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CRE Success: The Podcast, S01E15

sheRIF HASSAN, RE-LEASed

FULL TRANSCRIPT BELOW.

 

SUMMARY KEYWORDS

landlords, data, industry, market, podcast, people, commercial real estate, success, geographies, released, leases, clients, tenants, sherif, trends, terms, outgoings, offices, heavily, head

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Voiceover:

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.

 

Darren Krakowiak:

Hello and welcome to Episode 15 of the podcast that is made for people who are looking to be at the cutting edge in one of the world's most competitive and performance driven industries: commercial real estate.

Today my guest is Sherif Hassan, who is the head of APAC sales at Re-Leased. Re-Leased are bringing a cloud-based approach to managing commercial property. And during our discussion today, Sherif and I will be talking about the opportunities for our industry to leverage data and technology to implement automation, increase efficiency, and improve decision making. We’ll also find out about how to use data to market your own business, and what success and leadership looks like from his perspective.

Before we start talking to Sherif, I wanted to quickly share why I decided on an interview format for the first season of CRE Success: The Podcast. I started CRE Success, the business, to deploy leadership experience and my track record of results in commercial real estate to support the professional development of others in the industry. However, I wanted this podcast to include stories from a variety of successful people in the sector. I want our audience – you – to benefit from a broader perspective on what success looks like, which goes beyond what I've personally experienced and observed over my own career. Everyone's story is different. And the purpose of this podcast is to share many stories and hear a range of different perspectives. For example, my guest today comes from a digital marketing background and bring specific skills that he's using to help people in our industry implement new solutions. His skill base is not something that I'm highly equipped to talk about. Also interviewing a variety of guests equips me with the knowledge required to help more people. As I interview a variety of people, I'm learning more about success and leadership strategies which gives me more knowledge to share with people in my network.

Today's guest Sherif Hassan release definitely has a perspective to offer which is different to any of the guests we've had on the podcast so far in terms of his experience and expertise. And I'm looking forward to sharing our interview in just 30 seconds.

 

(break)

 

Voiceover:

And now it's time for the interview on CRE Success: The Podcast.

 

Darren Krakowiak:

Sherif, welcome to CRE Success: The Podcast.

 

Sherif Hassan:

Thank you for having me.

 

Sherif, the first thing we do at the start of each episode is we ask our guests to step into the virtual elevator to give us their elevator pitch of who they are. So, Sherif, who are you?

 

Yeah, fantastic. Well, my name Sherif I'm a first-generation Kiwi with an Egyptian background. So both of my parents are from Egypt, moved to move to New Zealand in 1997. And have been here ever since. So I'm coming to you guys at the moment from a brisk Auckland morning where I live with my wife and my two little boys. My first love is basketball and my second love is marketing. So out of school, I pursued a career in an agency marketing and went down the digital marketing route. So the concept of having that innovative product and service and competing for mindshare with the target audience, that's what really excited me. And the digital aspect of marketing, which was really blowing up at the time when I got into it, really gave me that, you know, that new element of transparency and traceability, which really hit home for me.

 

And in terms of your love of basketball, were you blessed with vertical advantage?

 

Thankfully, I was I actually had a bit of a, I had my growth spurt quite early. So I'm six foot four, but, but I've been I've been about six foot four since I was 12. So I haven't  grown much since then. So that really tapered off the trajectory in terms of where I thought I was going. So I think I peaked a little bit early on this, I played a lot of competitive basketball growing up. Obviously, as I got more into my later 20s it started to become more of a casual hobby.

 

Cool, cool. And you've had an unusual path into a career in commercial real estate. So where did you come from and how did you land in our industry, ultimately at your current role in released?

 

Yeah, it's interesting, really, because I like I said, I never really thought I would be in the commercial real estate space. After a number of years and working in the digital marketing industry, I was approached by Tom Wallace, who's a who's a CEO and founder at the time, who just expanded R-Leased over to the UK After the first initial years of success in Australia and New Zealand, we were looking to really grow this section as he was kind of focused more on the UK and wanted someone to look after that growth of it here. It didn't take much convincing for me once I saw the product and spoke to a couple of customers to say, right, this, this looks like a game change I need to get on board. So fast forward four years later, I now I now lead that lead our growth team across Australia, New Zealand, and now parts of Southeast Asia. And yeah our rate of growth is really the same as now as it was back then.

 

In a nutshell, what does Re-Leased do?

 

So Re-Leased, it's commercial property management platform designed to automate day to day activities. When it comes to commercials when it comes to outgoings, arrears management, invoicing, the whole lot, but also providing that cloud platform that's easy to use; often gets described as a sexy version of what a lot of people are currently using in a server based, but also providing that that cloud based element where it's like a single source of truth, accessible from anywhere, a mobile app suite that's really brings that, you know, an industry which has been severely lacking in this type of technology into that into the 2020, modern era.

 

Right. And proptech is a is a buzzword that's been floating around the CRE industry for a few years now. But I think as you've just alluded to it be fair to say that as an industry, we've been fairly slow to adopt technological innovations, even probably slower than the residential sector. So given your background in digital marketing and technology based services, I guess that's something you'd agree with?

 

Yeah, absolutely. Absolutely. I think it's a hit the nail on the head. The reason we've been successful is exactly that. The markets just been slow to adapt. And, and the interesting spot is isn't so much the Yes, it's the Why. And until now, we've found our customers previously either hadn't found the solutions that were good enough, or, and an equally commonly, they haven't had the reason or haven't had a pain large enough to evolve. So for decades, you know, commercial property owners and property management company have been able to coast by just purely by owning the asset. And that was enough. Now the demand for space as a service has meant that landlords need to think about the full end to end experience that their tenants now have, how they interact with the space, whereas before, they were just, you know, used to being an owner in the space and just maintaining, and keeping the lights on and AC on. And for a small segment of the market today, that's still it, for prime real estate, that's still that's still the case. And that's still enough, but for the bulk of their portfolios, there are a lot more factors to consider now, especially as leases are getting shorter. At the same time for property management companies, their landlords, clients are now averaging, becoming more educated their actual clients, the value offerings from competing agencies are growing in the landlord experiences just as important as a tenant experience as well now too, so I think all of those factors together are really, really forced the industry to change in the last 10 years or so,

 

You mentioned there that leases are getting shorter. And of course, leases have been getting longer for for many, many years. But I guess very, very recently, as a result of COVID-19, many occupiers are now looking for more flexibility. So, you would be very well placed to have an understanding of what leases look like based on all the data that you have access to. Are leases actually getting shorter. Is that something that you've picked up on very recently? Or what's the trend there?

 

Yeah, absolutely. Absolutely. I think even before COVID, COVID-19, we were already starting to see that, that that change in direction. And that really almost seems like that, you know, that power shifting to the tenant side in terms of what they're after, as I mentioned, that look what they're looking for, for at least, looking for that flexibility. And our early success was really due to the fact that the market had that appetite for change, and was heading in that direction. But like you said, COVID has really acted as I think as a catalyst for this process, instead of the reason for it; it's just sped up the trends that were already inevitable. And that's really, that's really the data that we're seeing. So, you know, lease lengths are dropping. And it's differing, of course, depending on the asset classes, definitely, as expected, as everyone knows, the retail spaces that have been hit the hardest out of all of them.

 

Right. And we'll get into the data in a moment. And I want to ask you, though, about the main opportunities, as you see it, for the industry to benefit from technological change. So obviously, you've got a product suite that allows your clients to do that, but more broadly, what are the benefits for the industry from embracing prop tech?

 

Yeah, it's a good question. I think the opportunities for change, I think really boiled down to three key elements. And I'd say they're almost like pillars for us and our success. The first one is the experience; I talked about already a little bit, but the this goes from both the tenant experience when interacting with a space and their property managers, landlords, the landlord's experience when dealing with the tenants and the agencies, and also the your own internal staff when they're conducting their day to day jobs and what their expectations are, you know, whether it's being able to work freely and also as of recently, remotely, there's also a lot of new generation of staff coming through of that, you know, the younger generation, the millennials, who are used to having everything at their fingertips, a lot of the technology that they're used to using on a daily basis is much more advanced than what a lot of people are using at the moment.

The second key element is efficiency, which is the number one strain on resources that I come across on a daily basis. And you know, that's just for simple administrative tasks like invoicing and rent reviews and outgoing reconciliations and just general admin, so that this results in not only the tired and overworked staff, but resources taken away from improving the experience part of it.

And thirdly, and most importantly, I think, at the moment, is that ability to make decision making and that that's being able to do that and do that and drive decisions based on not just your own data, but also industry data, rather than that, from that shoot from the hip approach, which is, I think had been come more common of late.

 

So it's experience efficiency and decision making. Is that right?

 

Yeah, that's what it boils down to.

 

And that's obviously, you know, how you're disrupting the sector specifically at Re-Leased. So can you tell me, how does your data help the industry make more informed decisions?

 

Firstly, traditionally, you've been able to, like I said, Hold the building turnover, healthy margin, more or less have the same sense of stability. So now, trends or requirements and tastes are changing very quickly. So, we know it firsthand. You know, for example, during the COVID period, we had landlords coming in saying, hey, look, we've got all these tenants not wanting to pay rent, what's everyone else doing? And that's where we had that early access to that data and being able to show the historic trends and being able to paint a picture moving forward, and arm our customers in the wider market with information to then go back and say, right, so this is what's happening with the trends, we're seeing, you know, we're seeing across the states a 30%, drop of rent payments in the office space, or the retail space. And they're able to use that information to then reach fair agreements with the different stakeholders.

 

Interesting, because it took a while for the government in Australia to come out with a framework to guide those discussions for landlords and tenants to I guess, share the pain as a result of COVID-19. But there were other countries where there wasn't a framework from the government. And it really was left up to the tenants and the landlords to arrive at some negotiated solution. So, your clients, I guess, benefited from having earlier access to data to make decisions, which allowed them to move forward more quickly.

 

Exactly. I think it's I mean, you don't have to look very far. Look at the difference between even Australia and New Zealand; New Zealand government was very, very…particularly not getting involved or providing really any proper framework except for the fact that, you know, just just the guidance, that everyone should just be fair and work together to share the pain. And I think it's something it's an interesting point, because, you know, the government obviously don't want to get involved with commercial agreements between parties and, and not wanting to really adjust or amend that too much. But at the same time, they're like you said, just being able to see that market data, I think was a good starting point for landlords and tenants to have those conversations where, whether it's, you know, some of the other landlords who stuck their head in the sand and say, no, we're not providing any type of relief, being able to see that data and then understand, right, so this is what's happening across the board. Same thing with tenants, being able to see that and I think it just provides a much healthier platform for those discussions to start.

 

Data, of course, helps us make more, or better-informed decisions. And you know, what, one thing I talk about with some of our clients is about time management and how we want to increase efficiency and utilise automation. So how did they come into the equation in terms of the solutions that you offer your clients?

 

Yeah, massively. I mean, I think that's where Re-Leased started. So having access to technology which automates administration, you know, it's the first step of reaching that, that that modern era of property management. I’ll give you an example, we've had a an organization that I worked with recently, who had 30, a team of 30, running through the accounts that after really drilling down to their processes realized they actually needed a headcount of five to achieve the same result. And they didn't, it wasn't a matter of, you know, letting 25 people go there actually, to repurpose those, that team to the value-add activities. And it actually, rather than being an operational cost, it's actually generating revenue.

 

Right. I think that repurposing of some staff into activities which enhance the tenant experience, for example, can actually result in greater benefits across the portfolio, potentially.

 

Exactly. 100%. And if you look at that, you know, that operational deficiencies that were before and when they were running a team of like, 30, it was the negative impact of that, was not only, you know, not being able to service your clients right, you have staff doing tasks that are cumbersome, and they weren't very happy as well. So that can result in things like staff turnover. And as I mentioned before, as well, you've got that generation of, the new generation entering the workplace, which have different expectations of what they expect to be to be doing, and also what their time is spent on.

 

So how big is Re-Leased now in terms of, you mentioned a little bit about the geographies that you that you're in, but how big is it in terms of you know, buildings and leases and stuff like that?

 

Yeah, so we've got we've got offices like I said, we started in New Zealand and quickly expanded to Australia. So I think Australia, New Zealand, combined have about 40% of our company size. But we've got the UK and the US which is starting at the moment as well. So UK, we've got a large, large majority of companies in the UK and just entering the US, which is unfortunate timing for us earlier this year given  COVID hitting, so we had to re strategize a little bit there. But in terms of in terms of actual, you know, the portfolio's that we're managing, we've got properties in over 40 countries under management. And we've got about $5 billion of rent moving through the system every month. So, to give you the idea that we're talking about probably close to 50,000 leases in one of those geographies at the moment giving us that information. But we’ve got a team of about 100 people across these offices with a short hiring freeze like everyone else during COVID. But we're expecting that to ramp up again, because our trends of growth have been averaging around 100% year on year growth, which is, as you imagine, getting harder to do as we get bigger

 

The 40 countries that you're in in terms of serving your clients, how many countries do you have offices in at the moment people on the ground?

 

The people on the ground at the moment? Australia, New Zealand, UK and the US?

 

Okay, good. So you're in the US? So you're not locked out at this time?

 

No, no. So we've actually got our global head of sales has joined us in New York at the moment, and we've got a team there who's slowly strategizing, we've got kind of a land and expand strategy and entering new markets, where we go in and really feel out, you know, with it with a small team, understanding where our product market fit is, where we need to go what the market opportunity is. And then once we hit that right in the right spot, we then expand rapidly.

 

Right, well, there's plenty of real estate in New York that I'm sure you can conquer.

 

Absolutely.

 

Look, I know you got a new product suite to drive some more growth. Can you tell me a little bit about that?

 

Yeah, so product’s called Credia, and it's a real time CRE intelligence platform. And what it does is it provides our customers with a single source of truth to visualize and benchmark their data. So enabling those valuable insights and data-driven decision making, which we've talked about a little bit already. To really explain Credia, I can tell you a little bit a few points of what we're fighting against with Credia. So, first thing is timeliness; analysis often happens one to two months after the fact, you don't really have access to that real time, day to day data of what's happening and being able to react to trends quickly. But that is a you know, a pack data that is hard to find. It's dispersed in different places, having, you know, lots of different data sources, some many, many cases of inaccurate data, you're trusting, you know, whether it's user-entered data from spreadsheets or coming from different sources, again, lack of insights in terms of what the data is telling us, not being benchmarked against the wider market, having manual process to actually pull that information and compile it. You know, we've worked to talk to people who have teams or teams of people who actually do this job as opposed to what we're doing where we're extracting that information live from their property management platform, and giving them real time dashboards to show them this is what's happening. These are the trends and being able to dig down directly into that.

 

Right, well, one piece of content marketing, which I think that you guys are definitely qualified to produce, is in depth data about how many tenants are paying their rent on time, in all the geographies and sectors around the world. And this has been an especially interesting metric to measure since COVID-19 impacted markets as landlords or tenants, as we touched on before, have been trying to negotiate a share of the burden of the economic downturn. At a very high level, can you share with us what your data has shown us in 2020, about how various sectors and geographies have been performing in this regard?

 

Yeah, so just taking a step back, we were very much heading in, towards this journey, before COVID hit, we were coming to the realization where, we're sitting on this massive data set, which we could have held, or, you know, we could decide whether we were going to hold that, share with our customers. But we also want to benefit the wider market with this information. And that data has allowed people to make, you know, those data led decisions in the context of the wider market, I think that that's really helped us solidify what we're trying to do and where we're trying to sit in the market as well. And what we what we've been able to see as a real trend line of which markets are recovering faster from a rent collection perspective, we've been able to see, you know, for example, New Zealand based on their COVID response and had originally the same levels of rent collection where they're down across the board by about 35%. But, that recovered a lot faster than that other regions. Naturally, you've got Victoria, which is still impacted quite heavily as opposed to, you know, New South Wales and Queensland but they've all been, they've all they've all had their fair share of drop in rents. And again, the interesting part with this, and I digress a little bit, but property management, property managers right now are collecting, you know, fewer fees than they ever have before because of the drops in rents, yet they're working harder than they've ever had to, and again, that's one of the key reasons why these systems are so important to look at these and analyze them and understand how you can be more efficient.

 

And, you know, I would expect that Retail, for example, would see a bigger drop in rent collections than say industrial. Is that borne out in the data?

 

Yeah, absolutely. Yeah, we're seeing the biggest impact heavily hit and in some geographies have reached down to about 50% for retail, and just industrial is remains strong. You got a slight dip in the data. But absolutely, absolutely very much the retail which has been impacted the most. If you're interested in having a look, you can head to credia.com. And you can download, we released reports on a monthly basis, which gives you updated information on the previous month. So definitely worth checking out.

 

Cool, we'll put that link in the show notes. I reckon that all of this data you've got would be a great way to promote your brand and to integrate into your marketing strategy. So how are you using this data to grow your business?

 

Yeah, it's interesting, because our overall marketing strategy is, I think, twofold. The first one is being there, when people are looking for systems. You know, they've identified they've got a problem that they've got a pain and making sure that we're front of mind when they are looking for those two systems. The other one is that education piece, and as much as teaching people about being more automated, and efficiency, is important. The data piece is really what drives it home and being able to really reflect on what where we are in the market and the kind of information that we have. And I think it also gives us, it gives the market, a little bit more trust in us, as someone who's right, what we're building is based off data ourselves. We are a data driven business. And that's how we get there. So when we're making new builds in our features, new builds in our product, it's all done based on that market insight, which we have, and really putting that information out to the wider market is, is helping reflect that and our brand.

 

Awesome. Well, Sherif, if I want to turn to the topic of success now, as that's a major theme of our podcast. And first thing to ask is what is it that you deliberately and consistently focus on that contributes to your own personal success?

 

What I like to do is I like to invest heavily and heavily in my own personal growth. And that's not necessarily a monetary investment, but time investments. So, you know, I came into coming into a new industry for me, obviously, commercial real estate, as a new sector for me, and I had to find ways to add value to those I'm speaking to who perhaps been in the industry for decades. So, you get at times, you can get a little bit of a sense of imposter syndrome. But that's when you realize that right, I'm focusing here on a specific aspect of a specific issue, which is prop tech. And there's a wealth of information books and your podcasts like this is really what I consume on a daily basis to upskill. And I think as cliche as that might sound, like my favorite, my favorite saying is, you know, if you're not if you're not growing, you're dying, which is, if you're not learning, you're dying, which is a great way to look at things and a great way to constantly keep the ego in check and you know, there's always something new to learn. And somewhere to grow, that's for me is how I measure success. Because if you get big, get bogged down into market into numbers or specific goals that can it can really start to weigh heavily on you. But I think if you're always striving to grow for me that that's how I define it.

 

And do you have a specific amount of time that you're looking to invest in yourself, every day or every week? Or is it just making sure that you set some time apart to focus on that?

 

I think I mean, I'd like to tell you that I have x x number of hours every week that I put towards this, but the reality is, is obviously some weeks are better than others. And I think that what I've found that works really well for me is focusing on the downtime. So, going to work in the morning or early or coming back from work, I've decided to you know, you've got an hour, for example, sitting in a car, where I could be listening to podcasts and upskilling that way. I like to consume books by audiobooks. Again, there's a lot a lot of downtime during the day that people are, you know, you either spend on your phone or doing something else, which is unproductive, but for me, just having something in the background and constantly listening is how I consume it. So, it's an easy way to make sure that you're not you don't have to set aside time to do it, but making the most of downtime.

 

Right, and what's your approach to leadership?

 

My approach to leadership is leading from the front, rather from the back. I think that's the number one. The number one difference between the leaders that I've had in the past that and the ones that have been successful are the ones that have kind of showed rather than told. Whether it be in, you know, basketball or professional workplace, it's probably that the number one aspect is being led by someone to show me, you know, the passion and the drive being shown by the leader, as opposed to do as I say, not as I do. I think that's the big one. The other trait which I think is heavily undervalued is empathy. This is the ability to see through someone else's eyes and meet them where they are, before then guiding them to where, the direction where you want to take them. That's a massive one for me.

 

Definitely. Final question Sherif is, you've only been in commercial real estate for a few years. What's one thing about how they industry operates that you found, I guess, surprising when you started working in it and might be something that you can evoke awareness for our listeners in terms of taking another look at the way that we do things.

 

Obviously, the biggest surprise for me was how far behind the property industry was compared to other industries when it came to technology and data. I think it's probably the reason why I entered the space because, I know being shown this, that this new way of doing things and for me, when I first saw the product, I was like, this seems pretty straightforward to me. But then when I saw it was being compared to and how the industry actually was that, that was the kind of the aha moment for me, especially being a millennial. Like I said, everything in my life to this point is heavily data driven. So whether it's from my basketball or digital marketing, where everything's measured by the cent down to, you know, the ROI on everything is being calculated. Even from a social life perspective. You know, as a millennial, you look at things like likes and comments and friends and followers and everything we do is drenched in technology and data. So, I think that that's the one aspect for me, which I mean, I've touched on it earlier as to why those reasons are, but that was the biggest surprise coming in.

 

Well, Sherif, I'm sure that Re-Leased will be dragging the industry kicking and screaming into the 21st century. So, I want to say thank you very much for sharing your insights and for joining us on CRE Success: The Podcast.

 

Sherif Hassan:

Much appreciated. Darren, thank you.

 

Voiceover:

For more information about our guest, visit cresuccess.co/podcast. And now a final thought from Darren Krakowiak.

 

Darren Krakowiak:

Thank you Sherif for being my guest today. I would also like to say thank you to those of you who have taken the time to send me an email or a direct message on LinkedIn or Instagram to say that you're enjoying the show. That feedback is really appreciated. I really, really do appreciate it. So thank you for taking the time to say so. I do put a lot of work into creating this podcast and bringing it to you each week. And I'm really pleased that you're getting a benefit from the content that is being released via this podcast.

One other thank you that I would like to give today is to the voice over artist who provides the intro outro and bumpers for this podcast, Tracey Szymanski. I first worked with Tracey at Melbourne youth radio station Hitz FM back in 1997. And I've been friends with Tracey and her husband Chris (who I also work with in radio) for more than 20 years. They even traveled all the way to Seoul, Korea for my wedding in 2018. Because we're good friends when Tracey agreed to be the voice of the show, I didn't actually have to pay her. But I did promise to take her to lunch to say thank you. Sadly, she hasn't been working at her office, which is near where I live, since the podcast launch because, like most people during COVID-19, she's currently working from home. Tracey, for the record, I just want you to know that I'm still good for that lunch once you're back in the office, I'll still pay up even if it takes another six months or longer. Although I do hope that it's not that long.

That's our show for today. Thanks as always for listening and I will speak to you soon.

 

Voiceover:

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

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