The Real Market With Chris Rising – Ep. 63 Robert Thornburgh
The Real Market With Chris Rising – Ep. 63 Robert Thornburgh
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Chris Rising (00:49): Welcome to The Real Market, with Chris Rising. I’m really pleased to have Robert Thornburgh with me to here today. He’s the CEO of SIOR, which I think those of us who were in the real estate business very often see a broker come to us with a card that says SIOR. And if you’ve been around enough, you know it has to do with industrial and office real estate. But this is the first time I’ve had anybody who’s the CEO of any of these organizations in real estate. I know Robert by reputation, I think we may have shook hands once or twice over the years at a conference, but he used to be a very senior partner at Kidder and ran his own firm before that.
Chris Rising (01:26): So I’m really pleased to have you here, Robert, I think we’re going to have a lot of things to talk about, but most importantly, congratulations on your new role at SIOR.
Robert Thornburgh (01:35): I appreciate that, Chris. Great to be here with you. Thanks for the invitation. And I’ll try not to screw this up given I’m the first guest, I guess, from the “alphabet organizations” for you.
Chris Rising (01:44): That’s true.
Robert Thornburgh (01:45): So just cut it up and dive in however you feel appropriate.
Chris Rising (01:47): Yeah. Well, here we are, we’re sitting here in end of March of 2021. Los Angeles County has just moved down to the orange, moving towards yellow. That is important to us in real estate because what that means is they’re no longer mandating that people can’t come into the office, they’re encouraging telework. But for the most part, it means that if someone wants to come into their office, they can, which is important to what we do.
Robert Thornburgh (02:13): A little Bit.
Chris Rising (02:16): How has it been in the last year, you’ve gone from running a brokerage shop to now running an organization that oversees so many broker members, but yet we’ve been told, offices, you can’t go into them, and there’s a lot of people pontificating that we don’t need them. What do you think?
Robert Thornburgh (02:35): Yeah, the lesson there is, we could spend all 45 minutes on this topic if we wanted to. I think maybe to start, let’s just acknowledge what a crazy 12 months it’s been. And I think the more interesting part of this is there’s absolutely or was no playbook to help guide what we’ve all gone through. There’s a little bit in this because there’s different conversations. There’s the sectors and the segments of commercial real estate and its impacted us all differently. I think talking about the space of attracting and recruiting talent and retaining talent, imagine telling a group of high-performing type-A brokers that they can’t come into the office, particularly when I think that segment of the business likes the collaboration piece so much.
Robert Thornburgh (03:15): We want to be around one another, we’re conquering the hill together, and to not to be able to do that together really had a significant impact in terms of production for so many of us over the last year, at least that’s been my primary observation.
Chris Rising (03:26): Yeah, I would agree with you. There’s a whole lot of people out there who’ll say, “Well, most people can just do their work from home. An office was just a place to keep books, keep the papers, but now everything’s in the cloud.” I personally think that those kinds of remarks miss really what work is. But when you look at the people that you represent, the brokerage community in both industrial and office, there are people who say, “I’m on the road all the time, so I don’t need to be in the office 40 hours a week.” But is the consensus that therefore they don’t need an office or is the consensus they need an office?
Robert Thornburgh (04:02): Yeah. Thanks. We’ll step right into it. Chris, listen, I’m as transparent as they come and I’ll give you my ideas. It doesn’t necessarily make them everyone else’s, of course. But I think we just have to admit as an industry and as an organization, that we’re all still struggling to find our balance in this “work from home” model. Again, as you’ve already pointed out, no shortage of opinions, and I’d like to get yours as well, but in my view, there isn’t a one-size-fits-all solution, it’s impacted by things like company, culture, the industry, the specific roles that individuals play.
Robert Thornburgh (04:33): And I believe, again, it’s healthy to acknowledge that we’re still trying to figure this thing all out. What we do know of course as leaders, and as I think of the broader question, standing still is never a successful strategy. And so the pandemic, at least in my view, what it’s shown is the quick and nimble are winning time and time again. And maybe the more difficult question is, in today’s environment or an environment like this where change is coming at us so fast, is, how does a company manage to maintain an enterprising mindset, for lack of better terms? Continual transformation is something most aren’t good at, it really takes hard work.
Robert Thornburgh (05:06): But I guess going back to the question, in my engagement in my interactions, the majority of the people that I’ve spoken to on the industrial and office side would prefer to be in that collaborative environment that we were talking about earlier.
Chris Rising (05:18): Yeah. That’s all the feedback I’ve gotten. And for who are pontificating this saying, “Well, Jack Dorsey said this and Twitter never have someone in the office.” Well, that’s not exactly what he said. There’s great podcast, Matt Mullenweg, who founded a WordPress, interviewed Jack Dorsey in December, and he was very clear that for a lot of his team at Twitter, sales, anything that’s a design component, collaboration was going to be key in the office as they’re going to move forward. What he was saying was, “I’m willing to rethink,” like engineers, and maybe not every engineer has to be based in downtown San Francisco, but he was pretty clear acknowledging it.
Chris Rising (05:59): So the headlines we saw, I don’t think are necessarily reflective of reality, with Microsoft yesterday says they’re coming back to work. Amazon says that they’re coming back to work at an office. So this maybe this may be just a blip.
Robert Thornburgh (06:12): Yeah. And it’s complicated. I was just talking to a gentleman the other day and we were talking about accounting services, a perfect example that could remain at home potentially. But the part that I keep going back to is, if you’re building a company and culture, which is potentially an overused word, but it’s important, it can’t be overstated, can you really drive value to a growing team through Zoom meetings? I think there’s a misconception that working from home, building a company, advancing your presence in a marketplace through virtual is easy. I think it’s doubly difficult in terms of how, again, you’re building that culture, you’re building your brand awareness and recognition, you’re getting people together; we keep using the term collaboration.
Robert Thornburgh (06:54): So it’s not that easy, and I don’t necessarily think that it’s a proven model for what we do, at least in commercial real estate, not to say that it wouldn’t be for others.
Chris Rising (07:03): One of the best examples of how I think the world’s going to be, and it came out of this Jack Dorsey interview, but it was that for those in January of 2020 who thought an office was the same office in 1991 but we have email, their world, that’s not coming back because what we saw in the pandemic was that there were these software like Teams, or obviously Zoom, or Asana, or Basecamp, all of these things that allowed a work flow, that was different. And so the challenge, I think, is going to be for an office to be effective, are you running an office like it’s 2021 with software from 2021? Are you trying to pretend it’s 1995 using email?
Chris Rising (07:55): To try to present it’s 1995 with email, I agree with all those pundits, that world is dead, but I think this going to be a lot of winners and losers out of this new world, but the office and office headquarters will be important. We had an acquisition team meeting, a two-hour meeting yesterday, the first one we’ve had in a year, it was the best meeting we’ve had in a year, even though every meeting we would grade and we’d give it a 10 on Zoom, because what we were dealing with, stress, sadness, what is the world going to be? Oh, we got a lot done, it wasn’t the same as that first meeting in person.
Chris Rising (08:29): I have to imagine that people you represent and the organization you lead sees that as a reality.
Robert Thornburgh (08:35): I see a softening. There’s an interesting part of the conversation that I actually would need your guidance on, I’m a casual observer to it in terms of the office space. But it’s an interesting discussion because I’m going to say, I don’t see the demand for office going away, I think we both agree on that. The majority of our business wants to get back to, I don’t want to say the ways of old, it will look and feel a little differently. Maybe that’s the point I want to drive to is, a lot of conversation about change and design because of the impact of COVID-19. Not my idea, but somebody brought this up recently on a panel, and they were referencing a lot of what happened before 9/11 and then how we travel now today through as an example of TSA.
Robert Thornburgh (09:12): Kind of a crude comparison, but it was honest and it was impactful in terms of how he brought it forth. So a lot of conversations about how tech will be introduced and interlaced into office dealings that interplay between privacy and facial recognition and health and an area where I guess the questions all require to have a health point of view now for office space. Some really fascinating conversations, but I don’t think any of that takes away the use of office space and footprint in the next few years.
Chris Rising (09:38): Yeah. I want to talk about a lot of other things, but I do think that we’re seeing in our buildings where we’re in, we continue to track the quality of the air, the light, the water, and now we’re just making it more transparent to our tenants. I have already installed the OpenPass so you don’t have touch something. The elevator is already measuring how many people are going to come in before they cut it off. So those things were in progress and they went on steroids over the last year. And I do think that the onus will be on landlords to be more flexible and figure out shorter lease terms. I’ve always felt there was a place for flexible office space within a building.
Chris Rising (10:17): But at the end of the day, a company is only as good as its people and its culture, and there’s a reason why Apple built the Spaceship, there’s a reason why Facebook hired Frank Gehry to build a campus, and those reasons didn’t go away in the last year. Robert Thornburgh (10:28): Couldn’t agree more well.
Chris Rising (10:30): Well, I’ve made a lot of references to your new position at SIOR, and we laughed about what’s the appropriate rate to say it. But I know this, it’s a very important organization, which I have been involved with both as a broker, when I was a broker, and then now as an owner of real estate. But why don’t you tell our audience a little bit of about it, about what was appealing to you to leave a brokerage firm and join and what you see as the role for SIOR.
Robert Thornburgh (11:00): There’s a lot in this, and I guess there’s the comment about, I guess, for me personally, what it’s meant, and I can just tell you that being an SIOR has really been one of the most rewarding aspects of my career. So I guess I’m thrilled to have this opportunity to contribute four thinking ways to this amazing organization. I care deeply about commercial real estate as an industry, and now this role gives me this rare opportunity to uniquely contribute and give back on a more of a global scale. It’s interesting because I imagine every member will tell their story a little bit differently, but it goes so far beyond deal-making, that great idea that you pick up at a conference, there’s a piece of it too, which is the friendships and relationships that we have in all of these major markets and tertiary markets across the world.
Robert Thornburgh (11:41): And so from a personal perspective, you have those so that you can collaborate and think bigger about issues and ideas that you’re facing. And then you can also reach out to them on a more personal level. And it’s hard to capture that in terms of a brand when we’re actually conveying that out to the marketplace. But I can tell you that every SIOR member that I’d have the good fortune of interacting with really does reflect best-in-class work in their local marketplace. Speaking broader in terms of the organization, I’m not sure how much the audience really knows, but SIOR was probably born out of the war effort, World War II. So we’re a 80-year-old organization, but it was really a function of the need for finding more industrial space to support the war effort in the early 1940s.
Robert Thornburgh (12:22): Two gentlemen, David Houston and David Binswanger were traveling back and forth trying to figure out how to connect and collaborate on deals. And it was really in those early engagements that the idea of SIOR is this high level network of best-in-class real estate professionals came about, and they grew it from there and it is what it is today.
Chris Rising (12:40): I had no idea. That’s a really amazing story.
Robert Thornburgh (12:44): Yeah, it is.
Chris Rising (12:46): When did the office part become a part of… I get the industrial World War II, but-
Robert Thornburgh (12:50): Originally, it was SIR, and it was in the early ’80s that we transformed and added the O, as we like to say. And today, now, we’re a little over 3,400 members across 42 countries, and growth can sometimes be a dirty word when you’re talking about something that’s special and unique. I like to say we’re finding parity and gaps in marketplace. We’re growing globally in countries that we just hadn’t seen before. And so it shows that there’s this demand for what we’re delivering. We retain more than roughly 97% of our members every year, historically. So we’re clearly doing something right.
Chris Rising (13:26): So I have to ask you about the word realtor in the name, because when I was a broker at Cushman Realty and then Cushman & Wakefield, it was always great pride saying, “Well, I’m not a realtor, I’m a broker.” And there’s a lot of reasons to be proud to be a realtor. Because if you take your license, that’s what you’re getting, your brokerage license, your realtor license. But tell me about the importance of that word in it to the organization?
Robert Thornburgh (13:49): We’ve been affiliated with NAR, the national association of realtors for years. And when you think of NAR, I imagine most in commercial real estate make the mistake of associating it with the residential side. And historically, let’s just be honest, that residential and commercial don’t play well together at oftentimes. There’s the term [Rezzy 00:14:10] Marshall’s thrown out quite often, “You have people that are parachuting into markets and going into product types that they’re not an expert at.” I’ll table that for a moment, I want to come back to it. For us, NAR is an incredibly important relationship because of the lobbying efforts that they do.
Robert Thornburgh (14:23): And so for us, it’s of critical importance we don’t have the power and the influence to be able to go out and do what they do on a scale that they do. So we, as a by-product of our relationship now, have a much stronger voice, and some of the other stronger affiliate organizations like CCIM and others are affiliated with us. So now we can go into a room together and speak as one voice. So that’s been incredibly important. If you think of… of course we’ve got a split role, we’ve got 1031 and all those lobbying and legislative things that are coming at us. It’s been a great vehicle.
Robert Thornburgh (14:55): I will go back though. It’s interesting, realtor in commercials for whatever reason at times can have a negative connotation, and I think that there’s a broader issue here, which is we need stronger and broader barriers to entry to become a real estate professional. And I’ve said this publicly in so many different occasions, and I know I get myself in trouble time and time again, and so be it, but you can’t be a real estate professional by taking 150 question tests and then go work part-time at a local company and you think that that part-time part of the time mentorship is actually going to get you where you need to be.
Robert Thornburgh (15:29): And the issue that I have for this is really, we represent people and their interests, business and personally, multi-multi-million dollar transactions. I used the expression casual earlier, you need to do this job full time, your clients deserve a service that matches with those expectations. And so I wish that we could, as an organization, develop those higher standards and barriers to entry. The problem is of course, that it’s run on a state level, so getting that scale and momentum to change it is a big ask, but something I’m committed to trying to fix.
Chris Rising (16:01): I think that’s really important. I think you hit on why we took so much pride in calling ourselves a broker, because this was your passion, but it was also your life and it was everything that you would do. And to just be put into a group of someone who sold a house once a year, it was frustrating.
Robert Thornburgh (16:19): Just really quick question. There is an interesting part that goes, if you… I’m always careful about how I couch the residential side, because there are some extraordinary residential agents that are… they personify excellence in everything they do, and I would say that it’s unfortunate for them too, because you have a large percentage that are viewing it as their casual profession, which also hurts their reputation as well. I think residential actually does a far better job of adopting tech than commercial does, and we can get into that later if you’d like today.
Chris Rising (16:48): Yeah, I do. Actually, I want to segue right into that because you hit on exactly… Technology is where I was going next, but also about some of the influences I’ve seen most recently at residential brokers, residential realtors, bringing things they do to sell big houses now being implemented across the board by all of the major brokerage shops, whether it’s flying drones, doing iPhone or GoPro tours. These started with residential real estate realtors, and to see now where commercial has gone, it’s going to be tough for the small realtor to keep up, but they were the impetus for a lot of that.
Robert Thornburgh (17:28): No question. Well, how about just walking through the front door, if you go through a residential tour, there is an electronic, a digitalized lockbox, which codes your information, it tells the listing agent how long you were there. And so the information that’s captured is meaningful in terms of a metric and getting back to the client. There’s a security element to it. I know this is exclusive to industrial, but for vacant warehouses, more often than not, we’re going through a set of keys in a construction lock box that the prior broker actually put in their pocket and ran out, and so now you’re on the tour behind them. That makes no sense, but yet we’re still doing it.
Robert Thornburgh (18:01): And that’s just one antiquated method that we’re still adopting or using as commercial brokers.
Chris Rising (18:08): Well, let’s talk about technology and SIOR’s role in helping the brokerage community get exposed to technology. I’ve always found it’s frustrating because it’s all technology and no importance of the individual, and that’s where the fight keeps going. Whereas I really think where we are is, technology is giving the tools to the best brokers to be the better. You look at things like DTS, and I’ve had Nick on my podcast, Nick Romito. That started as people just filming space, and they’ve turned this into an amazing tech company that I find helps the brokers immensely when they deal with me as an owner of real estate. It’s a great tool that any of the firms could use. What are you seeing out there in technology and how it could help your members?
Robert Thornburgh (19:02): Well, isn’t the most interesting part of this is that technology is available to all of us? It’s almost that classic, what does it take to be successful in commercial real estate? Well, the answer to that question is, there are no secrets to success. We all know what it looks like. And I think the same thing applies to technology. And I’ll try to get into this on a broader perspective, the quote that I heard a few months ago is that there’s over 3,000 startup companies currently orienting themselves towards real estate all from a tech perspective. So that VC money getting thrown, this race to scale to try to fix this big gap that we have potentially, the void in tech.
Robert Thornburgh (19:39): In fact, someone the other day just asked me this very question, what keeps me up at night when it comes to our profession? And this conversation is absolutely it. Yet, from my perspective, I can’t think of what will be more interesting time to be involved with commercial real estate. This reinvention that you’re talking about, it’s occurring all around us and unique opportunities emerge as a result of. It’s that sense of innovation and revision, or I would refer to it as line blurring, which is inspiring to me. We can talk about the obvious, there’s AI, and there’s blockchain, and there’s virtual reality, big data.
Robert Thornburgh (20:12): And we can all agree that this is going to have a profound impact on us, it already is from a construction and research and design, the list goes on. But I think what’s interesting is, anything with a repetitive process is at risk, and we’ve seen multiple industries that have been impacted by disruptive forces with a base in technology. I say differently, someone actually just found a better way to deliver a service to the consumer, right? And when you think of commercial real estate, aren’t we a consumer business? Which basically means we’re just a susceptible to these disruptive forces.
Robert Thornburgh (20:45): Now, I’m not going to say that the role of brokerage is going away, far from it, but we’ll get to, I think, the point of this conversation for today’s real estate professional, or maybe more importantly for tomorrow’s, we’ve got to be paying closer attention to this. If you don’t, I think the broker that just says, “Oh,” and is dismissive of this tech that’s coming at us, this tech wave, I think they could potentially be out of business in five years because of the pressures, because of the client expectations. And it touches communication, it touches marketing, it touches building and design, again, the list goes on and on.
Robert Thornburgh (21:17): Just maybe a quick plug for a good friend of mine, Michael Beckerman at CRETech. If anyone’s looking to be more than just that casual observer in this, he has a wonderful blog, he’s got a great group of friends that he’s built in the profession, and he wants to try to help. He’s just one of the most giving human beings for this time. So again, it’s Michael Beckerman at CRETech, and be sure to look him up for those that are interested in-
Chris Rising (21:38): We’ve had Michael, I’ve had him on the podcast. I’m a big fan of his as well. I’ve spoken to a lot of his things, I just did something recently. I agree. What I like about his approach to it is he doesn’t come from a real estate background, far from it, he comes from a PR background. And what he’s trying to do is just give people the tools that are out there and access to them and not saying this shop does it better than another shop or vice versa.
Robert Thornburgh (22:05): Yeah, agreed. You’ll tell me when to keep going on this conversation, but I still think one of the most fascinating aspects of it is we have these models that are out there, but yet many of us are slow to adopt. We’re just starting to talk about the impact of tech, but there’s a broader conversation for our industry, and all the things that are coming at us, if you think of M&A and legislative and sustainability, and even solving for diversity and inclusion, which is a huge issue and something we have to address. But when I think of strategy in business today, I think what we’re going to see more of is thinking creatively and breaking old ways is really going to become more prominent than we’ve ever seen in our business.
Robert Thornburgh (22:43): I was actually talking to a gentleman the other day who runs a major industrial shop, and it was fascinating because what he was telling me is all the work that they’re doing to integrate different teams, basically the idea was getting the best data to the market the fastest, but that’s not a new idea, but everything that he was talking about was finding the perfect tech-driven platform to achieve it. And they’re evaluating existing systems and infrastructure from top down, they have a plan and a goal to hire a chief data officer before the end of the year. You could tell from having a conversations, this group, this company was fully committed, they were all in. And what’s so odd about this conversation, Chris, is when you talk to another company or another leader, and they’re just completely lost. They haven’t even taken the time to think about it.
Robert Thornburgh (23:26): So maybe this is actually giving you a place to pause for a moment, but if you believe that the landscape is changing and it’s changing rapidly, how often do you and your leadership teams have meaningful conversations about this very same topic? And of course, I’m posing the question, not to you, but to our audience, because I guarantee you that your competitors are, which means that the plain field is adapting with or without you. Maybe this is the point that I think is the most fascinating. It’s worth noting that if you’re actively engaged there, I only see upside potential.
Chris Rising (23:54): Yeah, I agree. I want to hit on a few of the things you just said. If people aren’t aware that there is a Twitter professional real estate players who are having these kinds of conversations, you’re in trouble. If you haven’t been on Clubhouse, what will take the place of a lot of conferences, I truly believe, things like Clubhouse or got involved in any discussion that’s outside of what your company is, you’re missing a whole bunch. And there’s a lot of managers out there who just keep hoping that, well email is just the next step from a fax machine. It’s not. If you’re thinking emails technology, you’ve missed the boat on what’s happening, you really have.
Chris Rising (24:40): Talking about the data, how do you represent somebody today if you can’, say you’ve got a million square foot industrial need, a logistics company. If you’re not using technology to identify locations where employees are, all that stuff is not in some files somewhere anymore, you have to wholeheartedly accept the role of data. And there’s just some groups that just haven’t and I don’t think they’ll be around in five years just as you’ve said,
Robert Thornburgh (25:12): Really great. And it’s sad because it is absolutely fixable if they took the time and made the commitment, but I understand, change is hard for some, and it’s not an easy conversation. You mentioned fax machines, I remember efax was like, I guess, I’m aging myself, there was a big thing to put efax on your business card, boy, you had evolved at that point.
Chris Rising (25:36): Talking about the business as a whole because it’s not just technology, the model of working at a brokerage shop is changing pretty rapidly. It used to be you work at some shops, you’ve got a 90/10 split with the house. You get 10 to the house, you keep 90% of the commission, and they kept out of your way because they didn’t invest in things. And then they go to shops more like you still and a lot like JLL where they’re giving you a salary plus bonus model, much more of an investment-making model. I see the world going more that way. I don’t see it going to the small shop where you get to keep 90% of the commission of everything you get. I don’t know, what do you se? You see it firsthand?
Robert Thornburgh (26:16): Well, it’s probably a little bit of both from my perspective, I’m probably in the camp that I believe that you’re always going to have that independent shop that is able to do something unique and distinct in a local marketplace. Now, will that local operator be able to drive global business? Of course not. Not in a way that would compete with the global giants and what they’re doing because the scale that they have and the control of the clients on a corporate level, because of the quality of service that they’re delivering and the reliability. There’s a contract that’s driving a lot of that, there’s measurements and metrics that are accountable for that. But I still think that the small and quasi regional player has a position, they just have to stay in their lane.
Robert Thornburgh (26:56): You can’t get too sexy with it and think that you’re going to be all things to all people. That’s the most interesting about this business. Chris, you have friends and I have friends that work for a variety of different companies for a variety of different reasons and sometimes it’s a little baffle. It’s like, “Well, why are you there?” And then you’ll hear their story and it’s something unique and distinct. More often than not today, if you’re competing for talent, I think of it as the buzz, you need to be doing something that’s just a little bit different than your competitor, and it has to be believable. You have to deliver on that promise when those people come over, but the first part of it is you have to capture the attention.
Robert Thornburgh (27:31): What is it that they’re doing that’s just a little bit different and unique and how will I be successful? How will I fit in that platform? And is that a place that I want to stay in for the next 10 years of my career? Because moving is disruptive, back to the conversation of change. There is something about the splits and the rest of that, splits is a dangerous thing when you’re recruiting. if you’re only focusing on the comp, then you’re really attracting someone that’s not coming for the culture, they’re coming for the ultimate justification of that. And check now, the by-product should be great culture, great comp, and everything that goes in between it. And then that’s that stickiness where they stay. We could probably take this a couple of different directions, but those are my immediate thoughts.
Chris Rising (28:11): Well, let me ask you this because as you move from Kidder and you move to this very prominent role as CEO of an organization that represents all of the shops, all of the different companies out there, what is your sense of where a smaller local brokerage firm fits in a world that has JLL and C&W and CBRE, who just seem like the biggest behemoths ever? There’s the small shop in Bakersfield, California, or Tulsa, Oklahoma, Frisco, South Carolina, do they still have a role going forward with technology and all this other stuff?
Robert Thornburgh (28:55): Independence and giants, that competitive force between these two, the beauty of this is we’re recording this, and so in 10 years if I’m wrong, somebody can pull it out from the archives and say, “Look at you, you don’t know what you’re talking about.” I used to own a private boutique firm in Heger Industrial, we were able to develop in the backdrop of an incredibly competitive landscape of Southern California real estate and being very successful at it. It’s that buzz, it’s just like how brokers go to work for a different company for a variety of different reasons, I think clients do the same, think of how we gain businesses in the relationships and the trust. And so if it’s localized business, I still see independent firms vying for significant business, and in many instances competing and winning for that business. But you can’t go into that room ill prepared.
Robert Thornburgh (29:43): And I think some of this goes back to your conversation, those that are ignoring technology, those that aren’t looking at their brand recognition. You mentioned something about social media, which would be fun if we can get back to it here in a little bit, but if they’re not playing in that space today, you are not going to be relevant in the next three to five years. There’s this whole new group of decision makers that are coming in that are paying attention to that in ways that we’ve just never seen before. So I’m going to phrase it this way, those small, medium and regional firms that are really close, intimately paying attention, all of these trends that are helping lead them, I think that absolutely will continue to have a significant place in the landscape for commercials.
Chris Rising (30:21): Well, let, let’s go right into social media because I am just amazed and it’s being driven by a lot of the 30-year-olds I see out there, but how things like with the JOBS Change Act of 2012, people are soliciting accredited investors. And to be honest, we’ve started to do it too, because the competition’s there, that’s driven by social media, driven audience, mostly millennials, some Gen Z. And I have to think that the brokerage shops trying to get clients are also diving into social media and diving into… As I said, I’m just amazed by Clubhouse, I’ve enjoyed Clubhouse immensely. I try not to have to say anything when I’m in it, because I just learn. But these tools for social media in the last year have just exploded in my view.
Robert Thornburgh (31:08): And kudos to you, I see you on Twitter and you’re out there engaging, and so it’s always fun and sometimes surprising what you bump into. There’s social media, there’s marketing, there’s PR, let’s just call it this really broad-based external messaging or communication plan. And there’s two camps of conversation, there’s what your firm is doing, and there’s what you’re doing personally. And I think for any transactional broker in the marketplace today, your individualized brand is just as important, if not more so than say the company that you’re working for, because and this is a stat that’s been repeated on more than one occasion, but before decision-makers sites that they’re going to hire you, what’s the first thing that they do?
Robert Thornburgh (31:49): Well, they Google your name. And if they only find, I’m going to call it a quasi rushed bio on a particular company’s website, I don’t know if they’re going to be engaging, but if they see your LinkedIn profile, they see you on Twitter and they’ve got multiple options, basically click through, they’re going to see that word engagement. And it’s really never been more important. And there’s something else too, it’s the speed and the amount of content that’s really forever altered our landscape. This whole space is now 24 hours a day, seven days a week. And I think you’d agree with that.
Chris Rising (32:18): Oh, it absolutely is. I think there’s so many benefits from being worked from anywhere at times where you can open your iPhone or open your laptop and get a lot of work done. It does take away what we were talking about importance of a headquarters’ office, but it also has allowed individuals to be their own marketing department, their own editor, their own blog, it’s just podcast like here. And it’s amazing. And I just think if you’re not there, it doesn’t mean everybody has to have their own podcast or everybody has to have their own blog, but if they’re not gauged, I just don’t know how you’re successful.
Robert Thornburgh (32:53): Yeah. I’m just going to reference, what you’re doing through podcast, it’s just a perfect example. And I’m sure you’ve done this before with some of your other guests, but for someone that hasn’t stepped into this, it’s scary. It’s like public speaking, if you haven’t done it, imagine standing in front of 1,000 of your peers and being asked to give a presentation. That’s a tough thing to ask. And social media is just if not more so, because it lives digitally. So there’s this fear of making a mistake. And I got to tell you, I stepped into it with no guidance and I made mistakes. And so I guess I would just really counsel or courage the audience, don’t be afraid of making those mistakes because you’re going to learn, you’re going to get better at it, time and time again.
Robert Thornburgh (33:37): And there’s so many examples of people out there that are doing incredibly well. So you already have a leg up, you can look at assortment of real estate professionals, there’s this list that you can actually pull up and see the body of work that they’re doing. So there’s no excuse to engage, even if you’re fearful, take the first step. I always say, LinkedIn is a really safe place to play around and you get a feel for it, as your confidence builds, then you’ll move into a Twitter, Clubhouse is great because you can really sit in there and just get an amazing amount of information.
Chris Rising (34:06): And it’s a big players, it’s a really big players. It’s not Elon Musk, but there’s a whole lot of others who actually spend time there that I’m just amazed.
Robert Thornburgh (34:16): Yeah. But still, like the technology conversation, can you imagine five years from now leading no state professional, whether it’s office, or industrial, or retail, or multi-family and not playing in this little space, so it’s not-
Chris Rising (34:29): Well, let me ask you, I got to take a little detour on our conversation. We’re a couple of Gen Xers, you as I understand, you’re a mid-western guy from Minnesota who found his way to be an Aztec at San Diego State, which is a wonderful school for real estate. I have to say over the years, I’ve just really, really quality people who went to San Diego State Business. And you also got a master’s in theology, I believe, you’ve got an MBA, right?
Robert Thornburgh (35:01): An MBA, degree in biblical studies, not a masters, but I’ll take it if you say so.
Chris Rising (35:07): But you didn’t start necessarily at age 18 or 20 saying, “I’m going to be a commercial real estate broker, I’m going to be an owner of real estate.” Did you? What was your process?
Robert Thornburgh (35:20): Oh, it has a long story. I’ll try to get the abbreviated version and it’s not going to come out well, but I was interning in undergrad and I had this opportunity to work for a couple of guys, kind of rough and tumble group that were rehabbing multi-family apartment buildings. And I got to be honest because they were slapping paint on these things and hanging blinds and then flipping them and just making an offensive amount of money. But it was being around the real estate and they were energetic, they found this way to make the day fun. And so it was really fun to shadow them for a period of time. It just opened my eyes.
Robert Thornburgh (35:51): I didn’t know necessarily what I wanted to do with that, my dad had dabbled in real estate and he took me to a few auctions once I had graduated from San Diego. And I just remember, this is the FIC days and sitting in this room and there’s just the energy and the buzz that was going around. So it took me a while to figure out how I was going to actually go into this. I worked first sales job I could get, which was in tech. And then the early tech was actually selling T1 lines, if [crosstalk 00:36:21], but a good friend of mine, Jon Reno, who was at Heger Industrial at the time, and he’s now a Kidder and an SIOR member and just a phenomenal LA broker called me up and said, “Hey, you need to come meet Jack Heger. You need to take a look at this company, just seems like a perfect fit.”
Robert Thornburgh (36:36): Because Jack was a broker, but Jack was also applying real estate and he had just this entrepreneurial field. Came in, I interviewed with Jack, I was sold. I think I started a week later.
Chris Rising (36:45): Wow. And did you start the traditional way right out of school?
Robert Thornburgh (36:49): Oh yeah.
Chris Rising (36:49): No draw?
Robert Thornburgh (36:53): Yeah. By the way, I don’t have that attitude, even though I went through it, here’s your “Thomas guide map” again, old school, here’s the phone, you go sit in the corner and you bang out your calls, and this is an old school industrial comment, but back then you had to walk the market before you could talk the market and all these expressions. But I don’t know, I might take a hard ride on us, I’ll tell you, somehow I lucked out because I know there’s a conversation about this next generation coming in. I really was fortunate early on in my career to have these incredible mentors who, for whatever reason, took an interest in me. And they showed me what professionalism and excellence look like.
Robert Thornburgh (37:30): I had this front row seat to see how some of the industry’s best could reflect things like kindness and integrity in collaboration. And they were huge deal-makers, so they had the expertise, but they did it in such a thoughtful way. And so I don’t know if there’s a recommendation here, but as I think about this conversation with you, first, we all have a responsibility to mentor this next generation. And one of the best things that we can do is to help remind them to model the right behavior. I say this often publicly, all you have is your reputation and it’s not something that you want to lose.
Chris Rising (38:01): Yeah. I still think the most of that, if someone asks me, well, what does it mean to be a mentor? The most valuable thing that ever happened to me as a young lawyer, which I was briefly working with John Cushman was just being in the room while he was on the phone, being in the room all day, taking notes and listening to how he dealt with things. Overall, I love John dearly, he went about 150% to get about 98% right, but he was just one of those guys who just pushed those bush. So he wasn’t the best in all things, but what a mentor. And I say this all the time to people, yes, it’s important to go out on the roads, it’s important to go out and see properties and all that, but you can’t say it’s more important than just sitting here and listening to my partner, Scott and I negotiate a deal, talk about a deal.
Chris Rising (38:48): Because there’s things that books they don’t teach you, they teach you what the cap rate is, but they don’t teach you that if you push so hard that you lose the deal, the cap rates are irrelevant because you didn’t get the deal. And so I agree with you 100% that that mentorship is key.
Robert Thornburgh (39:04): The one that goes back to our conversation about the residential space and residential and even commercial, because it happens in both, but you can’t just hire this young college graduate and give them, I don’t know, a CRM and say, “Here you go, start making calls.” It just doesn’t work that way. And a lot of that still want to being the example 100%.
Chris Rising (39:25): What point in your career because I think people who have really adopted technology, they did it when they were younger, whether they knew it or not, but what point in your career did you really see the tools, the technology could pay? Was it a Lotus CRM system that was just different than keeping a Filofax? Was it email in a way to communicate with people? When did you say technology’s important, it’s so important, I’m always going to be on top of this?
Robert Thornburgh (39:53): Maybe this is why I’m so passionate about it is because I was an absolute late adopter, I was asleep at the wheel. So when I talk about this, and I’m encouraging somebody, and then we talk about this five-year point in time, it’s because I was that guy for a long period of time. It was using old methods to capture new business, and a lot of it, I will credit going back to as I were, being around a group of people that were simply doing it better. And you start to have this realization that it’s passing you by. And so it was a little bit of a forced adoption for me, Chris. You’ve got kids at home, I will also tell you, really convenient when you can go to your daughter and your son and say, “How do I do this?”
Robert Thornburgh (40:35): And I think stepping in and just owning it was huge for me. And part of it was trying to align yourselves with other people that were doing it better. And I did mention Michael Beckerman, there’s plenty of others out there, but ever since I made that switch and made that commitment, I never turned back.
Chris Rising (40:52): Well, let me ask you this, you’ve had an interesting year to say the least as the Chinese say, we live in interesting times, but not many people take a career that you’ve spent years building, well, as a broker and as a manager at a major brokerage firm, and then move over to a nonprofit world that they did not go trying to win business everyday work. Nonprofit because it’s an organization, but you’re driven to grow it and navigate inclusive. What has your year been like? You started 2020 not thinking your role would be any different and here we are a year later and you’re a CEO of a very, very important global organization?
Robert Thornburgh (41:34): Well, it’s too bad my wife couldn’t answer that. When I told her that it was time for me to make a change in the middle of a pandemic, there was some long, hard conversations here. To be fair, I didn’t know that SIOR was going to be the next step. I just knew for me personally, at the point in time of my career, that it was time for a new challenge. And I want to be really careful, Kidder has been incredibly kind to me, it has nothing to do with Kidder Matthews as a company, it was where I was and the things that I felt that I needed to continue to grow as a real estate professional, and I like to be challenged.
Robert Thornburgh (42:06): And so for me it was figuring out what that next step would look like. And yeah, so quite a year, and certainly some interesting times. The one thing that was very reassuring for me is when you start talking to a few people in the business and you realize that you’ve done the work right. We talked about reputation earlier and to see that it was going to be okay and that I had these options in the marketplace. And so very reassuring to know that when you do it the right way, you can take a hard right. For me I just say at the end of the day, SIOR had this global view that I had not had the opportunity to contribute to. And I knew that I could bring meaningful contributions to it.
Robert Thornburgh (42:42): And there’s another piece of this, I started as a broker and somehow kept finding myself in these leadership opportunities and as uncomfortable as they might’ve made me, I always said yes to them because I felt like I would grow as a result of it. And in that process, you go from the transactional side, also you’re helping others achieve their goals. And it’s one of the most rewarding aspects of any business. And I just say that interestingly, the unexpected byproduct is through that same work, you also learn in the process. I don’t know if that makes sense, but that’s generally how it’s unfolded for me in my career and a different look and a different field, but just I couldn’t be more excited about the opportunity.
Chris Rising (43:20): That’s terrific. Well, one of the things about moving organizations is you are now having to use totally different technology I imagine. What do you use at SIOR? Is it Microsoft Teams? Is it Google back system, Microsoft system? What is that technology?
Robert Thornburgh (43:36): A little bit of everything because we’re an association, so our primary driving force is Aptify, which is really an association management software. We definitely use Teams, I’d say more so for communication, just the ability to chat and pick things up quicker than email. By the way, it’s really fascinating, somebody was talking about the end of email the other day, and it was just an exceptional-
Chris Rising (43:57): Cal Newport, wonderful book. I don’t know if you’ve read it.
Robert Thornburgh (44:00): I haven’t.
Chris Rising (44:01): He has finished it. It is fantastic. Robert Thornburgh (44:03): Okay. I will. So I will read it and I will follow up with you, but in terms of SIOR, we have just an incredibly talented person, even Mike Roberts who runs our IT, and in fact, one of the first meetings that I had when I took on the job was with Mike and we talked and we looked at everything from 30,000 feet down to basically ground level. And the beauty is start doing everything right. So it was really more so where do we want to go in the next five to 10 years? But the good news is they were already pretty well positioned.
Chris Rising (44:31): As your role as CEO, it will require that you travel internationally a lot as well as domestically?
Robert Thornburgh (44:37): Yeah. Well, it’s certainly a lot of travel. I’ll spend at least a week, probably 10 days back in DC where we’re headquartered and the balance of the time home with my family here in LA, and then wherever the job takes me. So a bit of international travel. It’s a little odd because I know what the schedule should look like, but we’re still in this unusual phase of COVID, although just a quick comparison, it was a month ago plus or minus that I was back in DC, my flight was probably 30% occupied from LA to DC. I was just back there a week and a half ago, my flight was full with standby passengers in the airports. So it is changing quickly.
Chris Rising (45:11): Yeah. I’ve had some business travel as well and the airports still aren’t that crowded, but the flights are, so what they’ve clearly done is limited the amount of flights to make sure more people are on them.
Robert Thornburgh (45:21): Yeah, no question. Your flight’s emerging soon, I hope, but I get it, they’ve been hammered pretty hard as an industry and so they’ll figure it out, but yeah, quite a bit of travel, certainly some public speaking along the way, what an incredible opportunity to be a brand ambassador for the industry, both industrial and office speaking. And then not just our 3,400 members, but the sponsors and the people that we have close working relationships with. So it’s a big job, I take it very seriously.
Chris Rising (45:48): How do you balance it? Tell us a little bit about your family and your life here in LA. You’ve gone from being very regional-based person, how are you going to balance the whole thing? How does technology play in balancing it?
Robert Thornburgh (46:03): Yes. Well, we’re empty nesters, that’s who we are about to be, so that helps a little bit. And I am very fortunate to have this incredibly supportive wife who believes in pursuing dreams, and so that’s everything. You’re a family man person, I’m sure you’d agree, it starts with having that balance at home. Maybe that’s simplified, but if the families close, you have that necessary foundation to get you through the tough days at the office. Another big part of is your closest friends, I think are an extension of your family, so that’s critically important as well. I’m an early riser, I’m highly driven, I work hard, but anyone that knows me the best would say that I find balance in that friends, family, and faith space.
Robert Thornburgh (46:41): And another big part of it too is laugh a lot. I think a day without laughter is a day wasted.
Chris Rising (46:46): That’s great. That’s great. Well, we had this great conversation, but I do want to point us a little bit to the role that SIOR plays in the universe of real estate organizations. There’s a real estate round table that really focuses on real estate interests in Washington DC, there’s there’s, Naya, there’s Uri, there is corporate real estate. What is the role that SIOR plays amongst all of those groups and where do you think that you’re positioning it to be a leader?
Robert Thornburgh (47:20): Well, the beauty is, we’re already a leader. And so for me, I guess we joked, I said, not to screw up this interview, the bigger picture is not screwing up SIOR because I actually would say we’re already doing the excellent work. The really interesting thing, some of this actually goes back to it’s a theme of our conversation, it goes back, we already know what success looks like. Some organizations, some companies, some people, brokers are just willing to work harder at it. SIOR’s job and all of the other association jobs in the next five to 10 years is going to be stretching to maintain relevance because it’s competitive in that world too.
Robert Thornburgh (47:57): Our job primarily is to drive back to our membership base, so there’s those 3,400 members across the 42 countries that I’ve talked about, but another part of it too is this emerging group of real estate professionals that we’ve talked about and mentoring that part of this next gen that’s coming in. And then of course, those sponsors in those industry relationships we have. So it’s a big job that extends globally, but it’s about driving value back to that group. So the job is doing it better than the rest. We’ve been very fortunate, I’ll tell you just quickly, because I don’t want to make this an infomercial, but we’re ahead of the curve.
Robert Thornburgh (48:29): It was three years ago that we combine a group of leaders and our board of directors who have just committed themselves in a different way, their commitment and their ideas and they’re focused on taking SIOR forward in unique ways, it’s nothing less than extraordinary. So some of that goes back to culture. Again, it’s a group that wants to do excellent work, they’ve got ideas. Well, we say that there are no bad ideas when we get into rooms, we really live and believe that. And we don’t want to just hear from our members, the young professionals, every segment of our business what’s happening in the marketplace, someone that’s tech proficient and making sure that they have a perspective.
Robert Thornburgh (49:02): Global members that are talking about changes there, because of course what’s happening overseas is potentially different than what’s happening here domestically in the US. So I’m not trying to bill out of the question, but I think it’s really about doing that same body of work with excellence, it’s paying attention to trends, being a leader, being a voice, and making sure that we continue to deliver a platform where all of these members can come together, share ideas, find a home for that client that needs to go a different market where they can represent them, find high level education. And the list goes on.
Chris Rising (49:31): Well, I have to imagine because I’m saying this from the position as an owner of real estate and with a team that we strive very hard to be diverse because our clients, our tenants are diverse, but it would be disingenuous if I didn’t admit that it is very hard not to attract, I don’t think it’s hard to find because I think they’re out there. It’s hard to attract women and minorities to come into the real estate business. Whatever doors that won’t open on the ownership side, we try very hard to burst open. Having been a broker, brokers have the same challenges. The thing that I keep questioning is, wait a sec, when we go to our space, I get it, when I worked for John Cushman in the ’90s, it was the CEO, John Cushman and I was carrying a briefcase and they were going to decide what the space was going to be.
Chris Rising (50:23): And it was going to be one of three places, next to the CEO’s golf club, home or Townsville. That’s where I was going to be. Today we do tours, it’s usually a group of five or 10 of a HR group, but usually more women than men, it’s usually a very diverse group trying to create the greatest space, but you get the brokerage industry much like the ownership of real estate side of the business is still far tilted towards white family. What are we going to do to have the brokerage industry reflect what the United States looks like?
Robert Thornburgh (50:58): Listen, isn’t it just insane that it’s 2021 and we’re actually having this conversation? Again, to be fair to white males on a podcast talking about this, and so I want to be clear, I would not pretend to have all the answers, but I’m so encouraged by the momentum and the power of the conversation that’s occurring. I talked to Ken McIntyre, who’s the CEO of REEC just a few weeks ago. And so we’re trying to find new and unique ways to support the extraordinary work that they’re doing to try to solve for this. The part that’s just crazy to me is you can’t have a leader and a culture that expresses a position publicly, it does nothing internally to match those statements. And that’s still happening every day.
Robert Thornburgh (51:40): There has to be open discussion and vision and really meaningful work to support the change that’s still needed here. And so I very much appreciate you asking the question or at least raising the topic. We’re working incredibly hard to try to figure out, and what I’m being counseled is the importance of catching this next generation at the tail end of high school, committing to finding and through college in some capacity, and then making sure that we’re there for when they emerge into the job market, that we’re basically connected and touching base with them at three unique points in their career. But if you can do that right, what I’m hearing is that we can actually make that change occur.
Robert Thornburgh (52:22): And of course, listen, there’s a lot more into this and you’ve got to turn policies into real action that are led from the top, that’s mentorship that we talked about, gender cap pay analysis. It’s crazy how many companies aren’t doing that, you have to evaluate, you have to adjust a lot of conversation about unconscious bias training. I think so much of this is culture and leaders like you by the way, and a huge nod to you, I saw on your website, some of the metrics that you’re showing, you are the example of someone that it’s not just conversation for you, you are actually doing it. We need more of you in the marketplace, period.
Chris Rising (52:56): But I’ll tell you why, and I’m very honest about this. I grew up in a more liberal family and around people of different backgrounds and ethnicities, and I was a football player. Come on, you can’t be a football player that see color. And so I had all those, but I had a definitive moment, the first time I ever put my money into a building that I was listing. And I went to see a tenant who was going from 10 to 60,000 feet and would have made the building if we could, and it was a young woman who had a company that was exploding called Nasty Gal at the time. And I went to meet with her in my traditional Cushman outfit, dark suit, white shirt, red tie, little pocket, square thinking I was on top of the world.
Chris Rising (53:39): And she literally said, “Get out, I don’t meet with white men in dark suits.” I’m like, “Ooh.” And so I laughed and the next day with jeans and t-shirts to say, “Sophia, can I just get your time and just talk to you about what you’re doing?” And I developed a trust with her, and she continually said, “Look, I have everything I have in this business and it’s people like you who’ve told me how I’m doing it wrong all the time. And so I’m defensive about it.” And I said, “Well, I’m going to make sure that we’ll figure out something that works for you and hopefully works for us.” And it just triggered in my mind that we’re all different and if you just show up with one brand and one look, you’re not going to be able to grow your business because that’s not what the world is today. And I’d say that for any business out there.
Robert Thornburgh (54:21): There it is. I love that story. Can you think of the commercial real estate where we are… An expression that I’ve heard time and time again, it’s male, pale and stale, I’ve heard sea of vanilla, and a lot of that is absolutely true and we need to own it and fix it.
Chris Rising (54:37): Yeah. And I see some positives. I think you hit it right though, nobody really starts high school unless their parents were in the business or gets through high school and goes to college and says, “I want to be a real estate broker.” It’s something that comes later in their career, and you’ve got to get to people earlier. And real estate has so many different facets, it’s not just one thing, and there’s so many different opportunities. We’ve got to get people interested at a young age.
Robert Thornburgh (54:59): I couldn’t agree more.
Chris Rising (55:01): Hey, we are sitting here, I said it earlier, we are at the end of March 2021, the world’s looking better, what do you think over the next year… If we sit down a year from now, what do you think you’re going to make happen for SIOR and where do you think the world’s going to be?
Robert Thornburgh (55:18): I’m an eternal optimist, so I have to preface it. Listen, it’s a green light for me, not to say that it’s going to be perfect and not without challenges, but in the recent travels that I’ve had, there is re-emerging excitement, and I used that expression buzz earlier. And I just took a look at some of my travel schedule for some of the events that are happening, there’s a tempo that’s picking back up that feels like the days of old. So when we can really start traveling, we get past some of these remaining vaccinations that are so crucial, I got to believe we’re back in a really robust and dynamic way. So I might be dialing in with you, Chris, somewhere overseas or back East, but I think we’ll both be smiling.
Robert Thornburgh (55:58): I think we’ll be saying that we’re blessed and fortunate to be in this business. And that’s my view.
Chris Rising (56:03): Terrific. So you think you’ll go back to having events, I’ve gone to some great SIOR events over the years, so you think those will come back once it’s safe and healthy for us to do so?
Robert Thornburgh (56:13): Between now and the end of the year, there’s no question, I think we’re going to see in-person events. They might look a little different, there’s going to be social distancing and it’s going to be governed in great part by the municipality, local rules and regs that are driving that, but we’ve got our Fall World Conference in Nashville. If the environment allows us, I think it will be a record-breaking attendance. I think there’s so much pent-up demand to just get out and want to see friends, and maybe conversation for us finishes the way we started a little bit, but this is interpersonal relationship driven business. People just want to be around that collaboration piece and seeing friends and the business.
Robert Thornburgh (56:48): And so I think it’s going to be bright, there are a lot of events being planned with a variety of different organizations right now, they’re all saying August, September, they’re going to be in-person. So it’s encouraging.
Chris Rising (56:58): That’s terrific. Robert, I loved having you on The Real Market. You are someone I’d like to bring back in a year from now and just see how the world’s changed.
Robert Thornburgh (57:06): I’m glad I didn’t screw it up, Chris, but I really appreciate the time.
Chris Rising (57:08): This is wonderful. And please remember to subscribe to The Real Market Podcast. You can do it on any of the podcast platforms, Apple, Spotify, and don’t forget to follow us on Twitter @chrisrising. Thanks so much.