June 30, 2009

Leasing 101 - Part 4

4) Prioritize: All things are never equal

  • What is the most important thing to you and your company?

o Do you care most about?

§ Location?

§ Rate?

§ Amenities?

  • Rate these three in order of importance
  • Do not waste time looking at spaces that do not meet your number one requirement

Timeless Marketing & Sales Lesson #6

How would you like to write a piece of copy that pulls a 100 percent response rate?

In case you are wondering, a typical direct mailing produces a 1–5 percent response rate.

In 1925, Bruce Barton, one of the founders of the BBDO advertising agency, wrote a fundraising letter for Berea College in Berea, Kentucky. The letter, which was sent to 24 people, asked for each recipient to reply with a check for $1,000 ($1,000 was a lot of money in 1925). All 24 recipients of Barton’s letter responded—some even more generously than Barton requested—and Berea College was $30,000 richer.

How was Mr. Barton able to achieve this miraculous feat? He followed the three rules that should be tattooed on the foreheads of anyone who wants to communicate more effectively with his or her customers, colleagues, peers, or husband or wife.

1) Brevity: "About sixty years ago two men spoke at Gettysburg; one man spoke for two hours. I suppose there is not any one who could quote a single word of that oration. The other man spoke about three hundred words, and that address has become a part of the school training of almost every child."Bruce Barton

—Being brief—concise, not short in length—means learning how to make every word count and every sentence impactful.

2) Simplicity: "I think it might be said, no advertisement is great that has anything that can't be understood by a child of intelligence. Certainly all the great things in life are one-syllable thingschild, home, wife, fear, faith, love, God."Bruce Barton

—Writing simply means knowing your audience and then carefully choosing language they will easily understand. If you want to show off your vocabulary, write for an academic journal.

3) Sincerity: "I believe the public has a sixth sense for detecting insincerity, and we run a tremendous risk if we try to make other people believe in something we don't believe in. Somehow our sin will find us out."Bruce Barton

—Being sincere means always believing what you say.

Timeless Lesson: Be brief, simple, and clear in all of your communications.

If you want to read Mr. Barton's letter in full, and I highly recommend that you do, please click here.

June 29, 2009

A Letter

Before my wife married in June of 2005, I sent Governor Mark Sanford (see latest thought on Governor Sanford here) a letter asking for any advice he could provide to a young man about to embark upon one of life's greatest and most difficult journeys.

Here is the response I received:

Dear Stephen,

Thanks for your
letter, and congratulations on your wedding in June. You were generous enough to ask for a few pearls of wisdom on the marriage front, so here are a few thoughts from one who has yet to earn all his marriage badges in this chapter of life.

If memory serves me correctly, I'm thinking about a Scott Peck book called The Road Less Traveled. This book, or one I'm confusing with it, talks about moving from independence or dependence to interdependence. My sense of an ideal marriage - and it takes experiences together, time and maturity to reach this point - is that you have the union of two people perfectly able to stand on their own. They come together knowing that their lives will be more fulfilling and meaningful by choosing to build a life together. In this regard, view your marriage as a partnership, and extend to your wife the same courtesies in communication you would extend your business partner.
Surprisingly a lot of couples don't, and from unintentional and small communication lapses grow big differences. Jenny and I try to consult with one another a lot, and it has paid dividends.

Forgive - and forget. Apologize. In James the Bible says never let the sun set on your anger. It is great advice. If you have to stay up all night fussing until the issue is resolved, do it. Don't let
anyone go to bed brooding because only bad will grow from it. In resolving these issues, take Steven Covey's advice from his book The Seven Habits. He says seek first to understand - then to be understood.

The Bible charges men with the role of head of household. We set the tone and among other things are responsible for the spiritual condition of the household. Be willing to assume leadership. Part of that means to love her when that is not the mood of the day, she will respond, but you have to consistently take that all important first step. God gave you a mission in life, be sure to in some way incorporate her in it. She will be thankful and like all women want to be part of a mission impossible that is bigger than just cleaning dishes and washing the baby's diaper.

Thank her for the little things she does. I do a poor job of this, and it is worth focusing on.

Keep it fun. Don't let spontaneity die. Take time to smell the roses along the all too short path called life.

My life has been made richer by our friendship Stephen. Thank you again for it and again congratulations.



I am not posting this letter as some sort of "gotcha" moment. Governor Sanford and his family are going through enough without having the likes of somone like me trying to pile on whenever they can.

This letter was great advice in 2005 before I had lived one day as a husband, and it's even better advice after four years of marriage. I thought so highly of this letter and the advice Governor Sanford imparted that I had the letter framed.

I am posting this letter because it is my hope and prayer that Governor Sanford will remember the words he wrote to me in 2005 and be the husband and leader he recommends that I strive to be.

After observing over the last few days the actions and reactions of Jenny Sanford to this whole mess, I thought it would be appropriate to end this post with this passage from Mr. Churchill:

My ability to persuade my wife to marry me was quite my most brilliant achievement.....Of course, it would have been impossible for any ordinary man to have got through what I had to go through in peace and war without the devoted aid of what we call, in England, one's better half.

June 25, 2009

Jenny Sanford

May we all exhibit the kind of grace, elegance, and love that Jenny Sanford does in this statement regarding her husband's affair.

"I would like to start by saying I love my husband and I believe I have put forth every effort possible to be the best wife I can be during our almost twenty years of marriage. As well, for the last fifteen years my husband has been fully engaged in public service to the citizens and taxpayers of this state and I have faithfully supported him in those efforts to the best of my ability. I have been and remain proud of his accomplishments and his service to this state.

I personally believe that the greatest legacy I will leave behind in this world is not the job I held on Wall Street, or the campaigns I managed for Mark, or the work I have done as First Lady or even the philanthropic activities in which I have been routinely engaged. Instead, the greatest legacy I will leave in this world is the character of the children I, or we, leave behind. It is for that reason that I deeply regret the recent actions of my husband Mark, and their potential damage to our children.

I believe wholeheartedly in the sanctity, dignity and importance of the institution of marriage. I believe that has been consistently reflected in my actions. When I found out about my husband’s infidelity I worked immediately to first seek reconciliation through forgiveness, and then to work diligently to repair our marriage. We reached a point where I felt it was important to look my sons in the eyes and maintain my dignity, self-respect, and my basic sense of right and wrong. I therefore asked my husband to leave two weeks ago.

This trial separation was agreed to with the goal of ultimately strengthening our marriage. During this short separation it was agreed that Mark would not contact us. I kept this separation quiet out of respect of his public office and reputation, and in hopes of keeping our children from just this type of public exposure. Because of this separation, I did not know where he was in the past week.

I believe enduring love is primarily a commitment and an act of will, and for a marriage to be successful, that commitment must be reciprocal. I believe Mark has earned a chance to resurrect our marriage.

Psalm 127 states that sons are a gift from the Lord and children a reward from Him. I will continue to pour my energy into raising our sons to be honorable young men. I remain willing to forgive Mark completely for his indiscretions and to welcome him back, in time, if he continues to work toward reconciliation with a true spirit of humility and repentance.

This is a very painful time for us and I would humbly request now that members of the media respect the privacy of my boys and me as we struggle together to continue on with our lives and as I seek the wisdom of Solomon, the strength and patience of Job and the grace of God in helping to heal my family."

The Art of Selling

The following are lessons learned from David Ogilvy’s “The Theory &Practice of Selling the Aga Cooker”. Fortune Magazine called this the best sales manual ever written. Ogilvy wrote this manual in the early 20th Century when he was a door-to-door salesman for the Aga Cooker company.

Tell the person who opens the door (receptionist, secretary, etc.) frankly and briefly what you are there for.

It will get them on your side.

Never get in the door on false pretenses. No one likes a liar.

Study the best time to call on folks.

It may be at unorthodox times.

In general, study the methods of your competitors and do the exact opposite.

The worst fault a salesman can commit is to be a bore.

Be interested in the subjects your prospects are interested in.

The more they talk, the better off you are.

Pepper your talk with anecdotes and jokes.

Accumulate a repertoire of illustration.

Never forget the most powerful phrase in sales:“Let me tell you a story.”

Avoid at all costs any standardization in your sales talk.

If you find yourself one fine day saying the same things to a bishop and a trapezist, you are done for.

When the prospect tries to bring the interview to an end, go gracefully.

It can only hurt to be kicked out.

The more prospects you talk to, the more sales you expose yourself to, the more orders you will get.

But never mistake a quantity of sales for quality of salesmanship.

Quality of salesmanship involves energy, time and knowledge of the product and the customer’s needs.

Two ways to sell: Attacking and Defending.

Attacking: For the Aga cooker, Ogilvy developed 12 arguments to attack prospects.

These ranged from economical arguments to arguments that appealed to cooks only.

If you can’t attack the prospect with arguments about your product, don’t expect to make the sell.

If you don’t believe your prospect actually needs the product you are selling, don’t sell it to them. No sale is better than a bad sale.

Defending: Preparation is everything.

The ideal aim is to make your attack so thorough that the enemy is incapable of counterattack.

This will rarely happen.

Be prepared that your prospect will have a brain.

Be prepared for any and all objections to your product.

If you don’t know your product better than anyone, don’t expect to make many sales.

Defending Against Competitors

On no account sling mud against your competitors.

It will carry little weight coming from you, and it will make the prospect distrust your integrity and dislike you.

The best way to tackle the problem is to find out all you possibly can about the merits, faults and sales arguments of competitors, and then keep quiet about them.

Your knowledge of your competitors will help you make a more convincing case for your product.

Defending Against Price

This is the supreme test of your salesmanship.

Your voice, your manner, your expression, even your smell, must be controlled and directed to soften the blow.

Be specific about the price.

Be factual about the price.

Be definite about the price.

Don’t give your personal opinion about what is or is not expensive.

June 24, 2009

The Last Straw

Governor Mark Sanford, one my personal heroes and the man I truly believed would one day be President of the United States, is now the straw that broke my political back.

It turns out that Governor Sanford was not hiking the Appalachian Trail to clear his head and gather his thoughts as first reported by the Governor and his staff. Governor Sanford was in fact visiting his mistress in Argentina.

I have praised Governor Sanford to everyone I know. Since this news broke and since I have been writing this post, my phone has not stopped ringing. My friends and family are calling to ask how in the world this could have happened. Sanford has been the man who has kept my faith in politics and belief that not all politicians are alike.

Maybe it's unfair of me to expect a politician to be as faithful to his wife and family as Winston Churchill was. Maybe it's unfair of me to expect more out of our leaders. Maybe it's unfair, but at this point, I don't really give a damn about fair.

I am simply sick and tired of the nonsense and flummery that clouds the lives and actions of so many of our elected leaders. I am sick and tired of cheating, stealing, and lying politicians. I am sick and tired of the hypocrisy. I am sick and tired of politicians touting Christian values on one hand and gallivanting around with Argentinian mistresses on the other.

Harry Truman used to talk about wanting to surround himself with one-armed economists. Well, I want to start electing one-armed leaders so I won't have to watch politicians say something on one hand and do the exact opposite on the other.

In the end, I am just sick and tired of being sick and tired.

I am more aware than most of the sinful nature of human beings. In the words of one of the most powerful hymns of all time, "Amazing grace, how sweet the sound, that saved a wretch like me. I once was lost, but now I am found." Being found and discovering the salvation of Jesus Christ doesn't mean we walk away from the sinful nature of being human. However, it does mean that we fight sin with every ounce of our heart and soul. It does mean that we learn to hate and despise everything about sin.

When it comes to today's political leaders, even the ones who pronounce themselves as devoted followers of Christ, the battle against sin is being fought with kid gloves.

As the great Samuel Johnson once said in a letter to his good friend and fellow scholar Joseph Baretti, "Keep always in your mind, that, with due submission to Providence, a man of genius has been seldom ruined but by himself."

No matter if you're a ten year child watching your favorite baseball player get busted for steroid use or a thirty-year-old commercial real estate broker watching one of your political heroes confess to an affair, being disappointed really stings.

I will pray for Governor Sanford and his family and will hope that this confession will rekindle his fight against the vices that so aggressively attack us all.

June 23, 2009

Red Ink for Red Roof

First, it was Extended Stay.

Now, we learn that Red Roof inn has defaulted on $367,000,000 of mortgage debt.

Red Roof filed Chapter 11 Bankruptcy protection on June 15th.

They currently carry about $1,200,000,000 in debt (OUCH!).

Once again, we are reminded of Howard Marks' classic business and finance formula:

Leverage + Volatility = Dynamite

In Praise of Quiet

See update on this post here.

Walter Bagehot (here, here, and here) once remarked:

Pascal said that most of the evils of life arose from "man's being unable to sit still in a room"; and though I do not go that length, it is certain that we should have been a far wiser race than we are if we had been readier to sit quiet - we should have known much better the way in which it was best to act when we came to act.

Yesterday, I received a call from a family member informing me that Governor Mark Sanford (here and here) had gone missing.

The media and Sanford's critics were in an uproar about this.

Apparently, the Governor had the nerve to actually take a few days to himself without providing the entire political and journalistic world with his travel itinerary.

It turns out that Governor Sanford, an avid outdoorsman, had gone on a hiking expedition along the Appalachian Trail.

Governor Sanford wanted some time away. He wanted some time to reflect. He wanted some time to think. He wanted some time to be quiet.

We live in an amazingly busy world. Email. Blackberrys. Twitter. Blogs. Cell Phones. 24-Hour news. TV. I-Phones.

The above list could go on-and-on. I am certainly not advocating we return to the days when we actually had to converse with people and do such ridiculous things as read for pleasure (SARCASM ALERT!). However, I am advocating we all think about how often we experience quiet in our daily lives. How often do we sit still? How often do we reflect on the current state of our character? How often do we think about how we think?

Charlie Munger, Warren Buffett's business partner, once remarked about Buffett, "Half of Warren's time is sitting on his a** reading."

Is it any wonder that when Buffett does choose to act, he seems to make wiser decisions than most. Maybe he is just that smart or that lucky. Or maybe, just maybe, he is able to better avoid the deafening noises that so often accompany bad decisions, misjudgments, and mistakes because of his willingness to sit still and be quiet longer than his peers.

Leasing 101 - Part 3

Part 1 and Part 2:

3) Have representation: Here comes the shameless plug

A good broker is worth every penny that your current or future landlord will pay him or her

A good broker:

· Knows the market

· Knows the rates

· Knows the spaces

· Knows the other brokers

· Knows the owners, landlords, and property managers

· Knows what a good deal looks like given the current market conditions

· Takes a complicated process and makes it look relatively easy

· Always negotiates with your best interest in mind

· Saves you time

· Saves you money

· Reads all of the documents word-for-word (you would be amazed at what is overlooked because people simply don’t read the documents. As my sales manager always tells me, “If you want to be an expert, simply read the document”)

June 22, 2009

Depressing Deutsche

Some really depressing stuff from Richard Parkus, head analyst of commercial mortgages for Deutsche Bank Securities.

From the article:

"Rents will be back to where they were in 2017," Parkus said. Building prices also will take six to eight years to recover, he said.

"We are not only not approaching stability, we are at a period of maximum deterioration," Parkus said.

Given Mr. Parkus' comments, I thought now would be a great time to keep in mind the words of the sixth century B.C. poet Lao Tzu, who said, "Those who have knowledge don't predict. Those who predict don't have knowledge."

Let's hope Lao Tzu is right about Mr. Parkus. Otherwise, the next six to eight years could be very rough for many, many commercial real estate owners.

The Art of Becoming a Better Middleman

I am an MBA. I am also a real estate salesman.

During my two-year stint at business school, I learned very little about the art and science of salesmanship. This past weekend I went to West Meade Wine & Liquor Mart to pick up a bottle of wine for dinner with some friends. I spent about twenty minutes in the store and left with much more than a bottle of wine—I left with an education in salesmanship that I will take with me the rest of my business life. Twenty minutes with an oenophile taught me more about selling than two years at an elite business school. Here are five lessons I learned while buying a bottle of wine that will make me a much more effective middleman.

1) Don’t be a salesman—be an expert: The salesman I dealt with was more than a salesman. He was an expert. During the twenty minutes I was in the store, I never once felt like I was being sold to. I felt like I was taking a Wine 101 course. I learned why it is important to know about ruffino soil when considering a Chianti. I learned about specific vineyards and even learned some of the stories behind the families that produce some of the finest wine in the world. By establishing himself as an educator and an expert, the salesman won my confidence and earned my trust.

2) Questions, questions, and more questions: Throughout our conversation the salesman was asking questions. He was not trying to steer me towards a particular bottle of wine, rather, he was trying to discern my preferences and tastes. He asked ab0ut my favorite wines. He asked how long I had been drinking wine. He asked if I could distinguish between the different flavors in a wine and which flavors I preferred. He asked what I was having for dinner that night. Though I didn’t know it, he was making the sales process very simple by asking me the questions he needed to know in order to sell me the bottle of wine I never knew I already loved.

3) Nice is nice: I know a lot of experts I would never buy from because I simply don’t like them. The salesman at West Meade Wine & Liquor Mart was genuinely a nice guy. People don’t just buy from experts—they buy from experts that they would like to drink a bottle of wine with.

4) Give options, but know the decision: After learning exactly what I was looking for, the salesman presented me with five bottles of wine to choose from. He then talked me through each of them and systematically eliminated all but one. He made me feel like I had several choices, but he knew exactly what bottle of wine I was going to buy.

5) Price is always relative: Of the two bottles of wine that remained after three were eliminated, one was quite a bit more expensive than the other. My expectation was that the salesman would try to convince me that the more expensive bottle was worth the extra price, but he did just the opposite. He candidly told me that the more expensive bottle was indeed a very nice bottle, but it was not worth the extra money. I walked out of the store feeling like I got a good deal.

Whether you are selling real estate or running a publicly traded corporation, these lessons will help you become a better middleman. And to steal a quote from the movie Layer Cake, “the art of good business is being a good middleman.”

June 21, 2009


From a recent article in the WSJ:

According to the administration white paper circulated prior to the president's speech, the Federal Reserve would be authorized to create a special regulatory regime -- including requirements for capital, leverage and liquidity -- for any firm "whose combination of size, leverage, and interconnectedness could pose a threat to financial stability if it failed." In addition, if a large financial firm is failing, the Treasury is to be given the power -- in lieu of bankruptcy -- to appoint a conservator or receiver to "stabilize" it.

I don't want this blog to get too political, but I also don't want to shy away form certain issues simply because I may be on the other side of an issue from some readers.

In a speech in Wolverhampton, England in July of 1943, Winston Churchill presented his listeners with a choice:

The choice is between two ways of life: between individual liberty and state domination; between concentration of ownership in the hands of the State and the extension of ownership over the widest number of individuals; between the dead hand of monopoly and the stimulus of competition; between a policy of increasing restraint and a policy of liberating energy and ingenuity; between a policy of levelling down and a policy of opportunity for all to rise upwards from a basic standard.

I think we are facing a very similar choice today, and I believe we all are going to have to choose a side.

I will end with these words from Governor Mark Sanford:

The role of government is to promote, in my view, individual freedom. In other words, we have a governmental apparatus that is legitimate in nature in as much as it is to maximize one’s individual freedom. There are other folks who believe in the idea of a nanny state, and believe government is there to take care of your different needs, cradle-to-grave, chief among them being employment. Rather, government is there to create a foundation by which private sector can grow and create employment opportunities. Its job is not to create employment itself as I see it.

10 Pithy Points About Prosperity

As readers have probably noticed, I have been somewhat on a kick of posting thoughts from yesterday that are extremely relevant and telling for today.

Let us never forget the words of Sir Winston Churchill, who said, "The farther back you can look, the farther forward you are likely to see."

The list below was written by William J. H. Boetcker, a Presbyterian minister, in 1942. The list was part of pamphlet titled Lincoln On Limitations.

1. You cannot bring about prosperity by discouraging thrift.
2. You cannot strengthen the weak by weakening the strong
3. You cannot help the poor man by destroying the rich.
4. You cannot further the brotherhood of man by inciting class hatred.
5. You cannot build character and courage by taking away man's initiative and independence.
6. You cannot help small men by tearing down big men.
7. You cannot lift the wage earner by pulling down the wage payer.
8. You cannot keep out of trouble by spending more than your income.
9. You cannot establish security on borrowed money.
10 You cannot help men permanently by doing for them what they will not do for themselves.

Check Please!

"No wise pilot, no matter how great his talent and experience, fails to use his checklist." Charlie Munger

One of the most important things I have learned from studying men like Charlie Munger is the importance of thinking about how you think.

Why do pilots, no matter how many times they have flown, continue to use checklists? They do so because the consequences of their failure are too great to rely on "experience", "talent", and "instinct".

The consequences of blowing a real estate deal are not remotely comparable to the consequences of crashing an airplane, but that's not really the point.

We should learn to develop checklists in our personal and professional lives to avoid the errors of human misjudgment that lead to plan crashes, extra-martial affairs, blown real estate deals, missed opportunities, etc.

Using checklists will certainly not save us entirely from making bonehead decisions, but checklists will greatly reduce the probability of error and misjudgment in our lives and will keep us focused on the process of decision making and not just the result.

Below are Munger's checklist items for how he approaches an investment decision.

1) Risk - All investment evaluations should begin by measuring risk, especially reputational
a) Incorporate an appropriate margin of safety
b) Avoid dealing with people of questionable character
c) Insist upon proper compensation for the risk assumed
d) Always beware of inflation and interest rate exposures
e) Avoid big mistakes; shun permanent capital loss

2) Independence - "Only in fairy tales are emperors told they are naked."
a) Objectivity and rationality require independence of thought
b) Remember that just because other people agree or disagree with you doesn't make you right or wrong - the only thing that matters is the correctness of your analysis and judgment.
c) Mimicking the herd invites regression to the mean (average performance)

3) Preparation - The only way to win is to work, work, work, and work and hope to have a few insights.
a) Develop into a lifelong self-learner through voracious reading
b) More important than the will to win is the will to prepare
c) Develop fluency in mental models from the major academic disciplines
d) If you want to get smart, the question you have to keep asking is "why, why, why?"

4) Intellectual Humility - Acknowledging what you don't know is the dawning of wisdom
a) Stay within a well-defined circle of competence
b) Identify and reconcile disconfirming evidence
c) Resist the craving for false precision, false certainties, etc.
d) Above all, never fool yourself, and remember that you are the easiest person to fool

5) Analytic Rigor - Use of the scientific method and effective checklists minimize errors and omissions
a) Determine value apart from price; progress apart from activity; wealth apart from size
b) It is better to remember the obvious than to grasp the esoteric
c) Be a business analyst, not a market, macroeconomic, or security analyst
d) Consider totality of risk and effect; look always at potential second order and high level impacts
e) Invert, always invert

6) Allocation - Proper allocation of capital is an investor's number one job
a) Remember that highest and best use is always measured by the next best use (opportunity cost)
b) Good ideas are rare - when the odds are greatly in your favor, bet heavily
c) Don't fall in love with an investment - be situation-dependent and opportunity-driven

7) Patience - Resist the natural human bias to act
a) "Compound interest is the eighth wonder of the world" (Einstein); never interrupt it unnecessarily
b) Avoid unnecessary transactional taxes and frictional costs; never take action for its own sake
c) Be alert for the arrival of luck
d) Enjoy the process along with the proceeds, because the process is where you live

8) Decisiveness - When proper circumstances present themselves, act with decisiveness and conviction
a) Be fearful when others are greedy, and greedy when others are fearful
b) Opportunity doesn't come often, so seize it when it does
c) Opportunity meeting the prepared mind: that's the game

9) Change - Live with change and accept irremovable complexity
a) Recognize and adapt to the true nature of the world around you; don't expect it to adapt to you
b) Continually challenge and willingly amend your best-loved ideas
c) Recognize reality even when you don't like it

10) Focus - Keep things simple and remember what you set out to do
a) Remember that reputation and integrity are your most valuable assets - and can be lost in a heartbeat
b) Guard against the effects of hubris and boredom
c) Don't overlook the obvious by drowning in minutiae
d) Be careful to exclude unneeded information or slop
e) Face your big troubles; don't sweep them under the rug