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Bio
Charlie Hewlett, Managing Director, RCLCO
Charlie has over 35 years of experience in real estate and has consulted on a broad spectrum of commercial and residential properties in most major metropolitan regions in the country. Before joining RCLCO, he was president of Lofty Builders, Inc., a real estate service company concentrating in renovation, rehabilitation, and management of investment real estate properties in the Boston metropolitan area.
Charlie graduated from Brown University in Providence, Rhode Island. He has conducted training seminars on the methodology for metropolitan development trend analysis for regional branch offices of major national commercial developers. He is also a frequent speaker and ULI panelist-including the redevelopment of the Southeast Federal Center in Washington, D.C., and Atlantic City in Norfolk, Virginia. Charles has written articles published in the Corridor Real Estate Journal, Urban Land Digest, and publications of the National Multi Housing Council.
Charlie is the author of Strategy for Real Estate Companies (Volume #3) which is a guide for real estate operating companies of all sizes to plan and build their enterprises.
Show Notes
- Charlie’s current role at RCLCO (00:05:45)
- Charlie’s role as Managing Director and owner, and the company’s real estate economics and management consulting activities.
- The foundation of the “Strategy for Real Estate Companies” book (00:07:00)
- The book’s purpose, uniqueness, and its focus on strategic planning for real estate companies, considering the cyclicality of the business.
- Origins of the book and the thought process (00:09:10)
- The influence of Charlie’s mentor, Chris Leinberger, and the need for strategic planning specific to real estate companies.
- Charlie’s origin story (00:10:45)
- Charlie’s upbringing, family background, and early experiences in real estate and retail.
- Transition to RCLCO and its activities in the late 1980s (00:10:19)
- The establishment of RCLCO’s Washington office, the company’s focus on primary research, and its decision not to enter the data business.
- Charlie’s pivot to RCLCO and the real estate industry (00:14:15)
- The evolution of real estate as an investment class and the institutional market in the late 1980s.
- Impact of the 1990-1991 downturn on RCLCO and the industry (00:17:50)
- The severe downturn in real estate, challenges faced by RCLCO, and the need for companies to revisit their strategies.
- Developing the thought process for corporate advisory practice (00:21:45)
- The impact of past downturns on the need for contingency plans and strategies for different phases of the real estate cycle.
- Modulating Strategy (00:22:30)
- Companies adjusting strategy for growth management and risk mitigation.
- Learning Real Estate Economics (00:25:00)
- Early career focus on real estate economics, market, and financial feasibility.
- Metropolitan Development Trends (00:26:20)
- Understanding urban cores and generations for predicting real estate evolution in new markets.
- Unconscious Strategy (00:27:45)
- Discussion on the presence of strategy in companies of all sizes, regardless of formal documentation.
- Strategic Planning Process (00:34:15)
- Introduction of the Parthenon strategy framework for real estate companies.
- Importance of Strategic Planning (00:36:00)
- Value of strategic planning in aligning teams and moving organizations forward.
- Discovery and Planning (00:40:00)
- Initial steps in the strategic planning process, including defining goals and strengths assessment.
- Understanding Profitability (00:42:00)
- Charlie discusses the importance of understanding where a company makes money and shares a case study.
- Strategic Planning (00:43:00)
- The discussion shifts to the importance of strategic planning and understanding a company’s profitability.
- Volatile Nature of Homebuilding (00:45:00)
- The volatility of homebuilding and land development is highlighted, emphasizing the need for strategic planning.
- Risk Management in Land Development (00:45:30)
- Charlie explains the risk involved in land development and the strategy of having a zero-debt policy on land.
- Company Growth Timeline (00:46:30)
- The conversation delves into the timeline and milestones for company growth, including evolving capital sources and sophistication.
- Property and Asset Management (00:48:00)
- The distinction between property and asset management and the need for sophistication as companies grow is discussed.
- Diversification and Market Focus (00:49:45)
- The conversation explores different real estate company types, focusing on specialization and regional market understanding.
- Flexibility and Discipline in Strategy (00:51:30)
- The importance of building flexibility and discipline into the strategic planning process, considering unforeseen challenges.
- Preparing for Economic Cycles (00:54:45)
- The discussion centers on the planning required for different phases of the economic cycle and seizing opportunities at the inflection point.
- Lessons from Past Downturns (00:55:30)
- Charlie reflects on past market cycles and the challenges of anticipating market downturns.
- Designing a Strategy for Risk Management (01:00:45)
- The conversation shifts to designing a strategy that minimizes downside risk and building a cushion without being too conservative.
- Writing the Third Edition (01:01:30)
- Charlie shares the motivation behind writing the third edition of his book and the importance of seizing opportunities.
- The Writing Process (01:02:15)
- Charlie discusses the challenges of writing a book in his spare time and the process of finally completing it.
- Changes in Real Estate Strategy (01:03:00)
- Charlie explains the changes in the real estate market and the updated capital strategy pillar in the latest edition.
- Importance of Implementation Plan (01:03:45)
- Charlie emphasizes the importance of an implementation plan as an essential part of a well-rounded strategy.
- Revisiting Strategy (01:04:45)
- The discussion touches on the frequency of revisiting strategy and the need for annual reviews.
- Shift from Cycle to Risk Management (01:06:25)
- The shift in focus from cycle management to risk management and the importance of considering various real estate risks.
- Strategic Decision-Making (01:08:45)
- Charlie discusses strategic decision-making, citing examples of companies adding or selling services to control the overall process.
- Strategic Balance in Real Estate (01:12:45)
- The concept of strategic balance in a real estate platform and the importance of recurring income to support the organization.
- Positioning in Challenging Markets (01:14:45)
- Recommendations for positioning in challenging real estate markets, including examples for small, medium, and large companies.
- Opportunities in Real Estate Sectors (01:16:00)
- Charlie discusses opportunities in office, retail, housing, industrial, and niche real estate sectors.
- Scale and Capital Formation (01:19:45)
- The importance of scale and capital formation for real estate companies, particularly in accessing institutional capital.
- Each topic provides insights into various aspects of real estate strategy, decision-making, and market positioning.
- The Peterson organization’s risk management strategy (01:22:45)
- Discussion on their strategy of one-off capitalizations and risk management.
- Transition from one-off to fund model (01:24:00)
- The shift from one-off capitalizations to a fund model and its success– Bell Partners
- Debate on property management in real estate private equity firm (01:24:30)
- The debate on whether to sell or perform property management in a real estate private equity firm.
- Critical mass for efficient operations (01:25:30)
- Importance of achieving sufficient concentration of assets for efficient operation within a given metropolitan area.
- Technology integration and strategic decision-making (01:27:00)
- Challenges and recommendations for real estate companies to embrace technology strategically.
- Impact of the pandemic on real estate strategy (01:36:00)
- The unprecedented impact of the pandemic on the real estate industry and the need for strategic adaptation.
- Success through strategic planning and goal setting (01:39:40)
- The power of strategic planning and goal setting in achieving success for real estate companies.
- Personal Life and Work Balance (01:42:00)
- Charlie discusses balancing work and family life and the importance of separating personal and professional life.
- Giving Back (01:43:20)
- Charlie talks about his company’s foundation and its focus on affordable housing, as well as efforts to work with influential organizations in the industry.
- Real Estate Industry Professionals (01:45:00)
- Charlie mentions industry professionals who inspire him, including Ron Terwilliger and Dick Michaux, highlighting their strategic thinking and contributions.
- Advice to 25-Year-Old Self (01:47:00)
- Charlie reflects on what advice he would give his younger self, emphasizing the importance of understanding capital markets and their impact on a career in real estate.
- Capital Markets and Affordable Housing (01:48:45)
- The discussion delves into the volatility of capital markets and the crucial role of increasing housing supply in preserving affordable housing.
- Billboard Statement on Affordable Housing (01:49:15)
- Charlie emphasizes the importance of increasing housing supply for the preservation and development of affordable housing.
