RG 157 – The Future of Big Retailers & Mixed Use Developments in the US with Babak Ziai
Nuts and bolts
Babak is the founder and managing principle at Brand View Capital Partners which is commercial real estate investment management and advisory firm. Babak is also a professor of real estate at the University of Southern California. Babak works to help solve the problems at the intersection of community, space, finance and innovation. Babal made his first dollar when he was saving up for a new bike, he couldn’t get a job because he was only 10 years old so he modified his old bike and sold raffle tickets for this improved bike. He realized he could make more money selling the tickets than he could selling the bike outright.
Babk started at a large scale development company where he worked for 10 years. This meant that he understood the operation and financial side of real estate and then he realized that he could do a lot of this stuff himself. About 5 years ago Babak started his own partnership. He decided that the only downside to going out on his own was that he would have to come back to work if it didn’t work, which isn’t the end of the world, so he took the jump. Babak says the ultimate way to success is to teach yourself to be resourceful. He wasn’t lazy in his old job however he had to learn so many more lessons when he went solo and these lessons have made him a better partner, father and business man. The best learning is solving problems on the hop when your back is against the wall.
He didn’t decide on a figure to save before leaving his job and instead thought that any money spent was an investment on himself rather than seeing this as bleeding money. While he was still at his job he transferred to a 10-99 and moved to being a consultant rather than fully employed. This meant that he was weaned off full time work and allowed him to work on his business while still having the security of a paycheck.
Babak invests in the retail sector which has several subcategories; community centres, malls, street retail etc. The retail sector has been changing because goods are being bought online whereas the rules of retail real estate haven’t changes for approximately 30 years. The next change that’s coming us to use the space in order to give value to customers where they buy online and pick up in store. Historically retail real estate has been leasing too much space so now they can move somewhere smaller and pay less rent. This new smaller space can be enough to expose the customers to your brand but doesn’t need to be 2 storeys. This means that the extra storey can be office space or similar. This is a great opportunity for real estate investors to breath new life into these spaces. For example places like Walmart own their own spaces so now they co-tenant the space with community projects.
- Most important habit – Always showing up and cold showers in the morning
- Most influential person – His mentor
- Most important tool – His staff
- Most influential failure – Early success is the worst teacher