420. The Art of Storytelling in Commercial Real Estate with Spencer Levy, Host of CBRE’s The Weekly Take

Spencer Levy (0:00)

If you have human communication, you will create human bonds, and I think that's a key part of leadership and so many other things.

Haley Keane (0:11)

Welcome to The TreppWire Podcast, the show where commercial real estate meets data and insights. This is a special guest podcast. I'm Haley Keane with Trepp, a data modeling and analytics firm for the CNBS, commercial real estate and CLO markets. I'm with Lonnie Hendry, Chief Product Officer. Today, we are joined by Spencer Levy, Global Client Strategist and Senior Economic Advisor for CBRE, where he plays a central role working daily with the firm's largest investor and occupier clients. Spencer is also a fellow podcaster, and I'm sure a lot of our listeners know that already, as he hosts CBRE's award-winning podcast, The Weekly Take. Over the course of his nearly three-decade career, Spencer has worked across law, investment banking, research, capital markets, and client advisory. And today, he sits at the center of some of the industry's most important conversations, advising major investors and occupiers at CBRE while interviewing many of commercial real estate's top executives and thought leaders. Spencer, we are so excited to have you on the show today. Welcome, and we can't wait for this interview.

Spencer Levy (1:16)

Haley, Lonnie, I'm delighted to be here.

Haley Keane (1:18)

So we normally start every guest podcast by asking people how they got their start in the industry. And we will do that with you here today. But since you're usually the one asking the questions, we wanted to start a little differently. So you've spent years interviewing and advising some of the industry's top leaders. What have you learned about people?

Spencer Levy (1:39)

I have learned that, well, first of all, most people that we have interviewed are not only top professionals, but good people. And I say good people, I want to start in a kind of a philosophical way, because in addition to my podcasting, I also am on stage, as you know, almost every day. I give over 200 speeches a year, and I meet literally tens of thousands of people. And I think the really good news about what can be a interesting world when you read the headlines is that most of the people are good people. And it's something that I think everybody should take into consideration when they're thinking about some of the challenges out there. But the other thing I would say is this, when we get down to the nitty gritty of real estate, wow, there are a lot of smart people out there. And we have a lot of people that are going after the same prize. And that same prize is getting outsized returns versus the market on the investor side and on the occupier side, getting the best productivity out of their space. And I'm very careful about how I say that because I want to be very clear here. This is the core message I give on both sides of the table. I say that real estate is not a cost center. Real estate is a revenue generator and it is a mind shift. And every time I see it, say it, sometimes people are like, it's like an epiphany, it's like, yes, that's what it is. But it still takes some time to persuade. So incredibly bright, incredibly driven people. But I think the very good news is that most of them are just really, really good people.

Lonnie Hendry (3:04)

We've seen that as well in our show and in our day-to-day business, Spencer. It's interesting, Haley went through your intro and I got to put the pieces together. I mean, you have law, investment banking, capital markets, client strategy, now your podcast. How did all that come together? I mean, obviously you've been in the business a very long time, but maybe give us a little bit of background on just how you put all those together, maybe how it makes you who you are.

Spencer Levy (3:24)

Well, it's a common thread. I've been in real estate 100% of my career. So it's always been commercial real estate. And I take each element of what I've done, law, banking, capital markets, research, you name it. And I try to look at things from a top down perspective. And using these different tools in my toolbox, I then bring it to very, very micro. So having been at a law firm, having been at a real estate developer, having been a banker representing lots of companies, I don't just know the real estate. I understand the corporate side of, well, this is how these companies run. This is why it's done this way. But what it does is not just how they run the companies, it also brings up different opportunities for capital. So one of the major changes in the capital world that's happened probably in the last, I would say, less than 10 years is that until about 10 years ago, there was really only a handful of firms out there that were in real estate investing that would buy pieces of companies. Now, that is, I would say, the majority of the big real estate, private equity type firms will buy not only the real estate, but also pieces of the operating companies. And the timing is excellent for that. The timing is excellent for that because the world of getting lower exit cap rates as the primary driver of your returns, that ain't coming back anytime soon. And so you need other cash flow streams. And so the new structure is an excellent one to be able to capture additional cash flow streams. Another interesting structure, which is not new, but is really taken off in its popularity, are secondaries. Secondaries where you get to buy a piece of an existing deal rather than buy the entirety of the deal. You could do that because a lot of people need liquidity. And that liquidity need is, unfortunately, a lot of them are college endowments, which have been probably more challenged than other capital providers. But nevertheless, you were able to get some of these LP interests at a discount using secondary. So long story short is, because I have this diverse background, I'm able to see maybe more of the playing field than others through a variety of lenses and I try to use that for the benefit of our clients.