What Great Leadership and Succession Look Like in Today’s Real Estate Industry with Matt Slepin | Durable Value Ep. 89
Listen
Watch
Transcript:
Ryan Swehla: So we're here with a special episode of the Durable Value podcast because we have a guest today with us, Matt Slepin, who heads real estate search at ZRG And we always like to start our podcast out with guests to talk a little bit about, um, your background. It would be great if, Matt, if you could tell us a little bit about your journey toward, uh, executive search, particularly in the real estate space.
Um, we know that career journeys are never linear, and I'd love to hear yours.
Matt Slepin: So I'm Matt Slepin, I am the co-head of real estate for ZRG Partners. ZRG Partners is a talent advisory firm. We're the eighth largest or seventh largest talent advisory firm globally. What I do is recruiting. The firm does some consulting around human capital.
We do interim search. Uh, we do embedded recruiting. And then I'm a, basically a headhunter in the real estate space, and I have been for about 25 years. Uh, I sold a business called Terra Search Partners to ZRG f- about almost four years ago. Um, so we merged into this large company, which has been a wonderful experience, and I'm sure we'll dig into that.
Ryan Swehla: Yeah. How did you get into the search space in, in, initially? 'Cause I, I... Last time I checked, they don't have a major in, uh, talent search in college. What, what, what drew you there? Uh, or how did you, uh, find that to be the space that you, uh, practice in?
Matt Slepin: So I started my career in the real estate business, not in the real estate...
I started my career in real estate, not in the real estate business. I was a lobbyist for low-income housing, actually low-income housing co-ops in Washington, DC, now 40 some odd years ago. This is a long time ago, and being a lobbyist 40 years ago was very different than it might be today.
Ryan Swehla: Very
Matt Slepin: much. But I...
But, but lobbying for low-income housing got me into real estate, which I found to be a very interesting subject. I didn't like lobbying all that much, and so I got into development, and I wound up having a, about a 15 to 20 year career in DC in different real estate roles and functions through a couple of bad cycles, and the cycles kept interrupting the career I was planning to have.
I started in, in, uh, lobbying stuff, and then I was gonna do congregate care, seniors housing, and the market interrupted us. I went to the RTC, which is where the market interrupted everybody, and I was there. It's in the belly of the beast. And then I wound up running a trade association in the apartment business to create transparency of data for the apartment business back when the apartment business was non-institutional, believe it or not.
And then my wife had a job relocation from Washington, DC to San Francisco. So I was 40 years old. As I like to say, I had just gotten on the cover of both Real Estate Forum and Real Estate, and National Real Estate Investor magazine for run- for doing this thing with the Multifamily Housing Institute, this data project, and I had to leave that.
And what does a 40-year-old do with all that experience that's weird experience? It didn't tie together well enough to that age 40 to find s- my next job 'cause no one really cared I'd been on the cover of National Real Estate Investor. That, for me, that was kind of a highlight of what my organization might one day accomplish, but it didn't mean anything to anybody.
So I came to San Francisco, started talking to deal people, mostly in the apartment business 'cause that was my background, and I loved transactions, but I couldn't, I couldn't find my place, and I met with this recruiter. He said, "Well, you know, I, I can't sell you into the marketplace. There's no job for you.
You're a weirdo." But he called me a week later and said, "Hey, wanna be my partner?" Wow. And so I did that. It was about 30 years ago. And all of a sudden, for this frustrated real estate person who wasn't finding his place, I found the one home that worked. All of both my experience and my skill set came together in this place all of a sudden It blew me away.
And then all of a sudden, I found a pathway to success and meaning and where I could make a difference in the real estate business that was really significant. A- and then 10 years into that, I started my own firm. We sold that firm here. But, uh, but anyhow, so-
Ryan Swehla: Yeah, and we'll, we'll talk about that-
fast-forward, but that's where I got- ... 'cause that, that i- in and of itself is a, is a, is a fascinating trajectory. But I, I'm curious. You started out, uh, just really boots on the ground, no book of business, like, um, you know, many, many people who start in a new, uh, profession. You mentioned that it was a right fit for w- the experience that you already had.
What experience prior helped you accelerate in the business, and how did you really get started in the business?
Matt Slepin: I had done a little bit of everything in real estate. I had run numbers. I was an early Lotus 1-2-3, which is pre-Excel spreadsheet guy. Ran spreadsheets. I was an asset manager at an office and a company.
Um, I was a lender briefly at a pre, uh, at a multifamily lender. Um, I, I worked at the RTC. So I had all the... I was a developer. I was an acquisitions person in different roles and function. So I had touched all of these bases, so the language of real estate really meant a lot to me. And also, my wife, who's a really important part of my world, she was in adjacent business.
She's a lender. So when we moved to the West Coast, she ran real estate capital markets for Arthur Andersen, and thank God for Diane. But, so those experiences fit, and I knew people across the country because of the institute that I had run was a national organization. So I always had kind of a national perspective on the world and then solving real estate problems.
I didn't... I had a three-year period in my career where I was focused on northern Virginia office buildings, and I felt like a fish out of water 'cause it was too narrow a playing field for me to understand the people or the geography. I couldn't find myself. But when I got to this thing, it made sense, both 'cause I understood the business.
Second thing is my partner, a guy named Peter Hall, who was my mentor who got me started in this, he had three searches day one, 'cause he was a rainmaker, and the three searches were searches in spaces where I immediately knew the candidate pool, knew what to do, knew how to attack it And understood it because, you know, one was like head of multifamily for a group called Glenborough REIT.
Another was a head of investment sales for Cushman & Wakefield nationally. And I just knew how to attack it. It just made sense to me. The, the skill set and demeanor, which I didn't understand before, but I did have the experiences and somewhat of the network that made this click and work.
Ryan Swehla: W- so we're gonna talk a little more about your, your path from there, um, and, and building your own business.
But I wanna double-click a little bit. You said the phrase, "Back when multifamily was not institutional." And I think for, uh, many people in our industry, especially if they started in the industry, you know, more recently, the, the... that statement wouldn't make sense. Can you speak to a little bit to, uh, how you've seen that industry change from when you started in multifamily?
Obviously, you work across real estate, but specifically with multifamily, how have you seen that change? Uh, and, you know, what precipitated and, and how has that changed, um, you know, manifested itself?
Matt Slepin: Great deal. We talk about this on, on my podcast all the time, and actually the, the theme which w- I'll mention but won't go dive into is the two food groups of real estate.
There's four food groups: office, retail, industrial, multifamily. Industrial and multifamily were the two stepchildren back then, and those are the two food groups that you guys deal with in your business, right?
Ryan Swehla: Yep.
Matt Slepin: And I think the headline was, we like shiny office buildings that we could put on the cover of our annual report.
We like shopping malls that we could put on the cover of our annual report. We know that building. I've been there. It means something to me on the skyline. Now, those are, have been the two struggling asset classes for the past twenty-five years, both shiny office buildings and shiny malls. But people were like, "Well, apartment building, it's not of institutional quality.
No one knows what it is. Doesn't matter." Or it could be a woody walk-up. Whatever it was back then, it was non-institutional. And then the business began to understand, and this is what we were gonna do with this data project that never really happened, was, wow, it behaves better from an investment standpoint with lower risk, better returns, less volatility than those other two asset classes which actually have, you know, negative behavior patterns.
That's how multifamily changed, and it changed initially through the REITs and 'cause it was the REITs that began to accumulate data, information, size, and scale, and then investment track record. They never had that transparency before And one of my favorite moments was talking to someone from AvalonBay, a guy named Leo Horry, and this was obvious to everyone, but I just didn't put two and two together.
He said the moment of change was the moment we became a REIT, because I used to have 70 individual LP P&Ls, and then the next day I had one P&L. So I could approach real estate from a stable position and from a corporate position as what do I... How do I invest in that one P&L versus 70 separate things that are all out there in the universe?
Ryan Swehla: So, so
Matt Slepin: interesting because- And, and it's gone from there ...
Ryan Swehla: because, uh, you know, we look at the NAICREF, uh, index, and it was originally just those four food groups, and just for, you know, fairly recently it's, they've added these, these other more specialty, um, you know, asset classes. Tell me if you see differently, but I don't see that changing.
If anything, I see continued growth into these niche areas, and I'm curious, how does that transcend as you're, um, finding talent and you, you are now essentially working with a much broader universe of specific asset types and things like that? How does, uh, this, this continued, I guess, splintering into more niche categories affect the, the talent space?
Matt Slepin: So let me... I'm gonna answer it with a couple of different thoughts. So one thought, and this is another moment in the podcast that everyone knew but I didn't know, which was g- one of my guests, Chris Hartung, said, "Hey, do you know that 60% of the REIT index are specialty asset classes now?" Maybe it's 65% now.
And if you look at the top 10 REITs, you know, Welltower is a healthcare REIT Uh, Ventas was on my podcast a couple podcasts ago. You know, they're the 14th biggest REIT. These are healthcare, these are specialty asset classes, and that is now the majority of where real estate investment kinda goes and plays.
So that's really interesting. Um, the second thing, I'm still not answering your question, but it's a institutional business more than a deal business now. So who does it take to run these institutions, and what does that look like? And is the skill set of running an institution transferable between asset classes?
It's a skill set of running a REIT or a skill set of being a COO at a large company that has a balance sheet. So we have size and scale in the business overall that's never existed before, and capital flows from that stuff. And then it's the same in the specialty asset classes. Uh, we do a bunch of work at our, uh, for Welltower, for example.
And, you know, are they only hiring people to be head of development from healthcare development? No. It's, you know, it's other asset classes of development or CFO. So that part's transfer- translatable, but some of the skill sets are specific to that sector. Uh, we did a lot of work with Digital Realty back in the day, and they said, "Matt, I can't work with you anymore because it's not real estate people I need.
It's not the way to look into the lens of this company. Maybe a quarter of our people are real estate people, but the other three quarters are technologists." It depends on the asset class and the situation.
Ryan Swehla: Just going back to the, uh, the, the career prog- um, progression I'm a entrepreneur. Uh, I, uh, love the entrepreneurial journey most days.
Uh, some days I don't. Uh, you, you, uh, started out with a, a wonderful partnership, but ultimately decided to start your own firm. Um, and I, I won't get to the finale of that yet, but I would love to understand, you know, what precipitated you kind of taking the risk of, uh, going out on your own and starting your own firm?
Matt Slepin: I had no choice. I mean, just, just to be-
Ryan Swehla: You know, that's an answer that more entrepreneurs have than one would think.
Matt Slepin: I, I never saw myself as an entrepreneur at all, and probably still don't. But I'll tell you the story, and the through line will make a little bit of sense. So this guy Peter, my mentor, um, we...
I, I started in search, realized it was a really good fit. This was gonna be my career. As I like to say, this was the place I was gonna make a difference. Like, we can go into that later what that means, but it was really interesting and impactful for me. And then about eight months into the deal, he said, "Well, you know, I'm 65.
I, I'm old." I'm older than that now. "It... And I need to sell the business, so let's, you know... L- What are you gonna pay me for it?" And I said, "I'm gonna walk across the street." Like, there's no, not... no reason to pay you for it, and I can't saddle myself with debt to do that in a business I don't yet understand.
So we sold the business to a group called Heidrick & Struggles, which is one of the Shreks, one of the top five search firms in the world. I really wanted to do that in part to help him get liquid, but the other thing is I only knew this through the eyes of this one guy, and I had no idea if we were doing it the right way or the wrong way.
I wanted to broaden my experience and get an education in my business, and luckily I did at Heidrick & Struggles. It was awesome. So the training and to be able to m- um, m- uh, have mentors... They weren't mentors. To watch everybody else do it and see each of the idiosyncratic ways they do what I did was really, really helpful for me.
It was a great education. I, I didn't like that big company. Now I'm at a big company, but then I wasn't mature enough to, to flourish there or enjoy it, and we also had some cultural issues. I did one of the biggest searches in the real estate business, and it wound up being a bad story 'cause we didn't, we didn't know how to do it right or well, and there was internal, well, blech stuff.
Uh, so ultimately, I formed my own firm. It was the only answer to this conundrum. I formed it with a partner. I picked the wrong partner because I so wanted a partner. I just didn't wanna pound my chest and say, "Okay, I could do the Matt Slepin firm," which was my only answer, but it was really the Matt Slepin firm with someone else And so we got divorced a year into it, and then it was mine for a while, and I kinda loved that.
So then I was the entrepreneur, but in my business, you know, we were like, you know, I had my practice, I had colleagues who had practices. I tried to coordinate the practices to mean something. And the entrepreneur side of me was actually that it wasn't four separate people trying to do their business. I had a goal to unite it into a message, and unite it in how it presented itself to the world, and I did that a lot through thought leadership and th- and through relationships, which are two very different things.
But that really grew the business, and the entrepreneurial gene was the desire to be good, successful, meaningful, create something.
Ryan Swehla: Obviously, you were able to sell your firm and join ZRG, and w- we can speak a little bit about that. But people look and say, "Wow, built a business up, sold it. That's great." Uh, but I'd love to hear maybe what some of the challenges were along the way, um, or maybe if you wanna pick something in particular and drill down.
As you were growing your firm, what would you say is one of the, one of the biggest, uh, challenges or, uh, you know, difficulties that you had to navigate growing your firm?
Matt Slepin: Yeah, I'll pick two or three things. So one is getting an early divorce was a good thing, 'cause it was a bad marriage. So you, you're like 26, you're in a bad marriage, and then you have a great marriage after that, right?
But it takes getting out of something that didn't work, so that was really important. The second thing is we were a tiny firm and a boutique firm, and how does a boutique firm make some noise and get some reputation? And I always believe that I couldn't have enough lunches and dinners with people, nor could I afford the number of lunches and dinners to do backslapping, and I hate backslapping.
So I picked thought leadership as something to do in order to look like the Wizard of Oz. I was the wizard behind a curtain, and we had to look bigger than we were And so thought leadership was the, my avenue to do that, something I enjoy, and it worked really well for me to seem like we were more and more institutional than we really were.
So we were the real thing from that perspective. At the end of the day, it never occurred to me that there needed to be succession. So I didn't... I loved it. I was 50. I was 52. I was 55. It was really cool. Well, you get to be about 60-something, and if you don't have succession, your whole group is at risk, and we see this in real es- real real estate companies all the time.
So you need succession planning both for a capital event as well as a leadership event, and I worked for a number of years to do that within my team or external to my team, and we couldn't make it happen. So a sale became the way to accomplish that.
Ryan Swehla: How much of the work that you do with the real estate firms has some part of that discussion?
I would think it, that that's an important part, but I'm, I'm curious.
Matt Slepin: It's a hugely important part. So first of all, my peer group, I'm ... I'll be 69 by the time this podcast comes out, so I'm, like, right on the cusp of that, that number, and I'm semi-retiring in a year and six months. So we'll talk, we can talk about what that means or not.
It's just, it's, it's my business. But, um, my peer group is struggling with the struggle that I have, and my c- peer group struggles with it because they, not me, they've, they've made a lot of money. I've made a little bit, but they made a lot. Yeah. They love what they do. They're masters of their worlds, and they can't believe they're there, but they have to let go, and it's really hard because they need the capital to let go.
They need the team to let go. And then when they let go, they don't wanna go away. They wanna be somewhat involved. That's a real trick, and it's an emotional trick. So, A, my peer group of people I've known for years or people I can become peers with pretty quick in a conversation, they struggle with that stuff.
So that's one of the major things that I get to do as a recruiter, is to play that out, and it's such a personal journey, and the answer is not linear, right? One size does not fit all to answer that question. Oh, I'll go find a person, hire them, and we're done. But th- that's, it's not that straightforward at all whatsoever, especially because of capital, because of taxes.
There's a lot of vectors to that. So yes, it's a big part of what we get to do, which is delightful.
Ryan Swehla: You said your peer group, uh, we'll just say broadly, you know, tail end of, uh, Gen X or slash baby booms is, are still in the market as well. And, uh, how do we... Y- you know, there's been a lot of talk within, um, our industry about that kind of transition.
How are you seeing that transition play out and in, in your business and, and in the real estate industry as a whole?
Matt Slepin: Usually well and usually successfully. There's some horror stories of companies that wait too late, and then the whole thing disappears because the team has to go somewhere else before the person can make that decision.
And there's some famous ones. Was it PM Realty? There was, like, an advisor on the West Coast, and the guy kept waiting for a bid that never came in, and then by the time it happened, his whole team had left And it was a bad one.
Ryan Swehla: Yeah.
Matt Slepin: Um, so th- so that happens. You also have people who just stay on too long, and they won't let go, and they can't figure out how to do that.
But our industry's success abounds here. So one of the recent podcasts we did was with, uh, the two co-heads of Lincoln Property Company, now in its second generation of leadership, and it's two, you know, f- right at 50-year-old guys who've been there for a long time, and they're succeeding, and they were able to recapitalize the company at the same time as they were able to take over leadership.
So I think it's the combination of recapitalizing and leadership, and they still have their mentors around.
Ryan Swehla: Again, you, you t- spoke about capital as well as talent and those two needing to kind of come together when you have a succession planning, uh, or a proper succession planning. Are you guys involved in the capital side at all?
Or, or how do, how do you guys interplay with that relative to finding the right people?
Matt Slepin: It's separate from what our business can do. It's an interesting parallel dynamic to this. Often it's a transaction. Sometimes it's a restructure within the team. So there's one search I'm thinking of where I was involved with that.
I didn't j- it was a legal thing, right? Which is how does Person X... And there wound up being two Persons X, and how do they partner the two generation of Y to come in and take over that company? So they, we, our search had a six-month pause while the lawyers got involved. But other times it's, you know, "Hey, we're, we're out for private equity, and we're trying to figure it out, and we're gonna have a new financial partner that then enables the next generation to come up and be the leader."
Ryan Swehla: Now that you've been with, uh, ZRG for four years, how, how would you say that has, um, you know, helped add to or contribute to what you guys do provide to clients now?
Matt Slepin: Having the sensitivity to that and those transitions and being an advisor to companies around that, first of all, is what I love to do. It took me a long time to be worthy of doing that and learn enough to be kind of wise.
It'll be what I'll do when I semi-retire, too, because it's still fun, and it's still interesting, and the wisdom is, is somewhat rare, right? To, to know how all those pieces fit together and to be able to have what winds up being a fluid, open-ended range of conversations to know that all those pieces have to come together to make these transitions work well.
You know, that's what boards do. That's what a great advisor does. Another theme in this, if we think of it one level down, which is also as interesting for our search practice, in addition to that leader, 'cause that's what we're thinking of it when we're having this conversation, that leader has a team And in so many of these companies, that team all grew up together at the same time, right?
You and Joe, you're, you're in this together. I don't know your second tier of people. They may be peers of yours age-wise, or they may be a generation behind you age-wise. But when the whole team is of the same generation, then we have a, a big issue. Not issue, right? We have a challenge to address that Or we have a head of a part of the company that is not matched for what our future is anymore.
So we've done a bunch of search work recently for CFOs and for chief technology officers who were really good at 70 individual assets in LPs, and I know how to manage an LLC really well, but I don't know how to manage a balance sheet of a company as an entity in a business. We've done a bunch of searches to replace those CFOs who weren't quite ready for retirement, but they needed to be moved on.
Or even more stark and obvious is the chief technology officer or the IT guy who got you to, you know, 2 billion AUM, which is a big number. They're not the person to get you to 20 billion AUM because the challenges of this business are very far beyond what the challenges were to get to 2 billion, particularly now with AI coming and the level of technology.
And the driver... Two through lines for me are institutionalization and technology, which are hand in hand.
Ryan Swehla: We were talking a little bit about these transactions that occur, uh, as we, uh, as a part of the succession planning, and I was thinking about your sale to ZRG. Um, w- w- walk me through a little bit of what that process was like, and you talked a little bit about what precipitated it, but, um, I'd, I'd love to hear a little bit more of that and then what the process was like to sell, 'cause I, I think you said ZRG's top 10 search in the country.
So obviously a very large firm buying a very small firm, and I'm curious, uh, you know, about that transaction, how that transpired and, and what it was like.
Matt Slepin: So a couple different things. So, uh, ZRG is backed by private equity as well. So private equity needs... wants a company to grow. So we're a growth company.
I think we were 12th largest when I started three and a half years ago, and now we're like seventh or eighth. And that's largely through acquisition, both organic growth of, hey, we're gonna add a recruiter, but a, a bunch of acquisitions that have been accretive for the company. And it's incredibly accretive because the trading value of a sole proprietor, 10-person real estate headhunting firm, for whom if I got hit by a bus, the value's about nothing.
Not to pound my chest about it, but it was true to a firm that is like ZRG. So they have a multiple... My multiple might be, you know, less than one, and their multiple might be four or five. So that differential is where a lot of money could be made. So the roll-up strategy is huge and valuable. It is also valuable For me, from two standpoints, the l- the obvious one is I, I get to monetize a little bit, which is lovely.
I get to brag a little bit, which is more lovely, 'cause it just feels good to round-trip something. So we end-- You know, that's the definition of success, whatever it means monetarily. But the other really interesting thing is as a 10-person company, the inefficiency of a 10-person company, not just from a capital standpoint, but, you know, we had a business manager who We were paying pretty well.
She didn't think so, but, you know, we- she was being paid pretty well to be the business manager for a $3, $4 million business. That was really inefficient, and so the things we had to think about to keep the lights on for a $3 to $4 million business, Christmas cards, Christmas party, uh, you know, insurance. So I spent 20, 30% of my time on that stuff, which not accretive to any value to anybody, and I wasn't any good at it.
You take all that stuff away, and you let me be an advisor recruiter where I am valuable, then again, that takes out some both inefficiency and stuff that I realized I thought I loved. It was like I was really proud of as my company. Eh, not really.
Ryan Swehla: Now that you've been with ZRG for four years, and you alluded to, uh, semi-retirement, which we'll, we'll ask a little more there.
If you had to pick kind of the top couple things that, um, you're happy about with that transition or that sale or merge into the larger firm, what, what would they be?
Matt Slepin: Yeah, a couple things. One, I was really lucky. So I was lucky from a couple standpoints. One is culture, which people talk about, but you don't really know what culture means till you're there, and the culture's pretty good, pretty collaborative, pretty cooperative.
Recruiting firms like brokerage firms are all about fee splits, or could be all about fee splits and fighting and territory and turf and locking your door and all that stuff. ZRG has virtually zero of that. So we have low egos and good people. So that's, right off the bat, really, really matters, and matters to me.
The reason I left Heidrick & Struggles before, I think I alluded to this, but it, it was, it was a fee split thing that was ugly and poor performance for clients. So here we're not battling each other, and we're aligned towards client outcomes, and that's a really good thing. Second thing is I joined, and I had a co-head.
I didn't wanna be the head. I keep saying this, right? So my ego's relatively in comfort zone. And so Kevin Jones has been... was the long-term sole head of real estate for ZRG. We became co-heads of real estate, and it was just a blessing to have a wonderful colleague with whom I could collaborate all the time, brainstorm all the time.
We were non-competitive with each other. Our egos were in match with each other, so it worked, and that was a blessing. And then the last thing is, and then I got rid of stuff I didn't like doing, Christmas party and- ... all that stuff. Insurance. I was bad at that. Right, insurance. They let me continue to do my podcast, so that was really cool.
But then we had some things that I couldn't bring to the table. So four of my favorite searches were for chief technology officer searches And I wouldn't have pretended to do that, but, you know, I have a guy. Uh-huh. Yeah. And Lambert, and he's wonderful. He's expert in that, and together we can serve that client because I understand real estate, he understands what chief technology officer looks like.
So we could do a CTO search. We could do a CHRO s- uh, head of human resources search with someone who knows human resources. The client is not demanding it be a real estate person, but I can, I can sensitize that generic recruiter in HR to real estate by being at the table with them. So that stuff is really, really fun.
Um, that's been delightful
Ryan Swehla: Uh, maybe touch a little bit on, you mentioned semi-retired, uh, coming up here. What does that look like, and, uh, I... What, what, uh, precipitates the transition?
Matt Slepin: I'm gonna be close to 70, and there's things that are not right for a 70-year-old to be doing. Or the... For, at least from my standpoint, and I've thought about this for a long time, my wife totally agrees.
So A, more time needs to be given to the family, to travel, to those things I love to do. Bike riding around Lake Tahoe, I'm gonna do that. But equally important is what does the work side of semi look like, and what does the non-work side of semi... The non-work side, I'm not gonna talk about. It's, it... But it's e- it's e- I will talk about it for a minute.
We're gonna do one trip a year that takes a month to another place, and we'll be semi off the grid, but that's the travel thing that everyone talks about. And then we're gonna do one month a year in a foreign city where we sit still. I think that combination of those two months breaking up the year and of a different kind of travel and cultural experience for me and Diane will be really a blessing.
So we're excited about that. Um, so that's the personal side of this. And I play music, and I play guitar, so I get to do all those things. But the work side, you don't wanna let go of. So what's appropriate? What's good balance? What is low stress? Where is delight? And so I'm lucky. I... We talked about this before.
I do my podcast. I do some consulting. I'm on a board. I will continue... And, and, and I do some, some search, and the search is largely mentoring my group or leading my group or strategizing my group to do better in the searches we do. And if I could do each of those things, that's about another half, that's the other half of the time, and it's energy producing versus energy sucking.
So can you find the things in your work life that produce energy, intellectual stimulation, relationships as you age, or whatever the right word is? Cut out that other stuff.
Ryan Swehla: Yeah.
Matt Slepin: So that's what semi might look like.
Ryan Swehla: We'll, we'll have to check in on that, by the way.
Matt Slepin: Okay, please. And-
Ryan Swehla: You have a, uh, special vantage point in the real estate industry, both being on the kind of talent side, um, in the C-suite, but also, um, just your, uh, amount of time in the real estate industry.
I'm curious, a- as you look forward, what do you see currently or on the horizon as kind of some big shifts or trends within the real estate industry?
Matt Slepin: So one, institutionalization of this business continues. Professionalization, institu- whatever the right words are for that. But that will... That's a trend that won't stop, and capital makes that happen, and size of scale makes that happen.
Technology will be a huge driver going forward, and it has been. So the theme I've seen You asked about multifamily. One of the pictures I had when you asked the question a few minutes ago was 20 years ago, people were scared to have technology at the site level for multifamily because they figured the site level people would just sit there on their computers and they look at pornography.
Literally, that was the discussion in the boardroom, right? They're not gonna really use it. Well, now everyone uses it 'cause it's their phone, and they're really using Amazon, not porno. But who knows what that is? But technology has driven so much change. But with AI, the amount of change that will be driven is hyperscaled.
And, and COVID hyperscaled it, um, to allow us to work remotely and to have all this stuff in the, our infrastructure. Thank God we were ready for COVID from that perspective. But AI will hyperscale that. We had a session last, this week, earlier this week in San Francisco with leaders from 12 different real estate companies talking about way, what AI will mean to them.
And the subjects that that group of leaders, which were across the board from real estate companies, were dealing with, addressing with, and the fuzz around what they mean for each part of their business was different. Different but total agreement in, "Yeah, it's gonna be a different world in five years."
Um, last comment is the baby boomers will be gone. We may be mentors, but we're gonna be out of this picture. And then the last comment is, in the post-Trump world, it will not go... It will be a different world than the world we've had ever before, in part because of AI and technology and globalization, all that, whatever that means.
But the post-Trump world's a, a new world, and I don't know what that looks like. And, and that might be Republican, it might be Democrats, not a political statement as much as our world has changed in these fundamental ways. What will that mean for the real estate business? It's gonna be fascinating
Ryan Swehla: No, it means you're, that's why you're retiring.
I'm just kidding. Let's throw in
the towels. Well, it's why I'm kind of staying involved. Let's, uh, take that to, uh, kind of, uh, circle back really. Uh, one of the questions that we love to ask, um, at the end of our podcast is what advice you'd give to someone starting in the real estate industry. But before you answer that, I would love to hear a plug for why, um, pursue a career in talent search within the real estate industry, or what you would say, uh, you know, why someone should consider that as a profession.
Uh, and then we can go back to just the broader advice.
Matt Slepin: So I'm g- gonna answer it a little bit differently than you're suggesting, 'cause I think he- headhunting is for rare people. Headhunting should be, you know, .1% of the people are natural to wanna do headhunting. It should be a very niche business. I'm not trying to not have competition, but, you know, there's just not a big enough industry for that many folks.
I've had a massively delightful career, and it, and it's worked really, really well for me. And it's a great thing to do if you're so predisposed. But the thing that I do think in- interesting, so here's my pivot on your answer, is I think the real estate business going forward is about the business, not about the transactions.
And we talk in real estate so much about we're a developer, we're an acquirer, I do deals. Deals, deals, deals. That's the word we l- hear all the time. But I think it's the business platform that's the differentiator, and it also differentiates more people coming into the industry 'cause they don't have to be a deal guy or a deal gal.
And what skill sets do people need to run a business platform? Is it technology? Is it HR? Is it culture? Is it strategy? Is it operations? Is it property management? Is it asset management, portfolio management, investor relations, right? Those are the parts of the enterprise that aren't related to doing deals, and that's the fat part of the bat, and it's the fat part of the bat in the, in an industry that across the board is where we work, live, and play.
It defines our cities. For people who, like me, are kinda climate f- fear people, this is an industry where the change in the industry will move us towards carbon neutral in some way. And so all those, the... Can I get to play in those places if I'm not a deal person, right? What does all that mean for real estate as an institutional asset class?
I think it's fascinating
Ryan Swehla: Just if I can paraphrase a little bit, what I heard is the real estate industry is broad and wide, and so it's not as much a certain skill set or inclination that works in the real estate industry as much as maybe what you're saying. What is your inclination? What is your skill set?
And there's a place in the real estate industry for that skill set if you so choose.
Matt Slepin: So I was... I backed into real estate, and until I became a recruiter, I felt like a stranger in this because I wasn't a good deal guy. It just didn't work for me. And then I felt like, "Well, no one wants me." But then I found this role.
But I would say that 80% of the roles are not that thing. It's these other things, and that's where we need to bring in talent. It's a huge, still a lack of sophisticated people who can grow companies and know what great companies can look like.
Ryan Swehla: Wonderful advice. Uh, it definitely has my wheels turning. And, um, I just want to thank you for taking time to be on this podcast with us, and, uh, I definitely came away with some, uh, new insights.
Thank you so much.
Matt Slepin: Great. Thank you, Ryan.
In Episode 89 of Durable Value, host Ryan Swehla sits down with Matt Slepin, Co-Head of Real Estate at ZRG Partners, to unpack what great leadership and succession really look like in today’s real estate industry. Matt shares his fascinating 25-year journey in executive search, from lobbying for low-income housing to building and selling his own firm. We dive into the real succession challenges facing today’s real estate leaders, the institutional rise of multifamily, and how AI and technology are rewriting the playbook for talent and decision-making in the industry.
00:00 - Introduction
02:30 - From Lobbying to Real Estate Development
05:45 - Career Interruptions & Finding the Right Fit
13:20 - How Multifamily Became Institutional
18:30 - The Rise of Specialty Asset Classes & REITs
24:00 - Entrepreneurship & Starting Terrace Search Partners
29:45 - Succession Planning Challenges in Real Estate
34:15 - The Sale to ZRG Partners
38:30 - Benefits of Joining a Larger Firm
42:00 - Semi-Retirement & What's Next
45:15 - AI, Technology & The Future of Real Estate
51:30 - Advice for Real Estate Careers Beyond Deal-Making
56:00 - Final Thoughts & Closing