Episode 8: How to Cultivate Meaningful Business Relationships
Meaningful relationships are especially crucial in the world of commercial investing. In this episode of Durable Value, hosts Joe Muratore and Ryan Swehla, principals at Graceada Partners talk about how mentors, advisors, and friends have deeply influenced how their business looks today.
Start Transcript
Ryan Swehla:
I remember he came to us with frustration about property management and said, "Can you guys do property management?" And we said, "Sure." And then we went and figured it out.
Joe Muratore:
We literally Googled it.
Ryan Swehla:
And that was a major inflection point in our business because that was the start of us doing commercial property management.
Speaker 3:
From Graceada Partners, this is Durable Value: An Investor's Podcast, with hosts Joe Muratore and Ryan Swehla demystify commercial real estate with safe, sound investment strategies to help you balance your portfolio.
Joe Muratore:
So we were talking recently about inflection points in our business and key turning points in our business, and some of the people who have been a part of that, almost like a little bit of a hall of fame. But when you've done this for 15 years, there were points along the way when certain people had a need or saw something in us that maybe we didn't even see in ourselves that shifted the outcome of our business and our lives.
Joe Muratore:
Who are some of the people for you that had a big impact, and what were some of the inflection points in our business that you've seen?
Ryan Swehla:
I'm thinking early on from the beginning, we started the business December of 2008, the beginning of The Great Recession.
Joe Muratore:
Dark times.
Ryan Swehla:
And we joked around for years that we never knew what a good year would look like anyway, so we were fine. But early on, there was one guy in particular, Steve Ensley, who was really influential for us in our business because we started out with a consulting arrangement with him, a retainer relationship that allowed us to have a regular income as we were just growing and starting our business.
Ryan Swehla:
He really took us under his wing and we were able to work hard for him in many different capacities from asset management to leasing to whatever. And I look back on that as had Steve not been there at that time, our business would look different than it does today.
Joe Muratore:
I think that Mark, based out of Clovis, but I knew him in [Antica 00:02:23], and he was a vice president of special assets for Delta Bank, since been acquired. But at that moment, there was a lot of workout on those loans and a lot of buildings that they needed to solve, and I was recommended to him through a board member of theirs, but we just jelled. And I ended up helping him sell all the special assets in their portfolio that needed to be sold. But the first deals we worked on, I remember one was a fiveplex apartment and it had two inches of sewage in the basement.
Ryan Swehla:
In Downtown Stockton.
Joe Muratore:
In Downtown Stockton. And then we worked on a pretty ratty office building. But at the time, it was like, "You bet." I couldn't believe it.
Ryan Swehla:
I'm on it.
Joe Muratore:
It was great. We sold the land together, some other office buildings, but what was really great is becoming a trusted advisor for him and becoming a part of that team. We solved problems together and that's informed the rest of my career, just like with us.
Joe Muratore:
I've always looked for teams where I can magnify the other person and experience the same. And together, we can do things that couldn't be done. Mark was one of the first people in my career that did that for me, and I really enjoyed working with him.
Ryan Swehla:
I remember another thing about Mark is he came to us with frustration about property management and said, "Can you guys do property management?" We said, "Sure." And then we went and figured it out.
Joe Muratore:
We literally Googled it.
Ryan Swehla:
That was a major inflection point in our business because that was the start of us doing commercial property management. And number one, we've learned a ton in that amount of time. But number two, as we invest today, our management team, the expertise there, the experience there, the shared wisdom has been a tremendous advantage as we're buying properties.
Joe Muratore:
We're an [IRAM 00:04:25] accredited firm now, we're both certified property managers. Our team has been built around this, but it started at that moment when the client said, "Do you guys do property management?"
Ryan Swehla:
And we said, "Yes."
Joe Muratore:
We were young enough and dumb enough or whatever to say, "Yes, absolutely."
Ryan Swehla:
I think of another similar situation a few years later when we were handling the disposition of a shopping center because of a relationship that we had in the brokerage community in Stockton. And the buyers of that shopping center at that point, we had done management, but we had not managed any large properties, but the buyers of that center, Jeff Leon, Evan Lilivan, they took a bet on us. They saw that we were hardworking and that we didn't act as though we knew everything, but rather we were willing to learn.
Ryan Swehla:
And they were willing to take on that because of the level of ownership that they saw. I still look back at some of the fumbles and learning curves that we had taking on a 125,000 square foot shopping center. And that propelled us to that next level up to be able to feel very comfortable managing or acquiring a 100,000 square foot office building, a 200,000 square foot shopping center. But it was because they took a chance on us and were willing to work with us as we grew into that expertise.
Joe Muratore:
I think there is something to be said for that saying, when the student is ready, the teacher will appear or when the business is ready, the client will appear. There's something in that vein of having the right attitude and the right desire where the phone rings when you need the phone to ring.
Ryan Swehla:
Speaking of the student and the teacher appearing, another person that's been really pivotal in our business and someone who we can actually track our growth trajectory with starting working with this person is Greg Campbell. We connected with him fortuitously, but he was willing to take us on as essentially, a client that he advised or helped with.
Ryan Swehla:
And he has always been there, pushing us to that next level and asking those uncomfortable questions about how far we can go and what we think we can accomplish. And pushing the limits of our capabilities.
Joe Muratore:
For the people who are watching, Greg Campbell was the chief operating officer and one of seven owners of Coldwell Banker company. He was one of the original employees in America of the Richard Ellis Corporation, which became CB Richard Ellis, which became CBRE, but he's now retired and doing some consulting. But through someone else, he met us.
Joe Muratore:
And even when we were a tiny business that didn't deserve his talent, he was willing to be on a call with us every week and listen to us talk about our issues. He was our first board member and today, he's now an official board member of our company. But I love that he saw us through infancy really, to growing to where we are, and certainly to where we hope to grow to. And that's been a great source of wisdom.
Ryan Swehla:
And his insights have been even more valuable as we grow. It was incredibly valuable when we were younger, but now as we've grown into a larger business, his guidance along the way has been tremendous.
Speaker 3:
You're listening to Durable Value: An Investor's Podcast. We understand the world of commercial real estate can be daunting, but we want to make it as simple as possible for you. Get the free 56 point checklist for evaluating investment properties that Graceada Partners uses every day at graceadapartners.com/guides.
Ryan Swehla:
What are some other inflection points you can think of?
Joe Muratore:
Well, I think just this year, and we've talked a little bit about Ali Nadini, he's on an episode of our podcast here, but he's a broker in Sacramento that we're doing about $50 million worth of business with this year. And what's interesting is this is an agent who saw something in us in a way that he started bringing deals to us, and seeing what we could be in this town.
Joe Muratore:
And it's been wonderful. It's helped us go from one small building to now, an escrow and a large office building and a 150 units of apartments. There's a couple of other deals we're kicking tires on, but the momentum here and the opportunity's been outstanding. That's been exciting.
Ryan Swehla:
Last year, the total amount that we acquired last year was about 35, 40 million, and just in a couple of transactions that we're working on right now with Ali, we'll exceed that. And certainly for the year, we'll substantially exceed what we did last year. So, absolutely.
Joe Muratore:
One thing I find is that the skill exists within us. It's like you have to awaken and see yourself in that role. The transaction we did prior to the two we're doing right now was $4 million. Today, we're doing 40 million. Certainly, we've done larger deals, Century Center, 25 million, but we're capable of that if we're willing to understand that and see that in ourselves. And it's powerful, especially when others see that in us and reinforce that. It's great to work as a team when both parties see greater potential in each other.
Ryan Swehla:
I think of a closed worldview versus an open worldview. When you go into situations and relationships with that open worldview, you uncover opportunities that you never would have otherwise. And with each of those inflection points, with each of those people, it required both parties really, to come with an open mind frame and see how that opportunity unfolded.
Ryan Swehla:
And obviously, each of those individuals saw something in us or what we were doing, and we were there and ready to respond to that opportunity as well. So I just encourage as people are going through life, always having that open worldview or open mind frame allows you to spot opportunities that otherwise you may not.
Joe Muratore:
We have the motto in our company that we create environments that transform people's lives. If I look at that with a little bit of a selfish angle, one thing I've seen is that as we transform other people's lives, our lives are transformed. And the real joy of building this company has been in that personal transformation, internally, in relationships.
Joe Muratore:
When you lead with abundance, when you lead with hands open, when you lead with thinking about how you can add value to other people, without fail, it comes back around. And the joy is one that's mutual and shared. It springs from our relationship too, which is that over the 35 years that we've been friends and the 15 years we've been business partners, we've built that together.
Joe Muratore:
And that's what life is about. That's what life is about. And I really enjoy approaching life within an abundance or open handed approach.
Ryan Swehla:
Like you mentioned at the beginning, a hall of fame, the other thing that I think helps us in this is to have the gratitude and to look back on those people that were part of an inflection point in our business, because it's very easy to just be focused forward and also not recognize the people that were involved in those moments.
Ryan Swehla:
Because those people, frankly, may not even have realized the impact that they had at that time. But to be able to give them that due credit and to recognize that they played an important part in our journey, I think is important.
Joe Muratore:
And I think that as we're now in a position to sometimes be in the hall of fame of people we work with, younger people, interns, people getting started or very experienced people, I think that's important to reflect on. Often I see people's lives where I can play a small impact, or provide a little bit of vision or leadership, or a spark of something and see confidence in them in a way that maybe they don't see in themselves.
Joe Muratore:
And I really enjoy that. I think for people that are listening to this podcast this morning, too, there's probably people today, there's probably people in their lives that they can be in the hall of fame for as well. Life is more enjoyable when you do that.
Ryan Swehla:
Yep. And sometimes, it's just a little effort that makes a big difference in that person's trajectory.
Joe Muratore:
Especially as investors, we're in the business of doing things now for a payoff in the future. And even as we invest in other people, a lot of times that payoff isn't directly for us. That's an investment in the future, and that's tremendously gratifying.
Ryan Swehla:
Yep. Yes. Speaking of Ali Nadini, we started working with him back when we were working with Steve Ensley, for 15 years earlier. And who would have thought that today, we would be doing the kind of transaction volume that we're doing with him? Who would have thought that he would be doing that?
Joe Muratore:
Well, 15 years ago, he was a junior on a brokerage team, and we were juniors working with a client.
Ryan Swehla:
I reflect on that a little bit to think that people move in and out of your life and you don't know what connections will transcend into future opportunities. And I think there's an important point there which is number one, treat everybody well because you never know when that relationship will come back around in some other way.
Ryan Swehla:
But the other thing that I recognize is planting those seeds as Ali mentioned earlier in his podcast, planting those seeds, it takes time. And developing those relationships takes time. You can have a very short term outlook that inhibits your ability to grow, but being willing to develop relationships and start conversations that may take years to translate into opportunity, it's the investor long game versus the short game.
Joe Muratore:
I think when it comes to relationships, I tend to approach life with the idea that you hold things loosely. Nothing is owned. There will be relationships that come in and out of your life, and I'm not talking about my wife or my kids, but with regards to my business career. There will be themes where a group may come together for a while and it works really well, and then interests diverge or capacities or capabilities or visions, the world diverge.
Joe Muratore:
Those can come together and come apart as is appropriate. So on the one hand, you don't know who you're going to be working with, but on the other hand, you need to be open to working with people that you don't work with now, and to finding new relationships and to seeing where that might take you. And I think that's really important. You can't hang on to things tightly.
Joe Muratore:
I often think that what got you to here won't get you to there. And so it's a mix of both celebrating the past and allowing the right parts of that to continue with you, and also being open to what's next and where you should be headed. So back to Ali as an example, right at this moment, we're doing a lot of work together. That's really exciting, and I plan for that to continue. And I also look for other relationships where we can add value and where value will come.
Ryan Swehla:
I think that touches a little bit on that phrase of luck is when opportunity or preparedness meets opportunity. The inflection points that we've talked about in our business while there is a person or a circumstance that started that off, it also was our willingness to step in and do it that allowed that to flourish. So I think as people who are listening in here think about their lives, the willingness to step in and try something is a really important part, I think of business and of finding opportunities in life.
Joe Muratore:
Well, there's small apartment buildings, like we started with, with two inches of sewage that need to be solved in life, and there's a 100 million dollar problems that need to be solved in life. In this life, there will be someone to fit every piece of that. And one thing I've enjoyed about our trajectory is each time we've solved one issue or another, we've elevated the next level and said, "All right, how do we solve that next thing? How do we solve that next piece?"
Joe Muratore:
And this year and next year, I think we'll solve a 100 million dollars worth of buildings and beyond that. But as we build our aptitude and ability and vision for that and team that can do that, it's been a joy to step up and keep moving to that next thing. And being able to add value at that next level.
Speaker 3:
Thank you for listening to Durable Value: An Investor's Podcast, where we demystify commercial real estate with safe, sound investment strategies to help you balance your portfolio.
Speaker 3:
If you enjoyed this podcast, be sure to rate it on iTunes or wherever you get your podcasts. To learn more, visit graceadapartners.com where you'll find more information, investor's tools, case studies and more.
Speaker 3:
This podcast is hosted by Joe Muratore and Ryan Swehla. It's produced, edited and mixed by Melodic, with intro music by Ian Post. Thanks again for listening, and we'll see you next time.