W. Cabell (Cab) Grayson- 41 Amazing Years at CBRE (#3)

Speaker 0 00:00 <inaudible>. Speaker 1 00:10 Hi, I'm John Cohen. Welcome to icons. Let me see area real estate or one on one interview show I lighting we backgrounds and career trajectory of leading luminaries in the Washington DC area real estate market. The purpose of the show is to highlight their backgrounds and their experiences and some interesting stories about their current business as well as their past and to cite some things that you might take away both from educational standpoint as well as lessons learned in the industry and some amusing and sometimes interesting background stories. So I'm hoping that you will enjoy the show. I guess for today's episode is Cab Grayson cab as senior managing director of CVRE global investors cab has spent 41 years at CVRE in various forms. His latest role being money raising for their pension, various pension funds above $3 billion in value. Kev grew up in Washington DC and went to school at St Alban's, then on to Yale University after high school. Speaker 1 01:20 Most of his career has been spent in Washington today. We talk about his family background and heritage in the region. We talk about his schooling at St Alban's and on to Yale. We talk also about that he has no real estate background or any really influences as a child and real estate and picked it up by accident incident. He also learned when he came in that being able to help not knowing much about real estate, asking questions and digging was the best route for him to learn. And then we talk a little bit about the company changes. CVRE going through many, many changes over, it's his 41 year career and then his move to Los Angeles and has returned back from that experience. And then we evolved into talking about his family a little bit more in detail, including his two sons that are in the real estate industry. I've known camp for about 35 years. He and I have shared stories and ideas over that period of time and he's just a great person and I hope you enjoy the interview Speaker 2 02:25 cab. Welcome to the show. Thank you for joining me today. So cab, could you tell us a little bit about what you do at CVRE investors? Absolutely John, it's great to be here. It's nice to see you again. What I do is I work with corporate and public pension plans in North America, US and Canada who have 3 billion AUM or greater. Totally. You am not real estate. And the reason for that is we've found that the one smaller than that tend to have a very different approach. For example, they typically work solely through consultants. So one of my colleagues covers that group and I cover 3 billion AUM and larger. So tell me what you do on a kind of a daily basis. Well, I travel a lot as you might imagine, as I look at you, you probably one of the few people I know who's been to places like the Pika, Kansas, Jefferson city, Missouri, Lincoln, Nebraska, Albany, New York, et Cetera, et cetera. Speaker 2 03:21 I can speak with expertise that I've been to all those places, Tallahassee, Florida, on and on. And that's of course, cause the state capitols typically are for reasons known to others in the past are in markets that are smaller. They're generally not Manhattan or you know, St Louis or Kansas City. They tend to be in more rural locations, which was a decision made years ago by others. But anyway, that's where the public pension plans are and that's who our largest investors are. And we now as a firm across the world have about 107 billion in real estate AUM, which makes us one of the larger, I don't know where we rank, probably in the top three is my guess. It's interesting that a brokerage firm would be that large. And in the pension advisory, capital raising and investing, we were one of the first, and I was not around at the time or not involved anyway, but in 1972 is when the real estate investment management arm was started and people who are involved, you may know them, John, but uh, people like Vince Martin and so on who now I think are fully retired. Speaker 2 04:25 But ultimately after they left, CB went and formed TCW. It was the power of CB in the marketplace. The time that allowed for the expansion of different businesses, I assume. Yes, very definitely. But I, again, in 1972 I was graduated from high school. I was not involved in the decision that CV at the time. So talk a little bit about your, uh, your, your personal background cab. Well, as you know, I, I was born in Washington, D C my dad worked for the federal government. He worked for the Smithsonian. We are, I grew up between 16th street and Connecticut Avenue off of porter behind the zoo. They're various friends referred to it as rock sewer. But that was probably a little unfair. I mean I was a lifer on the cathedral close because I went to Beauvoir and then St Albans and then went away to college and went to Yale after that. Speaker 2 05:15 DC as you well know, went through a lot of changes and during the time I was there, it had some interesting changes to say the least. I mean, in 66 I believe this is correct. That's when they had the busing decision that didn't impact me directly cause I went to a private school. But of course it impacted the city a lot. And then 1968 we have the Martin Luther King assassination and the riots and so on. It was a very active time to say the least. We had sirens more or less, 24 seven and armored personnel carriers at the end of our street, all that type of thing. But that's so well known to many people. What were some of the, during your youth, what were some of the moments that you'll never forget in Washington? Well certainly the, the, when king was, I heard about it and was riding home on the DC transit bus with two friends of mine who lived in the 16th street area and they said, well, there's some something going on and there's a lot of stuff happening. Speaker 2 06:08 And subsequently they took pictures out of there. One of them in particular took pictures out of his apartment window and it was, you know, right out of a root frankly. I mean you saw looters and fires and policemen and soldiers and it was, it was quite something, I think at the time I didn't realize how big a deal it was when you're a teenager. It just sort of sounds like another thing. And of course the other big thing going on at that time and later was the Vietnam War, which if you lived in DC, you were exposed to, not the word itself of course, but certainly all the protests to a great degree and you'd drive. I remember my mother driving me through ward circle one time and the smell of tear gas was just overpowering and you know, we've, I've at least I wasn't really aware of what protest might've just taken place. Speaker 2 06:55 Again, I would think it was in the eighth grade at the time, maybe seventh, something like that. You just come across this in asphyxiating smell of tear gas. One thing that's really unpleasant, not that I was directly involved, but anyway, it was a very interesting time in retrospect to grow up in Washington DC. Not all great. Not all bad, but very interesting. Certainly you have a brother I know. Yeah. You have a sister. I have a sister who's between us. I'm the oldest of three of my sister's 20 months younger than me. My brother's five and a half years younger. They both live in the DC area as well. So growing up with two siblings being the oldest, I mean, did you dictate what was going on in the family or did they follow your lead or how did, how did your cutters, what was your relationship growing up as kids? Speaker 2 07:42 I didn't think it was probably relatively normal. I don't think I was any great older brother that was for sure. My sister, not exactly sure what year was, but she ended up going away to school. So I really didn't see her on a day to day basis. And then my brother being five and a half years younger when you're 12 years old, somebody who's five and a half years younger is in a completely different sphere. But I love and admire my brother and sister greatly and they're wonderful people. Like I said, they both live in the DC area, so I'm fortunate to get to see them pretty often. What influences at uh, at St Alban's and then you went on to Yale University, you know, look, you'll dad have on you, on you and your life and your perspective. Well, I can talk about that. I can also talk about family too. Speaker 2 08:22 About my dad and mother in particular. Maybe I'll start with that. My Dad unfortunately died when he was 58 when I was 26 which was quite a shock to say the least. My mother ended up having to go back to work. It was a very traumatic time for her. She kept a lot of the problems away from us, which I completely understand, but one thing I'll start maybe with my dad is that when he died, cannon Martin, who was head of St Alban's at his funeral, Ken and Martin said, I think I have this right. He said, this guy was most decent man I've ever known, and I of course I have no way of comparing to the rest of the world, but he was an enormously decent guy and just a really good human being. Why? Well, in a lot of ways I heard Gary did Gary Rappaport's podcast and he said something that his father said, it's important to be a good man, and I could have heard that from my dad. Speaker 2 09:17 I don't think I ever did hear that, but he modeled it in his behavior, and I can't tell you when he died, but also afterwards I would have people coming up to me at random times who range from being the lowest ranking unemployed person to someone who was pretty high up in government saying words to the effect of your dad was the most wonderful guy I ever knew, most decent human being, just an unbelievable person. And you know, in my eyes I was his son. Of course I'm a little biased, but he really was a wonderful guy. You know, I thought about, well what in particular, besides his decency, first of all, that's a key thing. He treated people well no matter who they were. I mean, as far as I could tell if it was the president United States or somebody on the street, he treated them equally well. Speaker 2 10:04 And I thought that's, that's something really hard to practice. We all think we can do it, but it's really hard to practice. But that's something I've tried to do. I, I do see I firsthand, Oh yes, many times. You know, and he was, I mean my father, I could talk about him forever. He was a physical fitness fanatic who exercise twice a day at least until he got ill to cancer. Yeah. He puts me to shame and I don't consider myself overweight, but I w I'm obese compared to him. He was lean and in great shape I would say lean and mean, but he wasn't mean. But he did his royal Canadian Canadian mounted police exercises every single morning, which was pushups, running in place, calisthenics, etc. And then in the afternoon when he came home from work or evening, he would do a variety of things, but frequently he would, he would put on his old Marine Corps boots, you've been in the Marine Corp during World War II and he'd take our dog and they'd go run sprints in Rock Creek Park. Speaker 2 11:04 And at that time it was, this was really before the jogging revolution. And to see a, you know, middle-aged male in Marine Corps fatigues and boots sprinting in Rock Creek Park I think was a little unusual. But it was anyway, that was among many memories I have of him doing it. And he was just about a physical fitness fanatic was definitely true. He had two older brothers whom I knew well and really one thing is our family grew up as sort of a clan because one uncle was unmarried until much later and, but the other one, the Middle Uncle Carrie has four daughters, had four daughters. He's deceased now and I'm still quite close to them as if they were my sisters, if you will. As you know, we had a family, have a family farm out in the Upperville Middleburg area and on weekends we'd go out there and in the summers, uh, my parents would rent their house in DC. Speaker 2 12:00 My Dad would commute from Upperville brutal commute even then and to the Smithsonian. And uh, so I'd be there with my four cousins, all girls. I was the oldest. Anyway, so that was an interesting environment. But I will add that going into St Alban's, which is what, how we got started on this. My Dad and his brothers had gone there for part of the time and I think they'd enjoyed it. It had grown quite a bit, so it was just sort of, I was never, I never was asked. I just went and honestly St Alban's was, it was fine. I think it's gotten to be a much better school than it was. It was, I think particularly in the lower school ended ups and downs, but I enjoyed it in a way, but it was a lot of hard work. That's the thing I remember most the most about Saint Elmos was just no free time and between athletics and academics, just endless work. Speaker 2 12:55 There were a couple other things I'd like to ask you about. Your, your mother and your father were very strong environmentalists. Your father point president of the Audubon society apparently, and that was a volunteer job, but that's right. And your mother was involved in the, the a group out in fuck county that actually fought his business. Yes. When they tried to come. Yes. That's all true. And my father was a fervent environmentalist way before it was in to be. So where did that come from? Camp, I don't honestly know, but it, he developed a love of the outdoors and I mean again we could tell stories forever, but one of them that a brief one was somehow, and this is when I was either just born or maybe just after I was born, he went to the fish and wildlife service and said, you know, there's a duck called the wood duck, which is grown. Speaker 2 13:47 What used to be very populous in northern Virginia. It's extinct now. How about you give me a permit to go raise them? And again, I wish I had known him at the time, but he built a big duck pen out at the farm. It was a feat of engineering. I obviously, I can't portray this in the court podcast, but if this was the ground, he built it. So it would go six inches below and then it went out six inches in each direction. So a weasel or you know, Fox digging to try to get in the duct would first of all hit something going down. And then if he made it past that, there would be something coming back up. Anyway, he raised wood ducks for years. Again, this was purely on his own and it was a huge success. He, we would band them, release them, and they were wood ducks all over the place. Speaker 2 14:34 We ended up giving a whole bunch to the national zoo and that became their breeding stock and so on. So, so he was a, I mean, he was a real environmental, so it wasn't some pie in the sky type thing. He was living at day to day and again, more power to him, but he just loved the outdoors. He had terrific vision. And again, we're on a podcast, but he'd see something 200 yards away and say, oh my gosh, John, look at that. That's a, a Ruby throated hummingbird. And you'd just stare out there and go, I just see a bunch of trees. Anyway, phenomenal eyesight and he can pick out stuff that you can believe, but just a wonderful environmentalist and I think my mom really got it from him, but after he died, she went to work for Russell train who'd had been secretary of EPA. Speaker 2 15:21 He was also my first employer. Then my mom married a guy named Charlie White House and really converted him and at least in my view to being an environmentalist too, and my mother started, started her coast, started the Goose Creek Association and the most be heritage area, which is an educational for kids about all the civil war stuff that's taken place in the Piedmont area. And then also she and Charlie really were the two of the real, maybe four or five guiding forces in terms of building up the Piedmont Environmental Council and also the fight that the feed Disney, which to me would have been a disaster for both that area, but also would have been a disaster for Disney frankly, because I think if they built something and expected all that traffic to come out 66 on a regular basis, it would have been a fiasco. My mom, she was very much a lady, but she had a very, very stiff backbone and she knew how to fight and literally one her deathbed, she woke up at one stage and said to me, she said, you know, capitol, you think people will remember me as somebody willing to lie down in front of a bulldozer? Speaker 2 16:24 And I was like, yeah, mom, I think they will. You know, you'd never guess it cause she was very much of a lady, but she was plenty tough in her own way. Very persuasive. I also, in my research, learned that she was on the board of their Gunston. Yeah, Plantation Gunston Hall. Yeah, out on stone hall, which was George Mason's. She was also very active. Not certainly not the only one among many is that Stratford Hall, which is the Lee family plantation in my salad, granite county, or exact river area, but on the George Mason site, it's actually not my mom. It's my father's side of the family is related to George Mason is a direct relative, and I want to say it's a, I think it's George Mason's mother. Anyway, I might, I'm a little fuzzy on that side, but yes, we are direct descendants on that story, but I'll tell you, John, I didn't have my growing up, my family did not emphasize things like that, particularly. Speaker 2 17:17 Not that they were hiding it, but it just wasn't a big topic. But to me what was fascinating or is fascinating is that my grandparents, grandfathers on both sides had these in my mind, classic American type backgrounds, and then my great grandfather on my father's side had a fascinating background without going into all the details. But my great grandfather, a man named James Gordon, he was my grandmother's paternal grandmother's father, immigrated from Ireland at 15 and ended up joining a brother in California, then became a mining engineer. Figured out that it was potentially more profitable to be an engineer rather than actually doing the mining, made a lot of money. I mean he was, became very successful, worked his way back. He was at the driving of the golden spike. He rode with the vigilantes. He ended up in Cincinnati, which is I think where my grandmother was born. Speaker 2 18:18 Then for some reason came back to Washington for reasons I'm not 100% sure. When I say back to Washington, came to Washington and my grandmother again, my father's mother was in one of the early classes at National Cathedral school and I wish I had known my, I mean, imagine the stories that my great grandfather could have told in terms of Ireland. You know, the voyage over, I mean, being in the West in that era, he took his daughter around, his wife died at a very young age, so he took his daughter all around the west. Oh my gosh. I'm going to just jump to other grandparents above your other, your grandfather. Well, one, the other one, I'll just, as my mother's father was born in Blair, Nebraska to a family with eight kids. His father was a itinerant preacher and they moved to deadwood, South Dakota. And I mean again, this is in, you know, a late 18 hundreds I think dead would have been an interesting place to go. Speaker 2 19:17 We all saw the a, what was that, a Netflix show or whatever it was also bill Cody, I think. Yeah, there's a lot of stories on that side too. But, but my, so my grandfather, his father died when the, my grandfather was somewhere in his teenage years. I don't know which area my, so my great grandmother had eight kids. She couldn't take care of them all. So she farmed them out to relatives around the country and four of them were sent to live with a family in Tennessee. And then somehow they ended up in Pittsburgh. And my grandfather and his brother started an advertising company, which became quite successful. They basically ended up supporting some of their relatives. But again, think of the background. If you're born in Blair, Nebraska, I ended up in Deadwood, South Dakota, then you go to Tennessee in the late. Oh. And the other thing is, one of his early jobs was he was a, I don't know how he learned to fly a plane, but he was, uh, he spent World War One in France teaching French pilots how to fly airplanes. Speaker 2 20:17 He said that was his, the job he liked the best. And I did know that grandfather, unfortunately, I never knew my father's father who we'll talk about in a second, but my mother's father, I did know him and he was a character as well. Everybody was. But my father's father, whose is known as Admiral Carey, t Grayson, he grew up in coal pepper county. His mother died when he was very young, I'm going to say year and a half to his stepmother for whatever reason, didn't like him, kicked him out of the house as a young man. So he went and lived as opposed to uh, with his father. Went and lived with another family that he was not related to, not too far away, several miles away, but this was again, post civil war Virginia. Not exactly, uh, you know, thriving time. He became interested in becoming a doctor because his father was a doctor during the civil war and he also became interested in horses because his father would ride rounds to go visit his patients or on a horse with my grandfather on behind. Speaker 2 21:26 It goes on and on. And, I mean, some of this is, you know, get into family lower versus what may be actually written down. But my grandfather, again, quite poor, gets a scholarship, goes to college, gets to go to medical school on what must've been sort of like one of the, uh, I forget what they're called, but it's a GI type situation of where if you spend a certain amount of time in the military to pay back, they pay for your education. And again, this is where a story may not, may or may not be true, but evidently he was on a troop ship and a theater. Roosevelt came down with some sort of stomach problem or something like that. They sent for the nearest doctor. It was my grandfather. He came and looked at him. President Roosevelt said, why don't you come work on the White House staff? Speaker 2 22:08 I don't know all the details of this, but remarkable right place, right time type story. My grandfather ended up working for a number of presidents on the staff. And then, uh, for Woodrow Wilson, he was his personal physician. And as you know from history, Woodrow Wilson suffered a series of strokes, particularly after the Paris 1919 peace conference and to sell the League of nations, he went on a barnstorming tour in a train around the country. Then, you know, you didn't have podcasts and internets and things like that at the time. And I don't think radio was as widely utilized to say the least. Uh, so we went on, but he ended up with a series of strokes which really debilitated him. And then ultimately because he Wilson, and I think he became much more dogmatic with during all these strokes, at least that's what history tells us, he effectively became almost bedridden back in Washington. Speaker 2 23:03 But because my grandfather and Mrs. Wilson were determined to help him see his vision and his vice president at the time was not terribly supportive. And I think the congress wasn't. So they literally would more or less prop him up in different senators or congressmen when they came to visit. They would say, well Mr Coe, you've only got 15 minutes, cause he's having a little bit of a bad day. And he'd say a few words and then the senator would leave. And again, it'd be a little difficult to pull it off in today's environment. My grandfather, w again, I wish I knew him, he died in 1938 he died young, like my father of cancer. And my grandmother talk about him at all. Oh yeah. My grant, my father and his two brothers love to talk about their dad. But my father's, one of his great regrets was that he didn't get to spend enough time with his father. Speaker 2 23:52 My father was 17 when his father died. And I think, and I'm just connecting dots here that probably much of the time that my father was a little boy, his father was at the White House. Right. And when I say the White House, we're doing various other jobs afterwards because he became president of the American Red Cross. He worked for Franklin Roosevelt, you know, he had a, obviously a very distinguished career. Sure. So he must have obviously had an influence on your dad. Oh yeah. Pull on the process of working for the government. And I think so. I, I, you know, I can't make that extrapolation but I, I think that's probably true. But you know, you assume that way. Certainly my grandfather was the one who got the family into the horse business. He was a there, a enthusiastic horseman and there are various, I'm not a big expert. My brother is much more expert as my sister, but there are a number of Grayson equine related health programs that exist mainly that were started by his friends that were named after him. Speaker 2 24:55 I think I have that accurate, but in the horse business through bad horse business, he was a pretty big deal for a while. Small world at times. So talk about your, your career at Yale University, why, why you went to Yale and I'll just add it at St Alban's and then this gets back to some of what my parents imbued me with. They certainly had the attitude that you weren't put on this earth to to relax and just fool around. I never remember a time not being working either at school or athletics. I guess that's not work. But then during the summers I was definitely literally farmed out to different groups, usually farm laborers and stuff like that. One thing that taught me was that's really hard work. Ultimately I never wanted to have to be a farm laborer. Nothing wrong with it, but wow, talk about tough work. Speaker 2 25:43 Working in a hundred degree heat in Virginia Summers is tough stuff. So you worked your farm out in Upperville at the farm, but also it'll add a lot of other places too. I will say that at St Alban's, I think one thing too is my father and mother definitely, I mean we certainly were not poor. We were actually very well off in many ways, but there was not a lot of extra cash and I vividly recall how worried my parents were. I have several very distinct memories that St Albans of seeing them pouring over finances and being worried about this and that. So I had a distinct feeling and I suspect my sister in particular does too, that I had had to get through St Alban's and had to do the best I could even if I didn't particularly like what I was doing. And that carried over when I got into Yale. Speaker 2 26:35 Frankly I had, even though I knew my father gone there, I had not the slightest concept that I would ever get in. I thought that would be hopeless cause frankly I had been a struggling student for many years at st elements and that's probably putting it politely. I mean I worked very hard and I did okay but I work very hard and I should have done much better. And really the turnaround happened in my started to happen in my mid to through a 10th grade year when I met a mutual friend of yours and mine Christian Miles and he'd transferred from the DC public schools and he lived in Cleveland Park at the time and I would frequently stop at his house on the way home and very frequently have a meal there. Christian and his family really turned my life around. I mean I've told him subsequently that his father and his family really saved my life and that might be a slight exaggeration, but I was a struggling student through ninth and 10th grade and I think partially just because I didn't have hard work and just keeping at it, I started doing improve, particularly in English where I'd been a very mediocre student. Speaker 2 27:36 Some of what teachers had been trying to teach me for years started to sink in and I started to do pretty well, but Christian also was very good at math. He is very good at math. By working with him, I started to do very well at math and so my grades shot up. I think probably to the eternal surprise of my parents who watch me struggle with things like that and I'd also struggled with French a lot. This is something I'm going to come back to, but again, I literally got I think two hours, two straight years I got seen minuses, which was literally the lowest passing grade. I think the role and the reason the teachers actually passed me because they saw that I was working hard. I don't think I actually passed. And so I had this image of myself as hopeless and French and then my parents got me a, um, a tutor and that helped enormously. Speaker 2 28:22 And I will say, and I think this is a life lesson I've taken away, there's different ways to success or to doing well in something and there's not just one path. And I think that took me a long time to realize that well into my working career. But when I look back, the fact that I ended up doing very well at Saint Alban's in academics really was due to the fact that I just didn't give up. And also that other people were there to help me, both St Alban's teachers, my parents and also the miles family is all. But anyway, when I got into Yale that was a huge shock and I was um, probably unprepared you in some way. I was prepared well academically, but unprepared mentally in many ways. It was very hard, especially in my first couple of years. I just had no time, no spare time. Speaker 2 29:08 And frankly, Yale my freshman year or a couple of the college, well, particularly my college counselor was not helpful. We don't need to go into vast detail, but it just, it made for an overall fairly miserable academic experience early on. Things really turned around my junior and senior year at Yale and I started doing a lot better. And frankly, I, you know, I've, I greatly value the experience. Your interest in real estate evolve starting that at that point. Or when, when does the real estate book, uh, you know, when I went to St Alban's, I don't think I knew an entrepreneur really. We, I listened to the Gary Rappaport podcast and he said every single person he knew in his neighborhood was an entrepreneur. And I'm sure I'm overlooking somebody, but my image at St Alban's of the other kids' parents, if you are successful, you did three, one of three things. Speaker 2 30:02 You are a doctor, you're a lawyer or you work for the government. And that's DC. That was my sphere of influence. I mean, I knew that entrepreneurs existed because I read about them in history books and you know, whatever. Is Cornelius Vanderbilt or somebody like that, but I would, if someone said, what do you do to be an entrepreneur? I would have said, I've got no clue. You know, the classic Tabula Rasa, the blank sheet of something. When I went to Yale, there's things on that score. It didn't really improve. My senior year, I got to be close friends with a guy named chip Tom who you won't know because he's never been in the real estate business. Grew up in Chicago, Chinese American, second generation, and his father had, again a is actually his grandfather and grandparents had come over from China and his father had built a family business basically around Chinese food, both a restaurant and then in terms of import, export and so on. Speaker 2 30:55 And his father was a huge influence on me. Just a wonderful man, unfortunately died at 49 but like Christian's father, who was a huge influence on me, and I'm jumping around a little bit, but Christian's father, I remember telling a friend of his, who was a dean of a small college, he said, you know, words to the effect of Christian and capital aren't going to go to some small school. They're going to get into a Yale, Harvard, Princeton, because they're that type of quality. When he said that, and I overheard this, I was floored. The idea that somebody thought I was going to get into one of those schools was like you saying, let's go to the moon this afternoon. I mean, it was just incomprehensible. So the fact that somebody believed in me was hugely important. And I think one thing that I've tried to impart to younger people who come to me for advice is that things really are possible if you really want to do it. Speaker 2 31:50 And that, again, everybody says that, and I think my mother said it when I was young, but I frankly just didn't believe it. I said, you know, I just felt like, Hey, no one, you know, I've just felt like I was struggling. I was always destined to eternally struggle and nothing would ever work out really well. So when I've actually got a light that wow, someone thought I could do more than that, it was huge, huge thing. But anyway, back to my friend chip. I've had the blessing of making some really good male friends over the years and that's, you know, they say that guys in particular are very poor at making good male friends for whatever reason. I've been very, I've been blessed in lots of ways, but that was a way I've really been blessed. So besides Christian, my friend chip Tom, certainly others as well, but chip chip's father said, you know, you could, there's a, you could a career in business, you could do this type of thing. Speaker 2 32:42 And chips father had been very successful. Again come from certainly low, low middle-class and made himself into a real powerhouse in Chicago. I really took that bit and ran with it as they say on the horse business. And, but initially when I got out of Yale and we're skipping over one thing, cause I did live in Denmark for a year, but when I got out of Yale I got a job with Russell train who again had been head of EPA. I really didn't know what I wanted to do and a strong interest in environmental science. My Major was history, but my minor, if you could call it that at Yale, was environmental science. I'd taken a lot of courses at the forestry school. I'd gotten a waiver to do that. So I thought I'm want to be an environmental science. And I worked for rest train for a year, who's now deceased? Speaker 2 33:24 Wonderful Guy, fantastic thing, great intern experience. But after a year of that, I was like, you know the reason I like the environment is getting out and doing things outdoors, not writing policy speeches and that type of stuff. So I was really casting about, I was, I thought, well I want to get into business, which is again sort of like saying you and I saying now let's learn Sanskrit. And I had no concept of what it took to get into visits other than my friend chips. His father had started a Chinese food business. I was fairly sure I was not going to get into the Chinese food business, but I thought, I have no clue. Well, my roommate at the time was a guy named that, you know, Bill James and, and bill said, hey, you should come, you should go talk to these people at Coldwell banker. Speaker 2 34:09 Uh, it builds background a little bit for people. Well, he worked at Ko, I mean he worked at Coldwell banker too. He'd come from the Boston area and any up. Anyway, through, he and I ended up rooming together with several other people, some of whom ended up in the real estate business. But bill at the time was the only one. We lived in Alexandria together. A girl we knew had introduced me to him. I needed a place to stay. He said, Oh, you can move into our place. So I moved in and at the end of my internship with Russ train, he said, well, you ought to interview with Coldwell Coldwell banker again. I would've said, I mean with say I knew how to spell real estate was about the level of my knowledge. Wasn't CB just gotten into the city, just come in. I mean it maybe for two years type stuff. Speaker 2 34:52 A man named Jim O'Brien who had been the head of the Los Angeles office came here to open up the office. I certainly was not the first person hired. They hired a number of people who were successful. IBM and Xerox Salespeople, Bill Camp Dentist, Turner Halabaloo, Jeff Green, Bill Curtis, I'm sure I'm over. John mceverly, Steve Spencer, Ray Richie. Although ray rich, you burn and John joined later. I mean not way later, but you know after me I think after me, I'm sure someone will correct me, but, and if I have this story with Bill James Correctly and he, if he ever listens to that, he can correct me. But he went to an interview with Merrill Lynch. The interview ended earlier than he expected. He walked across the hall. There was a sign saying Coldwell, I think he thought it was a bank. He thought, well, I'm available. And so he walks in interviews and making a long story short, they ended up hiring him. Speaker 2 35:46 And again, my memory sometimes faulty, but I think bill was the first guy who was not a guy or a woman who wasn't a salesman, dryer, had no sales experience that they hired. And I think when I came along the fact that bill recommended and then I, they had an eight hour personality and sort of a combination personality, sat tests that you had to take. And I scored well on the sat part. And I think frankly it was because I had just gotten out of college or had been a year out of college as opposed to these other guys who've been selling for 10 years and probably couldn't remember what they'd done. But anyway, gave me an interview with at the Coldwell banker and I literally, I saw the notes from the sales manager years later and he wrote, this is the first time I've ever had somebody asking me what I do in business. Speaker 2 36:35 And because I didn't know what they did. I mean, I knew bill had said, well they listened sell real estate. And, but again, that didn't mean anything to me. It was literally like speaking French or something. I had no clue what was going on. But anyway, they, for some reason I guess because I tested well or something, they test or one of they took pity on me or something or they trusted bill. They gave me a job and I worked as a, as a broker or salesman at the beginning, but what we called a runner, which was in the effectively an apprentice under a guy named Jeff Green who had been a very successful xerox salesman and who had been, was then successful at Coldwell banker. Also a guy named Jamie Cobbler as well. But which product type did you work? Well they, Jamie and Jeff worked in apartments. Speaker 2 37:21 And so that's what I did to start with if you will. You know, I worked for Jeff, this is again faulty memory, I'm going to say maybe a year. And then I was put out on my own and you know, again, struggling along apartment broker apartment broker and I uh, you know, did reasonably well. My sales manager at the time was, well, initially it was very Lamberson. He was very, very, he really was the key to my success I think in terms of apartment sales. Jeff Green also, but Barry really took an interest in me and helped me. He's a great guy. But anyway, Ken McVie, after Barry, Ken McVerry became the sales manager and Tim O'Brien was still the resident manager and Ken or Jim said to me one day, you know, we're going to be opening an office and Tysons, we think you should go. You should be an applicant to be the sales manager. Speaker 2 38:08 But again, this is sort of one of these things. If somebody said, let's fly a rocket ship to the moon tomorrow. I had never even thought of going into management. I mean, it was literally incomprehensible to me. They said, but it's not going to happen for a number of months, blah, blah, blah. Just think about it. And I was like, well, okay, fine. Well, I was, I had met the woman who had become my wife at CB. She was working as a data researcher while she was getting her master's in business administration. And she said, well, you know, I think this management thing might be something you want to look into. And Her dad said something to me along the line of, yeah, you really ought to look into this management thing. And again, I think without the two of them telling me I should look into management, I don't know, I probably never would've done it. Speaker 2 38:51 Being a broker, I mean, was the instability of not having a steady paycheck, a concern for you or I mean, did you just have, were you fearless about it certainly wasn't fearless. I think the instability did play on my mind because you know, there were definitely some ups and downs, but overall I was making, at the time in this, a long time ago, I was making quite a bit of money and it meant a big, big pay cut to go into management, but it wasn't a regular paycheck. But what was very fortunate as I was so young a, I hadn't even gotten married, so I had no dependence, you know, I could afford that type of thing. And my wife was working too, so we scraped by, if you will. It turned out to be really a wonderful experience. And when the Tyson's office opened in this again memory, September of 82 I think Ken Macquarie was the manager. Speaker 2 39:48 I was the sales manager. Now I knew very well. I knew nothing about leasing office buildings, industrial buildings. I knew very, very little about leasing. Probably not much more than than just the average guy on the street. And I knew something about selling apartment buildings, but no one else in that office sold apartment at the time. So I w I saw, you know, I really felt like I was going to be complete fraud. And let's see, this is 1982 so I was 28 years old and I literally was <inaudible> were in the office when it opened. 1980 shoot, I don't remember. I'm going to say 20 and we probably hired another 10 but you know, 15 or 20 and a lot of them, I mean people like John mceverly, Steve Spencer, how we Jensen, you know, these were bill camp, Dennis Turner. It's amazing. They were some duds. Speaker 2 40:36 It's amazing to me. In 1982 you opened the office and I joined CB in 1983 in Oprah ally. And that's how we met. And at that time, our office in Oakbrook, Illinois, and your office in Tyson's corner where the top two offices in the country outside of Los Angeles, which was the home of Coel hurts. I'll add to something else there too, was. So anyway, I go to be a sales manager and I'm thinking to myself, these guys are expecting me to tell them how to sell and I don't know anything about their business, or at least very little. So I really had a sense of panic and I thought this is going to be a disaster. And I thought, well, how's this? How can I possibly make this work at all? And I thought, well no one's going to, I mean they're not gonna expect me to be some expert, but my attitude I was, there's two things I'm going to do. Speaker 2 41:27 I'm going to try to help anybody. I can not going to come across as an expert cause I certainly not. But if they want help, I'll give it. The second thing is I'm going to bust my butt and I said, you know, I'm going to be, if not the last person to leave every evening, pretty darn close. Now I'm not saying that's a great approach, I think because family tends to suffer in that type of situation if you'd do it too much. But I can honestly say I work extremely hard as being a sales manager. What was your impression of the role that you played as a salesman for you? Like a coach to the brokers or clearly I wasn't, I wasn't going to tell them how I met Kevin. McCleary was the head guy. There was no doubt about it. And uh, and Ken was very good. Speaker 2 42:09 You learn a lot from, I did learn a lot from Ken. I learned a ton. He was really, he was excellent in a lots of ways. But also I've, you know, along the way I sort of figured out some stuff too. I mean, here's an example I was supposed to, we were supposed to have a training class either once a week or once every two weeks for the newer brokers. Well, again, the idea that I was going to train people and something I knew very little about was obviously foolhardy. So I would go ask people again, the McKevitt least dispensers, the bill camps, okay, who here knows something about space planning? And they would go, well, you know, Davidson Carter, you know, Laina Scott that they are the experts. So I thought, okay, I'd call them up, hey, would you be willing to come in and teach a training class? Speaker 2 42:52 Well, I'm guessing they would say, hey, this is an opportunity to spread our word. We'll come in, explain it. And then I'd get some of the brokers, I mean, I'd go to, I mean I went to cspencer one time and said, Steve, look at leasing office space, what do you do? And he said, well look, you know, and I said, look, would you come in and tell people what you do and why you're successful? And most people, including myself, are willing to talk about themselves. And uh, Steve Spencer came in and he would go through and I'd go, I'd be taking notes right and left. I mean, I was taking notes right. And left some of the stuff he said, I thought, well, I never thought of that. I mean, he would say, use the, you don't have to do it these days, but you know, you'd use a, a slide rule and stuff to measure what the, you know, thus how should be in a window and all that. Speaker 2 43:34 I was like, wow, that's a really good idea. Well, the, in general, the feedback I think to Ken and to other senior people was very positive that I was doing a good job as a sales managers. After roughly a year and a half of that, Ken's boss, I think I have this right boy then ness, I think I have this right. He said, we think we need to have a, a managing director for investment sales for the east coast. And I said, well, that would be great. I mean, you know, it was a big step up and all this type of stuff. But I said, you know, I really know about apartments. And he said, nope, we're going to hire another guy to do that. And I thought, oh my gosh, here we go again. I knew something about selling apartment, but, but again, I'd never sold it. I'd worked on selling a shopping center, you know, but I didn't pretend to really know it. Speaker 2 44:24 And again, the idea that I was going to be teaching people, I was like, Huh, this is crazy. Anyway, they said, well, do you want job? This is that. So I said, okay. So I was then covering, like I started out just covering the northeast and then they included the southeast in my assignment. But I remember vividly that, that I said, well, let's look at the statistics. Let's see how many this, the northeast is sold of investment properties. It turned out the year before they'd sold to. That's was not an impressive track record. So again, I just took the attitude, I'm going to help people, and I've worked with people like Jeff Dunn who's very successful and so on. And again, we'll have you take the attitude, I'm just here to help you. If you don't like my help, that's fine. But if you'd like me to do something, so I'd go call on different owners, I'd go call on different buyers. Speaker 2 45:12 I tried to have meetings, I put together an investment newsletter and I'd send it out to all our brokers and so on. And the first year we went from two sales to 19 which was obviously a big increase. But again, not very many, but still, it was a big increase over the time. And it kept on growing. And after about, and I loved that job. I mean, I'm not, I hated the travel because I was just traveling like a maniac. But I loved the job because you literally, you didn't have any bureaucracy. You literally came in and said, John Coke because you were an investment salesman to, it's right John, how things go on, where do you need help? What's going on? And John would say something like, you know, hey Mr big, I'd been pursuing him for three years. And I'd say something like, well, let's call him up in bed. Speaker 2 45:56 And I'll say, I'm the guy from DC or wherever. Anyway, it worked great. And then I, uh, I'm skipping over a lot of, a lot of details. I find out from Ken that he's leaving to go to Charles E. Smith. And I thought, my wife, she said, you know, it really would be great if you weren't traveling constantly. We just had a baby. And I thought, well that's probably a good point. Blah, blah, blah, blah, blah. And I thought, wow, 85 yeah, this is 1986 86 and I took her, at least I started the job in 1986. And again, here I am, the resident manager of this group of people who I didn't know pretty well. The one huge advantage was the fact that my wife, having worked in the CV office knew everybody. Everybody. So instead of being some new guy from des Moines, Iowa or wherever, first of all, they knew me, which probably was a mixed blessing. Speaker 2 46:48 They liked my wife. So that was an overwhelmingly positive blessing and the general social atmosphere was positive from the get go. And the other thing is that, you know, that whole rest in Dulles, Tyson's Dallas corridor was just starting to really take off. And the people I mentioned, John, Steve, build dentists, et Cetera, et Cetera, how we knew people like Bob Shoe, you know, just we're taking off. And I mean I think I did a real good job, but it wasn't because I knew more than anybody else. I clearly did. And I would have probably been the last of the group who did. But one thing is I, and again, a lot of this I learned from, I really learned all of this from other people. I didn't sit in the office. I literally went and called on the owners or the other or the people are the clients that we were dealing with all the time and if they had a beef, so they got to know me pretty well and the office did tremendously well. Speaker 2 47:39 Again, I think really it was more of a factor. I didn't screw things up. I was helpful, supportive at a right attitude. I certainly wasn't the smartest. I certainly didn't know more than even any of the brokers in the office, but because the market was strong and we had a lot of good people, the office did tremendously well and Ken McVerry really helped Jim O'Brien first, then Ken McVerry, certainly Barry Lamberson along the way. But Ken and Jim Really helped build that northern Virginia leasing land sale, ultimately building sale tenants sale that business up. And I benefited enormously in the two years. Two and a half years I was the resident manager. It was the number one office in the country the whole time by profitability. And again, due to the group we had and we had a great time. I mean the business was rolling and we had some great social times too. Speaker 2 48:35 We had wonderful parties. At least I thought they were wonderful. Hopefully everyone else did. And it tended to be sort of a big family. And John, you've asked me why I stayed at CB so long. Really most of the time, every few years I was getting promoted and I would, they would generally be promoting me or offering me a promotion before I even thought I was ready for it. So in most cases I was like, well yeah, if you think I can do it, I won't get into all the names. But what happened in 1988 is I'm looking at the parent company now. They were acquired, they had been acquired by Sears Roebuck, I don't remember. Why do you need one? Yeah, that's fair. But in 19 let's say 87 Sears, his pension plan agreed to give, my recollection is $300 million of seed money to buy properties through what was known as Coldwell banker investment management. Speaker 2 49:37 And I, again, I might have some details wrong, but that I'm sure is fundamentally correct. And so the head of that group, they had finally decided that they were allowed to legally really invest pension fund money. There was a period where they thought they weren't because of the relationship with the brokerage company, so it had been effectively dormant. I mean, they had operate, they'd owned and operated properties, but they hadn't bought any for years and anyway, with the Sears $300 million, they needed a head of acquisitions. They talked to a bunch of people. For whatever reason, it didn't work out. My, I'm expect I, I'm guessing that they were, some of those people who are big names in the industry turned it down because they weren't willing to pay enough money. They ended up with me. They approached me and they said, well, we really think you ought to do this. Speaker 2 50:25 And I said, well, you know, how much would you pay me to do? I said, X. I said, went back, talk to my wife, and I said, yeah, that's crazy. <inaudible> Angeles. Well the story they PR they, I said no twice and they kept coming back to me and each time they upped the ante somewhat. Not that it was a huge sum, but it was certainly a lot more than I was making. So Lo and behold, in July of 1988 I moved to Los Angeles, my wife and then newborn son. Did you have to have no, not as that. No. The only, only Paul whom you know, and he was a two at the time. And so I move out to Los Angeles in July. We didn't sell our house till October, so they moved out October 2nd so there are three months where I was in effect. Well, living in Los Angeles, commuting back to DC, it was a little chaotic and we went out and started buying properties and with that money, that's our cobra second 1988 Halloween, as you know, is roughly October 31st 29 days after my family's moved out. Speaker 2 51:32 It's whatever that is. Four months after I'd started, Sears announces they're selling Coldwell banker, Allstate, you know the whole Sears financial network. Well here, I've just moved, I've moved my wife and young son solar house in Arlington and my first thought was I'm going to get fired. And because I thought, and over the next, you know, they didn't, the sale didn't occur overnight. It took whatever, I don't know, six months or something like that. But in the meantime, I'm really thinking and I'd paid a huge price for a house in Los Angeles as you know, real estate markets, stuff like that. So I was really nervous to put it in my element. I mean, because I had a huge mortgage and I thought I wasn't gonna have a job and I knew I didn't have a job back in Virginia because they had hired a new manager and also the market was starting to tank. Speaker 2 52:26 You may recall 1989 yes. Some of us with thinning hair recall those times vividly is, I mean again, make a long story short, I was part of the group at CB at a Coldwell banker that put together an offer. This was certainly run by our CEO, a gentleman named Jim Didion, but he included me in the mix, which was very nice and that gave me a little bit of an education in terms of hell. Wall Street looks at feels like this, and our bid did not succeed. The company's bid, we were outbid by, among others, a group called Carlyle, which you know well standing yellow, Fred Malik in particular at the time, Bill Conway and David Rubenstein were involved, but Fred and Dan were the two key guys at the time and they acquired it and they, I think they would say they paid too much money. It was an extremely interesting experience and I was extremely nervous because I thought we're, you know, we're going to get terminated here. Speaker 2 53:27 I mean, there were rumors in the marketplace that we were going to go bankrupt as a firm and blah, blah, blah, blah, blah. So it was quite challenging. I'm trying not to go into too much detail. I was very lucky also to make a very good friend, Scott Tracy out there. Not a guy, easily la guy, but not from here. One day, Scott and Matt, again, I'm skipping over some details, but one day Scott and I are summoned to go meet with our boss who was the head of the investment management group and Jim Didion. Well as you may know from Jim, Jim was not a person you would take a meeting with lightly and we thought, oh bleep, this is, you know, we're going to get fired here. So we were going in to meet him and the our boss, a guy named Ted Jones, great guy, wonderful guy. Speaker 2 54:10 I worked for him twice, said you know, that he really wanted to do this other area and Jim wanted to talk to us about running the group while I was like, you know, I mean again, there's a lot of details here, but we were again going in and expecting to be fired and now we're being offered a promotion is a different you go. But of course we were going, oh my goodness, cause the market's tanking. And I mean we weren't, we weren't thinking, oh boy, this is the land of milk and honey. Now, and again, I'm skip over a few details, but Scott and I basically said, well, what the hell are we going to do? You know, we're losing money. Our parent company, Sears is selling us in the process of selling us and we're not going to get any more money from them. Speaker 2 54:54 I mean, you know, we're out of luck. I could use stronger terms. But you know, we were literally, we're sitting in a room together going, what the hell are we going to do? And effectively what we did is we said, well, we've got to go back to all of our investors. Many of the investors did not like that group at all because they hadn't, they'd sat on properties for years because they didn't want to sell. Cause that would mean that all the people were out of jobs. And in any case, we, um, went back to all the investors and effectively said, look, we're new here. We know you're mad at us. We're going to go ahead and thoughtfully sell assets, which is sort of almost an oxymoron. And most of the investors were like, yeah, that sounds great, but we don't believe you in effect, you know, in a polite way. Speaker 2 55:44 And then the other thing that was really challenging at the time as we were told, you're going to have to cut your costs quite a bit. Well that means cutting people and that's, I've done that unfortunately more than a few times. That was brutal. I mean the number of the people that we terminated were good people. They were just in the wrong, wrong place of their own time. How did you handle that? The camp? I mean not just there but also as, as a, you know, I don't know that I have any great approach. I really tried to empathize with people. I probably took it too personally cause I could, as you can guess from my comments, I could've seen myself in those shoes any number of times. As a salesman, as a broker, as a manager, as a fun CB Fund Guy, I could empathize because I could see myself and you know when people need to see this will start to break down and they talk about losing their house and you know, divorces and all sorts of things. Speaker 2 56:41 It's brutal. It's really brutal. But I will say, I think we treated under the circumstances in that situation. We treated people as bout as well as we could. You know, others may dif disagree, but we tried to have Scott and I negotiated with our boss, our CEO, the company CEO About, you know, enough period of time where we'd be paying people their normal salary and that type of thing and try to help them get new jobs. But it was a really bad time in the industry, really bad, you know, 1990 that was terrible. It was horrible. But anyway, the Scott and I, I mean you can tell it's an emotion. It was, it's still emotional for me. But anyway, when we went back to those investors and said we were going to sell properties, we literally started to do it. And when we met with investors and said, you know, Mr and Mrs Pension Plan, we've sold the ABC property, we sold the CDE property, we sold the FTG property or whatever, and we're also got, we're doing something with this one and we're holding onto this one. Speaker 2 57:38 For that reason, they were like, oh my gosh, these guys are actually doing what they said. And Scott and I and another guy named Vance Maddox, who's very still close to, he's very involved. He's very high up now at a CVRE global investors. The president from basically went to three investors said, we have this idea that according to Torta Wheaton, whom you'll roll calls. Well, research group. Yeah, exactly. Bill Wheaton, Ray Toro, very capable. We worked very closely with them. Total Wheaton basically said, and I'm showing the hairs that hey, if there's no new office buildings built for the next whatever, five years, even though people like David Schulman were saying, you know, we have a 50 year supply. I'm exaggerating, but you know, and because it wasn't, you know, there was no take-up at the time. But Ray and bill said, just because of obsolescence, there's going to be demand, and I'm over simplifying of course, but the two of them, we took them basically Ray Torito on the road with us, met with any number of investors. Speaker 2 58:42 We got three of them to say, okay, we'll give you some money on a nondiscretionary basis. I might've had it. Of course, the first deal we did, at least this is from memory, was a deal in Detroit. Michigan of all places did very well. And long story short, we were off enrolling. Now we'd gone way close to going under. And so I'm not saying it was all milk and honey, but we were on a roll. So you were living in Los Angeles at the time? Yep. And you displaced from your lifetime home of Washington DC. You're traveling all the time. Yeah. Your wife is home with one, maybe two at that point. The second second child was born in Los Angeles. Your personal life had been pretty challenging at that moment. It was. And also because what was my poor wife, Susan, when we moved out there, you know, we joined a newcomer's club like you'd do in anything. Speaker 2 59:40 Almost everybody we met in the newcomers club lost their job because the recession was hitting right. So we had to make all new friends early and that was challenging. Plus when she was pregnant with our second child, she was confined to bed rest. So here she is, new place 3000 miles away from where her adopted home. She's on bedrest. There's no cable TV. I mean, that sounds like a minor point. No cable TV means you're literally watching, you know, NBC, CBS, and Fox or whatever it was in a house that's under a renovation and she has no friends. And it was your old boy. Yeah. Who a high energy, two year old boy. That was really tough. I really feel for her eye. And she grew to hate Los Angeles, which, and of course then you added, we had a few events in la, mudslides, fires. Speaker 2 00:34 Rodney King. Oh my goodness. And I mean, again, I'm laughing now. It wasn't funny at the time. You know, the Rodney king riots, they weren't confined to one little area. It was all over the place. I don't mean that I was personally threatened or something. That was not the case, but the towns not too far away from us. We're definitely feeling the impact. There were police everywhere. I was like the two rides just follow me around, but I mean, I shouldn't joke. I mean it was obviously very serious stuff, you know, and I won't get into all the details of that, but it was a really challenging time to live in Los Angeles. Ultimately, I wanted my sons to grow up in DC, la Kenyatta, which is a suburb of Los Angeles near Pasadena. Wonderful place to raise a family, wonderful place. But I always felt like I was away from home and of course Susan was very keen on moving back by timing. Speaker 2 01:27 Probably wasn't really great. But in 19 the beginning of 1995 we moved back to DC and again, I really didn't plan this out a whole lot. I wasn't sure what I wanted to do. I wasn't sure. Anyway, the company approached me and said, we know you want to move. You know, that's fine. We don't want to lose you. This was again Jim Didion, my CEO boss, which whom I greatly respect and then he had a guy who worked for him named Dick clodfelter. They were both very decent guys to me and they said, we in essence are going to create this job back in DC as where you'll be sort of a regional manager in the brokerage company again. So I thought, well, you know, that sounds pretty good. I know a lot of people back there and I have a lot of friends. Unfortunately what happened while I was in Los Angeles is a number of the brokers I knew left. Speaker 2 02:19 That was very unfortunate. But anyway, I did that regional job for awhile, couple of years I worked for, I worked with Bruce Basheer, I worked for Chris Ludemann. He was sort of our senior partner, you know, I had a great time with those guys. I view them as good personal friends for just the bubbling and go back to your time in Los Angeles and your relationship with your Videon and some of the senior management there. I mean at some time, Cabot, if you had not had this desire to move back to Washington, you think it's possible that you could have been on the, on the, on the train because of your success? Yeah. At the CB fund you could have been potentially Jim Didion successor at CV. Is that possibility? Possibility? Sure. Likelihood, probably not. Was it politics? I would've been, you know, I, there was a very good chance I would've had a, a senior position. Speaker 2 03:14 I W I was offered the job of running the CB mortgage banking group, which I, I mean again, I probably wouldn't have done, I probably would've had a challenge there too cause I'd never been a mortgage broker. But I think you know, I, yes. My, for the foreseeable future, my way was paved, if you will. From a career standpoint, it was certainly foolish to do what I did. And honestly, I was shocked at how much CBRA had slipped in this area. You know, I knew people had left, but it was a cold shock of reality. Interesting to come back and not be a top dog if the kingpins. Yeah. But anyway, hard. You have a perspective on what happened. I don't really, I mean I, I have, you know, right. I know something about it cause I obviously had a lot of friends among them who left. Speaker 2 04:06 I was doing something entirely different and the marketplace was tanking so, you know, maybe I would've done the same thing if I were in their shoes. So I don't really, it's hard for me to say one way or another. Working with Chris and Bruce was great. Oh, Dick Mannequin that Steve Gasaway Dick Mannequins is here in Washington. Yeah. Rick Davidson. Great people that were all of them. Nice people. So what did you do when you came back exactly? Well they had this sort of, there was, I was the, for the Baltimore Washington region. I was in charge of institutional properties, which included sales, mortgage finance, that mortgage brokerage, that type of stuff. If you will. And uh, you know, it gave me a, a good opportunity to get back into the marketplace after and I'm now on my memory fades. But I'm going to say it'd be two or three years of doing that. Speaker 2 04:55 I was offered the job again of running investment sales in the east, which of course I had done before. It was a totally different job because the market had totally changed and there was completely different, if you will. But I took over that job and enjoyed that. Worked for a guy named Greg Var Waller. And one of my colleagues was a fellow named Mike McMenamy and I told my, at the time, this was after he had been there for several years, I followed Jim Reed in the position that Jim had had back here. And Jim took over Europe or mea for the brokerage company or <inaudible> 96 97. Speaker 2 05:39 Yeah, probably into the 90s. I don't remember the CV r e a public company at this point. When did that, that's a good question. Because we were a public company, became a private company, became a public company. Right. You know, we went back and forth a couple times, but the Carlyle Group did take the company public and a lot. And that actually, I want to say I think it was a pretty successful effort. I mean the Carlisle Carlisle group I think made pretty good money and I think in a number of us who invested in the CB stock did well too. But anyway, I digress. And the A, when I was, so I was running investment properties for the east. Mike McMenamy started a group called the institutional group where you took all the brokers, assertive senior investment brokers and they made them sort of a superstar institutional group. Speaker 2 06:35 And then Mike did that for, I'm going to say two and a half years. And then he left to go be head of capital raising at CVRE global investors. And I remember I had talked to him once because I think very highly of Mike and after whatever, let's say two and a half years, I mean doing that, he approached me at a prio conference in Boston and said, do you want to come back to investors? And I said, well, Mike, you know, I'm not moving back to la. And he said, no, no, no, you can live anywhere you want. I was like, hmm, this would be interesting to talk about a weird career path. And so I said, yeah. And that was in 2007 and that's a, so I've now, I mean it was September, 2007 so we're getting on towards almost two years or until 12 years in that position. Speaker 2 07:29 Well, I mean it's obviously changed and morphed and stuff like that, but effectively the same thing. And one thing that appealed to me a lot about that is as opposed to being a manager, I would be a producer. Now this is in my mind, I mean I've still paid a salary and stuff like that and still get a bonus, but as opposed to supervise when I had run the institutional group and been in charge for the whole country, you know, and it did not go, I supervise everybody on a daily basis. But you know, you have a couple hundred people ultimately reporting to you here. Really it was just you and what you're doing. And Mike deserves a lot of credit for having the vision to see cause he really took over something that had not existed before. It had been the capital raising had been sort of on a, you know, the, the portfolio manager going out and looking for and Mike made it more of an organized, truly institutional approach. And I don't know what we raised the first couple of years, but it was a lot less than what we raised now. But last year I think we raised 13.3 billion and I think we'll exceed that this year. That's globally, not just me, but the whole team Speaker 3 08:30 that business interests me and that here we are CVRE now the largest commercial brokerage firm in the world. And so if I'm a pension fund and you deal with it everyday, they're saying, wait a minute, why should we give money to a brokerage firm? What makes you so special? As opposed to somebody who focuses on pension advisory work that's has an investment background and that's their, yeah, their thrust. Speaker 2 08:54 Let's, we used to get that question a lot but we don't much anymore because I think we've proven that Seabury global investors is may be publicly owned like CVRE the parent company, but CVRE global investors is completely independently operated and people like me or my colleagues, counterparts, superiors et Cetera are all compensated on how we do global investors does. If the CB stocks its public eyes, you know it goes up by a factor of three, that's not going to benefit us if it goes down shouldn't impact us. What the relationship does give us is access to information and resources that I believe is unparalleled anywhere. Obviously some of our competitors, I'm sure we'll disagree, but to be able to access the resources cause we are the generally the largest client or close to the largest client every single year. So we get great treatment from the parent company to say the least. And the information that we get is phenomenal and it's not just what our vacancies statistics and take up in that type of thing. But you know, the top of the ground knows absolutely tremendous information and it really helps in a lot of deals that we buy our off-market candidly. Now our competitors will say, well, we can access the same people. And that's true, but it's different when you're part of the same company. Speaker 3 10:15 So you know, the brokers is, I was a broker at CB and I was to fund the fund existed even when I was approached. Sure. You know, the questions, you take the deal to the fund if you had a deal, a listing, and why would you do that as opposed to, I mean, wouldn't the other investors that you take that, wait a minute, you're not going to, you're going to let them, your own company outbid me or Speaker 2 10:37 I mean, were there issues with that with the brokers or not? I think in the past there were early on that that perception. But what's happened, again, this is entirely my opinion. What's happened in the past 10 years is that brokers, whether are JLLs, you know Cushman Wakefield, it's Eastdil, whatever they recognize we're a big buyer and a big seller and a big financer. So we sell through all of those companies as well. And in general, if somebody brings us a bill, Collins brings us a deal. Unless some really unusual circumstance, we're usually going to sell that property through them too. And in many cases we're going to be more active. We cause we're big, we have a lot of resource, we have a lot of capital. We can do deals that other people can't or won't do. So does it become a policy that not only do you want to treat the CB brokers equally, but maybe you might give other people? Speaker 2 11:36 Yes, we do get benefit of the doubt. We don't give other perception in the marketplace to some extent. Yeah. It's not just perception in the marketplace. I think really it's more of, because in the investment sales business, particularly as you know, well you and I having both come from that side. If you sell to a buyer and that buyer won't consider you on the sale when you flip it and you're definitely, that's not going to be the first buyer you go to. I mean that's just a fact in the, in the business. But the other thing is, I think what happens also for us among the CVRE brokers is they know we'll protect them and there are other, some of our competitors will protect them too. So I'm not saying we're the only ones, right. But so we see a lot of off market deals because of that. Speaker 2 12:19 If it's John Coe and he's leasing that building over there and he thinks, you know, I know the owners, they're going to sell this property. Right. They haven't told me. So we don't have a listing. A lot of times that broker will pick up the phone and say, but maybe not to me because I'm a capital racer now, but he'll call Vance Maddix for Bob Perry or you know anybody and say, Hey, I think this is going to happen next time you're coming DC, let me walk you through the whole thing. You know, I mean that's, that's the way our business is done in general, not just with CB my sales that way. Exactly. So when you know you're protected as a broker, right? You'll treat those clients a little differently than you will if it's just somebody else. Now, if it's an auction, we see the same deals everyone else does. Speaker 2 13:03 Yeah. Now, where I think we do have an advantage many times is that we can get more information about the market and the property than is commonly known because we've got people on the ground all the time, and the property managers and the leasing agents, they know that we're likely to hire them. So they're going to give us usually very good information. So let's step back and look at the industry for a minute, both the brokerage industry and then also the fundraising business. Yes. You've been in both. Talk a little bit about how the changes have occurred over the last four, the years and that those now, well, you know, in those 41 years that I've been employed by this firm, which really is probably about eight firms because we've merged, acquired, gone, private, gone, public, private. But I agree same firm ultimately. First of all, I haven't been in the brokerage business for 12 years, so I'm out of the picture. Speaker 2 13:57 I mean I see it but I'm not on top of it. But clearly the number one thing that is just very, very apparent is technology wise is just a completely different world. And when my, I tell sons this, they look at me like I'm from the Cro-magnon. Yeah. For their purposes probably pretty sure. But I'm visibly remember being the resident manager and Tyson's the resident managers. I'm not talking about when I started and the admin manager coming to me and just saying, you know, I really think we should get one of these fax machines and I'm going fax machines we needed. Speaker 2 14:34 And now you know, and I'll let you remember. Mobile phones. I do remember mobile phones. John, my first mobile phone probably was about like this and I had to pick a sticker next to him. When he says the size of a notebook here, wait about two and a half pounds anyway. Oh yeah. Vividly recall. Well, partially because I was always traveling. Right. I mean in all these jobs I was traveling and having to use a pay phone. I'll tell you one thing, having these things is really handy. I mean I could go on and on, but being able to sit like this, like we are in the room and we can be doing all our emails without having had the computer in front of us is huge. Well, email didn't exist when we started out. I vividly recall Ray Tornado telling me when I was in Los Angeles, Hey, if you guys had your email up and running, we could be commuted communicating via email. And I thought, Huh, wow, that's pretty cool. We could do that. Oh, I mean that was again probably 1990 92 so like them, Speaker 3 15:33 the other business that's obvious exploded as you suggested. Computers. Data. Yeah. And back when we started at CB, the data was, excuse me, I was dialing per dollar space that you called office owners to find out when their leases were, you know, they tell you or you find out, yeah. Get when the leases were matured. And then the guy by the name of Andy Florence for a thesis at Princeton about how to do, take the computer industry and apply it to management, managing state sales, Costar, it'd be a good guy for you to interview maybe. So. Speaker 2 16:09 Yeah. But yeah, no, that's right. And you know, because and way back when, like when my wife was in the research department, you know, they went out and surveyed individual buildings and that was one of CBS competitive advantages. No one else, I shouldn't say no one else, but relatively few other firms had access to all that information where you could just pull up how many square feet are in downtown DC and how many tenants, you know, all that type of stuff that we view as just basic Speaker 3 16:35 today. So that's the evolution of brokerage industries. Basic communications of data. Speaker 2 16:40 Yeah. And Technology in general. I mean, because that's just a different world. I mean, we were almost closer to the civil war then we were to today. I mean that's embarrassing. But if you think about it, this is a complete tangent, but I remember reading that between 18 like when Lewis and Clark did their expedition in 1802 and the civil war is you had to, somebody had to get on a horse and ride to go tell somebody what, what had happened. And during the civil war you had, you know, actual to telegraph telegraphs. So w so somebody 10 miles away would know what was going on. But, and if you think about it, think of the difference that made anyway. Speaker 3 17:25 Well, in 10 years you can think about something and somebody known to know what you're thinking about. I know that's a little scary. It is a little scary. Also, the flying cars and stuff like that. Yeah. You and I are going to date ourselves who are very bad, but if we haven't already. So talk about the fundraising business. Now. You've talked about brokerage and, well, you know, I did a lot of it. I wasn't able Speaker 2 17:46 technically a fundraiser, but when from 88 to 95 when I was with what was, this is the precursor of CVRE global investors, which was basically cap known as CBR CB capital management. I did quite a bit of fundraising, but I wasn't purely a fundraiser. I mean I and Scott Tracy were the two guys running the group and again, it was a much, much smaller firm and a much different environment and a lot to really get established. We weren't raising funds, but Scott, me and Vance Maddix in particular were going out to investors, trying to persuade them to consider deals if they met certain criteria Speaker 3 18:25 because we couldn't, we didn't have a track. I mean the firm didn't have a track record. You didn't have a of a bucket of capital? No. So you were just funded for Sears. But after Sears sold us, that was gone so early on. Eastman of deals, obviously almost. It was like being a middleman. Speaker 2 18:43 The only differences, I mean we were going to be the manager, you know, we were going to run the property and all that type stuff, but it was a quite different, it was quite challenging. We did build up to where we were raising actual funds. Now they weren't huge at all by today's standards. Partially because this is early nineties you know, it wasn't exactly a great time, but for example, we started a mortgage fund that today, I mean at the time because there was a very little mortgage capital, you remember it really nineties and literally it just went, we went out to investors, we use Torta Wheaton and they, we basically in effect said to investors, look, you give us money. We're going to get, and I forget what the returns were, but you know, hundreds of the hundreds of basis points over treasuries because we said there's no competition. Speaker 2 19:27 We can get the most risk-free deals, be in the primary position, no competition, and we're going to be making, we really shouldn't make lots of money. The answer was, we did again come in compared to today. It was relative. Once you raise the money, it was easy, easy. It's always the wrong term. But you know what I'm saying, it just wasn't much competition. And then we ultimately got, this was after I left, but we ultimately got a great offer for the whole mortgage business and we sold it. Maybe that was a mistake, but you know, it was, it made a big returns for our investors overall. Well you know, it's interesting the technology and, Speaker 3 20:03 and the explosion of real estate in general as a, as an investment medium Speaker 2 20:08 is, is, is amazing. Let's shift back again to your family. You moved back to Washington in 94 beginning of 95 95 and you had two boys. They've grown now to be productive members of our industry. Yes. So talk about your sons a little bit. Well I could talk about them both forever as like the typical dad and how I got into real estate. Why, you know, they might have a different take, but I really don't think I pushed real estate on the metal now. They heard a lot of chatter about it, cause you know, I'd be talking about it or I, they'd hear me talking on the phone or friends of mine, you know, we'd be talking about deals and stuff like that. You don't have to ask them to get the real take. But my oldest son, Paul went to Vanderbilt. There's always a story there too. Speaker 2 21:01 He told me when he was graduated, when he graduated, he went to saint all but both boys went to St Paul when he graduated from St Almonds. I said, Paul, you know, I really think you should look at Yale and maybe Harvard, Princeton, et Cetera. You know, the schools like that. And he goes, no, I just want to look at Vanderbilt. And I was like, why do you just want to do that? And not that I'm anything, didn't do well in school. I did very well. I think he personally would've got, he was a very good athlete. You'd been on a very good baseball team. He was on Arlington County, was the state champions. He was on that. I mean, and he was a very good athlete. Overall. Good football player. And in my mind, he certainly could have played Ivy League baseball and football. And you know, who knows. Speaker 2 21:39 He might disagree on that. And I said, Paul, you really should look at these schools. I don't care if you don't go, but look at them. No, no, don't want to do it. Now I don't know if that's because I talked too much about Yale and my wife and talked much more about the University of Kansas than we ever turned about Yale. But that's besides the fact and all over the kids' clothing was all Kansas. It was never Yale stuff. But that's a whole other story. And he said, no, I just want to apply to Vanderbilt, see only school and then I'll apply to it. And I thought, okay, you know, as a parent you go, this is nutty. I said, okay Paul, what's going to happen if you don't get in? And he said, well, I'm going to, I'll work for a year and then I'll go. Speaker 2 22:14 And I did uncle George Heaven. Him impact in that well, yes. And then also cousin William, who was, this is my nephew, William, two or three years older than Paul was at Vanderbilt at the time. And I think Paul saw that the social life at Vanderbilt was not lacking. That's my impression. And my brother George, I think, gave an impression that he had had an active social life when he'd been at Vanderbilt too. No surprise, no surprise. And probably the impression that Paul had from my sister and me who both went to Yale was that we had worked quite hard at Yale, which was a true statement. So my guess is Paul said, where would I rather be spending four years? Vanderbilt looks good. Well, anyway, in my mind at the time I said, Paul, I think you're making a mistake, but I'm telling you this as another parent, you can either go, no, you have to apply to wherever you have to do this. Speaker 2 23:12 And the kid, if he doesn't like it, it's going to hate you for the rest of his life. But if he blinds, let's say he applies to Vanderbilt, gets in and hates it, who's he going to blame himself? And I was like, you know, Vanderbilt, if he'd said he wanted to do something really wacky, I would have slammed the door, but I wanted to, Vanderbilt Vanderbilt's a great school and blah, Blah Blah. I was totally comfortable with him going there. Anyway, he, uh, he goes to Vanderbilt his first quarter, whatever it is, first semester grades were not of a level that I had in dissipated. So he and I, I think he wouldn't mind me telling you this, but have a private conversation where I said, I really am not keen on the spending $55,000 a year for you to work on your social skills. Either get to work or do something else. Speaker 2 23:57 To his great credit, he got his act together, graduated, I think magna cum lada yet at Vanderbilt works. I went to him, I mean, I'll skip over some details. He worked for JP Morgan for a year in corporate finance, I think worked for at Morgan Stanley as an intern and went to MIT to get these <inaudible> real estate. And I told him at the time, I said, well listen, Bill Wheaton started it. I know Bill Wheaton, well, it's a great program, but don't you want to get an MBA and leave your options open? Because if you pick real estate and you're kind of picking it and that's it. And he goes, no, I know what I want to do and it's real estate. I was like, okay, great. He went to that. He worked at Carlyle and then he's been off working with Neil Gambon and uh, well we want to thank you for your confidence in me helping him in his early, in his career. Speaker 2 24:48 Oh, thanks. Yeah, you were great. To great to talk to joy. You know, young folks need people to talk to beyond just their parents, right? The parents, you know, they're out there, they're there. Their credibility, at least in my case, my credibility with my kids is very low. So they need to talk to other people. And I think almost the greatest gift as a parent you can do is to introduce them to other people. And I was very lucky yet again in that being in the real estate business, I knew a lot of people, of course. And not that I'm calling them up into and I that actually this is the one really good lesson I've told them a lot of kids, is you don't ask somebody, Hey, can I get a job Mr Cope? Cause he's going to go, I'm available in the year 20,000 but if you say, Mr Colm, my name is such and such, and my father so-and-so said the, would you mind giving me some advice or telling me what you do? Speaker 2 25:42 Right. Well most times people go, well, yeah, sure I'll talk to yours. And then you do. And then you build up and then you say, well, Mr. Cote, do you know anybody else in the real estate goes, well, I don't know, but there's this from Jpg, there's Coldwell banker, there's CB, you know there's blah, blah, blah, blah, blah. Right before you know it, your networking network. And a lot of people just don't realize that. And I frankly didn't know it at first, but I did do that myself anyway. I've told my kids, you have to network one way or another. So all now as he's married, his wife has a very successful business called tuckernuck along with her sister and now 25 on their employees. My son, Billy is married to Emily, who is a partner of Maddie at that business at tuckernuck small world as usual. Speaker 2 26:30 Both of them went to NCS, not a coincidence there. And then Billy, he went to Gettysburg Division three school. He's a very good, Lou was a very little good lacrosse player. He became an all American in college and division three all American. And then when he got out, he's basically, he went to work for Suffolk construction in Boston and then worked for Clark here in DC. He now works for a firm called Jair Lynch, who Jair Lynch from you, I'm sure know, but also who went to Sidwell and who was, if I recall correctly, silver, silver metal winner and it's Olympics a few years ago. That's correct. So He's been there several months, but I'm really, really blessed in many ways. Both boys live in the DC area. Both of their wives are from DC, so we get a chance to see them pretty regularly. And Paul having a grandson is a lot of fun. That's why they both decided to get into real estate. You'd have to ask them, but I think they've enjoyed it. My nephew, William, also, the guy who went to Vanderbilt, he's also in the real estate business and he worked up until recently for David Webb here at CVRE and anyway, now he's off on it with another firm. Well, Speaker 3 27:39 yeah, but it's clear from our discussions today that you learned a lot from your father about being a good person and it really passed on, not through you to your children because of what they've done and how they've accomplished because obviously they emulated you and your career. They may, as you say, they may say have a different story, but I have a strong feeling that your career had a lot of influence on their future, Speaker 2 28:06 which is, which is awesome. I want to tell you one other quick story. Do you remember how you cut me off when we need to, but I, you know how I told you that? I said, there's different paths to success and of course who can define success. But as I told you when I was at st almonds, I struggled and struggled and struggled with French. I mean, I finally did well when I had a tutor, which basically meant I work even longer hours on that. I had an opportunity after my junior year at Yale to go to Denmark as an exchange student, and I had always assumed I was just lousy with languages. But when I went to Denmark, and there's a whole story there too, but I lived with two. I was put with two farm families before going to a school that I guess would be the equivalent of a community college. Speaker 2 28:53 They have a different system, but something like that. But it was in Danish. But I thought, you know, hey, this'll be fun. Well, I learned Danish I think remarkably fast and I still regard myself as pretty fluent and I mean, I'm going to go there and a week, a divisible or friends. And it's just funny when I was sitting in a classroom trying to learn French impossible. When I'm in an immersion environment where people around me, there's something to me, I love to dance as an aside, and there's something about the rhythm in a language that if you hear people speaking it to you, you start to pick up the rhythms. So to me, one of the things that taught me was just because you fail, fail, fail, fail, fail, which I did in French. It doesn't mean there's not another pathway. And I think now, even though I don't, I don't pretend to speak French well, I think I speak French much better than I did when I graduated from Santa Homans. Speaker 2 29:48 Well, that is what you just said. It's a theme probably for your life in some ways because you've immersed yourself in your career and you just got into it. I mean the idea that this is a sales manager, you had no experience, but you just listen and you were willing to help. I mean, that's a really key thing. You immersed yourself in the environment, which is interesting. I think that's true. I think that is true. And again, I'm sure I was not the best sales manager in the world, but I think if you approach, especially when you're supervising people, if you approach people along the line of helping them as opposed to telling them what to do, generally they're going to be more receptive. Granted, there's always circumstances that don't work out so well, but that was certainly my experience and I've had a wonderful, you know, I view myself as an incredibly lucky person and my whole experience with Coldwell banker CB has been over overwhelmingly positive. Speaker 2 30:48 And frankly, if there's somebody, if there's some of the names who helped me along the way that I've left out that I deeply apologize because there are lots and lots of people who helped me. So there's a final question I want to ask. Yeah. And it's what I've asked others. If you could post a billboard for millions to see, what would it say? You know, John, I don't know. I saw that question that you sent me. I really don't know what it would be, but I will say one thing. I think, you know what Gary Rapaport said about trying to be a good man, a, that's important, but B, I also think that even though it might sound very exclusive, the real estate business and the environmental world need not be mutually exclusive. I don't know if I could put it on a billboard, but I think it's, uh, it's up to us of this gender of our generation, but also our children to help take care of the earth for future generations. And I'm, that sounds probably way too hokey in a way, but I do think that the natural world has much to teach us, and it's important to incorporate that as much as we can in our daily lives. Okay. Thank you very much for your time today. I appreciate it very much to this and sharing your, your lessons and your career stories with us today. Well, thank you, John. It's been a pleasure.