Ackman-Ziff Execs Teach Young Pros Patience, Longevity
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Like many different industries, it is unusual for people to stick around at the same commercial real estate firm, especially at the beginning of their careers. This does not seem to be the case at the New York City-based Ackman-Ziff Real Estate Group, where three of its principals, Patrick Hanlon, Shawn Rosenthal and Russell Schildkraut, have not only spent more than 10 years each, but where they all began their real estate finance careers. In a recent conversation with GlobeSt.com, the three discussed the culture created by Simon Ziff, the firmís president, and explained why they have remained at the company. They also took time to muse about their beginnings in the industry and what advice they would give to young people seeking a long-term career in commercial real estate, something they all believe they have found at Ackman-Ziff.
GlobeSt.com: How did you get involved in the real estate industry?
Russell Schildkraut: My family owns a small real estate company, so I knew I always wanted to be in the business. I started with an accounting firm in the real estate industry, and I owned some real estate and went to NYU at night for their Masters of Real Estate. There I met a professor, who recently passed away unfortunately. He suggested I contact Ackman-Ziff and he introduced me to Simon. I went to a networking event that night, and I was literally working at AZ a week later and have been here ever since.
Shawn Rosenthal: I worked at an accounting firm, mostly in real estate, and thought that would be a great background for what I eventually wanted to do. I actually ended up going to NYU for law school. I thought that legal training would be beneficial to anything I wanted to do. I spent a lot of time taking real estate courses on the business side and got more entrenched in the industry. I loved the people and the excitement. When I graduated from law school, I thought about going into the banking world but decided not to do that. I wanted experience on the legal side, so I worked for a large law firm for a couple of years and spent a lot of time representing lenders on financing. It was at a time in the market when the CMBS business was first taking off in the mid 90s. Because that business was booming, as a young associate, there were a ton of deals in the office. You were thrown into situations early in your career, and while you werenít the number one person on the deal, you were much deeper into a deal than you typically would have been. You very quickly were negotiating with attorneys for borrowers who had been involved in the business for 20 years. At the law firm, I saw what partners at the top of their game were doing, how they spent their days, and I said: ďThis is not what I really want to do.Ē I wanted to be on the business side because there is a lot more excitement putting the deals together.
Patrick Hanlon: When I was 13 to 15, my summer job was working on a race-horse farm. That family that owned the farm included the chairman and president of a group of REITs. Years later, their biggest company at the time was a mobile-home company. They wanted to start a sales and finance company. It was a beta test and it was 1994 and 25% unemployment in our age group, so they got me really cheap. But it was fun because I got to learn that business with hands-on experience in real estate for five years. That was a great education, but I was in New Jersey in a stealth industry and knew I wanted to get into New York City. I went into that same program that Russ did at NYU, and the same professor that he knew introduced me to Simon.
GlobeSt.com: What has kept you at Ackman-Ziff for so long?
Hanlon: When I met Simon, I really didnít want to be a mortgage broker. What I got out of him was that if I worked out of Ackman-Ziff for two years, Iíd learn how to finance anything and meet everybody. But then I got here, and really liked the business. The reason we stay is that in five seconds you understand that Simon is sincere about the fact that he really wants to grow the company. He looked at people in their 20s that were energetic, smart and had a shared vision for that, and because of the open and collaborative nature of this place you could really believe in it, and it happened pretty organically. As we grew, we all got to know the business better and started getting our niches. I realized, because of a housing background, that the CMBS markets werenít really into the multifamily business, but I knew eventually they would, so I positioned myself early to be a part of that, doing billions in large CMBS multifamily transactions.
Rosenthal: When I was in law school, I met Simon. He had a posting for an intern, and I came in on Fridays Ė I was still in law school Ė and Simon would be running around for meetings, and I would be following and listening to whatever he was talking about. I could have graduated from law school and worked here, but the economics at the time didnít work out. But we always kept in touch, even later on when I worked at an Internet company. It fizzled, and I started at Ackman-Ziff working as an analyst and underwriting deals and learning the business. The first three months were really difficult, but from three months to six months, something clicked, and you felt yourself moving up the learning curve really quickly. After two years, I loved it and was learning an incredible amount. The most important part was working with smart people who I like, smart clients and working as a team and growing. This is a place where we are in a team environment and discuss deals openly. The last five years havenít always been easy, but weíve stuck together, and thatís important.
Schildkraut: I was about 25 at the time and wanted to be on the transaction side of things, so I thought brokerage was a good way to learn. You learn to negotiate, you get thick skin, and you see a lot of deals. I felt like if I went to a financial institution or an owner, I was going to be pretty limited in what I looked at, and I felt like I could only do things in their specific box. But in brokerage you have a lot of different boxes. I can do insurance-company business, pension-fund business, CMBS, and I felt like it would be faster paced and would really be a good spot. I personally did not want to be a broker. I thought I would do it for a couple years and then make another move. Now I joke about it all the time because Iím in my 16th year, and Iím still at Ackman-Ziff. I have a great execution strategy and love doing deals. Itís really interesting every day. You never know what is going to happen. We negotiate for clients every day on real estate finance. There is also an attribute to Simon thatís not in a lot of family businesses, where they get talented people, but who hit a ceiling. If he hadnít made us all partners we would probably be doing something elsewhere. He learned early on that people who are going to be successful needed to share the upside with him. Thatís really meaningful to why weíve stuck together.
GlobeSt.com: What advice would you give young people getting started out in this industry?
Hanlon: For young people, learn how to finance anything. But recognize an opportunity to become a little bit of a specialist, and then attack that proactively and build a brand in that space. Once you do that, you can start applying that to other opportunities. Today, the opportunities arenít as real-estate focused as far as asset class and are more capital-markets focused and what types of products are most advantageous to the most amount of players. Weíre trying to bring those ideas to clients proactively, even before they call us.
Rosenthal: The most important thing is patience. One of the biggest mistakes for people is that they need to succeed immediately, and theyíre impatient. There are a lot of talented people, who should have stuck with it for another couple of yearsÖthis is a business that is based on relationships.† Those relationships take an incredible amount of time to develop. Patience is extremely difficult to have in this business, but itís probably the most important thing.†
Schildkraut: For all of us it took five years before we hit our stride. It really takes a long time. But my advice to young people is that when youíre starting out, donít focus on money. Focus on an experience thatís going to get you to where you want to be in your life. I took a pay cut to come here, but it was positioning me better for where I wanted to be 15 years down the road, and it worked out.
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