Landing the Interview: Lessons on How to Navigate the $2 Trillion Real Estate Marketplace
Rahul Kumar (MS-GRA’24) talks with Bob Steers (B’75, P’06, ’08, ’10), executive chairman of Cohen & Steers, chair of the McDonough Board of Advisors, and a member of the Steers Center for Global Real Estate Advisory Board, about his career in real estate — and what he sees for the industry’s future.
How did the university and its community propel you toward a career in real estate?
Candidly, when I arrived at Georgetown, I had no idea what I wanted to do. There were two turning points in my academic development. The first being Bill Droms, professor of finance and investments. That was my first exposure to finance and investing, and it resonated with me.
There were a number of courses focused on corporate social responsibility. It hadn’t occurred to me that businesses did anything beyond making money. Firms like IBM were taking the leadership position in that space. What they were doing then would seem pretty simple today, but it was interesting. That’s what drove me toward the investment side.
How has your career evolved?
In 1986, when we started our company, I had about 10 years of experience as an analyst looking at emerging growth opportunities. My training taught me to think in terms of waves of change. Our concept was that commercial real estate, which was owned 99% privately by insurance companies and pension funds, generates contractual income. We believed real estate would become more securitized every year. When we started our company, the entire market capitalization of U.S.-listed real estate was less than $6 billion. Today, it’s a $2 trillion marketplace.
We contemplated this wave of change. We positioned our firm very modestly at first to generate a track record. It’s almost impossible to have a great concept and time it perfectly. We positioned ourselves so we didn’t have to be right in the first few years. During that time, we focused on building an investment process and organization, so that when investors decided there was merit and interest in what we did, we would be the obvious choice. There are a number of takeaways from that process. When you see a wave of change or an innovation that just strikes a chord and seems right to you, pursue it.
Where do you see the next wave of change coming?
Waves of change are a moving target. With respect to core property types, for example retail properties, they’ve been through their own waves of change. The e-commerce apocalypse for retail started about 10 years ago. At that time, there were those that said no one will ever shop in brick and mortar retail venues. Certainly e-commerce has eaten into retail sales significantly, but it is by no means the predominant venue. Retail went through 10 years of right-sizing to accommodate changing buying patterns. In 2023, retail property types were the top performers in the REIT marketplace. Why? Because they actually shrunk their supply and now they’re in a great position.
Thinking about waves of change on existing property types — the office will be next. It might take six or eight years to eliminate obsolete offices, to build new offices, and to accommodate new cultural practices. But the office is not going to go away. So there’ll be a wave of change that will create opportunities.
There are waves of change that ripple through real estate constantly. And if you’re looking in the rearview mirror, you’re going to get left behind.
Reflecting on your career, can you share a lesson you learned the hard way?
If you’re lucky enough to have the passion for something, you just have to go for it and stick with it, because it gives you purpose and you enjoy it. My advice is to keep going until you find something that resonates with you.
This story was originally featured in the Georgetown Business Spring 2024 Magazine. Download the Georgetown Business Audio app to listen to the stories and other bonus content.