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Mar 17, 2018

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Feb 26 2015

A question often posed to real estate students and professionals is “why are you interested in real estate?” For Bruce Cohen, CEO of Wrightwood Financial, the answer is simple: it is an inefficient market where you can produce outsized returns on a risk adjusted basis. More particularly, it’s a relationship based industry that accommodates entrepreneurship. Mr. Cohen came to Kellogg’s Allen Center on January 28 to address a group of twenty students over lunch on a career in real estate. Bursting with energy and not once taking a bite of his food throughout the two-hour session, Mr. Cohen laid out a series of important and practical concepts for students pursuing careers in real estate.

Trust was the most important concept that Mr. Cohen highlighted. Dismissive of the term “networking,” which he believes implies an agenda, Mr. Cohen emphasized the importance of relationship building with a long term focus, devoid of any short term goals. Mr. Cohen shared how critical trust-based relationships are in real estate and how forming these connections early is a pivotal first step to forging the ties that will ultimately bear fruit as one’s career unfolds. Mr. Cohen cited examples of trust building within the context of the dozens of complex negotiations in which he has been engaged throughout his career. “The idea that both sides should be bloody has never made sense to me,” according to Mr. Cohen. Rather, a negotiation in which you’d be comfortable taking either side, governed by a sense of fairness, is the kind that sows the seeds of healthy, long-term business and personal relationships, with the business and personal blurring over time.

Mr. Cohen also highlighted the importance of an “appropriately framed timeline” as real estate students consider their career options. “You do discounted cash flows in making decisions on assets all the time,” said Mr. Cohen. “Why wouldn’t you do such a DCF when considering your own human capital? Think about your return over a series of years and not just in your first year out of school. The short term economics will quickly seem irrelevant if the long term ones are suitably compelling. Beyond that, you’ll always generate more when you pursue something about which you’re passionate.” Overall, Mr. Cohen cited a broad universe of longstanding relationships as the foundation by which he and the firms in which he has been involved have grown, survived market volatility, and prospered.

While trust and a long timeline are solid career guides, in real estate, says Mr. Cohen, finding competitive advantage or “an edge” is key. “You can’t win when you’re just doing what everyone else is doing. There are always ways to establish points of differentiation in this asset class.” More importantly, Mr. Cohen conveyed that although simple in nature, given that the industry is driven by the relationship between the supply and demand of space and the supply and demand of capital, asymmetrical information exists everywhere, creating the opportunity to produce the type of alpha that investors seek. Mining those inefficiencies is where the entrepreneur finds success and can generate profits for themselves and their investors.

These lessons are already proving essential as Kellogg students work to position themselves in the best way possible for careers in real estate.

About the Author

This article was written by Ari Parritz '16.