HEATHER EWING: The CRE RUNdown
Are you intrigued by Commercial Real Estate? Join Heather Ewing, CCIM each week as she dives into CRE trends, Deals, and Developments throughout Madison, WI. Learn the crucial role of Mindset in CRE and Marathons! Success leaves Clues.
HEATHER EWING: The CRE RUNdown
Ep. 42 Doug Motley - Corporate Finance to Real Estate Success and Mental Resilience
Unlock the secrets to real estate success as we sit down with Doug Motley, a distinguished real estate developer and investor from Delaware. Discover how Doug transitioned from a corporate finance background to founding Jack Lingo Asset Management, navigating early career challenges that ignited his entrepreneurial spirit. Doug shares invaluable insights on identifying overlooked markets and asset classes, emphasizing the importance of finding the right partners and cultivating a collaborative company culture. This episode is a goldmine of practical advice and strategies for anyone looking to make their mark in real estate investing.
Prepare to be inspired by Doug’s wisdom on maintaining a strong mindset and building genuine relationships. Learn how inner peace and strong fundamentals can help you weather the unpredictable ups and downs of the real estate industry. From engaging in physical activities like weightlifting and running marathons to mastering effective negotiation strategies, Doug reveals how these practices contribute to mental clarity and professional success. Tune in to hear about the art of achieving mutual benefit in negotiations and leveraging diverse perspectives to create winning solutions for all parties involved.
Welcome to Heather Ewing, the CRE Rundown. I am your host, heather Ewing, and today I have a special guest from Delaware. I have none other than Doug Motley, doug, welcome.
Speaker 2:Thanks, heather, great to see you and appreciate you having me on.
Speaker 1:Definitely. Thanks for joining me today. So we've gotten to know each other just a little bit, but I wanted to introduce you to my audience. Can you share more about yourself?
Speaker 2:Sure, I am a native Delawarean. I've been in the real estate business almost 20 years now it's scary to say that Started my career in banking, corporate strategy, corporate finance and, through an acquisition, found myself looking for a different industry at the ripe old age of 25. And a friend connected me to someone who was in the real estate development business. We hit it off and they were willing to take a risk on me. And you know, finding people who are willing to be your champion and to take a risk on you is something special, I think, in life, and I was fortunate to have a couple instances of that but this was certainly one of them and got into real estate development.
Speaker 2:Didn't know anything about real estate at the time, had done one real estate transaction and that was purchasing a house and I did that very poorly. A house, and I did that very poorly. So fortunately I learned very quickly and actually ended up stepping into the chief financial officer role at this development company within being there six months. So it was definitely a sink or swim type of environment and really learned so much in a couple of years that I was there. There I learned the entrepreneurial uh, I guess spirit through that experience, and that was the catalyst for starting my first company in 2009.
Speaker 2:I guess it was where we were focused on investing in distressed office coming out of the gfc, and we did that very successfully. Performance was fantastic. Amount of capital raised was not tremendous, but if you're going to have something be wrong, it's better to be wrong on the capital than wrong on the performance. So that was my first entrepreneurial experience. And then, in 2011, formed, with several other partners, a company called Jack Lingo Asset Management, or JLAM, and that's what I've been co-running for the last 13 plus years. Now we're a regional development and investment company that really focuses on overlooked markets and overlooked segments of the industry, but really have the capabilities to both acquire and develop a variety of different asset classes, which we think puts us in a pretty good position to succeed in a variety of different markets.
Speaker 1:Right, the diversified portfolio, right, yep. So backing up a little bit your statement of a sink or swim, I think anyone that is familiar with commercial real estate, investing any any related arena of it, will understand that, and I've frequently thought that it reminds me of Darwinism playing out. What would you say about that?
Speaker 2:yeah, I guess we tend to have a lot of. I don't know if they're cliches or phrases they eat what you kill, sink or swim whatever, sharpen your pencil?
Speaker 2:yeah, exactly, and they're, you know, they're all relevant in different contexts, but, um, you know, for for me it was finding that right environment of having the support and empowerment, um, you know, to succeed, but also the um culture, or knowing I needed to be able to figure stuff out on my own, and that's, you know, as we've built our company, that's a big thing that we pride ourselves on in terms of our culture is finding the right people that have the right skill set and really empowering them to do, you know, awesome work, and so I don't liken it quite.
Speaker 2:I personally don't think the safer swim term is appropriate for our culture, because maybe it would be if you had a life jacket on kind of thing or you had somebody looking over you with a safety boat as you're swimming across the English Channel. So you've got support, you've got the team to to help you succeed, you've got the team to help you succeed. And, as a leader, I think our function is really to help set goals, empower people and remove roadblocks and really kind of get out of the way.
Speaker 1:And so I think that sink or swim mentality is what I was in, but we look at it a little bit differently here in our company today, which is ideal, because it's one of those, I think, when you're beginning, everything is new, there's so much and you're trying to gather it all in, but with the years, the decades of experience and creating your own brokerage firm, that you're able to determine the environment, the atmosphere that you want to promote, which is definitely more of a relationship, collaboration, growth, which is something that I align with too, because you'll get a different feel from each of the different firms and investors, and it's really selecting. Who do you want to tie ships to in that sense, because it's like the old adage of birds of a feather. I think the same is true of of brokerage and investing, that you align with different people that have similar values, and when people are investing significant amounts of money and assets, you want to make sure that you're connected with the right group absolutely, and from the the investment.
Speaker 2:We've invested about half a billion dollars in a variety of different strategies over the last 13 years or so, and you know that finding the right partners on the brokerage side is really important most important word in our whole business because if finding people that a have a similar mindset to you but are willing to take the time to understand your mindset as well, as you know, help provide value for you as an investor. Working with brokers that are very proactive and trying to, you know, help you find what you're looking for, help you achieve your goals, enables them to also achieve their goals. So it's a very cooperative environment when it's set up correctly. And I've definitely seen the other side of that, which is just maybe less worried about a win-win and more worried about a win-win and more worried about somebody.
Speaker 2:One person winning irrespective of what may be happening to the other people involved in the transaction.
Speaker 1:Right Two very different vantage points as far as short-term quick win versus the long relationship and I think too like yourself of creating those long-term relationships are really satisfying, and when you deliver at a high level and are proactively looking for ways to increase their returns and maybe do something uniquely and outside of the box, that's going to benefit them. People value and appreciate that and it's very reciprocal. Them. People value and appreciate that and it's very reciprocal. So, as we advance down, you had mentioned about various asset classes. Is there one right now that you're really leaning into, or one that you think is going to shift the market a little bit more in the upcoming months or year?
Speaker 2:Sure. So great question and, I think, really interesting timing as it relates to where we are. So we've invested across a variety of asset classes, but we saw the lending market changing very dramatically starting about two years ago with the Silicon Valley Bank collapse, the regulatory environment changing for virtually every lender out there, interest rates increasing and just the whole dynamic of commercial real estate lending kind of getting turned on its head, and we saw some similarities to what happened in the GFC Definitely some big differences, but we saw some similarities. And at the same time as supply of capital or debt capital was getting massively constrained you have more than $1.5 trillion of commercial real estate loans maturing, so you have this giant demand for debt capital but you have a constricting supply.
Speaker 2:And so we saw an opportunity, or we believe that there were going to be some things that break or just kind of a market dislocation, and so we put together a private credit vehicle to provide rescue capital, subordinated debt and preferred equity across asset classes, so a little asset class agnostic in the lower middle market space. So we think that that's a really compelling space to be in right now. But we are also continuing to lean in on the residential development side and that's both for rent and for sale product, because the US is short three to six million houses, depending on which number you look at, and that's not a problem. That's going to get fixed very quickly. So we think that you know, over the long term the residential segment of the market makes a lot of sense to be an investor term.
Speaker 1:The residential segment of the market makes a lot of sense to be an investor.
Speaker 2:I agree, and where would you say that mindset settles in with all of this? Wow, that's a great question. So, yeah, I think you can look at it from the macro perspective and you know we're not in a business that changes by the minute, like trading stocks might be, but you know we also don't have a crystal ball and know where where things are going. So you have to make sure that the fundamentals are strong, no matter what may be happening with things outside of your control. From a mindset perspective, I think that's super important to have stability, have compassion, have understanding. And then, from a more micro perspective, we all have transactions that are getting ready to close and something comes up and it's going to delay it or push it or you catch a curveball at the last minute and having the again kind of awareness and, um, almost uh, inner peace of everything is going to be okay.
Speaker 2:Um, having that, uh, having that mindset really can just make doing what we do a lot more enjoyable or less stressful, and that's not something that I learned, um, naturally, you know it had to be very intentional kind of process for me to get there, and so had some very challenging transactions where things were coming up and I would get like physically ill and I was like, okay, something's not right here, this is not good right.
Speaker 2:And for a variety of different reasons, I ended up. I had the opportunity to work with a, an executive coach, who was really um very active and a deep believer in the, the power of mindset and and how that can impact, um your effectiveness, and he really turned me on to you know, a couple great books and some really interesting ways of thinking that I've put to work over the last five years that have really, you know, increased my impactfulness and my effectiveness and everything I do, both internally with our team as well as externally, and how we think about investment strategies or how we, you know, transact with others definitely, and I think too that in life it seems like people want to put everything in a silo your career is here, your personal life, all these other aspects and it's they're all interrelated.
Speaker 1:So if you're crushing it in one, you know chances are it's going to flow into the other and vice versa. And that's where, too, I really like having that bigger macro vantage point. And so, with your example of the executive coach, they're able to see that bigger picture, know all of your goals. Obviously we know ourselves, but they also are able to see that little part of us that we may not always acknowledge or think of when we're moving through.
Speaker 2:So it's really who you become on the journey when you say absolutely, and I think for people who are going back to the kind of relationship topic. But genuineness and authenticity matters and you can see that and as you're interacting with people, whether it's in work or in you know leisure activities. You can see that and as you're interacting with people, whether it's in work or in, you know leisure activities.
Speaker 1:You can see that right I mean, we're all people.
Speaker 2:You can tell somebody's you know bs in you or or they're legitimate or they're being authentic, um, and that matters and everything we do right. Like if you meet somebody out of the restaurant and they just seem fake, you're not going to be, you know, interested in talking with them more. If you meet somebody in business and they're just authentic and they are listening and seem to really be interested in what you're doing and how they can help, you're going to want to do business with them. So I think exactly as you said is you know we're all people and you don't compartmentalize from a work outside of work kind of bucketing.
Speaker 1:Yeah, and I think, too, everyone has a gut feel, a gut intuition, and it's one of those. Sometimes you see people with a smile and it's just like you can just feel, though, that something is off, and so, to your point, having just that crystal clear trust in someone makes all the difference. And again, you're not investing. You know even something very small they're typically big amounts, and you want to know that your money is being invested properly and that you have a good relationship with the investor. So what would you say is a good way? So you've definitely, you know, transitioned over the years from feeling kind of sick with different deals to now of you know, of being in that space of stability, of kind of having your resources. What are a couple of those resources that you would recommend as a go-to to really help people stay on the up and up as they're moving through stressful deals or capital raises, things of that nature?
Speaker 2:I think just physical exercise is a big one, whether that's, you know, just walking and letting your brain meander as you of that nature. I think just physical exercise is a big one, whether that's just walking and letting your brain meander as you do that, or I'm big into lifting weights and that's a good. Get out some stress by doing that, meditating and finding things that really help you focus, help you strip out some of the noise. I'm also a pilot, so for me, going up and flying around is something that you still need to be obviously paying attention to what you're doing for safety and all that, but it's just kind of a Zen space for me.
Speaker 2:So finding those things that really make you feel good and kind of invigorate the body. There's a big connection, I think, between you know the physical body and how well you're, you're you keep, you're taking care of your body and how well your mind is functioning and how effective you ultimately can be in work. But I know you're really active in athletics or endurance. How do you think about that same question?
Speaker 1:I agree completely. I frequently am asked how do you find the time to run marathons and also run your firm? And for me it gives me energy, similar to weightlifting for you and it's mindset, because when you don't feel like running and you choose to because it's choice. I think that sends that repeated message throughout your entire system mentally, physically, otherwise that you're a person of your word, that you keep your commitments and that you deliver for yourself and for others. And I don't know how people do it without a physical outlet. Well, I guess I do, because many, many decades ago I used to not really work out and didn't make the best choices. So it's one of those. It's a staple of my life. I look forward to it. Like with anything, you're going to have days you don't want to do it, but you're always glad that you followed through and did it right yeah, for sure, for sure yeah.
Speaker 1:So my, my big question for you, doug, is how? What does living fully mean to you? That's an unbelievable question. Um yeah, oh, I know it's a hard hitter. That's why I got you all warmed up.
Speaker 2:Could probably talk for a really long time on what that might mean and philosophize, et cetera, but I think for me it's it really comes back to that relationships concept and finding people. And this includes people you work with internally. You know friends that you that don't have anything to do with work, but building meaningful relationships and meaningful can mean a whole bunch of different things, but I think interacting with people is one of my favorite parts of the business. Entrusting us with a significant amount of their capital for us to invest, whether that's dealing with brokers who are advising us or helping us source opportunities, or representing us and leasing our properties, or vendors all over the whole spectrum, but really getting to know people and learning about them and helping them succeed. And it may be direct ways, it may be indirect ways, maybe opening up doors for them, it may be giving somebody a hand up at a time when they need it, but really those things I find so rewarding and and that's, you know, I think that's the most important thing for me.
Speaker 1:Definitely, and actually you know what I do. Have one more question. I'd be remiss if I didn't ask so your TEDx speech, which is something I would love to do one day tell our audience a little about your how to harness the and experience and anybody who has the opportunity definitely try and step up and take it very exciting and it was a very, uh, sometimes uncomfortable but really rewarding experience for me.
Speaker 2:But the my talk was um, about the power of the ant and really trying to. This goes back to the mindset question, which I think is is a great one, but trying to find, um, more than just maybe the obvious answer in things and that could be, you know, this property is an industrial property. Well, maybe on its face it is that, but maybe there's a way to reposition it and extract a lot more value. So it's and it's better off being a multifamily property, and that's just a really kind of cheesy example. But as we go to mindset, you know I think we talk about this a lot internally.
Speaker 2:But how are there ways where I can have the outcome that I'm looking for and you or the counterparty on the other side can also get what they're looking for? And a lot of that comes down to asking questions and listening and trying to understand different people's viewpoints. So it's an idea and it's a concept that I try and pull into my thinking, you know, as much as I can, because I think there are so many applications to it. Sometimes it's very, you know, specific as to how we look at a real estate investment. Other times it's, you know, negotiation that we're entering and it's not just what do I want, what do I need. But hey, maybe there's a way where I can get that and I can the seller or the buyer, I can help them accommodate what it is that they're looking for. And I'm guessing that in your role as a, as an advisor and and um consultant in the brokerage side, you probably have to do that quite a bit and the most effective people and kind of bringing two perspectives together are the leaders in the industry, definitely.
Speaker 1:And I would say, with the climate that we're in too, the end for me really comes from that creative vantage point of seeing it outside of the basic structure, what people have done, maybe how it's zoned and creating the wind. So with that, doug, thank you so much for joining us. It was a true pleasure today. And, folks, I will leave Doug's contact information because I know you're gonna wanna reach out to him. So, doug, thank you so much.