Bio
Oliver Carr serves as Carr Properties’ Chief Executive Officer and is a member of its Board of Directors. Oliver serves on the Executive Committee of the Federal City Council, serves on the Advisory Board of Housing Nantucket, is the former Chairman of the Executive Board of the Massachusetts Institute of Technology Center for Real Estate, and is a member of the Real Estate Roundtable. Prior to founding Carr Properties, Oliver served as Chairman and CEO of Columbia Equity Trust (NYSE:CEO), where he and his team successfully took the company public in 2005. During his career, Oliver has completed over $7.5 billion of property acquisitions, developments, mergers, joint ventures, and financings. Oliver received his Master of Science in Real Estate Development from the Massachusetts Institute of Technology and his Bachelor of Arts in Urban Studies, with a concentration in Economics from Trinity College.
Back Story
In February, 2020, Oliver Carr was interviewed just before the COVID Pandemic began (See Episode #10). Because of our long time relationship and the considerable changes to the market and to Carr Properties’ portfolio, this is a sequel episode to update on his activities during the pandemic and its aftermath. As you will hear, he is quite optimistic about the future after a difficult period from 2020 until earlier this year, where he believes that the market has “bottomed out.” Please enjoy this episode!
Show Notes
Reflections of Pandemic and Its Effects
- Introduction and Reflection on Past Interview (00:06:15)
- John welcomes Ollie back, reflecting on their long relationship and the timing of their last conversation.
- Surreal Experience of February 2020 (00:06:45)
- Ollie shares a unique experience during a board meeting next to a significant COVID-19 event.
- Initial Adaptation to COVID-19 (00:07:45)
- Discussion on how they planned for potential rent payment issues during the pandemic.
- Unexpected Performance of Office Sector (00:08:20)
- Ollie highlights that office properties performed well, with high rent collection rates during COVID.
- Focus on Customer Experience During COVID (00:09:20)
- Emphasis on creating a safe environment and enhancing building amenities for returning customers.
- Occupancy Challenges (00:10:15)
- Ollie discusses low physical occupancy rates during the pandemic and the shift to managing operating expenses.
- Impact of Social Unrest (00:11:00)
- Ollie recounts challenges faced due to social unrest, including vandalism and property damage.
- Active Development During COVID (00:11:45)
- Ollie describes ongoing construction projects and praises the efforts of construction teams during the pandemic.
- Leasing Success During COVID (00:13:15)
- Discussion on leasing activity during the pandemic and the importance of quality products.
- Long-term Implications for the Office Market (00:14:50)
- Ollie shares insights on the office market’s future and the importance of quality in real estate.
- Quality and Market Trends (00:15:30)
- Ollie explains the flight to quality in the office sector and current market vacancy rates.
Shift to Mixed Use and Residential
- Mixed-Use Development Plans (00:17:45)
- Ollie discusses plans for developing mixed-use projects to mitigate office market risks.
- Influence of Hospitality Experience (00:20:45)
- Ollie reflects on lessons learned from his father’s hotel portfolio and its impact on customer service.
Expansions to Boston and Austin
- Expansion into New Markets (00:23:45)
- Ollie explains the rationale behind expanding into Boston and Austin and their performance.
- Challenges in Boston’s Office Market (00:26:00)
- Ollie discusses the high costs of construction and market conditions for new office developments.
- Austin’s Development Plans (00:29:30)
- Ollie outlines their initial plans for Austin and the current supply challenges in the market.
- Comparison of Return-to-Office Rates (00:31:15)
- Ollie contrasts return-to-office rates between Austin and Washington, D.C., noting regional differences.
- The Importance of In-Person Interaction (32:00)
- Discussion on the value of in-person meetings and mentorship in building relationships.
- Expansion into New Markets (33:20)
- Exploration of why the company chose Boston and Austin over California for expansion.
Focus on Quality and Redevelopment in Lieu of Adaptive Reuse
- Focus on Quality Existing Buildings (34:40)
- Strategy shift towards acquiring and improving existing commercial office buildings.
- Adaptive Reuse Challenges (36:35)
- Challenges and considerations in converting office buildings to residential use.
- Property Management Strategy (38:00)
- Plans to collaborate with third-party managers for their new residential developments.
- Current Portfolio and Opportunities (40:15)
- Discussion on the current portfolio and the perceived investment opportunities in the market.
- Market Trends in Office Buildings (41:20)
- Insights on the current state of office building valuations and potential investment strategies.
- Urban Development Focus (42:30)
- Clarification of the company’s definition of urban development and target locations.
- Residential Development in Boston (44:00)
- Legislative changes in Massachusetts promoting affordable housing development near transit.
- Federal Buildings vacated to CBD Buildings (47:00)
- Josh Bernstein’s idea of vacating buildings allowing for redevelopment in Southwest DC
- Conversion of Office to Residential (51:15)
- Challenges in repurposing office buildings for residential use and the need for strategic locations.
DC Initiatives for Housing
- Creative Financing for Housing (55:30)
- Discussion on potential incentives for developing housing for federal employees.
- Tax Abatement Programs in DC (56:10)
- Recognition of DC’s tax abatement program aiding the conversion of office spaces to residential.
- The Impact of Falling Values on Commercial Office Space (00:58:00)
- Discussion on the significant drop in commercial office values and opportunities for creating open spaces.
- The Height Act in Washington (00:58:30)
- Debate on modifying the Height Act to allow for taller buildings, enhancing downtown density and interest.
Carr Properties Services and Employment
- Hiring Criteria at Carr Properties (01:00:40)
- Overview of the importance of teamwork and customer service mindset in hiring practices.
- In-House Disciplines at Carr Properties (01:02:20)
- Description of the various in-house teams and their roles in the company’s operations.
- Customer Service Approach (01:04:00)
- Emphasis on prioritizing customer experience and internal team dynamics for success in real estate.
Giving Back to the Community
- Community Involvement and Giving Back (01:05:40)
- Discussion on focused charitable efforts supporting underserved youth through local schools.
- The CARR Cares Concert (01:08:05)
- Details about an annual charity concert aimed at raising funds for local schools and supporting youth.
Personal Challenges and Advice
- Perseverance Through Challenges (01:10:30)
- Reflection on gut-check moments during the pandemic and the resilience of the team.
- Fannie Mae’s Lease Termination (01:13:00)
- Insights into Fannie Mae’s downsizing and the subsequent lease renewal, highlighting market demand.
- Advice for Young Professionals (01:14:50)
- Encouragement for young professionals to learn and adapt in the current volatile market.
- Optimism and Perseverance (01:17:25)
- Final thoughts on maintaining optimism and perseverance in challenging times.
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