C&W's Trillion-Dollar Man Talks Valuation

NEW YORK CITY—For each of the past three consecutive years, John D. Busi has performed $1 trillion in valuations of acquisitions, financings and recapitalizations, including a record-setting $1.2 trillion in 2014, making him Cushman & Wakefield's trillion-dollar man. During the course of a career that stretches back to Ronald Reagan's first term in the White House, Busi has moved into ever-increasing levels of responsibility.

Nine years after joining C&W, he was put in charge of the New York office's valuation and advisory practice. He assumed national V&A oversight in 2004, and last month was named CEO of the firm's Global Valuation & Advisory group, after two years as global head of the group.

As Busi makes clear, the business has both changed and remained the same since he entered it in 1981. Some of those changes are ones which he brought about himself. He's credited with spearheading the adoption of asset class specialization and introduction of nearly 20 new specialty practice groups within V&A. He also led the launch of a technology initiative and built an industry leading quality control platform. Here, in one of his first-ever interviews, Busi shares his insights on what came before and what's coming down the pike.

GlobeSt.com: You have been in the valuation arena for a few decades and a few cycles. What has changed over the year in terms of how valuations are done, and what has remained the same?

John Busi: In terms of what has remained the same, you have price and value; it's still driven by supply and demand. We still need a tenant to occupy an office building, a warehouse, an apartment. But the biggest change from when I started in the business 34 years ago is that at that time, it was specific to the fundamentals of real estate. Now, value and price are heavily influenced by the supply of capital and capital's demand for real estate.

The second part of that is that capital has transformed from a domestic arena to a global stage. As appraisers, we need to be looking beyond our local markets, beyond our domestic markets because the influences on value are going to be global as well as local and regional.

The second thing that has changed is the availability of data. Twenty-five or 30 years ago, I'd go into a town hall and pore through the records, go to a courthouse to get sales records, go to the assessor's office to get tax information. We'd knock on the door of the chamber of commerce and try to extract demographic data. Nowadays, the appraisers sit at their desks—they still do property inspections, but their research is through websites. Third-party companies collect sales, lease and census information, then sell it through subscription-based services. I think the coolest thing that we're seeing right now is that there are companies emerging that are doing a lot of this collection through artificial intelligence and complex algorithms. It's a very different experience than the one I grew up on.

GlobeSt.com: It stands to reason that as you're looking at the broader market indicators today, one of the things you're paying closer attention is macroeconomics.

Busi: I'd say it's more important today than it was 30 years ago. Macroeconomics, the political landscape, anything and everything that can change the political landscape—those are the things we're paying close attention. Those are the things that can have dramatic impact in terms of how the markets are cycling.

GlobeSt.com: Over the course of your career with C&W, you've moved into increasing levels of responsibility. As you've done this, how have you looked to make changes in the way you and your colleagues perform evaluations—the technology initiative, for example?

Busi: Technology has been huge for us. We always look at ways to create greater efficiencies and layer technology into what we do, from developing templates and databases to where we're heading today. Technology is going to take us, and probably the rest of the world that does what we do, to different levels. Now we're looking at collecting and organizing massive amounts of data to create predictive research, in addition to the benchmarking and everything else that we can do.

The other thing is the migration we went through at Cushman from a generalist population to a specialist population. It was a big transformation for us. For the first 20 years that I was here, we had geographic expertise and we were generalists working across asset classes. About 10 years ago, we started to develop vertical alignment of professionals that specialize in particular asset classes. So today, we've got eight service-based specialties, we've got 17 vertically aligned asset class specialties. We go from broad bands like office, retail and multifamily to smaller classes like golf or self storage.

We valued 14 of the 20 largest retail sales in the US last year. Since 2012, we have appraised over 65% of Manhattan's class A office buildings that sold and over 65% of the top luxury condominium developments in Manhattan. And the list goes on. Because we're in these asset class specialties, we're really getting a lift in terms of the clients that are tapping into our expertise and tapping into the knowledge capital that we're amassing and creating.

GlobeSt.com: As you assume your new role, what are some of your priorities, near- term and long-term?

Busi: Everything we're doing today is being oriented toward a client base that's really a global constituency. Where we can provide a level of consistency, we are. Our challenges are aligning with the maturity and transparency in each market we work across. But clearly, we're looking at everything more holistically and looking at things with a global lens in addition to a local lens.