Legacy Over Leverage- -The Fearless Pursuit of Lasting Impact

A distinguished elder passes a key to a young businessman amidst towering buildings and deep-rooted trees, symbolizing the transfer of wisdom and legacy over mere financial leverage.

Welcome to Week 6 of the Iconic Journey in CRE's exploration of "A Year of Fearless Ethical Leadership." This week, we delve deeper into the foundational anchor of "Legacy Over Leverage," a principle that champions enduring value, reputation, integrity, community contribution, and relationships over immediate financial gain or excessive risk-taking. This fearless pursuit of lasting impact is a cornerstone of ethical leadership in commercial and multifamily real estate.

In a field often focused on transactions and maximizing returns, the idea of "Legacy Over Leverage" serves as a powerful reminder that true success transcends immediate profit or financial power. It's about constructing something that endures, positively impacting communities, and fostering the growth of future generations. This principle is a vital part of the 'Ethos of Ethical Power,' which guides ethical leadership.

Embracing "Legacy Over Leverage" demands a fearless mindset, influenced by principles like those found in The 50th Law. Fear often narrows focus to short-term profits or discourages investment in initiatives with delayed impact. However, fearlessness empowers leaders to focus on long-term vision and impact, even if it means sacrificing immediate leverage. It enables leaders to move beyond purely transactional thinking and adopt a purpose-driven approach.

Guests on the Icons of DC Area Real Estate podcast share experiences that vividly illustrate this principle. They demonstrate a consistent commitment to building long-term value and impact. Their insights can be organized into key areas:

• Prioritizing Integrity and Reputation: A foundational element emphasized by many guests is the crucial role of integrity and a strong reputation. They often view this as more valuable than short-term financial gains.

  • David Orr highlights that integrity is a core element that "permeates throughout" his company and sets the "standards" for leadership. His personal billboard message is simply: "It's All About Your Integrity". He also advises his younger self to "Always deal with a high degree of integrity and be honorable".

  • Brad Olsen reflects on the importance of "maintaining integrity" even in difficult business situations and advises his younger self that "Integrity. Personal integrity." is critical because it "takes a lifetime to build a reputation and an instant to lose it".

  • Tom Burton stresses the critical assessment of a partner's character, noting that "legal documents don't matter" if the partner isn't a fiduciary. He learned from leaders who modeled "strong fiduciary responsibilities" and were "very fair".

  • Gary Rappaport deeply values the "reputation that I've built," stating unequivocally, "Reputation is more important than anything else in this business". His company's brand encompasses "how we take care of our partners and our tenants and our employees and our vendors and everyone we work with".

  • Lacy Rice links personal capital directly to credibility, which requires being "good at what you do, and you got to be honest" and "never hide," advising prompt ownership of mistakes.

  • Bruce Kirsch emphasizes the "integrity of data" and building "trust" by consistently doing things in a "predictable manner," stating, "trust is worth more than anything".

  • John Ziegenhein prioritizes assessing "the right character" when hiring, warning that even one toxic person can destroy a great culture. He structures leases not to set tenants up for failure but to ensure the numbers "really work" for them, reflecting a focus on long-term fairness over aggressive terms.

• Focusing on Relationships and Partnerships: Building and nurturing strong, trusting relationships and valuing partnerships are consistently identified as crucial for long-term success and creating a positive legacy, often surpassing purely transactional approaches.

  • Brad Olsen highlights the immense impact of relationships over his career and deliberately structured his business to prioritize the "quality of his partnerships". He sees relationships as the "fundamental glue that holds the industry together" and engages in "full contact networking" to understand people deeply.

  • Tom Burton notes his firm's success is heavily influenced by relationships built on trust, finding outcomes more correlated to the "partner than to property type or geography". He stresses the importance of spending time with partners to assess character beyond just Zoom interactions.

  • Dave Bramble states that "relationships are key to our industry" and advises treating each relationship as if it could bring "a thousand deals" to ensure you're the first call.

  • James Barlia learned that "people matter, people are everything," realizing that focusing solely on the idea wasn't enough. His diligence process became "almost entirely focused around the individuals and the people," understanding their motivations.

  • Moiz Doriwala asserts that for future deals, the "number one for us would be who the sponsor is" because they are the partner. He emphasizes partnering with "the right people who are going to do the right things and who are going to communicate".

  • Herman Bulls distinguishes transactional networking from authentic "connecting," which builds "relationships which are so powerful" and form the "content foundation of your network".

• Investing in Community Impact and Social Responsibility: Many guests and their firms demonstrate a commitment to positively impacting communities and addressing social issues, often going beyond standard business practices.

  • AJ Jackson discusses JBG Smith's affordable housing initiative and Leo Impact Capital, aiming to move "private capital at scale" to address affordability. He views this as a "social impact investment platform" that builds relationships with communities and officials. He advocates for an "equity lens" in decisions, making the "business case for racial equity" for better decisions and market access.

  • Dave Bramble states that the social side of ESG is "in our DNA" and they want to "leave place better than when we... [came]". They "lean in" to community impact opportunities, recognizing the "extra costs... But it's worth it".

  • Gary Rappaport was taught that shopping centers are the "stability and the base of a community". His philosophy is to "give back to the community by being a supporter of almost anything within the community," believing everyone will benefit. His brand subtitle, "Cultivating Places," underscores this focus.

  • Ray Ritchey articulated his mission as: "Leave our communities better than what they were before". This powerfully reflects the pursuit of a lasting positive impact.

  • Shekar Narasimhan has a "huge heart for community service" and a passion for affordable housing, believing the problem "can be solved" because it's man-made. He supports Amazon's investment in affordable housing, linking it to their customer focus.

  • Chuck Bean highlights his "giving back" approach, working with regional stakeholders and favoring a "cooperative instead of competitive approach".

  • Jon Peterson advises to "give back to the community," and Taylor Chess advises to "Be a part of the community," citing the importance of community building.

  • Bruce Pascal mandates that his agents "join a board" of a non-profit, seeing it as essential for success as it teaches them "how a non profit operates".

  • John Coe, the podcast host, formed the non-profit Iconic Journey in CRE specifically to "support professionals at every stage" and "help reinvigorate downtown Washington with ideas," reflecting his commitment to giving back.

• Long-Term Vision and Purpose: Prioritizing a long-term strategic perspective and being driven by a clear purpose are recurring themes, contrasting with a focus solely on short-term profits.

  • AJ Jackson frames his involvement in affordable housing through the lens of "purpose," orienting his life and behaviors towards it. He's proud of proving the model for the Washington Housing Initiative, which he believes can be "really impactful and transformative".

  • Dave Pollin advises balancing short-term decisions with "long-term success" and having a "clear direction".

  • Ethan Penner views understanding human nature and philosophy as fundamental to real estate, suggesting a deeper purpose. He wrote his book to create a "family heirloom of ideas and experiences" to be passed down.

  • John Ziegenhein's company, Chevy Chase Land Company, operates as a "permanent capital vehicle" with a focus on "buy and hold long term," prioritizing yield and cash flow over IRR because they care about "long term value". Managing the family business involves thinking about "who you are tomorrow" and focusing on a "long term strategy".

  • Tom Burton's firm transitioned to an institutional fund business for scale and consistency, structured for "risk management" and "portfolio diversification" for "passive investors," focusing on "long term goals". He learned conservative investing, particularly regarding "exit valuations," from past crises.

  • The blog post highlights that building a lasting legacy "inherently requires patience and consistent effort over extended periods," embodying the principle of "Make Peace with the Long Game". This patient, long-term focus is enabled by fearlessly committing to a purpose beyond immediate gratification.

• Mentorship and Developing Others: A significant aspect of building a legacy is investing in the next generation through mentorship, teaching, and creating supportive environments. The Iconic Journey in CRE community and the podcast itself are dedicated to this.

  • The Iconic Journey in CRE community is dedicated to "supporting professionals at every stage," empowering young professionals through "learning, mentorship and networking". Experienced professionals are invited to "give back to the industry".

  • Brad Olsen views mentorship as crucial and is dedicated to "helping shape the future of young people in our industry".

  • David Orr believes providing mentorship and a "safe environment where it's safe for them to ask what they feel might be a dumb question" is most beneficial to younger people, emphasizing that "no question is too dumb".

  • John Coe was inspired to start the podcast because he wished he had senior people guiding him early on. He sees the Iconic Journey as a platform to "mentor and educate, really anyone in real estate".

  • Bruce Pascal views his requirement for new agents to join non-profit boards as a form of mentorship, teaching them how they operate and providing networking.

  • John Ziegenhein advises his younger self to "learn, be a sponge. Listen to what people have experienced," highlighting the value of learning from others.

  • Shekar Narasimhan believes a mentor must "invest time and energy," and must "see mentee succeed".

  • Tom Burton sees teaching as part of his job and encourages younger professionals to "teach yourself to read contracts," a "really important skill" learned from patient mentors.

  • Wendy White advises her younger self to "Make relationships" and is involved in pro bono work and helping young girls through non-profits.

  • The blog post highlights that mentorship is a significant way leaders contribute to developing future leaders, leaving a legacy of knowledge and guidance. Examples include Vernon Knarr mentoring junior brokers, Brad Olsen mentoring Lilli Dunn, and Art Fuccillo learning from Ted Lerner. This "generative approach" shapes the industry's future.

For early-career professionals, embracing "Legacy Over Leverage" means defining success by the positive footprint left on the community and the people influenced, not just deals or wealth. It's about aligning work with the mission of the Iconic Journey in CRE to empower professionals to thrive, excel, and build meaningful connections. By focusing on proactive contribution and holistic leadership, one embarks on this fearless pursuit of lasting impact.

These collective examples from the Icons podcast guests and the blog post emphatically demonstrate the prevalence and importance of the "Legacy Over Leverage" theme, showcasing a shared commitment to building enduring value, fostering strong relationships, contributing to the community, maintaining a clear purpose, and investing in the development of future leaders.

Next week's focus will be on another foundational anchor: "Power Through Character and Integrity".