Jul 15, 2022

The Real Market with Chris Rising – Ep. 77 Living Legends John Cushman Part 2

Introducing our esteemed guest, John Cushman, Chairman of Global Transactions at Cushman & Wakefield. With over 50 years of experience, John is a renowned leader in the commercial real estate industry. As the driving force behind Cushman & Wakefield's rise to prominence, he has shaped the company into one of the world's premier real estate firms. Join us as we delve into John's remarkable career, his strategic vision for the industry, and his insights on navigating the global market.

The Real Market with Chris Rising – Ep. 77 Living Legends John Cushman Part 2

Episode Transcript

Chris Rising (00:00:02):

Welcome to The Real Market with Chris Rising, the only podcast that brings the real estate conference panel to your headphones. You’ll hear from superstars from every realm of commercial real estate, the biggest brokers, the most well known architects, the largest investors, and the most visionary developers. You’ll learn what they do, how they do it, and what drives their success.

Chris Rising (00:00:23):

We’ll discuss the latest trends across regional markets, capital flows, both national and global, and we’ll explore technology’s role in shaping all of them. We’ll take a clear eyed look at where we’ve been, where we are now, and what’s to come. Real conversations, real experts, real insights. This is The Real Market.

Chris Rising (00:00:50):

Welcome to the Real Market with Chris Rising. I’m really excited to have John Cushman back for our second session. Our last session, we talked about his growing up in New Jersey, about the importance of the Boy Scouts. We talked about going to Colgate and then starting his career in business, and starting it as a broker where you really walked buildings before we had security and all of that, where you would go and cold call in-person people.

Chris Rising (00:01:15):

And then we talked about John, when he moved out to California to take on the largest development project on the West Coast, probably in the country I believe at the time, the 2.1 or 2.2 million square foot project that was done between ARCO, B of A and Cushman & Wakefield of which I think about 10 or 15% of it was pre-leased, and John had to bring in all the tenants. And we talked about how he did that.

Chris Rising (00:01:40):

We were ending our last session, we were talking about John, you going to Harvard to the executive program where you were one of the youngest people in this program. And the whole idea for you to do that was so that you could be prepared to take over Cushman & Wakefield. As you went there and you met people, your thinking started to change.

Chris Rising (00:02:01):

Now, one of the things that I’ve enjoyed about this podcast is I’ve had a lot of people talk about mentors in people’s lives and how certain people could help when there were big decisions. And as the audience knows, when you came back from that Harvard Business Executive Program, you made a fundamental decision to leave Cushman & Wakefield and start Cushman Realty.

Chris Rising (00:02:22):

Before we really dive into that, can you talk about who some of your mentors were leading up to that time in your life, that may have given you the confidence to make such a move? I know that we talked briefly about the relationship you developed with the head of ARCO. Give us a little talk about that relationship you had and how that may have influence you making probably at the time, the biggest decision of your life.

John Cushman (00:02:48):

It was the biggest decision of my life and the bottom line of it is there were probably three real mentors, people that helped my career immensely. The first would be O.K Taylor, my Scout master, who was 50 years the Scout master. He was the deputy treasurer of The Standard Oil Company, The Standard Oil Company. And he was the chairman of the largest pension fund in the world. And it was incredible because in my troop was Robert Trent Jones, the golf architect, Rees L. Jones, Buzz Aldrin. So we had a pretty high powered troop. So he would’ve been the first guy that made me think about leadership, responsibility, doing what’s right. And in those days with the Scouts, it was the Scout law and the Scout oath.

John Cushman (00:03:47):

The second guy that influenced my life was after I started at Cushman & Wakefield in 1963. I was a graduate at Colgate, and I went to an event with, I don’t know, more than 1000 people at a hotel. And it was the gathering of the alumni at Colgate. I don’t know what I am, 24, maybe, 25. No more than, I think 24. And I meet a guy in the crowd who was the chairman of the Reuben H. Donnelley Corporation. I didn’t know what that company was, I never heard of it, but I introduced myself and he was the chairman of the board, and he was active. He became the chairman of the board at Colgate.

John Cushman (00:04:45):

I told him I was a real estate broker. I didn’t know much, but he said, “We got a little problem on 45th Street, 235 East 45th Street.” So it wasn’t very big. It was maybe 4,000 feet. I said, “Well, I think I could maybe help.” And I did. I kept that client, and that relationship grew. So I did every transaction for more than 20 years across America. And it morphed into the guy who became my real mentor. His name was Harrington P. Drake. He was a real class act guy.

John Cushman (00:05:36):

Reuben H. Donnelley merged with Dun & Bradstreet, and in the process, he went up the ladder and became the CEO. I talked to him about the fact that I had this opportunity to move west. He was in New York, president of Dun & Bradstreet in the Great Lakes Carbon Building at 299 Park Avenue.

John Cushman (00:05:59):

So I would go to see him and he would say, “John, when you move to the west, here’s what you’ve got to do.” He really helped me, but I didn’t want to do what he wanted to me to do because he wanted me to go… He lived in west LA and I knew enough about west LA that I thought as a young guy, as a broker, that might not be a good idea because I thought it was a fast lane place, and I’d heard a lot about it with family problems and drugs. And I said to him, “Look, I want to take the easy way out. I want you to tell me, should I take the job?” He said, “You bet, take the job.” And I did. And he guided me, but I never moved to the west side. I moved to a safe bet in Pasadena.

John Cushman (00:06:59):

The bottom line of it is, he then became the chairman of the board at Colgate. He was the second mentor in my life. And because of him, he invited me to be the youngest trustee in the history of Colgate, which was founded in 1819. So he had a profound impact on my life. When I was in the West Coast and going to a Colgate board meeting, I’d fly to New York before I had a plane, I would go and stay at his house in Greenwich and fly on the Dun & Bradstreet jet to Colgate. I did that for every board meeting, and I was 13 years on the board. Actually, between the beginning and the end, I did buy my own plane.

John Cushman (00:07:52):

The third mentor and the most impactful on my life was Robert O. Anderson, the chairman and CEO of ARCO. With that, was a guy named Paul H. Snyder. And the two of them believed in me, I don’t know why, because if I were the Bank of America or ARCO I would’ve said, “Well, this guy is moving here, he’s 26 years old. What could he possibly know about developing 4.3 million gross feet, 2.6 million rentable and 2.2 million eight of office space?”

John Cushman (00:08:41):

So he helped me. He also saved my life in a way, because not only did he believe in me, and Paul Snyder, and eventually there were about 30 senior officers I dealt with. Over my career, I would say I leased ARCO pushing 10 million square feet of space in the best buildings in the best cities, long term leases and high rents.

John Cushman (00:09:16):

The bottom line of it is, how I ended up going to Harvard was at Cushman & Wakefield’s request. They had to pay my salary, pay my bonus and pay for Harvard. I never went home, and I stayed there the whole time of the AMP session. I was not one of the youngest, I was the youngest of 162, two women and five generals. I was sent there to get polished up and maybe come back as president. The bottom line is I had a great experience, I learned a lot. I did not get polished, and I came home and I quit.

John Cushman (00:10:10):

So the question is, why did I quit? I quit because before I went to Harvard, I was running 60% of all of Cushman & Wakefield’s offices in America. There was a guy in New York, a broker, he’s now dead. Was a sad story, but he and I were rivals the whole time of our time together at Cushman & Wakefield. He wanted to be sure that I didn’t become president. I was on the board, the executive committee, I owned no stock, no stock. And I realized this guy wanted me out. So I had a fascinating call, which I’ll tell you about.

John Cushman (00:11:04):

Cushman & Wakefield is then owned by the Rockefeller family. This is a story that no one’s going to believe, but the CEO of the Rockefeller Family Enterprise was Alton G. Marshall. He was the secretary to the governor of New York, Nelson Rockefeller. I was a huge person at Cushman & Wakefield bringing in new business. But I was brought in by him and the family. So I knew things that no one else at Cushman & Wakefield knew about what the Rockefeller family owned, the bag business, the oil business, the real estate business. And they shared with me everything. So I had lots of files.

John Cushman (00:12:12):

He called me as I was going to depart Cushman & Wakefield. He said, “I’ll meet you at 44th and 5th Avenue.” And I met him in his limousine. We’re in the back seat, just the two of us and the divider between the back and the front pushed a button and closed it, was an acoustical closure. And he said to me, “John, I’m going to tell you a little story,” he said. “There are people in prison today that don’t know why they’re in prison and they’re never getting out.” He said, “I want to tell you how they got there. I put them there.” He said, “When I was the governor, I did all the behind the scenes stuff and the dirty work.” And he was giving me a message. I was frightened by the message.

John Cushman (00:13:15):

I got back and he said, “John,” he looked me in the eyes with a terrible look. And he said, “This is the message. What you know is not going any farther than what you know.” And I was terrified because I understood. And I was worried that if I did something wrong, I might disappear. So I called my lawyers and I had them prepare a file on this. I told them everything. The bottom line of it is I had lots of files at my office.

John Cushman (00:13:57):

Bobbi Mathies, my assistant had these files in a locked closet, in a locked cabinet, in a locked drawer. Those files miraculously disappeared. No one knows how they got them.

John Cushman (00:14:17):

But most important part of this story is, so now I’ve left Cushman & Wakefield. I understood what Alton Marshall said to me. I got the message. But after I got the message, the guy in New York that didn’t want me around was clapping to himself, “I got rid of this guy,” but I was the number one business getter, really, and running more of the business than anyone.

John Cushman (00:14:46):

So here’s what happened. The Rockefeller family offered me a contract for five years, which I signed, for the family at $500,000 a year.

Chris Rising (00:15:01):


John Cushman (00:15:02):

And that was a long time ago, 1978. I also had in the contract that if I brought in a new deal, I got 20% of it.

Chris Rising (00:15:17):


John Cushman (00:15:17):

Here’s what happened. It sounded great in the beginning, and then I realized they had me locked up. And they meant well. They weren’t being devious, but I realized this wasn’t going to work. So I got out of it. That goes to the third mentor in my life.

John Cushman (00:15:42):

I had a contract with Cushman & Wakefield. The contract said when I departed, I couldn’t say anything bad. Number two, I couldn’t bring any people with me. I couldn’t take any Cushman & Wakefield employees. And thirdly, that I couldn’t work with anybody that Cushman & Wakefield was doing business with, had done business with, or was pursuing. I said, “I’m in deep trouble. What am I going to do?”

John Cushman (00:16:17):

ARCO and I by then were like peas in a pod. I went to Paul Snyder and Anderson, and Paul Snyder called the CEO of Cushman & Wakefield, Arthur E. Mirante II. You’ll remember him.

Chris Rising (00:16:34):

Oh, of course.

John Cushman (00:16:34):

The name. He was a great guy then. He was the CEO of Cushman & Wakefield. And Paul Snyder said, “Listen, we have a relationship with Cushman & Wakefield around the world, but we want to have the entire relationship regarding real estate in America with John Cushman. If you decide you want to block it, you’re finished. You’ll never have any business with us around the world.”

John Cushman (00:17:07):

Paul Snyder and Art Mirante were fantastic. They saved me from a horrible outcome. And they waived the provision. They allowed me to take five people. I took my twin brother, Lou, myself, the head of management for Cushman & Wakefield in the west, a guy named John Moore who was with Citibank, who I thought was going to be a great CFO. He didn’t know anything about the balance sheet or the P and L, and Bobbi Mathies. And that’s how it all started.

Chris Rising (00:17:47):

Wow. I’m really excited to talk about Cushman Realty, but Anderson was a pretty unique guy and a visionary in a lot of ways. And I know that he would spend time at the California Club, he’d spend time in New Mexico. Can you tell us a little bit? Because as mentors go, this is a pretty darn good mentor.

John Cushman (00:18:09):

He was the best you could ever ask for. First of all, ARCO was the most important company in Southern California. He was the CEO, but he was quite unique. He was a Renaissance man. So he’d get up in the morning in Roswell, New Mexico, where he lived on a ranch, and he would get on the horse and ride with his cowboys. And he would ride and move the cattle. Then he would come back in, have a meeting with some poets, then get on his 737, fly to LA, do business in LA. And then he would fly to London, meet with Margaret Thatcher. He was an incredible guy. He was a wild catter. He was a visionary.

John Cushman (00:19:08):

And when ARCO got involved with ARCO Plaza, Atlantic Richfield was not headquartered in LA. They were headquartered in Philadelphia. It was a merger of the Richfield Oil Company in LA and Atlantic in Philadelphia. The president of the company was Thornton Bradshaw. He was a wonderful guy, but he believed the only place you could operate a company as big as ARCO was New York City. Anderson thought that was a bad idea. Nevertheless, they did it. And Anderson believed in LA.

John Cushman (00:19:54):

So Anderson made the decision to move the company from Philadelphia, New York to LA. And he and Paul Snyder had more to do with the success I’ve experienced and the good fortune of my life than any other person or company.

Chris Rising (00:20:16):

I have a lot of friends who listen to this in Texas and some of the red states out there. They’re probably listening to this going, “You got to be kidding me. Blue California, blue Los Angeles.” Well, as you and I both know, that wasn’t the LA of the 1960s and seventies. We were a very pro business place to be. Can you talk a little bit about doing business in Los Angeles in the seventies and what was attractive about it to people?

John Cushman (00:20:44):

The first meeting I had was on October 10th, 1967 in the Fireside room of the California Club. And thanks to ARCO and Bank of America, I met all these incredible people. The bottom line of it was I learned two things quickly. You’ll get yourself destroyed if you take a position on either UCLA or USC. I never realized how passionate people were about these two universities. That was a quick wake up call. I made the mistake probably once, but never, ever again. I learned that.

John Cushman (00:21:31):

And then what I can tell you is when I moved to LA, it was a village. It was a village. And it had great people, the beginning of some fine companies, but ARCO Plaza turned the needle and took it from a village to a city. The best mayor we ever had was Tom Bradley. He cared about the city. He loved the city. He worked 24/7 for the city. He was close and the city Councilman for downtown LA was a guy named Gil Lindsay. And between the two of them, they put LA on the map and it went from no footage to a high of 32.

John Cushman (00:22:22):

Unfortunately, one of the biggest problems we’re facing in America, in Washington, in the Republican party, the Democratic party, state of California is leadership. Sadly, we’ve lost the leadership in LA. If you say, what does that mean? For me, it meant CEO of ARCO, the CEO of Unocal, the CEO of Carter, Hawley & Hale, the CEO of The Broadway department store, Gibson and Dunn, & Myers, and the Times Mirror Company, they’re all gone. They’ve left. And it’s sad because it’s a leadership vacuum today.

John Cushman (00:23:17):

But the early years, although it was a village, it was like the golden sweet spot of my life because ARCO Plaza moved the needle incredibly, and it had more space to lease at one time than any product it ever had in America, ever. And was 1,900,000 to lease. In New York, the biggest project was the Pan Am building, 200 Park that had 1,600,000 plus.

John Cushman (00:23:54):

So it was a great success for Cushman & Wakefield. And I was part of a team. The team that started Cushman & Wakefield, I was the first to arrive, to open the Southern California office. But following me was a guy who thought he was head of the office, he believed it. He was from MassMutual, and another guy was from a construction background. I don’t know whether I thought I was in charge or not, but it became a very competitive environment. It actually wasn’t healthy, but I didn’t mind it because-

Chris Rising (00:24:37):

John, I’d like to interrupt you only to say that for those people who don’t know you, they won’t know some of these stories, but you have always told me a couple things that I’ve never forgotten. Number one, the harder you work, the luckier you get. Number two, you got to find them, you got to mine them and you got to grind them. And then the third thing is in my career, I’d never met somebody who was more diligent and dedicated to taking notes, to keeping records and to writing followup thank you letters.

Chris Rising (00:25:13):

I still remember in the late nineties working for you, I was warned when I first started working for you, “Chris, keep some extra batteries around because if John’s dictating machine runs out of batteries, he goes nuts.” And so you didn’t know this, but the first few months I worked for you I had extra batteries in my bag and in my pocket, just in case. And I still remember that these were not the cell phones of today, these were the flip phones that had the battery packs. And I think at one time, your driver Alex told me he had 10 backup batteries for your two phones, because you would literally be talking away, talking away. And then that would die. You’d grab the other phone, he’d be changing a battery.

Chris Rising (00:25:56):

The things that have been written about you, one of the things that hasn’t come out that I think everyone should know is you worked and still do, but especially in the eighties and nineties worked harder than anybody I’d ever seen, were more organized and disciplined about how you did things.

Chris Rising (00:26:14):

We would get ready for a meeting, I remember this distinctly and you would say, “Hey Chris, tell Bobbi we’re going to meet with so and so. He’s the general partner of this law firm. I met him 15 years ago when he was a young lawyer, have her pull out the file.” And there would be this file of this relationship you had started 15 years before and we’d get into this meeting and you would just wow people with you knew everything that they were doing. “How’s your kids doing? Don’t you have three kids. Have you had any more?” Was that just innate? Where did you learn some of these things? Obviously your stamina is God given, you have unbelievable stamina, but where did you learn these things about the discipline and the followup, the file keeping?

John Cushman (00:26:58):

Well, it wasn’t from my father because I told you he wasn’t a people person, and he hated real estate and he hated the company. So I don’t know. I think I developed that. My mother was entrepreneurial, and she would do okay in marketing, but I realized when I canvased, I made incredible notes. Then later on, I realized I had too many notes and I had to keep it in my brain.

John Cushman (00:27:30):

But when we started Cushman Realty, I realized that the good fortune I had was because of one word, relationships. And to this day, it’s the way I can make things happen or hopefully make them happen. So when people say, “Well, John…” I used to tell young people, and you and I when we were together, I’d say to three people, “Write down three names. Don’t think about it, just write them down, and I’m going to tell you how I’m going to get together with the CEO.” And they couldn’t believe. I didn’t want them to think because then they would try to out-think me.

John Cushman (00:28:13):

And what I would do is I’d look at the names, I do this to this day, today I would do it, I would look and see if I knew the CEO or the senior officers. And when I say senior officers, I’m talking about the very top. And then I would look at the board of directors, see if I knew them or knew somebody that knew them. If that didn’t work, I would look and see who were their accountants. I knew I could get in that way. I knew it. And then I would look to see who their law firm was. And then I would find out who the biggest clients were they had, the law firms had, and the accountants had.

John Cushman (00:29:05):

To this day, I can make that formula work because those channels, if you’ve been honest and ethical about your life and not taking shortcuts, you can get where you need to get. And I do it every day. If you say to me, have I done it today, I have to this day.

Chris Rising (00:29:29):

I believe it. Let me ask you this. You were just a wizard, what the dictation machine. We would come out of a meeting, and before you would say anything to anybody else, you’d dictate your notes from that meeting, and then you would dictate a followup thank you letter. And that would go back to the office and in a couple days, the file would be started and the letter would come out.

Chris Rising (00:29:53):

When did you start that process? Did you always have that kind of… We didn’t always have the dictation machines that you had in the nineties. So when did that happen?

John Cushman (00:30:04):

Remember too Chris, that the iPhone didn’t happen until 2007. So think about it, for all of us, that’s not so long ago. And today the technology is moving so rapidly. The bottom line of it is, I don’t know. I never had a dictating machine really as a way of life before Cushman Realty. But I had a tremendous backup team. People like you, Bobbi and Lou McTague and everyone, and Charlie Peck who kept me… The key to the lock for me was to surround myself with the best people, people that were smarter than me, people who could help me help myself.

John Cushman (00:30:57):

And the one thing I did, which I know has had an impact on lots of people is, I’m very careful about writing a thank you letter. And every year at Cushman & Wakefield including this year, they asked me to kick off the interns, hundreds of them. The bottom line of it is today, the young people are so committed to their digital world, and that’s okay. But there’s nothing like having somebody write a thank you letter.

John Cushman (00:31:46):

Now, I never wrote them by hand because my writing is terrible, but I would dictate those notes to this day. Last week in one day I did eight. Couple were funerals, a couple were promotions, a couple were thank yous. But I don’t just write a thank you letter that’s four lines long. I think about what I did with that person and try to reestablish it in the letter. And I will tell you this, people remember that.

Chris Rising (00:32:24):

Yes, they do.

John Cushman (00:32:27):

I’ve done it all my life when good friends, sadly, when they pass away or the celebration of life. I’m lousy at funerals and things, I don’t do well. But I do pretty well when I write what I believe in my heart. So I believe the young people have to get away from just typing a quick text message saying thanks for the meeting.

John Cushman (00:33:03):

And you know I kept a record for years of people I invited to the Cushman & Wakefield event at the ranch. Bobbi and Deanna had to keep a record of who wrote a thank you letter. And I thought about it, and I can remember the ones who didn’t. I’m not saying they were bad people, but I believe in being gracious about life and saying thanks.

Chris Rising (00:33:40):

Well, what I also love is you’ve adapted this to this modern era because I know the most recent one I got from you, I got the next day in a PDF form in an email from you. And then the actual letter showed up a couple days later. I thought it’s such a nice touch, I’ve stolen that myself.

John Cushman (00:34:02):

I still do that to this day. It’s a way of life for me.

Chris Rising (00:34:07):

Well, I think it shows what you were able to do in order to be successful. So let’s go back to April 1st, 1978. You’ve come back from Harvard. You’ve decided that you’re going to leave, but it doesn’t just happen right away. You talked about these big problems you were facing about your non-compete and all of that. What was it like the first six months? What were the things that surprised you about your freedom, and what were the things that scared you about your freedom when you started Cushman Realty April 1st, 1978?

John Cushman (00:34:45):

Well, the bottom line of it is I didn’t have a vision, I didn’t have a plan, but I knew I was leaving. The first thing I wanted to do was to get a few core people with me and try to tackle the clients that I had. I was very respectful of my restrictions at Cushman & Wakefield, but I was able to work around them.

John Cushman (00:35:16):

And the bottom line of it was I was terrified about leasing space, hiring all these people and having zero income, zero. The bottom line of it was we were profitable within six months. We never looked back. Never in my life had I had an experience like we had at Cushman Realty, because we were a different breed. You and I were together. And the bottom line of it is we had a distinctive competence that didn’t exist then and doesn’t exist now. And we couldn’t recreate it if we wanted to.

John Cushman (00:36:00):

But the bottom line of it is I surrounded myself with very bright people. And my twin brother, Lou, who was always brighter than me, better athlete than me, better student than me. So he was the chairman, I was the president. And what we did is we built a model, and the model was based upon hiring the best brokers everywhere and anywhere, and not charging them a penny for anything. So we had property management, we had CPAs, we had project development, we had consulting. And these people back then were paid $600,000. Lou McTague. And then I got people like Charlie Peck. Charlie was the smartest guy that I ever worked with.

John Cushman (00:37:05):

It was a privilege for me to be surrounded by these people. So I was a sponge. I learned from these people, but we never charged our brokers. And today I don’t care whether it’s CBRE, JLL, Newmark, the company takes a big cut, then the clients take a big cut, and then they got to pay for everything. They got to pay 10% for financial analysis. I actually don’t believe in it, but that’s where it is. So the bottom line of it is we built a model and we were making money hand over fist.

Chris Rising (00:37:54):

Well, let’s talk about that. Do you remember the first commission check he made at on a Cushman Realty Corporation blue slip?

John Cushman (00:38:04):

I do actually, and I kept it. I also did one thing that was interesting, Chris, I realized how technology and the legal world was changing. I kept the first lease I ever did. It was at 10 East 40th Street in New York. And the name of the company was Matthews Conveyor. It was a little over 2000 feet. The lease was two pages long, two pages, both sides of the page. Was the Real Estate Board of New York lease. The commission was insignificant, but I was so proud of that.

John Cushman (00:38:45):

Not only did I remember the deal, I remembered the lease. I kept the lease because I remember going to a meeting and holding up the two page lease and then picking up this volume on the Merrill Lynch. Two books, which each were 6,000 pages. I was trying to make the point of how the world had changed. So I remember all those transactions at the beginning.

John Cushman (00:39:17):

But if you ask me, was I scared? I was scared the first day, the first week, the first month, but I quickly gained self confidence in my small team. And it was so much fun that I couldn’t wait to get to the office to get ready for the next deal. You had to keep five or six deals in your head because they were all happening at the same time. And that to me was really great.

Chris Rising (00:39:57):

One of the things that I always loved about Cushman Realty, if somebody came to you with an idea, you almost every time said, “If you can make it happen, go make it happen.” And I remember at one point I was carrying a business card that said I was doing life science in San Francisco and doing stuff in San Diego. Because you couldn’t really show up in a market and not have a business cards. And then when we merged, which we’ll get to in the next session, back with C&W, one of the first calls I got was, “You can’t have business cards in different markets. And by the way, Chris, what five blocks of downtown LA do you work? That’s not going to work.”

Chris Rising (00:40:35):

But the ethos of the entrepreneurial broker is something that you instilled at Cushman Realty, but you also instilled this teamwork concept that when I was at Cushman Realty Corporation, I knew I was part of a team. We dressed like we were part of a team. We acted like we were part of a team. You led that and you led certain things about what the expectations were for how we did things, from as much as Lou seeing a letter and redlining and correcting it and send it to brokers and says, “You can’t send it out until you make these changes,” to how we would go and plan our tours.

Chris Rising (00:41:16):

I remember you had a whole… it probably started with going back to Charlie or maybe Lynn Williams, a whole way of how we would do tours. This is what the team does. This is how we do it. And we do it at this level. And one of my favorites was you always had the mentality when we get into a lease negotiation, we got the brokers there, the principals there, and the lawyers, we’re locking the doors. We are not leaving until these things are done. Sometimes I tell stories about these meetings and they think I’m not being honest, but no, you really led with all of that.

Chris Rising (00:41:50):

And I feel like those years at Cushman Realty, you got to unleash all your entrepreneurial juice and did some amazing deals. Let’s talk about some of these deals.

John Cushman (00:42:02):

Well, I’ll give you one that follows up on that comment. I had a great relationship with the Burlington Northern. A Guy named Dick Bressler was the heir apparent to run ARCO. He left and went to St. Paul, Minnesota to be the CEO of the railroad. And the railroad was a sleepy old operation. This guy might have been, he was small, very quiet, and over the top bright. Didn’t say much, but when he struck it was like a rattlesnake. And it was over. You weren’t going to survive. The guy was so quick with his mind.

John Cushman (00:42:51):

So they came to me about representing the Burlington Northern Railroad and moving them to Texas. So I said, “Wow.” And this was happening every day, every week. So weeks stuff like that. So I went to Fort Worth and this was an enormous company which is now owned by Warren Buffet. And it was arguably one or two of the best railroad in America, but it was a bit sleepy. Bressler wanted to wake it up. So I worked with a guy that used to be the treasurer at ARCO. He became the CEO at Burlington Railroad. And they appointed me to represent them and move them to Texas. We decided that the right place was Fort Worth, not Dallas.

John Cushman (00:43:52):

So I met a guy named Ray Hunt, one of the wealthiest guys in Dallas, in Texas, in America. And he was the illegitimate son of H.L Hunt who had multiple families. He had a company, I think it was called Woodbine. And the CEO was named John Scovell. And I negotiated, and I had incredible leverage because I had the ability that I never had otherwise in my career, I had the authority to hire the law firms. So I would pick the law firm, pick who was going to be the client representative. And it was incredibly great.

John Cushman (00:44:43):

So what happened was we went back and forth, and I came down to a building ultimately that was owned by Ray Hunt, and the president was named John Scovell. I knew a little trick that I did for years. It wasn’t particularly nice, but it was a good, effective trick. When I was in another place like Fort Worth, I knew that I wasn’t home, and I know that people in the meeting were anxious to have a meal or go home, see their kids. I had this theory that we should drag it out, drag the meeting out, lock the door, keep everyone in the room.

John Cushman (00:45:33):

And so this one guy, the president of Woodbine called his wife and said, “I’ll be home by 8:00.” At eight o’clock, no possibility. Called her again at 10:00. Now she was furious. The bottom line of it was I used to make sure I had enough energy. And we kept going till maybe 1:30 in the morning. And this guy, the president of Woodbine fell asleep. He was a smoker. And when he fell asleep, it was next to the ash tray where he had put the cigarette ashes. So every time he breathed, the ashes would go all over his face and his suit.

John Cushman (00:46:24):

We kept it going all night long. And then he went home and he came back the next day. He was wearing a helmet, sort of a Norway helmet. And it was fascinating. We did the deal.

John Cushman (00:46:40):

I’ll tell you the bottom line and what Ray Hunt said to me. Ray said, “John, listen. This is a huge building, a fantastic tenant, a large tenant. But if this thing goes upside down, I’m going to drive to work every day and see this tall building that I lost because this deal was too tough.” I did not try to make the deal too tough, but I was pretty specific about everything.

John Cushman (00:47:10):

The bottom line of it, he said, “John, if I drill an oil well and spend 5 million, I can go hunting three months later when the rig leaves the site, looking for quail,” and he said, “it doesn’t mean anything to me.” He said, “It’s a lot different when I drive to work and I see the building that’s 40 floors high that I lost.” So that was the story with one deal in Fort Worth, Texas.

Chris Rising (00:47:41):

Well, I was fortunate to be around when you did probably one of the more exciting deals that I’d ever heard of was moving Boeing from Seattle to Chicago. You want to talk a little bit about that? We would go to Chicago, Denver, Dallas. They would bring parades out to try to get Boeing to move their headquarters. How did you get Boeing as a client? Talk a little bit about that deal.

John Cushman (00:48:11):

That was not the biggest deal, but it was probably the most high profile media covered deal in my career. What happened is Boeing got fed up as it related to the headquarters with Seattle. They didn’t like the mayor. And they said to me, “We got to get out of here.” So we agreed. What they did is they wanted to talk to three brokers. CBRE represented Boeing, but like any contract, the CEO probably had a way to change the commitment of that contract.

John Cushman (00:48:53):

So Roger Staubach was considered if they went to Texas. I was considered if they went to Denver, and CRE was considered if they went to Chicago. The bottom line of it was the president of Boeing Realty, they had 120 million feet, interviewed me, Staubach. And then Roger and I were buddies and we competed. He was a fantastic guy.

John Cushman (00:49:27):

Bottom line of it was, they offered to split it three ways. So I told Boeing, “I don’t want to be a part of the deal, so you can cross me off.” It was a strategy and I knew how to play this card. So it got back to Phil Condit. Phil was the CEO of Boeing, called all the shots. I knew him because I was the national president of the Boy Scouts of America, and Phil was on the executive board with me. He overruled the real estate president and said, “We’re not splitting it up. To the contrary, John Cushman’s going to handle all of it, everything, and the other firms are not involved.”

John Cushman (00:50:21):

So the bottom line of it was, was absolutely fantastic because you were a part of it. We had a big team. We would fly my plane to Seattle, or I would, and go to Seattle and then get on the Boeing business jet, the most incredible plane I’d ever been on. It had an office. We had pushed a button. There were nine senior officers. When the chief administrative officer of Boeing was on board, he was in command. Condit never went. And when the chief administrative officer wasn’t on board, I was in command.

John Cushman (00:51:08):

They had a phone and I called Phil Condit one day and said, “Phil, I have a phone on my plane and it’s just horrible. I want to get the same one you have.” And he laughed. He said, “John, there’s only two phones like that in the world. And one is Air Force One, and the other one’s on that plane you’re on.” He said, “That phone costs 11 million.”

John Cushman (00:51:40):

So what happened was you went, we all went, I would fly on this, everyone would meet at these cities, and everybody at Boeing, the nine senior officers had a bet and win dinner in Denver, that it would all go to Dallas. Everybody believed that. I said, “Wow, I can’t get in this bet. This is a bad idea. I’ll be in trouble.” So I didn’t get in the bet or discuss it. I knew in the end, only three people knew.

John Cushman (00:52:20):

And when we left and we made the decision to go to Chicago, the CEO did not trust the air wing at Boeing, the ones who had all the private aircraft, including the Boeing business jet. He didn’t trust them for a minute about the flight plan, because all of them wanted to know exactly where we were going to end up, because we’re going to affect where they lived and their family.

John Cushman (00:52:55):

The bottom line of it is, this is a true story. We filed a phony flight plan and never filed the actual plan until we were airborne. And then we met in Chicago and I met with Phil, the mayor, Daley and the governor. And we flew on a private helicopter and we moved into the Morton Salt building. It was an incredible deal. There was no participation in the fee by the company. It was a very big deal. And interestingly enough, when we went to the different cities, each one of us would have our own limousine, each one of us had our own helicopter, and we had our own security detail. Every night we would meet and we’d do an encrypted report. They had people carrying encryption equipment back to Phil Condit. And the other guy who was really involved was the chief administrative officer who was a rocket scientist.

John Cushman (00:54:09):

I learned so much. And they had a team in every city. One team was the office base and that was what mattered. We would look as you know, in every city at the downtown, and then we would have another team on the suburbs. And there was another team that we never interacted with that was evaluating the residential. So it was the most exciting transaction of my career, not the biggest, but it was absolutely unbelievable what we went through.

Chris Rising (00:54:46):

I do remember in the aftermath, there were a lot of hurt feelings in Denver and Dallas. And I remember, I might have it a little foggy, but that Dallas was really trying to understand how did they lose to Chicago? How did that happen? I remember that you spent a lot of time with the leaders of Dallas and explained, well, the art museums, the opera, the fact that there was public transportation. And you went through it.

Chris Rising (00:55:11):

And you go to Dallas today, it’s almost as though they took your playbook because Dallas today now has the modern art building. They really addressed a lot of those issues. And obviously Texas is a great place to do business. So I don’t know if it would’ve ended up that way today, but in 2000, Chicago was the winner.

John Cushman (00:55:30):

Yeah. The bottom line of it is you touched on what mattered. I eventually did a presentation at Roosevelt University in Chicago on how it happened and why. And amazingly enough, neither the governor or the mayor asked me why we finally picked Chicago. I did a presentation on it. It is as relevant today as it was when we did that deal.

John Cushman (00:55:58):

The bottom line of it was we were looking at the question of how airline transportation would work between London, Frankfurt and Tokyo. Then we would look at how we would get to each of the major cities in America. And then we would look to see which cities had the most universities and the best access to lawyers, accountants and engineers. And when we stacked it up in the end, it was fascinating because Denver was this high, and then Dallas was this high, and Chicago was this high.

John Cushman (00:56:43):

So I’ve kept the Boeing study, and it’s as relevant today as it was then. But obviously, politics plays a spot in every one of these big deals. And it’s the CEO’s call at the end of the day, and the board.

Chris Rising (00:57:09):

We can’t be talking deals and not talking about the biggest office lease deal that was ever done. I know for a fact that no one broker has ever done a deal bigger than your Merrill Lynch deal in New York. I think today if that were to come around, there’d be an army of people that were “the lead,” but you formed a company, headquartered it in LA, yet you represented Merrill Lynch in the largest lease deal in the history of US real estate.

Chris Rising (00:57:41):

Can you talk about number one, how on earth did you get hired when Cushman & Wakefield was sitting right there and at the time Merrill Lynch owned their own real estate company, but yet John Cushman out of a Los Angeles got hired to do this New York deal.

John Cushman (00:57:56):

It’s a great story. And that question’s unbelievable. It’s complicated, but Cushman & Wakefield never really knew this, but when I was at Harvard, I had a classmate who was executive vice president of Merrill. After I’d been back for a year or two, he called me, he said, “John, we’re having a heck of a problem. We got a real estate problem that’s over the top and we can’t solve it.” I Said, “What is it?” And he went through it all I said, “I think I might be able to help.”

John Cushman (00:58:38):

So he arranged to meet with me, with Roger Birk, the CEO of Merrill Lynch. So I met with him and I told him our story. And by then we’d done these massive transactions. He checked some of them out, but he said, “This is ridiculous. Why would I hire Cushman Realty in Los Angeles when in fact I own a company called Merrill Lynch Commercial Realty that’s multiples the size of your company?” I said to him, “I’ll tell you why, because those people don’t have the experience and the knowledge, and they will not know how to get this deal done.” I went through it in very, very specific detail why they couldn’t get the deal done.

John Cushman (00:59:40):

And at the end of the day, he couldn’t believe it, but he said, “You’ve got the business.” It took us 17 months to finish it. It’s the largest lease transaction office lease in the world. 4 million feet, 6,000 pages. In one meeting at one time, we had 21 law firms. The landlord was Olympia & York. They bought the big portfolio in New York that was a Uris Building Corp. And then they really got over extended later in life with Canary Wharf.

John Cushman (01:00:23):

But we had a team, and we were the second largest user of the hotel at 65th and Park Avenue. The biggest user of the hotel was Disney. But not only were we a large user, we were there for weeks, months. It took 17 months. We went there 17 months continually. It was a complicated transaction. One building was 2.4 million feet, the other was 1.6 million feet. And there were four buildings in the World Financial Center. Those were two. The other building was the headquarters of American Express, which was Shearson. And they owned the building.

John Cushman (01:01:14):

The fourth building, I was lucky enough to actually lease that one as well. I represented City Investing where the CEO was from Los Angeles, named George Scharffenberger. And I did that transaction with Eddie Minskoff who was with Olympia & York. That one was almost 700,000 feet. So we did building A, building B and building D. Not building C, building C was American Express. Look, it got immense coverage. Nobody could really figure out why we got the business, but it was all because Cushman & Wakefield sent me to Harvard, and I met a guy at Harvard who connected the dots and we got the business and that’s the story.

John Cushman (01:02:12):

Oh. One more, Chris. After we finished 4 million feet, Merrill called me up and said, “We’re out of space.” I said, “What?” We’re out of space. They said, “Get us…” So I leased them another 660,000 feet at 101 Hudson in Jersey City.

Chris Rising (01:02:38):


John Cushman (01:02:39):

So it wasn’t 4 million feet really. It was more than four and a half million feet.

Chris Rising (01:02:45):

Unbelievable. We’ve talked about a lot of deals outside of Los Angeles, but you’re legendary in Los Angeles or some of the deals you did. Los Angeles in the mid to late eighties was on fire in terms of its growth, and some legendary developers, some legendary deals. Why don’t we talk a little bit about how you got to meet Rob Maguire and how you got to do some business with him?

Chris Rising (01:03:14):

One of the things I should point out to the audience, when you were at Cushman Realty, you weren’t bound by some of the things that you would’ve been bound by at a C&W or a CB. You could go out, and if you saw a piece of property, you invest in personally, you were the boss, you could do what you want to do. So you wore two hats a little bit in Los Angeles that you had some really nice properties, but then you were also representing tenants. I know one of those deals came around with Rob Maguire and US Bank Tower and then also in Pasadena.

John Cushman (01:03:44):

Well, that was a little bit of a slippery slope, and it was an accident ready to happen, but we survived it. I used to compete for deals against CBRE, and I knew CBRE when it was Coldwell Banker. And then it was Coldwell Banker Commercial. But I used to say, “Why would you want to hire CB when they have now today, maybe 100 billion, 100 billion of owned assets?” I did that with as much marketing skill as I could put together. I never won the argument. I never convinced anybody like [inaudible 01:04:36]. I said, “Why do you want to hire them? When they’re competing every time you want to buy a building?” I never won the argument and I never got in trouble on it myself. I could have gotten in trouble, but I didn’t.

John Cushman (01:04:51):

So how did I get to Maguire? That’s interesting. It goes back to that employment agreement I had, which restricted me from doing business with anybody that C&W was doing business with. And remember, I got a reprieve from ARCO. But it was the most opportune situation of my career because it was a guy named Robert Maguire, Robert F. Maguire III. He was a developer and he wanted to develop a building in Bunker Hill. Bunker Hill became really important, but when I first moved there, it wasn’t that important. It got more and more important.

John Cushman (01:05:51):

The bottom line of it is, he had put together a building that looked a little bit like ARCO Plaza with a clip corner and a mirrored finish. And I met him. We had never done business and Cushman & Wakefield had never done business with him. So I was free. And we developed a relationship and I said, “Rob, that building you developed is not going to work. Downtown LA is quite conservative and that’s a flashy look in development. I think it would work in Santa Monica or West LA. It’s not going to work downtown.” And we worked together.

John Cushman (01:06:41):

He changed the design. It ended up still with the clip corner, but it was a conservative skin, granite clip corner. I developed a relationship with Rob and it lasted from originally Maguire Partners to Maguire Thomas Partners. It took various iterations in its life. But the early years were incredible. And Chris and I were together.

John Cushman (01:07:17):

And the bottom line was, it was smoking hot in terms of the market downtown. Rob said, “Okay, we’re going to design this building and you got to lease it.” Well, it was like ARCO Plaza. I didn’t have a million dollar room like Hines would build to sell a product. I had the trunk of a car, not an expensive car, but I had a big trunk. And in ARCO Plaza I had these boards that A.C Martin had made for me. Rob made boards and they were more beautiful, higher design.

John Cushman (01:08:02):

The bottom line of it is Rob had a project, but no tenants. So he came to me. It turned out that we would talk many times every day, seven days a week for years. And then his business grew. Rob was a little more complicated than some to negotiate with, and then he brought on Jim Thomas, who was a lawyer. So Jim would attack everything in a way that was very disciplined and legally focused. And so I got frustrated a little bit by both of them.

John Cushman (01:08:47):

The third guy in my lineup who became the most important guy was your father, Nelson because Nelson was able to see through the fog and help me with an idea. Rob was an idea guy a mile a minute, but was hard to keep him focused, and I needed help. And so Nelson and I at the end of the day, actually did the negotiation of most of the major deals. But the first deal to get Rob going was Bunker Hill. And it was called Crocker Center. This is a great story.

John Cushman (01:09:32):

I’ve got all these different models and so on that Rob’s made, and I’m really into it. So I realized that there was no name. There was no Crocker. I went to Wilcox, the chairman who was a chairman in both Crocker Bank in LA and San Francisco. I met with a guy named George P. Rutland and Morrison. And together, along with Wilcox, I kept showing him this project and I convinced them after they had just moved into 611 West 6th Street which was the original office of O’Melveny, and it was a 42 story tower, in its day it was the best, but I convinced Crocker after they had just moved in to think about moving to Bunker Hill.

John Cushman (01:10:39):

So here’s what happened. We made the deal with Crocker Bank. I then went to Gibson, Dunn & Crutcher, who had already previously moved from Spring Street to ARCO Plaza and convinced them to move, and they did. And those two kicked off tower one at what became Crocker Center. And then Maguire wanted to build the second tower. The first tower was 1.3 million. The second tower was a million. And I lucked into something. I don’t want to take as much credit as everybody gave me, but I fell into something with IBM, because I was doing a project on Mid-Wilshire with ARCO, and I met with the people at IBM and they wanted to get out. So I leased them over 600,000 feet as the broker at the second tower of Bunker Hill.

John Cushman (01:11:51):

This was the beginning of an incredible career between those two, myself and Rob Maguire, Jim Thomas, Nelson Rising, Ned Fox, a lot of different people at Maguire. And it was actually the most important milestone, even more important in a way, than ARCO because it was broad based, and included Crocker one, Crocker two, the Gas Company Tower, Library Tower, Plaza Las Fuentes.

John Cushman (01:12:31):

There’s a little story Chris mentioned about conflicts. Well, I was on top of everything downtown, and there was a lousy apartment building on 5th Street called the Engstrum Apartments. I was on the board of a bank and I tried to convince them that I’d buy the property and they could own it. None of my clients believed in my vision, so instead I bought it. I bought the site. So I owned more or less half the site that today is the 73 story Library Tower.

John Cushman (01:13:18):

But remember, 444 South Flower was owned by the Rockefellers. And the bottom line of it is I represented ARCO and put the deal together. But when the Rockefeller family ended up owning 444 South Flower, there was no way they were going to pursue a dream to do a deal with Maguire or anybody that included me. So I didn’t have a choice. It was an incredible home run. I put Bobbi Mathies, my assistant in it, and I think she got 13 to one return in 13 months. We waited for long term capital gains.

John Cushman (01:14:06):

But because I owned the land, I said to Maguire, “Look,” he’s now flying pretty high on his own. And this is a building where the FAR, the Floor to Area Ratio, when I moved to LA was 13 to one. Then it went to six to one. And then if you were a magician, you could get it to 10 to one. But Maguire, because of Nelson, got it to 20 plus to one, that’s because they funneled 100 million into the Library, the Central Library.

John Cushman (01:14:44):

I said to Maguire, “Look, I know you can’t develop this building because I know the Rockefellers will work with you, but they’re not going to work with me. So here’s the deal.” And it was very handsome for me and I owned almost all of it. But I said to Rob, “Rob, it doesn’t matter what you think. I’m going to be the leasing agent, the managing agent. Oh, and incidentally, I’m not going to do anything,” because Rob wanted to be the managing agent.

Chris Rising (01:15:53):

So you own the property, you own the land. You said to Rob that, “Hey, the Rockefellers will never let me do this.” So let’s go from there. Did you sell the land to…

John Cushman (01:16:11):

I sold the land, and then I became the leasing agent or managing agent, but this is a great story. Rob had a fee just like you would have, or I had when I developed, which was 3% of the gross revenue. I said to Rob, “You don’t want me involved, I know that. But I’m going to be involved, but I’m not going to do anything.” And I represented the main tenant in the building and First Interstate. So I was the broker on them. But I got paid the commission on both Latham & Watkins and the accounting firm, which were huge. I never met either one of the tenants.

John Cushman (01:17:01):

But because Maguire was getting 3%, I picked off for Cushman Management a point and a half. So Rob, he did manage it. We had nothing to do with it, but it was the biggest single project in a way, well, it was for Maguire, for Thomas, for Nelson, for the whole Maguire team, and as well for me. It’s a great looking building. Mies van der Rohe, and was really a Henry Cobb, the architect, but that’s the story. And then that morphed as you know, Chris into the Gas Company Tower.

Chris Rising (01:17:47):

Well, this has been a wonderful conversation. I loved the deal talk. I know for our third session, there’s a few more deals I want to talk about. We got Unocal, we got The Gas Company, Plaza Las Fuentes. We should talk a little bit about your foyer into doing some development, but then we’ll finish off when you merged Cushman Realty back with Cushman & Wakefield and what that run’s been like since 2001.

Chris Rising (01:18:10):

But this has been a spectacular conversation. I know all the deal junkies in my audience are going to love it. So, John, thank you so much and we’ll schedule the third one soon, and excited to do it.

John Cushman (01:18:24):

Thanks, Chris.

Chris Rising (01:18:26):

Thanks John. Talk to you soon.

John Cushman (01:18:27):

Thank you.

Chris Rising (01:18:28):

And please don’t forget to follow us. We’d really appreciate it if you subscribe to the podcast. You can do that on Apple iTunes or any of the other podcasting services. It’s The Real Market with Chris Rising and follow us on Twitter @chrisrising or @risingrp, and please follow our blog, chrisrising.com or risingrp.com. Thanks so much.

Speaker 3 (01:18:53):

This episode of The Real Market is brought to you by Rising Investor Platform. The platform provides credited investors with exclusive real estate investment opportunities on a deal by deal basis across various asset classes, including office, industrial, hospitality, multi-family and data. The platform also provides an inside look at deals in our pipeline while giving investors the chance to indicate interest before it’s too late.

Speaker 3 (01:19:16):

We recently funded our acquisition of if 9320 Telstar, a mixed use office industrial property in El Monte, California using our investor platform. To learn more about how accredited investors can join the Rising Investor Platform, please visit risinginvestorplatform.com.

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