‘We all have to adapt to change’

11/6/2009 - Adaptability and transparency are paramount to weathering the current economic environment, according to real-estate leader Stephen Quazzo.

Quazzo discussed his career path and his current role as co-founder and CEO of Transwestern Investment Company, a real estate principal investment firm, on Oct. 21 before a Kellogg student audience. His talk was the first in this year’s Kellogg Real Estate Executive Speaker Series.

“In business, it isn’t just real estate. We all have to adapt to change,” Quazzo said.

Quazzo said he spends much of his time on crucial stakeholders — employees, lenders, and investors — as well as on portfolio management and strategic initiatives. Despite difficult cutbacks, including a hiring freeze and the elimination of some staff, Quazzo stressed that “labor is not a variable cost in our business.” He said he has worked to reassure existing staff members that their jobs are safe and valued. “The team is obviously very important,” he said.

Quazzo urged his listeners to pay heed to organizational-behavior issues. He says he spends more time in the office these days and projects a positive attitude while also making sure people know he is keeping an eye on the future. “We’re going to take care of all of our legacy issues, but we’re going to develop new strategies that are going to have an incentive component to them — basically wealth creation,” he said.

In addition to keeping employees informed, Quazzo emphasized the importance of clear communication with lenders and investors. He cited transparency as a critical ingredient in his relationships with these stakeholders. He also advocated for addressing issues up front for the best outcome, pointing out that Transwestern has devoted a great deal of time to both its lenders and investors during the last year. The banks, he noted, “may not always agree with your plan, but if they have the confidence that you can get it done and that you’re the best player to handle the situation, they’re going to stick with you.”

Quazzo became interested in pursuing a real estate career while in business school. After earning his MBA in 1986, he joined Goldman Sachs’ real estate division and later went to work for real estate entrepreneur Sam Zell. In 1996 Quazzo formed Transwestern Investment Corporation, affiliated with Transwestern Commercial Services. Based in Chicago, Quazzo’s firm currently manages between $4 billion and $5 billion in real estate.
Quazzo pointed out that survival is key right now, but adds that he is also looking ahead. “We intend not just to survive the next three to five years, but to hopefully take advantage of some of the carnage that has been occurring,” he said.