From The Desk of Cindy: Milken Update
April and May were packed full of conferences ranging from mindfulness, real estate, finance, and blockchain. Below you will find my key takeaways from Milken that are relevant to you.
Many people asked who I was most excited to hear speak and it was no question- Sam Zell, the legendary real estate investor and business rebel is known for his bold market moves and creative antics. Sam shared his projections on the market and two standout lessons that apply to everyone reading this email.
Lesson 1: Do what makes sense to you!
Like many highly successful investors, Zell has had to make bold calls that go against herd mentality. Finding that comfortable zone of listening to others but sticking to your own conviction is a challenge. In Zell's words:
"I make a point of shutting out the noise - doing what makes sense to me. I want everyone's opinion because there is tremendous value in being a good listener. But then I determine my own path." - Sam Zell
Knowing when to listen but also when to stick to your conviction is a trait that separates good from legendary.
I relate to this in my work in real estate because I can pepper my clients with data and market trends, but at the end of the day it is important they do what makes sense for them. You can’t quantify the feel of an apartment or what it means to build a life in a special home. If you want a home you need to follow your instincts with the guidance of good data.
Lesson 2: Pay attention to basic economics!
Over his lifetime, Zell has taken on what many would consider complex investments. Acquiring the Chicago Tribune that incorporated an ESOP transaction, using NOLs to build up a portfolio of businesses, are just a few examples where an outsider could argue Sam Zell loves the complex deal. However, most of Zell's investments are driven by simple principles of supply and demand. Early in his career, he realized the value of just paying attention to the basic economics at play. To this day he uses that outlook as a driving thesis for his investments. The complex structures and moving parts have arrived as a means to execute on larger deals, but at his core, Zell fixates on the simple and basic supply and demand principles at play.
When looking for a home or an investment, it is essential you can describe why the property is special and unique. High ceilings, views, outdoor space, location, designer finishes, are all critical variables. I suggest investing in amenities that allow you to have a unique product for resale.