Steven Rotter | Vice Chairman | JLL | Why every deal matters and now is the time to invest

Transcript

DA: Welcome to TEN, the Tenant Experience Network. I’m your host David Abrams. In this episode, we are connecting with Steven Rotter, Vice Chairman JLL, New York City. In this episode, we learned about Steven’s journey to commercial real estate beginning with his early days as a golf caddy and camp counselor, and his first job out of college at a company called We Buy Ugly Houses, I kid you not. Eventually, Steven headed to New York to pursue a position in the CRE industry. After his first two years in the business, Steven really began to understand the importance of relationships and making connections as one of his keys to success. Over time, he referred to that as keeping the light on, and it has become a major contributor to his success. Steven is never shy about asking for an intro and has come to value the importance of caring about every deal, no matter what size. Working hard, building trust, and being enthusiastic helps breed success. There are certainly many changes continuing to emerge in CRE and in New York City specifically, but Steven feels strong that businesses will continue to see New York City as an important location to have physical presence, albeit with different use cases and purpose. Interestingly, a majority of the deals that are getting done today are with buildings that are offering new or expanded services and amenities to attract new tenants. Now is the time to invest and the benefits will accrue to building owners, employers and employees. Steven talked about how JLL is able to provide more data to support their clients and improve communications between stakeholders and the importance that technology is now playing in the CRE space. The list of personal insights that are shared is significant and I so appreciated Steven’s authenticity during our conversation. We’re excited to share this podcast with you so be sure to subscribe to TEN so you never miss an episode of the Tenant Experience Network. And now I’d like to welcome Steven to the show. I’m really glad you could be with us today, how are you?

SR: I’m great, David. It’s great being here and thanks for having me.

DA: Absolutely, I’m looking forward to our conversation. So I’d love for you to share with us a little bit about your journey to your current position role. How did you get started?

SR: I had an interesting start to the business, which really had nothing to do with real estate and like a lot of people, I had some interesting, odd jobs growing up. Back in the day, I was a golf caddy for many summers and then worked as a camp counselor, which was a really important part of my career and I’ll fast forward to that later on. And then my first real job out of college was a company called We Buy Ugly Houses. Catchy name and we had about 17 billboards across the city of Chicago and they all had big yellow writing that said we buy ugly houses and we’d go around to various areas of the city and I ended up buying about 175 houses in three years and learned to do a quick rehab on them, paint and carpet and learning the real estate business from a different perspective and it was an interesting start and I loved it. I just knew I wanted to do something a little bit different in the field and that’s when I had headed to New York about 15 years ago to get involved in commercial real estate. My first entree into commercial real estate, I worked at one of JLLs competitors and I was given a phone and a computer and told to make cold calls and ended up having 19 cold call meetings my first year in the business, which was a lot at the time, unfortunately went over 19 in converting those meetings. Didn’t do that well, was discouraged, but just like any other business, tried to find different angles and tried to find kind of something I was good at in the business. I nearly quit the business and then realized that I really hadn’t taken the chance to learn to network and learned to talk to people I know. And fast forward two years after being in the business and we ended up closing an 800,000 square foot deal for Acts of Financial at 1290 Avenue of Americas in Jersey City. And I was back, I started a business.

DA: One deal changed everything.

SR: Things were great and I learned that at a very young age, that relationships were important and I’ve always prided myself on connecting people and trying to meet new people, connect people, help people out, whatever I can do, and I kind of call it, keeping the light on and it’s been an important part of my career and it’s been a big part of my success in keeping that light on and making sure that I’m keeping up with my relationships and developing natural relationships too. It’s not something I try and do to become friends with people, it’s something I like doing, and I have a lot of new relationships over the years that I’m proud of.

DA: Amazing, well I hope that this conversation today lays the groundwork for a continued relationship between you and I and that’s really, I’ll be honest with you, one of the main reasons why I started this podcast was an opportunity to connect and engage with people, particularly in July 2020 when we launched at a time where we really couldn’t get out and meet them in person. It was a great way to just set up an opportunity to connect and talk about the business and at that point, our questions were a little bit different, obviously exploring the real impact of the heart, the heat of COVID in that moment, but a great way to connect and engage with people. So if relationships is certainly a key sort of importance to you, I’m just curious why do you think you were so uniquely suited to this opportunity? What’s helped you to become successful? I suspect you’ll talk a little bit about relationships in this question, but what else and maybe expand on that for us.

SR: Yeah, absolutely, some people are nervous to ask people for an introduction or ask people for a favor. I’ve never been one to be shy about that and I find that I’m happy to help people. People are always happy to help make that introduction that you need. And I’ve always been a trustworthy person. I work just as hard on the 2000 square foot deal for a new relationship as I am the million square foot deal that we’re hopefully going to work on in the future and I think working hard and getting people to trust you and understand that you’re loyal to them is huge in this business, huge in life. That’s part of keeping the light on, that’s part of what I try and tell some of the people we work with every day that enthusiasm is contagious and a good friend of mine, Jordan Feiner, told me that a long time ago and if you come into the office every day and be enthusiastic and other people around you have that similar positive attitude, there’s success that breeds from that. And that’s been a big part of connecting the dots and being nice to the people around you and things coming full circle.

DA:  It’s interesting, we share a similar philosophy. Prior to founding HILO, I ran a marketing communications agency servicing the commercial real estate industry and my approach was whether a client had an annual budget of $20,000 or $500,000, it was the same. Like my team treated both clients exactly the same. They both got the same amount of attention, the same respect, was the same expectation on our part to deliver. We didn’t differentiate and I think that’s a great lesson for so many people, because I’m not sure that everybody appreciates that no matter how large the deal, they’re equally important.

SR: Yeah, I still talk to my first client ever, who was at 90 John Street in New York. I’m pretty sure the rents were $19 a foot, 1200 square feet. And we talk every year and he’s become a friend and it’s a good lesson to understand that even the smallest clients and you can learn lessons from everyone too and it’s something that I’ve always tried to… People think it’s shocking if I’m working with someone to help them find a one person WeWork and I’m working just as hard on that one person WeWork as I am the next deal and it’s really helped in my career and it’s helped me be successful and a lot of people around here will see that and understand how important it is and it’s a life lesson that I always live by.

DA: Yeah, I think it’s a great lesson for our listeners. I think that young people today might be always searching for the big deal, the big fish. And I think you and I, with a little bit of experience under our belts, can hopefully offer a perspective that that is helpful and I think we’re both aligned there. There’s a lot of commentary around the physical workplace and the return to workplace and some very extreme opinions being expressed often confrontational, sometimes polarizing. My team and I, we believe very strongly that we need to live and work in the world as it is right now. And I think the CRE industry and employers can’t continue projecting to a date in the future when we’ll return to normal, perhaps living in a world with COVID is the new normal. So I’m just curious what your thoughts are on what this means for the commercial real estate industry and specifically, how can buildings continue to be important to businesses and to people today?

SR: Yeah, it’s a great question. It’s top of mind for a number of different companies. It’s top of mind for people who aren’t working in Manhattan, who are only working in middle America or somewhere outside one of the big cities. I think I’d answer in two questions two ways, but one is New York has always been resilient and I think that if companies want to exist in New York and they know they’re going to be in business, operating a business with clients or colleagues or employees in the next five years, they’re going to have an office here and changing the office is important. I think that COVID changed the way that we work and we live and we collaborate with people and maybe it’s not the hunter works stations anymore, and maybe there’s more collaborative areas so you can come in three days a week and touch down for hotel space and meet with your team or meet with a colleague that you haven’t seen in in three years. A lot of people have missed the interactions and seen people so I think it’s the structure of the office and the way that the office is built is going to change. I do think that the companies that are going to be around and will be successful will have an office, will come to work. And if they’re changing how many days they’re going to come to the office, that’s one thing and maybe working in a remote location is a healthy, it’s a healthy thing and it’s a healthy way of life to be able to experience everything that’s going on around the world and change things up a little bit, but I do think that we are on our way back. New York is on its way back a lot quicker than some of the other places in the country. Some cities like San Francisco, which are a little bit behind New York, I think are seeing how things are coming back and people are successful and people are energized with the new way that offices are being built and the way that people are thinking about the office of the future. So I think it might be a couple more years, but we’re going to get back to the new norm, and figure out what that is pretty quickly.

DA: Do you think that buildings can help employers attract and retain talent either because, or in addition to the benefits of coming together to create, to collaborate, to inspire, to build culture, what’s the role of the building and the employer in that process? Is it a collaboration? Is it strictly on the employer’s shoulders?

SR: I would say that 80% of the transactions and the deals that we’re working on and 100% of the strategies that we’re discussing right now with clients are all at buildings that are nicer than the current building that they’re in today and when I mean nicer, I mean they’re more amenitized, it’s a flight to quality, which people talk about a lot, meaning they might have a gym, they might have a cafeteria, they might have a coffee bar. It’s something that’s going to get people excited about coming back to the office. It’s something about getting people energized that they’re not just going back to some back office space, on a side street in New York City, but it’s, hey, this is this brand new construction building that has a ton of light and views, has this cool outdoor space, has a deck with a coffee shop outside that I can go meet my friend who I haven’t seen in three years, it has a gym so during the day, employers are actually keeping their people in the building, but they’re just going downstairs to take a break. And it feels there’s a renewed energy and it goes back to enthusiasm is contagious. People are getting psyched and happy about actually coming back to the office and not thinking that it’s such a job, but it’s a way of life and it’s a way of seeing people and collaborating and meeting new colleagues that you’ve never met before. But landlords are spending a lot of money right now on changing that building and making it a super A class building where there is that flight to quality, but I do think that the investment they’re making is huge and in the long run, it’s going to be beneficial for the employees in the building, the employers who have decided to move to the building and the landlord as well.

DA: This connects directly to my next question. It’s a great segue. The pandemic has recalibrated the market we believe and has helped building operators recognize that buildings are really places for people. People are the real asset, not just the building. And so as a result, tenant experience or workplace engagement, workplace experience are fast becoming the new differentiator. And they’re really driving real estate decisions today, perhaps even more so than the historical determinants, such as location and class. You spoke about some of the amenities and some of the physical changes to the space, but what do you think will truly define great customer experience for tenants now and in the future?

SR: I think that helping improve an employee’s way of life is become more important than ever. So, whether it’s giving people some sort of food during the day, so they can eat together, whether it’s having some of your employees have a gym membership or do a group exercise class, which we’ve done here, getting people together I think is the key. I truly feel that people are much happier after being stuck in their houses, especially in New York City, when you have a 300 square foot apartment being able to be out and have something new at the office and seeing some new faces is a big benefit in life. And then there’s little things that can be done too, whether it’s improving the employee’s technology, so giving them an iPad that they can travel with, or helping with some of the amenities around the neighborhood, whether it’s restaurant gatherings and being as a group and going out after work together, there is a big focus on the employee’s life and their satisfaction and how they’re going to improve just their wellbeing. And I think that given all the health and wellness that’s going on or everything that they can do inside the office or inside the building, that’s going to be a huge focus and companies are hiring specific people now to make sure that the employees are happy and that they’re in a better place than they were two years ago, three years ago, even before COVID. And I think a lot of companies who do it the right way are going to come out stronger.

DA:  Yeah listen, COVID’s been really a challenge for so many people, and I don’t necessarily want to think about it as here are all the positive outcomes or the benefits, but there are some outcomes that I think are going to be good for buildings and good for employers and good for employees. And you touched on some of the physical things that are happening in buildings, but there are also some less physical things that building operators and employers can start to do to engage and connect with their employees and focus in on health and wellbeing and the experience that they’re having within those spaces. So I think that is a good thing and I think that that focus is going to serve the industry much better, long-term.

SR: Absolutely, I think that’s a perfect point. I totally agree. I think it’s going to take a little bit of time. I think people are starting to finally come back and the return rate to the office is close to 70% now, which is a great stat for New York City and it’s a good lesson for some of the other cities that are a little bit behind, but we’re on the right track right now.

DA: We’re going to take a short break and we will be right back.

Commercial Break

DA: We’re back with Steven Rotter, vice chairman JLL New York city. Really glad you could be with us again today.

SR: Thanks again, this is great.

DA: Living through a pandemic has been challenging for so many, but it’s also provided the opportunity for, as we like to say, to do better, be better and ultimately build something better. And I’m just wondering if you could share any details about your business or some part of your business that is now being reimagined to reflect the reality of where we are today.

SR: Yeah, David, it’s a great question. I think a lot of people are very interested in data now, so they want to know what the next company’s doing and what their competition is doing, who’s coming back to the office, what their returned office schedule looks like, what type of amenities they’re putting in their office and who’s moving into the brand new building on the corner and making sure that they’re not going to lose some of their employees to that other company, or just making sure that they’re at least staying on par. So data has been a big part of our business. We have started partnering with data scientists. We’ve started partnering with venture capital specialists, private equity experts instead of the brokers going around and saying that they’re the expert in this tech company, because they’ve represented the biggest deal in the city. We have a venture capital specialist who’s partnered with us and who works at JLL that is with us on all these meetings and can speak a language with that venture capital individual, and just understand what’s going on with their business. So definitely, adding more data and more knowledge into presentations or just regular communication I think has been huge and we’ve been communicating with a lot of our prospects and clients once a month and we’re doing round tables and offering again, bringing people together, keeping that light on, but just the ability to connect and talk to each other and we’re sitting on the sideline kind of listening to everything that’s going on, but it’s interesting to have a lot of those clients just talking to each other and hear about what’s going on at the firms, not necessarily from a real estate perspective, it all ties into real estate eventually, and what the outcome’s going to be, but I think it’s been a good segue and it’s been helpful for people to have all the data and just be able to use that appropriately. And then I think the other biggest change has been just not brokers have a tendency to be, let’s meet, let’s go see office space. We’ve tried to tell people like, hey, there’s a bunch of different strategies here. And I like to tell people sometimes the best thing is to do nothing, stay in place. You’re in a great situation. You’re not paying a high rent, let’s wait it out for a little bit. So I think just being a little bit more patient and arming them with the technology and the guidance and the data that they need has been a big difference. And finally, I would just say that technology is huge. I would say we’re almost a technology company that specializes in real estate and whether it’s helping people with these virtual tours or executive that’s in San Francisco who doesn’t have a chance to come to New York this week, we can take them on a tour where they can go see this specific building in the submarket, take the elevator all the way up to the floor they’re going to lease and see the views to make sure they’re not being blocked in 10 years and have the full development pipeline of the buildings going up around them to make sure the view and the park that’s across the street is not going to be blocked for their entire 10 year lease that they just signed. Or just tracking their leases properly, knowing what’s going on with everything in their organization and communication between the brokers and their teams and making sure that everyone’s on the same page. If people aren’t together all the time, communication technology is going to be more important and that’s been a big key to our success is making sure we have the best technology, the best data, and communication is we’re overcommunicating now, instead of sending an email every so often and making sure that we’re top of mind and in a good place with everyone, whether they’re a client or a prospect.

DA: Well, it goes back to my earlier question and comment where buildings are really places for people, that that’s the asset and it feels like based on everything you’ve just shared that you’re far less transactional and far more focused on the service of real estate and being of service to your clients.

SR: Yeah, absolutely, it’s 100% true and what I mentioned earlier, and it’s something I learned in life. I’ve been best friends with the same seven best friends since we’ve been four years old. I mean, in kindergarten I grew up in Highland Park, Illinois, and we have a text chain. I was just with seven of them for the entire weekend with 42 of us and 18 kids. So it’s a blessing and it’s been great to have grown up with all those people and have had that relationship and maintain that relationship and grown that relationship and introduce them to people, they’ve introduced me to people and it’s not transactional, as you just mentioned, it’s a way of life, it’s the right thing to do, it’s a nice thing to do and it’s natural and it’s something that’s really helped all of our friends throughout life, whether it was at summer camp, whether it was going back to kindergarten or whether it’s trying to help someone in their career today.

DA:  And thank you very much for sharing that, it’s both personal and professional, but you can see where they overlap. And again, great lessons and great learning for so many people. And like you, I also have a camping background. So I spent eight years at summer camp and I know how important sleepover summer camp is and the impact that that has long term and many of my best friends, if not most of my best friends, still go back to those overnight camp experiences so totally get that. Our closing speed round, an opportunity to get to know Steven a little bit better. Can you share one way in which the pandemic has changed your outlook on life?

SR: I have three young kids now, a 10 year old, a seven year old and a three year old. Definitely not taking things for granted and spending a lot more time with my family, being able to do some different things, whether it’s a different sport or teaching my three year old to golf, which he actually likes to do, I think he’s the next Tiger Woods or doing a TikTok with my seven year old daughter, which I probably shouldn’t say on here, no one should check it out online, but there’s a lot of things in life that people realize, cause they’ve been home so much and with their families, they don’t want to take things for granted anymore. And I would just say, life is short and spending a lot of time with your family is the most important thing that’s come out of COVID.

DA: And we will give a photo credit to the graphic behind you, to your daughter I believe, correct?

SR: Yes, my daughter did invade to my office and that was actually two months ago, so I’m not allowed to erase it. And anytime she FaceTimes me, dad, show me your board.

DA: You have to stay in that office forever. What travel destination do you miss most?

SR: This is more of a business travel. I’ve been trying to go to San Francisco almost once a month before COVID and I co-run the tech business with a few of my partners and close friends out in San Francisco and it was great seeing them and seeing some of our clients and prospects out there. I missed San Francisco. And on the other hand, I’ve been doing a lot of new travel destinations. I went to Knoxville, Tennessee for the first time, I got to go to upstate Wisconsin where I went to camp for 11 years to see my 10 year old. So a lot of new, exciting trips, but I do miss going to see my friends out west and hopefully that’ll continue soon.

DA: Great, anything new on your bucket list that you’d like to experience?

SR: I do, this is more of… 37 years ago, I started to… This is actually happening this weekend and it’s kind of silly. 37 years ago, I started to collect baseball cards and I had been a little low-key about it and not as attentive in the last 20 years, and in the last three years since COVID started, my son and I have been completely into the sports collecting universe, which is really, if you read in the news, has taken off and I had never been to one of the national conventions. So this Thursday I’m actually traveling by myself to Atlantic City to the sports card convention and they do have a Mickey Mantle there that is supposed to set the world record in terms of the sales. So it kind of brings a lot of people back to their days when they’re growing up and, oh, I have shoebox of baseball cards in my garage from growing up and I’ve spent a lot of time and energy and money reinvigorating the collection and organizing and there’s a lot of cool technology that helps you. So it’s been kind of a bucket list thing that I love doing now, and it’s great to do with your kids and thankfully I’m going to experience a big show with about 50,000 people this week.

DA: Wow, well, good luck with that. That sounds awesome. What’s your favorite technology that is new to your life?

SR: That is a good question. I would have to say it’s the ability to… It’s the ability to kind of consolidate my computer, my iPad, and all the other devices that you can read email. And I’m a very organized person and I every night will inbox zero. So the technology and the ability to consolidate your work and life and your emails that you read every day and be able to organize them and inbox zero every night I think has been a game changer for me. It helps keep my head clear and it helps going at work every day and just being able to click on that last email and file it or read it or deal with it is a feeling that feels really good.

DA: Well, we will do a separate call and you’re going to help me develop a strategy for inbox zero, because if I could achieve that, I’d be one of the happiest people. I know I can’t stand a large inbox, but unfortunately it happens far too often so that would a separate call for you and I.

SR: I would just say just one more thing. We don’t have this technology and I’ve actually never used this technology, but just SpaceX and how space exploration has really taken off in the past three years and just the ability that humans are actually going up to space for a couple days and there’s going to be a concert in space in a couple months, I think has been something that we’ve never witnessed in life before and it’s something that is awesome and I hope this keeps expanding and it becomes a way of life in the coming years, but it’s a technology and a business that has just been really cool to see over the past three or four years.

DA: Great, very good. What’s your personal choice for days spent in person with your colleagues versus working from anywhere?

SR: Well, I 100% prefer to be in person. I’m in the office at least four days a week. And that fifth day, we’re trying to do a tour. We’re trying to do a meeting outside the office, either with our team or with clients and whether we’re all getting together for a Peloton class online, or we’re trying to have a various bootcamp together and something fun to get people together, but we 100% prefer in the office kind of where all the action is in New York. And it’s something that we’ll hopefully continue, cause we’ve had a lot of success here at JLL and we really do have almost the entire office back and I think it’s been a good thing for people to experience and hopefully that enthusiasm is contagious and it kind of spills out to other people as well.

DA: Very good, Steven, I just want to thank you again for joining us on the program today. I’ve really enjoyed the conversation. I’ve learned a lot, really appreciate some of the insights that you’ve offered both personal and professional. I will not be bashful and at some point I will reach out to you shortly and perhaps explore some opportunities for introductions and to continue our conversation. You’ve been just a pleasure to have on and I look forward to building the relationship and next time I’m in New York, I will absolutely reach out and hopefully we can meet up in person.

SR: For sure, David, this has been great and this podcast is great and very interesting and all your guests have been great so I really appreciate you having me today.

DA: Yeah, my pleasure. Our goal is to just connect with great people in all aspects of the industry and really just provide real insight into what’s happening today in the market. And so your insights, your comments, particularly with regard to New York, are always super helpful so thank you and we will be in touch in the near future.

SR: Thanks again for having me, take care.

DA:  Take care. I want to thank Steven Rotter for joining me on this episode of 10 and for contributing to the global conversation around buildings being part of a robust ecosystem that can help to build great companies and that they are vital in the effort to cultivate and support great people and teams. The future of the workplace will likely take many forms and we will continue to explore what that looks like together. Subscribe to TEN for more conversations with leading CRE industry professionals and experts who all have something to say about tenant experience and the future of the workplace. We love hearing from you so if you enjoyed this episode of TEN, please share, add your rating and review us through your preferred podcast provider. 

If you or someone you know would like to be a guest on a future episode, please reach out to me directly at david@hiloapp.com. And until our next episode, I wish you all continued success in building community where you work and live, thank you.

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Michael Beckerman | CEO | CREtech | Putting a spotlight on tech and innovation in the built world

Season 3 / Episode 13 / 36:12
In this episode, Michael shares his career journey from public relations for commercial real estate to launching a small news aggregator that has grown into something much bigger, now CREtech. Michael saw an opportunity to put a spotlight on innovation in the built world and create a global audience of startups, commercial real estate operators and venture capitalists.

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Season 3 / Episode 12 / 33:35
In this episode, Amy discusses the need for buildings to be more competitive, especially when stacked up against newer construction. Technology has been focused on the operations side of the business, but it’s not enough. With HR managers now involved in every real estate decision, now is the time to tap into what is most important – delivering what tenants really want.

Bob Knakal | Chairman NY Investment Sales | JLL | A titan in NY CRE shares his story and insights

Season 3 / Episode 9 / 42:36
In this episode, Bob shares his personal experience working through the pandemic and how his own thinking has evolved and changed. Bob believes that working in the office is more fun and hopes that people will continue to find their way back to the office and rediscover the many ways in which the commute can provide valuable time to read, listen to audiobooks or your favorite podcast.

Michael Beckerman | CEO | CREtech | Putting a spotlight on tech and innovation in the built world

Season 3 / Episode 13 / 36:12
In this episode, Michael shares his career journey from public relations for commercial real estate to launching a small news aggregator that has grown into something much bigger, now CREtech. Michael saw an opportunity to put a spotlight on innovation in the built world and create a global audience of startups, commercial real estate operators and venture capitalists.

Amy Carroll | President | Trademark Properties | Is Commercial Real Estate a dinosaur?

Season 3 / Episode 12 / 33:35
In this episode, Amy discusses the need for buildings to be more competitive, especially when stacked up against newer construction. Technology has been focused on the operations side of the business, but it’s not enough. With HR managers now involved in every real estate decision, now is the time to tap into what is most important – delivering what tenants really want.

Bob Knakal | Chairman NY Investment Sales | JLL | A titan in NY CRE shares his story and insights

Season 3 / Episode 9 / 42:36
In this episode, Bob shares his personal experience working through the pandemic and how his own thinking has evolved and changed. Bob believes that working in the office is more fun and hopes that people will continue to find their way back to the office and rediscover the many ways in which the commute can provide valuable time to read, listen to audiobooks or your favorite podcast.