Susi Yu, Principal & Head of Development at MAG Partners | Connecting residents to their community | 31:50

Transcript

DA: Welcome to TEN, the Tenant Experience Network, I’m your host, David Abrams. In this episode, we are connecting with Susi Yu, principal, head of development at MAG Partners. In this episode, we will learn about Susi’s journey from architect, to building developer, and now entrepreneur. She will share her learning from working with many amazing women who have been successful in managing both career and their personal lives, Susi will talk about the combination of design and the realization of development. We will discuss how a bit of luck along the way can become the secret ingredient to success, we will chat about connecting residents to the community and creating mentorship opportunities for social good, she will also introduce listeners to the notion of nature being a critical element of design, and how touch less access in buildings is the way of the future. We are excited to be sharing this podcast with you, so be sure to follow TEN, so you never miss an episode of the Tenant Experience Network. And now I’d like to welcome Susi to the show, really glad you could be with us today.

SY: Thank you David, glad to be here.

DA: Awesome. So let’s start with your journey to your current position as Principal, Head of Development at MAG Partners, how did you get started? walk me through it and maybe share a little bit more about your current role as well.

SY: Okay. So I am a recovering architect, turned developer, went over to the dark side, I studied architecture undergrad at UVA, and as soon as I graduated I came to New York city, because this is where I wanted to end up, it was the most exciting city in the world, and I was able to start my career working for a small firm, and then I moved on to work for a Robert A. M. Stern, who, you know has done, gosh, I don’t know, a whole Disney resorts, he’s done many cultural buildings, a lot of residential, high-end, multifamily, as well as single family homes for the wealthy, and I was there for about six years, and, I always, I always, never, I didn’t understand why architects worked so hard, put so much at risk, had so much liability, right? But made so little money, like, it just didn’t make sense to me, like the business model, in a way is a failed concept, so anyways, I started working for a developer who was trying to go for a zoning variance, and he hired our firm because of our reputation in doing a lot of historical work, and I spent a lot of time with him, doing zoning meetings, mayor’s presentations, the land use committee, and it just started to kind of absorb what developers do, and realize that, wow, this is so much more fun, and my portion as an architect is so much smaller than the bigger frame of how cities develop, how buildings go up, you know, that end of it, so I decided that I wanted to become a real estate developer with this much knowledge, like little bit of knowledge, right? And I applied to Columbia, the MSRED Program, and I walked through the Bob Stern’s office, and back then you could only see him on a weekend, because he had become Dean of the Yale School of Architecture, so it was a given that we were there on weekends, and I told him that, “Bob, you know, I really enjoy being here, “but I want to switch careers and go into development.” And he said, “it’s the biggest mistake of your life.” But then I wrote a really great recommendation for myself and he signed it, which is fantastic. And then, I did the Columbia program, and the second semester of Columbia MSRED Program was actually an internship for credit, and I was hired at Forest City to be the intern, they were starting to, they were designated as the developer for the New York Times building, and Bob Stern’s office had actually written the design use guideline for 42nd street, so having the design background was helpful, and then I stayed there, I started after school, school ended, I started there as a project manager, worked my way up, eventually head of the development of Forest City Ratner Companies, and then when they were acquired by Brookfield, I left with the CEO of Forest City and then started MAG Partners, so we’ve actually been in existence, I call us the 25 year old startup, we’ve been at this now two and a half years roughly, and we have three projects that we’re working on, currently, one is under construction, two, they’re both multi-family rental in Manhattan, two are in the design phase and we have one boutique office building that we are designing in the Hudson square area, so it’s been a really interesting arc, you know, going from a large publicly traded company with a tremendous balance sheet and then coming out of that, and, you know, becoming an entrepreneur and it’s been fun, it’s almost like going into a different mentality, I miss some of the resources, like I don’t have an executive assistant who used to sort of manage my entire professional life, I had to like book my own appointments now and manage my own calendar, and I’m horrible at it, just not having that support, but at the same time, it’s been so much fun, sort of getting back into managing projects and getting to the nitty gritty, and, so yeah, it’s totally exciting, oh, and the other thing that happened at Columbia was I met my husband who was also an architect, turned developer, so a lot of good things since I became a developer.

DA: Very interesting, that’s a great story, I love the whole evolution of how you started and your decision to sort of take a leap of faith, and I love how you, I knew this much, that’s the best part, right? But you go for it, so clearly you had that entrepreneurial spirit in you already, ’cause that’s very much the attitude that you need, so why do you think you were so uniquely suited to this opportunity, what helped you to become successful? Skills, mentors, colleagues, books, what helped you along the way?

SY: I think all of those things help you along the way, but I think, the main thing that helped me really to be a good developer is marrying the understanding of how important design is, to the actual understanding of the design, importance of design to the actual realization of development, and as an architect, one of the things that I can go head to head with Frank Gehry, Renzo Piano, you know, all these architects that I’ve worked with, Bob Stern, is that, I am an architect and therefore I know drawings must be coordinated, right? And certain things that the architects want to do, have no value to me.

DA: Right.

SY: And when I say have no value, it doesn’t create increased value in the development, and you know, and to balance that in a way that continues to let the architect be creative and get what they need out of that, but then it also means that I have the ability to push back and drive the development and design process, so meets the financial goals of the project. The other thing I think was incredibly helpful, and this is serendipity is Bruce Ratner was an incredible mentor to me, and I would say that he was, Forest City was a true environmental meritocracy, you know, Bruce had before Marianne, he had a woman as the chief financial officer who then became the chief operating officer, the head controller was a woman, the general counsel was a woman, you know, so you saw women in this leadership roles and there were women with families, right? It wasn’t like women who didn’t have families, didn’t have to like manage, you know, all the different aspects of being a woman and not also having a career, and I always call it with Bruce, it didn’t matter what color or what education you had, if you came through the ring of fire with Bruce and you had to go through the ring of fire, unfortunately, to sort of rise through the ranks, once you sort of came out on the other side, right? It was an incredible, incredible opportunity, and the other part was also that Forest City was unlike other development organizations where everything is sort of like silo, like there’s like an acquisition team and there is the development team, then there’s construction, then asset management, we really, the developers sort of did the entire cradle to grave. From the initial acquisition or entitlement, right? Development, overseeing construction, and then leasing it up, selling, you know, whatever it is, and, you know, we did crazy things like buying a basketball team and bringing them to Brooklyn and going through a 10 years of legal battle, and finally bringing that, you know, starting construction on a building post 2008 global crisis, there are things that happened at Forest City that I really think were opportunities, and it was opportunity that I was there to actually take advantage of this opportunity, and Marianne also was an incredible mentor to me, you know, she has a family of three, and you know, she was able to balance, you know, certain things. and as a woman being able to have a mentor who is giving it all, and seeing that, you know, she can do it, I can do it, right? And so, that was incredibly helpful, but I really think that luck has so much to do with where you sort of your career trajectory and mentorship is incredibly important, you know, I’m lucky to have a lot of amazing mentors outside of Forest City, you know, like Marianne Tai who had been unbelievably helpful, and, you know, I don’t know how or why, but, you know, I was asked to be on boards without being like CEO of a major company, so a lot of it really, I think is luck, I mean, and yeah, there’s a lot of hard work involved for sure.

DA: I was going to say, I agree, I think sometimes luck is an underrated factor, but then it also feels like you seem to be at the right place at the right time, and then obviously, you know, you need to be able to deliver, so you could be given the opportunity, but if you can’t deliver, if you can’t execute, if you can’t meet expectations, you know, that opportunity will be missed, and it sounds like you’ve had the right confluence of factors that have really contributed to an amazing trajectory, and an opportunity to meet amazing people and work at amazing companies, so good for you. I love it.

SY: I agree

DA: Let’s agree that living through a pandemic, I believe has been horrible, it has not been easy, and there are a lot of people who have really suffered, and I can’t just ignore that, despite the fact that you hear about people who have been so successful throughout this period of time, you know, I can’t ignore, you know, how difficult it has been, that being said, I don’t think we can use the pandemic any longer as an excuse, so our teams approaches, this is a time to be better, to be better and to build better, build something better, dig deep and see what we can create as a result, so if I gave you an extra $100,000 right now of budget, how would you spend and why?

SY: Well, is it budget in construction or is it budget in operating, two different things David.

DA: Yeah, well, listen, if it was construction, I think it would have to be a million dollars.

SY: I know, $100,000 isn’t really going to get me there. It doesn’t go very far, so let’s stay more operational, so I think for if there was extra $100,000 where I could spend to make the lives of the residents and the tenants of our buildings better, I think, I would try to connect the residents to the community and maybe start some sort of building base mentorship with the local community, you know, whether it’s high school, you know, we’re build in an urban environment where, you know, $10 million penthouse is right next to a housing project, right? That’s the nature of New York City, and I think being able to sort of reach out to community and make that connection, and create that opportunity, I think it is something that new Yorkers realize is important, and I also think, you know, the younger generation, and I’m saying people in their 20’s and 30’s want more than the pet spa, the pool, the, you know, the uber gym, I think they want something more in their lives that connects them through community, that allows them to really participate in social justice, local community, and so, I would try to take that $100,000 and figure out a program that really connects them to the community that our buildings are in.

DA: That’s brilliant, so as you know, you know, our startup HILO is all about creating community within buildings and also connecting building occupants, residents tents to their neighborhood, and we’re very thoughtful around a social good component, and we believe that because we’re, again, not just selling a building app, specific to a building, but creating that community, connecting to neighborhoods and cities that our social good component really should tie to the notion of community, but I hadn’t thought of what you just suggested, this potential to create mentoring and networking and connect people that may be are in, you know, different spheres of influence or different spheres of economic stability and how that can create an interesting community dynamics, so I love that, and if you don’t mind, I’m actually going to steal that a little bit and percolate that over, and I might come back to you and chat about that further, so very cool idea.

SY: I think it’s something that we need to be more cognizant of.

DA: Yeah, and I think you’re right, that young people are looking to also, you know, not only work hard and live well, but they are looking to make a difference in the world, and, you know, the notion of giving back, the notion of supporting those that maybe don’t have the same opportunities that they do, could be a very interesting dynamic that’s created, so I definitely need to be thinking about that some more. So, listen, there’s still a lot that we don’t know, you know, clearly the pandemic, you know, has a life of its own and there’s no clear ending sight, but I do believe the return to workplace, which has begun, will continue, I think it will be slow, certainly slower than any of us first thought, I see and we all hear about flexibility, and I think that’s going to be a significant theme that is going to continue to emerge within commercial real estate, recognizing that people are going to be working from anywhere for a very long period of time and maybe forever, so I’m just wondering what your thoughts are on the implications for commercial real estate going forward.

SY: I think how organizations view space is in a very dynamic state right now, right? On one hand, tech companies realize that they need to provide flexibilities because they need to keep talent, right? But at the same time, they also know that they need to bring the talent together to create that synergy for that unicorn moment, right? That’s going to be the next breakthrough idea, so I think you can’t discount that, that when we’re together as creative creatures, right? That’s when the action happens, that’s when they’re, you know, sparks fly, and I think, it’s going to take us some time to get out of this zoom hell, I’m going to say, it’s almost become a crutch, right? In a way, that sort of allows us to not be together

DA: Right.

SY: And so, I do think, you know, six months ago when we were starting the vaccinations, right? That everyone thought that we’re going to be back to office by fall and, you know, it may be some hybrid model, but I think that sort of, that sort of flexibility of the hybrid model, I think going to continue, as we figure out what the impact of Delta variant is on those of us who are vaccinated, and, you know, end of the day, we do have to be sensitive to people’s concerns about health and related to themselves, as well as their families, so I think, we’re going to see a lot of things changing, right? In terms of the actual need, the type of offices they’re going to need, right? It’s almost like you need more like enclosed space, but then you also need like bigger gathering spaces because you don’t want people to be sitting like one foot apart, you know, I think people are uncomfortable with that, so I think, how the space is going to be used is different, and I think end of the day, actual needs are not going to shrink, I fundamentally believe, it’s just going to be organized in a different way.

DA:  Right. Yeah, I agree, and I think this is where your background in architecture is going to be hugely valuable, as spaces, you know, certainly on new projects, they’re going to be developed from scratch, but on existing projects, I think there’s going to be a lot of re imagination of spaces to meet what those needs, I agree, I don’t think the footprints are going to change dramatically, I don’t think there’s going to be a huge reduction in need for space, but I think, how that space is designed and the kind of experience, that buildings now offer is going to be truly differentiated.

SY: Agree, agree.

DA: All right, we’re going to take a quick break and we’ll be right back.

Commercial Break

DA: We’re back with Susi Yu, principal, head of development at MAG Partners. So the commercial real estate industry is moving faster towards recognizing that their core business, is not really about building ownership, it’s really about creating the best customer experience for their tenants or residents, places for people we like to say, so can you share your thinking on how we will define and deliver tenants experience in 2021, the rest of it and certainly beyond.

SY: I think the experience is going to be much more focused on how you connect people to nature, especially in the city, right? People, those that actually stayed in New York city during the lockdown, were able to thrive if there were near parks or had their own outdoor spaces, right? Our connection to nature is going to become and continue to become more and more important, so, when we’re looking and designing buildings, we look at every single horizontal surface to see how we can create private outdoor spaces, as well as public outdoor spaces for the residents, and how do we program those outdoor spaces, right? It’s also important. You have to have great wifi, because a lot of people want to work outdoors now, and we have, you know, extended shoulder seasons that allow you to do that, people would rather work out outside than in a classroom, so do you have enough footprint for that? So, I think when we’re looking at, looking at development, it’s being able to provide that sort of different programming at different locations for the tenants are going to be really important, and the other part I think is also important is, you know, we are really focused on creating a touch less pathway, from literally the moment you are outside of our building, through your apartment, so that everything is operated through your phone, you can, you know, call the elevator with the door, you can open the door with your phone, the entry door, you can open the amenities with your phone, you can open your apartment door, so, lot of these things, where you sort of create, a sense of sanctuary for your residents, I think is really, really important, and I always think about, you know, this connection to nature needs to really occur from the moment that you step into your building and throughout, so I’m a huge proponent of using natural materials, natural light, lots of our greenery, landscape outdoor, opportunities, to really, like orchestrate a person’s procession from the moment they enter, the building lobby, through when they either go to their office floor or even through the apartment. So it’s something that we think about a lot, right? We really do it from the, you know, the sidewall and how you see the building, what are the materials of the building.

DA: Well, I think your nature could become nurture, right? So, that connection to nature would hope likely nurture an environment that ultimately just brings out the best in people, whether they were at work or where they live, so, totally get it, I think that’s awesome, and the notion of this no touch less experience, you know, we’re really thinking about that a lot and trying to create that single control pad that enables you to have all of those various different experiences all centralized and offer that seamless, integrated, you know, beautiful, easy to use experience that that just eliminates friction, so I’m with you on that front as well. Is there anything that you’re working on right now, a challenge you’re facing in light of the current world circumstance, or anything that you’re thinking about in terms of some of the new projects that you think our listeners might find interesting?

SY: So, this is real time information, I think you, that I can share is, I think COVID related material procurement for construction is going to continue for much longer, you know, whether the material is being, raw materials being sourced overseas and then, you know, lack of containers going back and forth, you know, as well as domestic manufacturing, if materials source, so, you know, certain pockets of construction, material sourcing, you’ve seen escalation, like we all know about lumber pricing, right? It went up 300% in a matter of nine months, and now it’s starting to stabilize and come down, we’re seeing real time, metal studs, right? And so, I think part of it is, part of it is opportunistic by, you know, suppliers and mills that can essentially create higher pricing because there’s lack of paddock and lack of inventory, and the housing demand has not slowed down, I think at certain point, you know, developers are going to say, you know what, we cannot absorb, you know, a significant increase in pricing, we’re going to stop building, we’re going to wait, right? And then once the jobs dry up, the power, right? Is going to shift, but I think we’re sort of headed into that trajectory because, you know, if your material pricing is essentially double what you had assumed, the project no longer works financially, you are not building on a huge margin, right? I know what my rents are going to be, and my rents are actually probably down, from when I had projected in 2019, we’re not underwriting well. So I think it’s, there’s an interesting moment right now that if you’re building, you’re going to think twice about building in a projects that you’re looking at, you’re going to wait until the pricing stabilizes because there’s a lot of uncertainty in the market right now.

DA: Yeah, I mean, certainly on the consumer side, they felt that price impact, that they don’t have the weight in the industry to make a difference, so, you know, they either, you know, held off on their, you know, home renovation or their back deck or their backpack, or they just went ahead because to them, you know, it was, yes, it was incremental, but it wasn’t going to, you know, put their project off site, for large-scale construction, you’re right, until maybe that industry will be the one that ultimately will say, sorry, these prices are just unacceptable, right? This is opportunistic, this is not the real world, and you need to adjust or actually we can’t build.

SY: Exactly, exactly. I think you’re going to start to see that a bit.

DA: Right, cool, okay, closing speed round, some questions to also get to know you a little bit better and see what’s going on in your life. If you could have one superpower, what would it be?

SY: Oh gosh, just one?

DA: Just one.

SY: Just one, one super power what would it be? I would make everyone kinder.

DA: Wow, okay, that’s a heavy duty one but I like it, and boy would that be, maybe a better world for us all to live in. What city or country would you want to travel to first when you can and why?

SY: Marrakesh. I’ve always, my husband and I were going to go after grad school and we missed our chance because we both got jobs, and now that we’re empty nesters, I think that is the first city that I would like to go to.

DA: All right, awesome. When you’re not working, what are you doing?

SY: I cook, I read and I box.

DA: You box?

SY: I box.

DA: Like I say, you know, I use these conversations just to get to know people better because there’s no way you and I would add a phone call and I would’ve found out that you’d like to box, so this is good.

SY: I love to box.

DA: All right, the number one thing you miss about the workplace?

SY: Being with my coworkers, I miss them.

DA: Yeah, yeah, we just had a zoom call this morning and we were saying goodbye to one of our colleagues and we haven’t been together in a year and a half, so it’s bittersweet and I miss them too, so I look forward to our team coming back in the not too distant future. Your favorite, sorry, favorite recent TV or streaming movie or series?

SY: Ooh, that’s tough, favorite, Mare of Eastown.

DA: Oh yeah, phenomenal, and then was she good or was she good, right?

SY: I love Kate Winslet.

DA: Yeah and so, she truly, you know, sometimes there’s an actor, an actress that you see and they’re generally in similar roles and when you’re watching you see the actor, actress, just as much as you see the character, right?

SY: Exactly.

DA: In that show, you only saw the character, who was brilliant. Very good. Okay, Listen, Susi, I so enjoyed spending time together and getting to know you even more, really appreciated some of your insights loved hearing about your trajectory through this industry and why you’re so passionate about it and what you bring to it, and I look forward to continued conversation and maybe some exploration around how we create community in the urban environment. So I look forward to chatting more about that. Thanks so much for being with me today.

SY: Thank you David, it was so much fun.

DA: Great.

SY: Thank you for the opportunity.

DA: All right, take care, be well.

SY: Okay, bye

DA: I want to thank Susi Yu for joining me on today’s episode of TEN, and for sharing her journey from early beginnings as an architect, to now being an entrepreneur in commercial real estate, great learning for all our listeners and an opportunity to gain insights into what it takes to become an innovation leader. Please be sure to follow 10 for future discussions, with leading professionals and industry experts who all have something to say about the impact of technology on tenant experience in the built world. We love hearing from you, so if you enjoyed this episode of 10, 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, until our next episode, I wish you all continued success in building community where you work and live. Thank you.

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