EH: Well, logically I did my PhD in economics and shifted into the commercial real estate industry. I was finishing my PhD and had no interest in staying in academia. Was mostly interviewing with management consulting companies and the key areas I was always interested in were telecom, fiber optics, railways, oil and gas and the answer as to why was always because of course there’s an underlying value in the real estate associated with that infrastructure. And I guess at a certain point I started meeting with people in the real estate industry instead of in management consulting. One of whom happened to be Michael Emery, the president of Allied Reed, president and CEO of Allied Reed at the time.

DA: A previous guest on our podcast and like you, I’m a big fan.

EH: As am I and he was willing to meet up with me. And after our first meeting I said, one day I really want to do what you do. And so he helped sort of introduce me to a few people, including his partner in the business at the time prior to going public, Wayne Jacobs and then I continued networking and met up with some more people and continued to keep in touch. And then fast forward, had a couple of job offers in management consulting, couldn’t get this real estate thing out of my head and sent a job ad to Michael and Wayne on Allied Letterhead and said, if this was something you guys would post, this is something I’d really be interested in. To which Michael responded, come on in, let’s talk kid and after a little bit of chatting, we came up with the big title associate and left the room and Michael said, you’re going to do great things. I don’t know what, but it’ll be great. And that was the start of my career in the real estate industry.

DA: I love it. So what you put down on paper, what did that look like?

EH: It was effectively sort of a, I guess, what would be considered an asset management role at this time or almost a rotation. So basically I had the chance through this to work with, they thought, okay, she’s got some empirical skills, quantitative skills. She’s got a bit of what’s called qualitative skills are there as well. So let’s see if it all applies to the real estate industry. And what I did was get exposure to each of the different aspects of whether public equity markets, dealing with the CFO at the time, working on acquisitions, trying to identify intensification, development opportunities, reporting the gamut. I literally did a rotation and sort of had just phenomenal exposure to everything across the industry and across the business of a public REIT and it was the best experience anyone could ask for. And something for which I’m eternally grateful, of course.

DA: How long were you at Allied for?

EH: Just under eight years, maybe seven-ish years.

DA: So that little rotation turned into that writing your own job application or writing your own job post that really worked.

EH: Well, it turned into, there were clear areas where I did need to and had the ability to focus and where the company needed at different times. As GFC hit and there was a concern that I was super interested in acquisitions and led me to what I was doing in the future. But at the time when it was determined that would be my area of focus, it was around end of 2008 and obviously at that point, not a single one to be had. So I was like, better sing for my supper. Let me start and try to justify what it is that I can do next and again, a stint in leasing across the board. But what was amazing was having the ability to step up, write a case study for what made sense, what would add value to the business. And provided I didn’t screw up, thankfully I didn’t. Willing to just give me a lot of leash. And it was, as I said, the most unbelievable experience ever because just a total immersion into all things in the industry.

DA: So what came next? What came next after Allied?

EH: Well, after that, I had worked on acquisitions, had worked with Michael and Dermot and a number of the other members of the team to kick off a development project, Allied’s first one. And at that point, I was interested in public equity markets, loved the model of the REIT, but almost at that point realized with the stipulations that were there and sort of the declarations and all of the guidelines that existed in the public equity markets, I found it pleasantly suffocating. And the opportunity for private equity and being a partner, having equity ownership interests, being able to put money in deals that came forward as Crown was looking to create a succession plan for their original founders and that was the point at which it really made sense for me to shift and learn something new, grow in my career, advance and taste something else, taste another piece of the industry.

DA: So, you’ve been at Crown now since when? 

EH: Close to 13 years. 

DA: Wow. Okay. And just tell us about the current role then, tell us what you’re doing, what keeps you busy today?

EH: So as managing partner investments, initially I started focusing on the acquisitions, was moving the acquisition plan forward for the different funds, the potential of shifting into capital raising and working with our investors to structure the fund products that we put out was sort of next evolution. And that’s what I spend a lot of my time doing between the capital raising now and the fund structure and sort of investment product structure. And that’s sort of the shift that my role has taken and it’s been a learning, especially going through raising a fund in the fund, just on the tails of COVID, going through that tsunami that came through that capital raise cycle that really focused on answering questions relating to the four letter word or the new four letter word ESG topics. So part of my role has also encompassed creating a rational platform that, and strategy that would guide our ESG strategy for the firm that’s necessarily linked to the investment thesis.

DA: Right. Right. Well, we’ll talk more about sort of where we are today, but let’s just, before we move on, just, why do you think you’ve been suited to this opportunity? What’s helped you to be successful? First of all, landing the position with Allied and now this incredible opportunity with Crown where you’ve already been for 10 plus years. What are the things that you can attribute to that success? Skills, mentors, colleagues, books, any thoughts?

EH: I guess everything. I guess generally what I do on a day-to-day basis is categorized into two things, relationships and opportunities and connecting the dots between them. And I’m a generalist. I’ve always been a generalist. My undergrad was in math, sciences, languages, economics. My economics was empirical and policy heavy, straddling health law, labor economics, and even zoning, municipal zoning bylaws. I love data. I love absorbing huge amounts of data and putting it together to see changes in behavior and still do. That was sort of what my thesis was based on and that’s sort of still what drives me and even finding sort of, hey, this is an investment thesis we could pursue. So for me, it’s about sort of that generalist approach to things and then seeing links between different asset classes, different investment opportunities, finding parallels, and then applying it to what we do regularly and making friends along the way who help facilitate a lot of that. So again, the relationships to sort of get these things done.

DA: Right. We hear that a lot. And I think that this is an industry that relationships plays a huge role. I started this podcast in the heart of the pandemic, right? And as it was taking root, just as a way to stay connected with people, but also to provide a real-time view into the commercial estate industry, really what was going on and trying to get away from the headlines that were in the media, those polarizing comments that often presented very extreme positions. We’re never going back to work. Someday we will come back to work. We really think now the conversation needs to be just about work, not where, not how, not why, just the notion of work and doing great work and really helping to identify how places and spaces can allow people to do their best work and to help build great companies. So we’re really interested in understanding all of our guests’ perspectives on how the industry is evolving and how the industry and technology need to sort of work hand-in-hand to deliver a better product. So I’m looking forward to diving in and getting your perspective on some questions around the industry and your experience. So maybe just to start, what are you thinking about today in terms of how you’re continuing to innovate through the lens of investment, through the lens of acquisition, in order to meet the needs of your customers, I guess, both on the financial side, as well as the user side, what’s influencing the direction that you’re taking as a business?

EH: So I guess setting context and remembering that Crown is first and foremost, we’re a value-add investor. And that is something that aligns a lot with my mindset. It means that in good times, you’re generating that extra oomph, the alpha, and in bad times, you’ve got this margin of safety and so as a group that provides, that adds value, we have to always look at finding a way of these outsized returns or beating the market by doing something slightly differently than others. And one thing that differentiates us from most other investment managers in the private equity real estate space is that we’re vertically integrated. So we have a finger on the pulse of the market and that means we can really add alpha at the micro level, operationally, when it comes to dealing with what’s happening within our buildings, whether it’s the people, whether it’s the equipment, whether it’s the relationship between them. And then you add to that sort of the investment understanding and the capital and macro markets. And it means you can really adapt to sort of some of the big secular changes that are happening and like there is no, like you said, this podcast started during COVID to connect and like that accelerator of COVID, there’s no denying these big, big secular trends that sort of kicked in just post COVID. Demographics, decarbonization, digitization. And they’re influencing every decision within the company, outside the company, how our clients are operating in and out of the buildings, everything. That’s sort of the main thing is these major accelerators and they’re accelerating at an accelerated pace.

DA: Right. You use the term vertically integrated and just as a side question, I think that we’re starting to see that the way in which buildings are managed, the way in which businesses are run, it can’t be departmentally divided, that there needs to be more collaboration, that IT and HR and operations and acquisitions and assets. How is that playing out for you as a company?

EH: Everyone has to rethink what is best practices in their field. And there is a lot of collaboration, but there’s also a huge amount of just change, transformation happening as a result of all of these, like the D’s that I said before, they’re driving each and every one aspect of those pieces of our industry. And thinking about sort of the ESG aspect, well, it’s a very broad category. Many people talk about it, but what does it really mean? Well, it means that now an acquisitions professional has to think quite intelligently about the type of acquisitions they’re doing, what the implications could be, not on the vague things that are box checking, but on the things that are really going to affect the value of the building. So if I have a building and I need to, as we often do, I need to do repairs in that building in the time that I own it, I’m going to make the right repairs and do those right decisions and upgrades to the equipment, do the things that matter to the tenants. Whether or not there’s been a clear delineation of what drives value in this new world, is a decarbonized building worth more or not? Regardless of that, I’ve got to think, can I find liquidity to this asset? Similarly, our building operators, as I said, we’re vertically integrated. So we’re on the ground with our operations. Our building operators respond to these changes and sort of change the way that they’ve been doing things. Everything, all equipment is now monitored and managed electronically. Everything, usage, timing, everything can be monitored. We’ve got metering and tracking on everything. So we can see what real return on investment is and real impact is of every change we do in a building. A building operator who can’t change the way that they work and react to that is going to be there in the future. They need to be responsive. And that goes through, like it filters through every level within the organization.

DA: And I’m assuming that a lot of this is not only driven from top down, but from bottom up where tenants are demanding. They are asking questions about these issues. They’re talking about decarbonization. They’re talking about ESG. These are things that will drive more engagement at the tenant level, I’m assuming.

EH: It depends on the sophistication of the tenant. But when you think about it, every business now is getting these questions from their investors and their stakeholders, their employees. The last set of employees, team members that we’ve interviewed had serious questions to us about what our strategy is going forward when it comes to ESG. How do we prove that we’re not just boss checking? What do we think of climate change? These are questions that are coming up from engaged, again, the demographic side of things, this engaged workforce that we’ve got who is so interested in making sure that they’re aligning themselves with a company that they can feel proud of being a part of, that it aligns with all of their social and otherwise goals personally and so all of the businesses operating within our buildings, anyone who has an investor, anyone who has to do a report, anyone who has to do disclosures, all of them are getting these questions. At some point, if they haven’t already, many of the very sophisticated ones have, but if they haven’t already, then they will be asking, how do we help contribute to those goals across the board? How do we help them engage and employ new team members? How do we help them contribute to their decarbonization goals and net zero goals? How do we help them? And it just sort of continues. That’s what our role is, to fill in that. Yeah.

DA: Yeah. It really is a new world in that regard. With regard to the office footprint of which you have significant holdings, talk to me about how you think space requirements are changing and more importantly, from a utilization perspective, what are your observations around the purpose of space or in turn, what’s influencing the engagement and experience within those spaces?

EH: I think, again, well, you had sort of alluded to this earlier. It’s not a question of, do people need the office? Everyone’s acknowledged that a singular place for everyone to gather and collaborate and work together is the most effective way of working. Now, what the layout of that space and the nuance around that space, it differs depending on the company. But I think the unstoppable, those secular trends are unstoppable and are affecting every single business in our industry. They’re driving the types of space that will succeed in terms of occupancy, in terms of being able to achieve debt, in terms of future sales and each one of them is pulling in slightly different directions. But when you pull them all together, a space that meets the needs is the one that will benefit. And in different buildings and to different companies, that’s different things. So one of the things we’ve noticed is companies now as they’re leasing just want move-in ready space. They want to be ready to go. There’s not a huge amount of variation. Everybody needs a little bit of private space, a little bit of public space, a little bit of common area space, a little bit of meeting room space. And so that’s sort of the consistency that’s been across our market. The more amenities and things that we can provide outside of the space within the tenant that they can rely on outside and sort of use at a cheaper cost outside of their lease space is better and that’s something that we work a lot on. There’s no one size fits all solution. It’s reacting to each of the actively, proactively reacting to each of the different needs within the submarkets that we’re working with.

DA: So you identified two key areas that when tenants are viewing buildings, they’re looking for that ready to move, and they don’t necessarily wanna take on all the responsibility for leaseholds and planning, design, et cetera, and then the other would be sort of the amenities that are available within buildings. Would you say those are the two main drivers that people are looking for as they’re considering their own requirements?

EH: I’d say that that’s what I’m getting from the leasing team, ease of just getting in, not everyone has a real estate group, and a facilities management group. So people wanna just do what they do best, which is their business, and leave the rest elsewhere. And so being able to respond to that as quickly as possible and as effectively as possible is the way that we ensure we capture those businesses into our office buildings.

DA: Makes sense. A little bit of a hypothetical question, if budget and resources were not an issue, in other words, you had all the money you could wish for, what three new initiatives would you undertake to position your business, from that vertically integrated business for success over the next three to five years?

EH: Oh boy. So yes, I would go back to the big three trends. You’ve got to listen to secular trends and then overlay that with what your core competencies are and at Crown with our strong roots in office building operation and retrofitting buildings, for example, like the digitization thing that I keep bringing up. It may not mean that our next big move is to purchase, dabble in data centers. One can’t quite dabble in those. It’s a very specific operating platform that you need. But what it does mean, aside from that specialized field is when it comes to the operations, we would avail ourselves of the best possible technologies in order to help support our business and facilitate that operational success. So investing in those right technologies and there’s a lot of them out there. It’s hard. So investing in the right people who are able to manage change to get those right technologies that are going to facilitate our and improve our building operations. That’s one thing. The other, so another thing is again on the D, the demographic side of things, it may not mean that we shift into multi-residential development tomorrow. But what it has meant is that we’re identifying the value on many of our sites and intensifying around our office buildings that are specifically those that are transit oriented and creating mixed use sites, which are again, very compelling to those demographics. So where would I invest given this secular trend, given our expertise, that’s a logical sort of next direction and then the last one, the decarbonization one, superimposed on a firm like ours where we are a value add player. And that strategy has typically been attributed to long-term core investments. The reality is we’ve got the buildings captive at a time when you’re investing in the infrastructure within those buildings. So we’ve got to make intelligent investment decisions at the time we have those buildings captive in order to create resilient assets because our whole business model only hinges on being able to sell in the future. Liquidity and financing and buyers and whatever else in the future, whether appraisers have clearly established different valuation metrics or not or for assets that have been decarbonized. So again, making these intelligent, rational decisions at the time that we can is sort of thing. If I could invest in every upgrade that would accelerate the building to that level, it would be awesome, I would love to, but that doesn’t fit the business model. So instead planning and creating that intelligent sort of trajectory.

DA: That roadmap.

EH: And roadmap is the approach that I would take.

DA: All right, I love it, three great areas. Thank you for sharing that. I think we can agree that building operators are no longer in the space business. You don’t just build it and they will come and you no longer just rent space. And there really is this notion of- No one’s building it right now. No, and this whole notion of creating destinations of choice where we need to have a whole list of attributes that will directly impact the experience that buildings offer to help bring people back and we also need to be a lot more collaboration between building owner, building operator, the occupier, the occupants. So a lot of opportunity to just deliver a better customer experience. And that’s really becoming the driver of utilization. We all have this choice of where we can work. You and I I think are both working remotely today and yet we’re able to come together. I’m just wondering how that phenomenon is playing out in your business. What are you seeing from an experience perspective and how is that impacting your business?

EH: It’s for sure all about experience. And I think that’s a large part driven by the demographics part of the story. We’re operators, so we have this vantage point from which to see these kinds of trends. The experiential aspect of the industry isn’t a new thing. It’s not even a post COVID thing. It’s newer in the headlines, but to most operators it’s actually something that’s been apparent for quite some time. We maybe didn’t have the ability to, or the technologies to execute it in as slick a manner as many operators are doing now. But it’s always been out there. That’s why as a focus in most of our repositioning going back to our first fund in 2006, it was on adding best in class amenities that you wouldn’t typically see in suburban assets, adding common area space that’s compelling, ensuring that buildings or office communities are healthy and of course now what we can do and what we do do is look to technology to facilitate communicating and engaging with the users of the building. And then also to help us create that healthy, efficient, nice, vibrant office community. So, and then finally too, we look to the technology also to help us make those informed decisions about the retrofits that we may initiate within our buildings because of the tracking now that we have available and efficiency metrics. So the experience, the technology and the communication around it.

DA: I’m glad you pointed out that yes, experience may be the big driver today, but you are absolutely right. It’s not like it, this is only a post pandemic phenomenon. And before founding Hilo, I spent the entire, most of my career working for in commercial real estate, actually still focused then without the use of technology, but focused on delivering great experience. You know, building owned and operated. Pardon me?

EH: Called something else at the time?

DA: Well, yeah, it really was. I mean, it was just called marketing and communications. We were hired to help implement programs and create content and create new services and events that just helped foster that connectivity, that great relationship between a building owner and their tenants, their customers. So we’ve been doing it for a very, very, very long time. I just think it now has a heightened awareness and purpose and is very much the focus of why buildings exist. But you’re right, it’s been around for a very long time. Let’s take a short commercial break and we will be right back to continue our conversation.

COMMERCIAL BREAK

DA: And now I’d like to welcome back to the show, Emily Hanna, Managing Partner Investments at Crown Realty Partners. I’m thrilled that you were able to join me today. So commercial real estate, we’ve touched on it in a number of our conversations. It’s hard not to. It continues to be impacted by new technologies. I think you identified one of your, out of your wishlist of what you could do, technology would be something that you’d want to invest further in really helping to shape how building operators deliver great experience and engage with their tenants and implement their, deliver services more efficiently. Any thoughts, what are you seeing from, in terms of the technology stack at the building level, what are you seeing both operationally as well as anything that might impact directly with a human being to deliver a better experience? What are you guys thinking about in this area?

EH: It’s crazy actually. I literally field multiple inbounds a day, as do each of my colleagues at Crown about some new technology promising to automate a process, render a process more efficient, whether it’s the deal flow process, investor tracking and management, reporting like from at every level within our company’s operations. And of course the technology itself is only as good as the users and the data on which it relies.

DA: True enough.

EH: And so I know in terms of operational efficiencies we have gained and we have a lot more to gain from some of the new technologies, especially energy, environmental management systems and metering and tracking. Once to see the effect of the upgrades and changes, operational changes that we make at buildings. And these can help really direct us to ensure we’re making those intelligent investment decisions in equipment and in the retrofits that are going to drive, ultimately drive our returns to our investors, as well as having obvious environmental benefits. So at every level we’re seeing and testing and trying out different technologies, but a lot of it is in the user and do we have the capacity to take on these technologies because they promise great things, but implementing some of them takes a huge commitment, time, energy and learning. And it goes back to that, what makes a successful person in this industry now? And it is that type of person who is willing to adapt to, like, this is not the confines of my role. This is not typical building operator does. This isn’t what a typical asset manager does. Let’s adapt and shift and technology is pushing that all forward across the spectrum.

DA: And I think you’re right. We’ll touch on in a moment a little bit about how roles are changing in the industry. As a provider of a technology solution, and I’m always eager to sell, but what I’ve learned is that don’t be too quick to sell if you don’t have the right partner on the other side. If there isn’t that commitment in terms of a dedication of resources and the availability of people to actually do the work. We assist at a very high level. We provide an incredible amount of support, particularly with the onboarding and the implementation. But if there isn’t a mutual desire to use the technology and invest the time to actually take advantage of it, you’re right, it is not going to be successful.

EH: You need, so we’ve been working on some technologies and we have a couple of super skilled people in our team who are making these things happen. And what we’ve sort of identified, we do a lot of learning with our team members going sort of learning management skills and other things. And one of the, I loved it when our coordinator of the environmental data came and said, I learned this at our last training session. In order to really execute a plan and achieve success, we need to make sure that we have a series of things aligned. The vision, you put it out there, we’ve got the vision, we know why we’re doing this. The skills, we’re all really skilled, we know how to do it. The incentives, huh, it’s part of my bonus structure, so that makes sense. The resources, you’ve dedicated everything you need to it. The action plan, now you’ve empowered me to create that action plan to achieve success and she sort of laid out all of these things and was like, and this is how we’re gonna get there. And we’re getting there with some of these new technologies on the sort of environmental management system and across the board with other team members too. This is something that I’m just directly exposed to, but it really takes dedicated resources. These are things that have typically been done off the side of other people’s desks. They have to buy in. People who are going to be using this technology, relying on it and shifting have to buy in and it’s not off the side of my desk. This is gonna revolutionize the way I do things and free me up to go seek out the next opportunity to accelerate my career.

DA: Right, so all the stakeholders need to, even though there might be an evangelist within the company that might be the acquirer or the buyer, all the stakeholders involved need to be part of the conversation.

EH: For sure.

DA: Okay, thank you so much for that. Before we run out of time, just our closing speed round is an opportunity to get to know you a little bit better, perhaps a little bit more on a personal level. So just curious, looking back, what’s one piece of advice you wish someone had given you when you first started your career?

EH: Just be yourself. By being yourself, you’ll attract like-minded people. I think it’s especially important for women in the industry, where you may try to spend a lot of time being like the others in the room and by being yourself, you’ll filter in the people who will propel your career forward and with whom you’ll do awesome things. And just as helpful, you’ll filter out the people who don’t enhance your prospects and your work experience.

DA: So be authentic to yourself, I think. Right?

EH: I’ll stick to that, yeah.

DA: Yeah, sounds good. Do you have a favorite book or podcast that has positively impacted your approach to work or life?

EH: As I said, I’m a generalist. So there’s a research and investment strategy platform called 13D. It’s run by a fellow Kirill Sokolov. I think I’ve said his name right. It consists of thought leaders around the world. They focus on, they sort of look at the world through different lenses, math, economics, engineering, psychology, every discipline, and then try to spot the broader trends that everyone misses and given that I’m so focused day to day on the real estate industry, I really enjoy reading insights across the spectrum. They’re also quite contrarian in their thinking and their research, and that sort of serves as a good check for me that I’m not part of the group think and that all of their concepts I’ve found can definitely be extended into the commercial real estate space.

DA: Very cool. Name one way in which technology has improved how you live or work.

EH: Given how easily I was able to set up this Zoom call. I don’t know that I’m the right person to answer this question. Certainly, it allows me to do more work in less time. Is that a good thing? I don’t know.

DA: Right, fair enough. To be determined.

EH: Yes.

DA: This is my question about the industry and sort of skills and resources. As commercial real estate is continuing to evolve and unfold, what skills do you think building operators specifically are going to need in people in order for the industry to remain vibrant and relevant?

EH: The most basic thing, better communication skills, better customer service skills, a better understanding of how to adapt in light of different changes in the industry. It’s those people who, whether technical, operational or investment focused, who can connect the dots and adapt to what best in class operations really means. Those are the ones who will accelerate forward and propel our whole industry forward.

DA: I think you would agree, and certainly I feel this way, that the skills that people needed yesteryear versus in the future have really changed. And I think it makes for a very interesting and exciting opportunity to be in our industry.

EH: But always still, it’s a relationship-based industry. So always, when it comes down to it, just the ability to communicate well and the desire to learn. And then there’s the complex systems and the different ways of operating. It’s the basics, I think, the relationships.

DA: Okay. If you were not doing what you’re doing right now, in other words, if real estate didn’t happen, didn’t sort of pan out the way it has, what do you think you’d be doing instead?

EH: So I’m an entrepreneur at heart. I’m also very hands-on. Something definitely involving my own business. I’m also pretty good at Tetris. When I was in Italy, I was complimented by a parking operator on the side of the mountain in Amalfi at my parking job. 

DA: Okay. 

EH: As I observed him skillfully cramming the other cars into his lot like Tetris pieces, I thought, started adding up the daily parking fees, realized this could be a great business. Could also be a sort of meditation. Right. Parking. Putting the cars in the lot, perhaps. I don’t know.

DA: Well, we know there’s money in parking. There’s no question about that, right? Emily, thank you so much for joining me today. Thanks for contributing to this conversation around commercial real estate, around the future of work, around how buildings are going to continue to be part of this important, larger workplace ecosystem. Talking about the industry, the future of the industry. Really appreciate you sharing your time. Your expertise, your passion. And I look forward to continuing the conversation with you going forward.

EH: Me too. Thanks a lot, David. It was a lot of fun.

DA: Good. Glad we got together. Thank you.

EH: See you.

DA: That’s a wrap on today’s episode of TEN. I want to thank Emily Hanna for joining me on the program. If you enjoyed this episode, don’t forget to subscribe and leave a review. It helps others find the show. Thanks for listening. And until next time, I wish you all continued success in building community where you work and live.