The president of a major global real estate services firm with 16,000 professionals operating in 66 countries offers his perspectives on balancing company culture and growth and the prospects for the commercial real estate industry going forward.
Development: How did you get interested in real estate and achieve your position at Colliers?
Taylor: I was working in the electronics industry and living in Switzerland. The company promoted me in 2000 while also moving its headquarters, and me, from Chicago to Detroit. I wanted to move back to Chicago. At that time, Jones Lang LaSalle, which had just been formed through the merger of LaSalle Partners and Jones Lang Wootton, had embarked on a strategy to bring people who didn’t have a real estate background into the industry. The company saw the industry becoming more global, and was looking for MBAs with global experience, preferably global account management experience. I started with JLL, then moved over to Colliers, where I was hired as U.S. CEO and subsequently promoted to run the Americas. I was further promoted to global chief operating officer, and now I am president of the company as well.
Development: As president, what are your core areas of focus?
Taylor: We are a newly minted company, having gone public last June. As a result, my key focus area is growth. In that context, I am focused on Asia right now. We see that as the next great frontier for growth in our industry.
Development: What special challenges do you have leading the company?
Taylor: From where I sit, it is balancing the scale of a large, multi-billion dollar company with the history and the culture of Colliers, which I consider a very special organization. When I was in my 20s, I would hear business leaders drone on about how business is all about the culture and getting the people aspect right. I remember thinking at the time, what a huge oversimplification that is of what it means to be a successful organization. I have since learned that having the right culture and the right people focusing on the how, not the what, is what it is all about. It is a big, ongoing challenge. We have 16,000 employees and operate in 66 countries, so preserving the culture and balancing all of that with the size and scale of the company is the biggest challenge.
Development: What qualities do you look for when hiring senior staff?
Taylor: There are really four “headlines” for me: honesty, integrity, hard work and what I call a “can-do” attitude. You could call that “can-do” attitude optimism, but it is not Pollyannaish optimism. Rather, it is a “we’ll figure it out” type of mentality. No matter what challenge we encounter, we will overcome it. Honesty and integrity are the show-stoppers. If you don’t have them, you are disqualified. I think the other two are essential to be successful, and the more of those qualities you have, the better. If you have them in abundance, there is no upper limit to the positive things you can do.
Development: What market or economic data do you review on a regular basis to stay on top of your industry?
Taylor: I have the privilege of being the vice chair of the World Economic Forum’s real estate council. In that role, I review a lot of economic data and original research from around the world. At Colliers, we also have several chief economists, top-notch research and expert brokerage professionals on whom I rely. For me, there are really only two things that matter at the end of the day: employment, specifically how many people are working, and the spread of cap rates over the 10-year U.S. Treasury bond, which is essentially the premium above the risk-free return that real estate generates. In my mind, those are the two things that drive occupancy and investment returns and, therefore, the two factors that I closely monitor.
Development: Are you seeing signs of demand letting up? If so, in what locations and for what product types?
Taylor: In the U.S., it is multifamily, where I have seen supply really matching demand. Other than that, the U.S. looks solid, at least in the near term. We are seeing a slowdown in Asia; China, in particular, has become much weaker. Then there is the U.K. We are seeing a pause there; I don’t think it is a slowdown yet. The so-called Brexit — Britain’s potential departure from the European Union —has people somewhat nervous.
Development: Are certain markets being overbuilt today?
Taylor: The obvious one is China. In the U.S., it is primarily the energy markets. Houston is probably somewhat overbuilt, given what is happening in energy. Some of the energy markets in Canada, such as Calgary and Edmonton, may be overbuilt as well. Other than that, the markets seem remarkably in balance, considering the run that we have had in the U.S. I do not see us in a general overbuilt situation.
Development: Over the next 18 months, what challenges and opportunities do you see for your business?
Taylor: In the general economy, there is uncertainty over the upcoming U.S. elections, over what they will mean for interest rates and for the largest economy in the world. With respect to Colliers, we are incredibly optimistic, and we will continue to execute on our strategy, which is to grow our business faster than industry growth rates and supplement that growth with strategic acquisitions. Right now, we are doing roughly one transaction every seven to eight weeks on the acquisition side. We have maintained that pace for quite some time and do not anticipate that changing.
Development: Looking out three to five years, what do you see on the horizon that will impact your business? And what you are doing now to prepare?
Taylor: The most obvious is technology. Technology is playing an increasing role in our industry, and we at Colliers are keenly focused on the impact of some of the technology platforms. We have invested in or partnered with some firms to make sure we know what is happening within the disruptive technologies in the industry.
Another aspect is coworking: the rise of coworking models like WeWork and the like. Fundamentally, work habits are changing. Millennials and the generation coming up right behind them do not envision work as rows of offices. That is not the way they want to work. They see that as an outdated model.
We are also spending a great deal of time working to understand millennials. We have published a lot of original research on this influential group to analyze how they work and think so we can anticipate their demands because, obviously, they are our future clients, and the employees of the clients with whom we currently partner. They are also our future recruits and shareholders. We want to make sure we have the right models to service the millennials going forward.
Development: How has the industry changed during your career?
Taylor: I have seen it become more of a professional services industry, which was one of my ambitions when I first got started in real estate. I perceived that real estate was an industry that would benefit from more professionalism, more sophisticated client delivery methods, better knowledge and greater expertise. I am passionate about elevating the industry to more of a professional services model, equivalent to investment banking and management consulting. I am proud of how the industry has evolved.
The second change is scale: the leading companies have become dramatically bigger since I got into the industry. We now have the “Big Four” companies in our industry. I think that they are all Fortune 1,000 companies; one is a Fortune 500 company. I anticipate that five years from now, all four will be Fortune 500 companies or perhaps even larger. So the scale is a dramatic change.
Development: What is the most valuable lesson you’ve learned over the course of your real estate career?
Taylor: For me, grit, hard work and determination trump everything else in this business. Real estate is a classic pull-yourself-up-by-the-bootstraps industry. It’s an industry in which, if you are really determined, work hard and treat people well, you will be successful. That is still the case, making real estate different from a lot of other industries today, which are more institutionalized regarding career paths and the destiny you can create for yourself. Real estate is unique in this regard.