Development: What attracted you to a career in commercial real estate?
Peter J. Cocoziello: After graduating from Penn State University as a finance major, my ambition was to pursue a job on Wall Street. With very few positions available, I made the decision to go into commercial banking. As a lender, you are a constant analyst in market trends and financial positioning of businesses. This proved to be worthwhile, and, in the process, I obtained knowledge of real estate investment trusts (REITs). In the mid-1970s, we were providing back-up lines of credit to REITs. When the commercial paper market was decimated, all these lines were taken down, and we ended up with a substantial portfolio of distressed debt. After three years in banking, I was offered an opportunity to work with an advisory firm to help banks analyze and dispose of these assets. In this new position, I traveled nationally — learning how these transactions were completed, and taking part in many syndications and sophisticated restructures. After four years of traveling more than 350,000 miles annually, I made the decision to break out on my own and started Advance.
Development: How did you start Advance Realty Investors?
Cocoziello: I wanted to develop a 14,000-square-foot office building and only had a $5,000 land deposit. The purchase of the land was contingent on getting site approval. I didn’t have the money to close on the land, but I did have a relationship with a man I worked with at the bank. He operated a business and was looking for office space. That’s where building relationships comes into play. He helped me and in turn became my partner in the building. I was able to secure a construction loan and began building the project. The contractor hired was my business partner’s friend. While under construction, we learned that there were massive flaws in the foundation. My partner said we had to tear down the foundation and start over. Our problems didn’t end there. The contractor on the job suffered a heart attack and was unable to continue the project. That’s when I left my job and became a contractor/developer. The project was finally completed and the building was rented. I had a building and a cash flow of $9,000 a year, plus a $5,000 management fee. I said to myself, “If I could do this 10 times — no matter how difficult it was — I could make $150,000 a year.” That was a lot of money, and that is what I set my sights on — a realistic goal.
Development: When you started the business in the late 1970s, interest rates were around 21%. How did you survive those times with a new business?
Cocoziello: In the late 1970s and early 1980s, the real estate industry was hit with a huge downturn. It was a crazy time, and no one was lending money. If you had loans at that time, 20%-21% was the floating rate. Times like those make you humble. More importantly, it taught me how to structure my time and transactions to maximize cash and stay in existence while still trying to build an organization with people.
Development: You survived and went on to build a multi-billion-dollar company. To what do you attribute your many years of success?
Cocoziello: Developing my own personal mission statement and guiding principles. My personal mission is to live, to love, to learn and to leave a legacy. It is about the hope of making the world a better place before I exit. I prioritize daily and to this day, I keep a piece of paper in my pocket that’s got five or six important objectives that I need to accomplish. It’s amazing to realize that if you remain focused and concentrate on your major goals, they are likely to come true. I work on these objectives every day. Additionally, the real key is integrity. After all, my word is my reputation, and my reputation was built on transparency, honesty and respect.
Development: What does leadership mean to you?
Cocoziello: Leadership starts with a purpose. I need to make sure that my actions align with my mission and values. If I do that, I create the most happiness. When leading others, I know what my engagement rules are, and I always look for mutual trust and respect. As a leader, you can’t just talk the talk; you must walk the walk and support others in their success.
Development: What is your primary role as CEO at Advance Realty Investors today?
Cocoziello: My primary role is vision and strategy. I operate the company using OKRs [objectives and key results], and I set those objectives and key results using my experience from many years in the business. The other part of my job is mentoring and supporting others in client relationships.
Development: What qualities do you look for when hiring senior leadership?
Cocoziello: I look at how people establish their values and how they look at life. I like to test that. “OK, these are your values. Demonstrate to me what actions you have taken to make sure that you are utilizing your time efficiently.” The most important thing with a new hire is to match the candidate’s skill set with the culture of the company.
Development: You have a reputation among peers as a leader who has developed trust with clients, communities, business partners and your own employees. How do you as a leader accomplish this and maintain it?
Cocoziello: Mutual respect and trust. At Advance, we need to constantly be brutally honest with each other, and we need to make sure we have common goals and that we act with integrity. We embrace change and adapt quickly. I share our beliefs with investors and others so that we create common goals. I share our objectives with clients so that we know and they know what drives us and determines our success. We must meet those goals, and we are accountable to each other for results.
Development: You have successfully brought the next generation into the business. Do you have any advice for others who wish to bring their family members into a business?
Cocoziello: People often underestimate how much work it is to integrate family members into the business. It doesn’t start the day they decide that they want to work for the company. My three sons wanted to be in the business. There were many discussions about our family values, and we even looked at a family constitution. That is how we would engage with each other. We then looked at how we would have the best chance of success. It came down to education and experience. My sons had the privilege of Ivy League educations for their undergraduate degrees. I felt it was important for them to be out of school five years, earn a master’s degree and have some work experience before the company would hire them. As they came into the business, each had a different skill set. This allowed them to work in different areas of the company and collaborate very effectively with one another and the rest of the team.
Development: How do you resolve internal conflicts or mistakes at the company?
Cocoziello: I look at the space between stimulus and response, which is intelligence. That is, when we have a bad situation or an issue within the company, we can say, “OK, I know what the results are. What did we do from an intellectual capacity to make the decision that we did?” That starts a discussion, and the goal is to create a learning experience so that we don’t make the same mistake twice.
Development: What is the best advice you have been given over the course of your career in real estate?
Cocoziello: The best advice I received was from a former NAIOP president, Frank Visceglia of Federal Business Centers in New Jersey. We worked together on projects at NAIOP’s New Jersey chapter. He said to me one day, “Peter, you are working like an animal, you have 10 projects going and you are constantly running. What you need to think about is doing three or four projects well with more of your own capital. Then you will be able to control your own destiny better.” At first, I rejected the advice because I needed to bring in more fees. But I ultimately took his advice and have used it consistently over the years. I ask myself if we are controlling our own destiny or not. If we are not, can we understand the repercussions of not doing so? I have always used that advice as a benchmark test in making significant decisions.
Development: What crucial lessons have you learned during the time you have been in the business?
Cocoziello: The greatest lesson I have learned — once again from Frank — is to never be overextended. And being overextended is not just about money; it’s also about your skills and time. You must control being overextended in a way that aligns with the mission and plan of the business, as well as your personal life.
Development: How do you like to de-stress during your off hours?
Cocoziello: I have a very supportive wife of 42 years. We just took a three-week journey to Italy and on that trip, we talked about how great it is to be at this stage of our life and to have the kind of close relationship that we maintain. I have a cliché that I use for my leisure time — the 40-40-40 Club. I want to ski 40 days a year, I want to shoot and hunt 40 days a year and I want to play 40 rounds of golf a year. We spend time with family and friends and never take our life for granted.
Ron Derven is a contributing editor to Development magazine.