly (2:19:00)
- Kindness, humility, intelligence (2:17:30)
- Personal philosophy
- Work Life Balance- HBR reference says it’s “total BS” (2:19:45)
- Life is to be lived- Do as much as possible (2:20:15)
- Learning to delegate (2:21:15)
- Family is #1 priority- Three children and works on being there for them (2:21:30)
- Giving back- Now Colgate is the biggest outside commitment (2:22:15)
- Some philanthropy
- Providing opportunities for 3,000 employees both within and outside the company (2:22:45)
- RISE Program– Employees decide where to invest financially or with time (2:23:20)
- Business and residents could be a “force for good” (2:24:30)
- RISE campaign approached all residents about Ukraine initiative (2:25:00)
- Lessons to share for young professionals (2:26:00)
- Authenticity is rewarded in life (2:26:15)
- We can accomplish anything if we work together (2:26:45)
- Don’t work at a place where you are uncomfortable (2:27:00)
- Humility (2:27:20)
- Authenticity is rewarded in life (2:26:15)
- Wins
- Post credit crisis in 2009- Millennials in college creating opportunity (2:28:00)
- Penny Pritzker created a fund with Bozzuto to boost their opportunities (2:29:00)
- Failures
- Beats himself up for deals that they didn’t do (2:31:00)
- Not recognizing opportunities when others did see them (2:31:30)
- Surprises
- Pandemic was huge in impact on fundamental beliefs (2:32:30)
- Tales to 25 yr. old self- “Hang in there for the long journey” (2:33:30)
- Billboard statement- “If I could leave the world and the business I lead could add impact to the world” (Reference to Song of Significance, by Seth Godin) (2:34:15)
Postscript
- Colin Madden perspectives
- Interesting journey of a legacy leader
- Harvard program was interesting- rare to hear about successful transitions
- Toby’s mentors were John Slidell and Rick Mostyn
- Toby’s music experience
- Creativity in thought process of amenities, art and ambiance
- Colin references the “high touch won’t replace high tech” statement
- Reference to Chatbot “Ivy”
- Dichotomy of being “alone together”
- Osmosis of being around other people
- Evolution of apartments becoming like hotels
- Full spectrum of housing at Chevy Chase Lake project
- Humble leadership- OneBozzuto
- Bozzuto brand appeal
