CRE Success: The Podcast, S01E11
leighton hunziker, savills
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retail, landlord, clients, people, business, tenant, australia, podcast, commercial real estate, rep, savills, career, korea, achieve, real estate, retailer, skills, rental, years, darren
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Welcome to CRE Success: The Podcast, where we help people working in commercial real estate achieve their professional goals. Check us out online at cresuccess.co/podcast. And now here's your host, Darren Krakowiak.
Hello, this is Episode 11 of the podcast with content especially curated for people who work in commercial real estate. I hope you enjoyed the couple of bonus episodes we had for you over the past couple of weeks, which were in part a bit of a highlight reel of the first half of season one, along with some new material, and it was all about passion and prospecting. Make sure you check them out if you haven't, and if you are new to the podcast - well, first of all, welcome to you - and secondly, don't forget there are another 10 episodes waiting for you to download into your podcast feed and listen to at your leisure.
Today my guest is Leighton Hunziker from Savills Australia. Leighton started his career in the industry 27 years ago and as we will discuss once he caught the bug for retail, he's been specialized in that sector ever since. His career has seen him be a shopping center manager, a portfolio manager, the head of the property management department. And then he transitioned into retailer representation, which he currently runs for Savills He spent a few years overseas about a decade ago and in today's interview, you'll hear some of the lessons he's learned along the way, including the importance of keeping the pipeline fed, the benefit of a human centered approach to business, and he will share why he is often motivated to make unpopular but principled public statements.
Before we get into that, I would like to take a moment to recognize Hub Australia who are the leading premium co working provider in Australia, and also our sponsor that has recommitted to support the podcast for another 10 episodes. In addition, I would like to welcome a new sponsor, Re-Leased; Re-Leased to provide 100% cloud-based, award-winning property management software designed for landlords and property managers. You'll be hearing more about them over this second half of the first season of CRE Success: The Podcast.
If you do enjoy the podcast and you would like to show your support, it's really easy to do, you can go to your podcast player and hit subscribe, and make sure you download and listen to all the episodes. Plus, you can also leave us a five-star rating or write a review for us. Your support for what we produce for you would mean a lot.
For now though, don't go anywhere because my interview with Leighton Hunziker of Savills starts in 30 seconds.
And now it's time for the interview on CRE Success: The Podcast.
Leighton, welcome to CRE Success: The Podcast.
Hi, Darren, how are you?
Very good, thank you. Leighton, the thing that we do at the start of each episode is We ask our guests to step into the virtual elevator and to give us their 20 to 30 second introduction of who they are, their elevator pitch. So Leighton: Who are you?
Ding! I’m a 48 year-old married father of three boys, live in the Aussie suburban dream: House dog mortgage, married for 20 years and having a great partner really has helped me in my career and go beyond where we both dreamed professionally. I'm a 27-year old learner of commercial real estate who gets a great buzz from helping clients and other people achieve their objectives. Overall, I'm an optimist. I love having moved engagements, meeting people learning about their experiences and challenges and how I can help them achieve their success and within the element of real estate. I find I can do a lot of help for people and that's where most My role as a tenant rep, it really complements my personal skills and abilities.
Awesome. So how did the the journey in commercial real estate start? 27 years ago?
Crikey; look so much of the pressures of parents, what are you gonna be when you're old? And I was very blessed Darren that I didn't have that. My father instead of saying, What do you wanna do get when you old? Instead said, what sort of life do you want to lead? So that to all oppression, expectations of being an accountant, or a doctor or lawyer or whatever, and it was more along the lines of well, I worked out, I wanted to be married, I wanted to live in the city. I wanted to have a good income, I wanted to all the things actually I’ve achieved. So that's great. And all these things came through sort of decision tree matrix that was real estate, because it involved meeting with people it was working indoors and outdoors, and negotiating because I'm reasonably good at sales. And so real estate sort of popped out as that, so I started their degree at University in real estate. And even at that point in time, I didn't know specifically what I wanted to do in real estate. Other the fact that I didn't want to do residential because I didn't want to work on weekends, call me lazy or what have you. And so that meant that it was commercial real estate. So in the area of commercial real estate, at that stage, this is going back almost 30 years now. It was it was reasonably defined. It's got a lot more narrow, narrow in terms of the options and things you can do. But I was very blessed Darren, that I came away from a green in land economics with an understanding of finance, law, physical construction, architecture, design, and a whole range of things which really stood me in good stead. I got a job working for Jones Lang LaSalle as a graduate, and that was a fantastic program and back then I really invested heavily in the in the young people and willing to incur a cost for no benefit. And I was rotated around a couple of different areas of the company, starting off in hotel valuation and Hotel Management, into retail, leasing and finally into shopping center management. Once I got a taste of shopping center management, you just get hooked on retail because retail is just so immersive involves so many different facets of life and business, and that you couldn't get back to anything else. So that's how I ended up in retail. I was managing some shopping centers and, and managing some teams of people and over time, that became a portfolio across Australia, New Zealand. And from there, you know, went on to Korea. So, overall, a great rounding, pretty diverse experience in real estate to date, and more to come.
So the year that you spent in Korea, what brought you over there?
Darren, I wasn't a big believer in a rigid career plan. You know, I didn't have a desire to go there. I've mentored plenty of guys or girls over the years that have got these users need to I'm going to meet this position Are you five in that position, and I've never really content where they were. And I've always believed that wherever you are at any given point in time, you give you a best and the rest looks after itself. And so we've done that after a few years with Savills, who my current employer is. And it turned out that we as a company who just bought a brand new company in Korea. And the CEO there wanted to establish a retail platform because there was none within the company over there. And indeed, we had some clients from Hong Kong and Singapore that had a development project, they wanted to have some skill set that was more aligned with the traditional western style of doing business to complement their assets over there. And they put the feelers out. And it just so happened that I thought that I could do the job and off we went. So, it wasn't through any determined plan. It was just opportunity. You know, I'm, as I said, a big believer in doing the best way you are, and the rest of soft itself. It's been 27 years that way, and it will continue to be that way. And so what got me to Korea, it was just serendipity. But it wasn't because I was a dope, it just worked out that way.
And you had the the wife and family with you over there?
Yeah. So um, I took I took my wife and two boys over to Korea and come back with three, we were there for three years, and had one child over there. And that was probably the most defining experience of my career, opening up my eyes, my ears, prejudices, my ego, to the fact that I didn't know it all. I couldn't do it all on my own. And it was a really good experience as a human being, and also a good experience professionally.
Right. So, would you have any desire to work overseas again?
Yeah, my wife and I, I mean, right now with our children, being in sort of senior high school, it's probably not immediately on the radar, but look, certainly working overseas. Living overseas, was like a great thing to do really broadens your horizons. You made a whole bunch of people who you'd not ordinarily meet. But so much in common in that you're in a different land, doing different things. And so that that for me Darren was really instrumental in broadening my horizons. You know, I went over to Korea, you know, slightly egotistical thing. I knew how to do business, I knew how to do retail, and you had to manage people. They wanted my skills. And so I thought I could go there and teach them how to do things. And I was, you know, the first month or two or so it was a, it was pretty humbling, because I realized that I didn't know nearly as much as I thought I did. And and the greatest thing I worked at was I realized then what I didn't know. And I had to sort of put all my conventional thinking on the shelf and open up my mindset, the that there is a different way of achieving things and I wasn't always right. And in Korea, they've got their own way of doing things. And it's, blow me down, quite successful.
Yeah, I think when you realize that you don't know everything. That's when you can start to really learn things and go further in your career.
Yeah, look that’s absolutely the case. And I learned I learned as much from being career as what I was able to help my team. The thing I'm really proud of is we had no retail skills as a as a retail business in South Korea. And after three years, we'd won a couple of jobs. We had good revenue streams coming in from multiple sources. And we were recognized as being one of the preferred service providers of retail services. The other thing was really good Darren was, we had some clients over there with projects. And the sort of western style of investment approach to managing, owning and structuring retail property hadn't really existed there. And so one thing I'm really proud of is we sort of set a platform for retail investment to really work in Korea from a property perspective. So that was that was quite proud about that.
It's a legacy that you've left in career and you came back obviously with a with a third child. So sounds like a pretty good experience.
Oh all in all, great. And again, it wasn't because I necessarily wanted to leave it was because there was an opportunity back in Australia to do some tenant rep work. I'd never been a tenant rep before. And so I thought, you know what, now's the next step. I know retail pretty well. I think I can put the leasing skills my management skills, my people skills. to good use, and became a tenant Rep. And that that was probably another great thing that I've done. I mean, I really enjoy being a tenant rep, because the ability to help people and add value is really manifest in that process.
So how long have you been focusing on the retailer representation?
Been about 10 or so years now, Darren, we started off doing a little bit of consulting for Apple. And that turned into a tenant rep gig. And we've now managed all of Apple's rollout program in Australia and continue to help them and off the back of that, we achieve some success with some other international clients. And through our networks of retail guys across Asia and globally. It's really collaborative to share experiences, share clients, and help each other achieve success, and you know, approach servicing our clients as if I was the client, what would I want? And invariably, I find that that always works. Yeah, we've, we've been doing this now as a team for over 10 years, and we've not lost a client yet,
That's a great record. So, tell me about the difference between representing landlords and representing tenants; how much of the skills are easily interchangeable between those two, those two roles?
There’s so much in common. First and foremost, there has to be a deep understanding of client expectations and what you want to achieve as a client. So whether it's tenant rep, or whether it's property management, or really anything that's out on a services business, if you've got the ability and the mindset to understand what the client once you're halfway there, going from property management to tenant rep was a great progression because I think if you can understand what a landlord wants, how a manager thinks, what the drivers of commercial value are, then I think you've got the ability as a tenant rep to structure a deal into that to create a win-win situation. You know, I made other tenant reps or retailers that don't really have an understanding of the nuts and bolts of how a property works and what the landlord's drivers are, invariably you just gonna butt heads. If you if you walk a mile and the other person's shoes, you'll be a much better negotiator understand what they want.
And was there anything that you had to do to sort of shift your approach as you as you switch from property management and landlord rep into a into a tenant rep role?
Well, not really. Darren, as I said, before, we're talking about client, you have always focused on what the client wants to achieve. And this is just a different client with different objectives. And so that much didn't change. Obviously, in terms of receiving rent versus paying rent, that was a key key driver. So I sort of had to train myself not to chase a big rent but to chase a small rent but overall, not not really client service, first and foremost, and everything else looked after.
And so given that the retail sector isn't as, if you like, represented as the office sector when it comes to the occupier side, how much growth do you see as the potential for a retail representation platform in Australia and globally?
Look, that's a great question. I think the potential for retail tenant rep is huge. I mean particularly know so, a lot of retails for bread and butter is supply chain, procurement, merchandising and selling skills. And a lot of the retail clients that we come across are not particularly property guys. And property is a pretty sophisticated business. And I love being a tenant rep because I see a clear imbalance in the negotiating skills and the bargaining power of a sophisticated landlord, and a retailer whose core business is not real estate. You know, you've got one guy who might do four or five negotiations in a given year, trying to negotiate against a bloke with full knowledge. And he does, you know, hundreds of negotiations in a year. It's just a very much asymmetrical situation. And given that retail is now, in the time of COVID, going through a particularly tough time, more than ever, there is absolutely a crying need for property specialists, with retail skills, to assist retailers to achieve more balanced or reasonable outcome, not necessarily to make money, but at the moment more so for survival. We are hoping some of our smaller clients now with negotiating rental abatements and rental deals and is one of COVID because without those negotiations, the business would probably be insolvent. And so the skills for retail are very deep and very broad, and I think more in demand than ever. And given that it's not a lot of other retail tenant reps in the marketplace, I think the future for anybody wishing to consider retail tenant rep can be very bright.
So as a general principle, do you think retail landlords have too much power?
Ah, look without question. Yeah, anywhere where you've got an asymmetry of information, concentration of power and ownership of an asset class, you end up with oligopoly behavior. And in Australia, that's exactly what I've got rght now. You've got a group of maybe 15 or so landlords who collectively dominate a substantial portion of the market, who willingly and freely share information amongst themselves. And that asymmetry means that, you know, over a longer period rental for a retail tenancy in Australia, the growth of that has outstripped profit or margin growth for the retailer. And that's where we've got to right now. Profitability was already under stress before COVID. Viability was on the edge and COVID just pushed us over.
So is Coronavirus, an opportunity for some more equilibrium in the market?
Oh, look, I think so. I mean, it was grinding in extremely lower in terms of rentals and the equilibrium before COVID. And this has just hit the accelerator and change I think the smarter landlords will understand and adapt into the marketplace and get on with it, and probably the not so smart landlords are going to try and hold on for grim death and expect that what happened in the past will somehow miraculously happen in the future which I think is folly.
in your view has Coronavirus accelerated and inevitable trend towards online retailing? Or is it more of a temporary spike which will come back to Earth once we we learn how to live with the virus and or move beyond it as a threat to our way of living?
No, I think Darren it's accelerated a change to online. What's happened is we've been locked up in our houses, we've realized, if we want something, typically we've had to go online. And sometimes we've experienced a great experience and some of that some of that online behavior will become sticky. And every dollar that happens online that didn't happen in the shop now is give us like 15 cents worth of rental equivalent, but that doesn't go to a landlord, which is $3 worth of capital value. So I think that yes, that's going to change because some of the online will be sticky. But overall, though, people are inherently social creatures, and there will always be a need for some sort of bricks and mortar marketplace, it's just going to be a function of the nation. function of the deal changes the rents to sales equilibrium will change, and the asset values will change. The experiences will change. But there will still always be some form of physical retail property. And I think it's the savvy landlord and the tenant savvy and savvy tenant rep, that's able to speak to and adapt to that new environment. But certainly, the old is gone. And we're a new world now.
So Leighton you're someone who I've observed has been willing to form a strong view that may not be popular opinion in the industry or in some quarters. And I do love the fact that you're willing to put those opinions out there because it takes it takes some guts.
Some of the ideas that you've put out there probably not easy to float with the internal powers that be because they might tell you not to proceed. So why do you think it's important to to speak up?
Darren, I had an experience about five years ago with a small retailer who literally was getting a very raw end of a deal from a landlord, and was suicidal, and I was trying to negotiate into the circumstance and that lender looked me in the eye and said, buddy, it's just business you gotta understand I said, No, I'm sorry, I don't understand this is personal. This is a person's livelihood you're dealing with here. And so I came out of that negotiation a little bit scarred, but also somewhat changed that, you know, if by speaking up and copping a bit of flack for myself, I can save somebody save a business save a livelihood, keep somebody employed, then that's a price that I think is a good price to take. As soon as we start thinking only about ourselves, our own self-interest, I think that makes a pretty sad human being the sad business environment. So, in the current environment, you're right. I've been a little bit outspoken in the press and on social media, about issues that I see are affecting us. And I'm not naive enough to think that I'm going to achieve a whole lot of change by that. But if one business becomes more viable, if one retailer stops themselves from undertaking some drastic action, then it's absolutely worth it. I have been blessed to have the support of the company, mostly for my opinions and views, I have had to temper them because I tend to be quite forthright as you're said in terms of how I've expressed this, I've had to edit some of those posts, things I've said, but overall, I don't resolve from them and I have copped heat, I've copied from the landlord community, I've been put on landlord blacklist, and they won't deal with me because those things, but at the end of the day, you know, I, you got to put your head on the pillow every night, believing and trusting that what you've done is for the greater good, even if it hurts yourself a little bit.
The landlords that have put you on the blacklist, is that something they've gotten over or is that still in place?
Yeah, no, they've, they've had to get over that because I'm quite blessed that my clients and my support, and my clients are quite good clients that those landlords want. And so at a certain point in time, they've had to get over themselves and realize that if they wanted to have my client in a shopping center they had to work through me,
Very good. I remember early on in my tenant rep career being told by a landlord, in Korea, actually where it was, you know, I was also based, that they wouldn't deal with us if we pushed a certain item and you know, we sort of stuck firm, and sure enough, the market turned and became much more tenant favorable. And that landlord continued to deal with us. So, good lesson to learn. Is there ever a time to pull your punches though, in that in these situations?
Yeah, absolutely. I mean, if, if saying something you're going to offend somebody personally, or slander a company or slander a person absolutely can't say that sort of thing and you can't do it. So I'm keeping all of my posts, observational, and anecdotally nonspecific, but certainly very much of a commentary nature, the time not to say something is not if it's going to hurt you or not, don't be afraid of that. If it's the truth, and if it's for the good, absolutely say it, but not at the expense of another.
Very good. Well, you've said that Savills have been a good supporter review when you have spoken up in the past and you've had a good innings, 17 years at Savills, so what's kept you loyal all these years?
Look, I've been pretty blessed that the company itself is pretty lean and flat. So there's not a lot of bureaucracy to jump through. It's the culture is pretty entrepreneurial. So it's kind of like choose your own adventure. People want to be spoon fed probably aren't the right cultural fit for this. And I've always been a bit of a seeker in a journey and make your own way in, in in things. And so the culture of the company be has been a good alignment for me. There's always been something to do, which has been exciting. In that 17 years. I've never ever been bored, and they give me enough rope to adventure along the way. Yeah, I'm running a team of people. Now in a division, in terms of bureaucracy and reporting. It's very lean, I probably spend about an hour a month on corporate stuff. Other than that, leave me alone. Get on with the business. I'm almost running a business within an overall business and it's, it's a good structure works well.
With that structure. I guess there's a lot of personal responsibility to ensure that you produce results. So what is it that you consistently and routinely do to help you be successful?
Look, keep close to you clients, you keep first your clients care about their outcomes, and the rest will always look after itself. Always keep an eye on for new trends and new opportunities, and always keep the pipeline fed. You know, always be reading the newspaper, working with lots of different people and understanding the viewpoints. I meet with lawyers, architects, planners, engineers, all sorts of people, because they've all got something to add and something that I can learn from. And yeah, keep the funnel full, keep your eye on the client, stay close to them, and it'll be okay.
And last question for you Leighton is about leadership. What do you think it takes to be a good leader in commercial real estate?
Be authentic, be yourself and lead by example. Yeah, I've worked in environments where the boss is trying to expect the team to do something that he wouldn't do himself. So you can never expect your team to do something you wouldn't want to do yourself. There's no such thing as having other people do your dirty work. If you're not prepared to do it, then that's not the right thing to do. So, lead by example, speak the truth, but also speak the truth in love, right? There's no, there's no benefit to be gained for anybody by being harsh. So speak with love. And in all things, consider the human impact. Business is not a bad business, business is about people. As soon as you start thinking of your team as units of production, or that sort of thing, you've got a cultural problem. If something isn't going well in a person's life, then it would impact on their professional performance. So care about the whole person. You know, I've great relationships with landlords and the leasing execs, because I actually generally care about them too, even though they're on the other side of the table. People matter.
Leighton, it's great to hear the human perspective of an industry which can be quite cutthroat and competitive. So I'd like to say thank you very much for sharing all of your perspectives here on CRE Success: The Podcast.
Thank you, Darren, have a great afternoon.
For more information about our guest, visit cresuccess.co/podcast. And now a final thought from Darren Krakowiak.
Thanks Leighton; it was great to hear from one of the good guys in our industry, you could tell he was a good guy couldn't you, who no doubt ruffled some feathers with the opinions that he shares. But of course, there are two sides to the story, and we have had retail landlord representatives on the show before, and landlords remain welcome in the future. In this case, though, I thought it was especially relevant to hear the context of his perspective, which tells me his intention when making bold claims does come from a good place.
If you would like to check out a transcript of the interview, make sure you go to our website cresuccess.co/podcast and you can also check out our entire back catalogue of transcripts on that page as well.
We do have a number of great episodes lined up for the second half of this first season of CRE Success: The Podcast. We will also have insights based on the group training and coaching that I conduct with clients and that I think will translate well into the podcast format. We'll be sharing that with you over the next nine episodes. It's all here for you available for free, and all you have to do to make sure you don't miss any of it is to subscribe to us on your favorite podcast player.
With that being said, that's all we've got time for this week. Thanks for listening and I will speak to you soon.
Thanks for listening to CRE Success: The Podcast. If you enjoyed this episode, make sure you subscribe to us on your favourite podcast platform and be sure to leave us a five-star review. For more information about the show, just check the show notes on your podcast app or visit us online at cresuccess.co