It is undeniably real estate when one talks about the weightiest industry that can change fortunes and keeps bouncing back stronger after every setback. But mind you, it isn’t for the faint-hearted to venture into it and tame the bull by its horn. Only those with agility combined with patience and a mind that works faster than a calculator could etch their names as real estate business practitioners. Paul Zeller, Chairman & Founder of Zeller (zeller.us), is one of them. His brainchild, Zeller, needs no introduction, just like the creator. And as you read on, it will unfold his uplifting journey and what it took to reach where he is today.
Success is measured and defined differently by a leader and a follower. Paul’s pertinacity has helped him become one of this year’s top 10 most ingenious CEOs. He defines success less as something one can attain for oneself and more as a desirable state reached when one can contribute meaningfully to an organization or team. He considers carrying out the Business Plan hinges on one’s responsiveness, foresight, and credibility. Each project has its own Mission Statement, Primary Excellence Goals, Objectives, and Implementation schedule, all embodied in a formal Business Plan. The key to success is maintaining focus, checking in regularly to see how one is doing compared to his goals, and adjusting as needed to account for any shifts. Paul is the embodiment of intelligence, dexterity, and eloquence. We wholeheartedly concur that this savvy businessman is “transformative.”
He is a man who reads between the lines and doesn’t downplay words, especially the ones said by legends, philosophers and celebrated personalities. Paul is an innovative thinker who can assess situations swiftly and take calculated risks. He epitomizes the term “accomplisher.” He recognizes that fate will inevitably play a part but chooses to focus on the now. He firmly believes in General George S. Patton’s words:
‘A good plan violently executed is better than a perfect plan executed next week.’
Paul, has it framed in the office to stay motivated. It helps him in keeping a structured schedule for his company.
Zeller’s back story and zeal
Paul reveals that his company, Zeller, was founded so that he could expand the kind of income properties he invested in beyond what his previous partnership had allowed. With diversification, investors might spread their money out among multiple types of investments, reducing their overall exposure to risk. The idea was to be as in sync with Private Capital as possible.
According to Paul, Zeller is a “vertically integrated, full-service income property investment and development company,” focusing primarily on office and residential real estate. What they have made, they believe, sets them apart. Their foremost responsibility is to ensure the safety of investor funds, which necessitates a regular review of the Business Plan. At Zeller, they try to make modifications if they notice a shift in the investment or competitive landscape. The association also emphasizes the economic benefits of high-quality building design. Zeller aims to find the most effective Capital Plan and the most appropriate architectural answers.
Initial challenges and strategies to overcome
Growth in a business can be a double-edged sword. While most of us desire nothing more than for our companies to expand smoothly, there are always many inherent initial obstacles that delay the process. These challenges can be perceived as roadblocks to ongoing corporate expansion. Paul divulges that the initial difficulties and setbacks resulted from dislocations, recession, and instability. Zeller has seen some lull stretches throughout the company’s almost four decades of existence. Recollecting them, he informs:
“We have had several periods in the company’s 35-year history where we made no new investments, periods of 2 and even 3 years, as conditions were not right.”
Initial challenges resulted from dislocations, recession, and turbulence as the decade of the 1990s opened. Over time Paul and his team learned to address these challenges, preparing for as many conceivable obstacles as possible and overcoming them.
The challenges facing the real estate industry and capital markets today in 2022 are of a magnitude not previously encountered, given the confluence of rising interest rates, global deleveraging, and the open-ended question of office utilization. This confluence of forces will require an unusual degree of trust and creativity, which the Firm is keenly focused on.
Paul’s push for Zeller’s growth
Paul considers that successful expansion results from careful planning and a slight intervention of good fortune. Correctly said, ‘Luck favours the well-prepared.’ Paul has worked hard to reserve the personnel and financial means necessary for navigating extreme current capital market dislocation and global deleveraging. He has also had the incredible serendipity to come across suitable expansion prospects. It was under Paul’s competent leadership, the Zeller team pursued growth outside its comfort zone but within parameters that capitalized on the people’s strengths and the financial resources they had collected and acquired.
Zeller’s “code of practices” to stay afloat!
According to Paul, the most challenging component of every business is the sheer intensity of competition. The success of Zeller is a result of meticulous attention to the suitable appetite that has provided their capacity to digest. They’ve never intended to be the largest company in the world, only a dependable one that other businesses can model their practices, policies, and priorities after because of their consistent emphasis on the needs of their clients and customers. Any company can achieve growth with such as solid foundation.
The aha moment for Zeller as a brand
Recessions are part of the usual ebb and flow of the economy, just like the seasons. And just as any time of year might bring forth unusually severe weather, running a company during a downturn can provide its own set of difficulties for both management and staff. However, it was through hardship that Zeller developed resiliency, weathered recession, and emerged more potent in the next economic upswing. This resiliency will once again be tested in the current environment.
Paul explains that their persistence during economic downturns demonstrates their viability as an idea, purpose, and long-term strategy. They were able to survive the economic downturn of 1990–1991, as well as following downturns, and eventually became a successful brand. According to him, one must work to maintain a brand rather than merely establish one. Zeller has invested more money to weather the current economic downturn and remains dedicated to its customers.
Thoughts on real estate’s shifting landscape
In Paul’s opinion, the most challenging issue is the constantly changing environment. As the only constant, change must be welcomed and fostered. The merger of institutional actors vs. independent business owners and the modification in the Tax Code are the two most significant changes in the commercial real estate industry, which may be cause and effect. The development of REITs, Funds (debt and equity), and Institutional Money Managers (domestic and foreign) has profoundly altered the strategic and tactical environment. IRRs vs. MOIC drive transactions; Fund Holding Period Terms vs. Best Time to Transact; Strategic Asset Allocation Models and Rebalancing Requirements vs. Specific or even General Characteristics of Total Range Investments vs. Strategic Rifle-Shot Investment of a Small Group of High-Performance Opportunities. And because of the revisions to the tax code, many of the remaining attributions of the code that are permitted for taxable companies need to be addressed or considered, which causes a misalignment between institutional capital that is tax-exempt and private entrepreneurs’ tax-sensitive capital. The Funds’ significant usage of Subscription Collateralized bank lines of credit has worsened the imbalance between the Funds and Private Entrepreneurs in terms of an actual net effective return on investment.
Here, Paul quotes John Maynard Keynes, who said, “The Avoidance of Taxes is the only Intellectual Pursuit that still Carries any Reward.”
CEO and Founder’s roles and responsibilities
Being successful means having commanding clout and authority but also more layered and convoluted duties. Paul Zeller’s professional life is no exception. A line from The Drummer (5:1, Act V, 1716) by English poet Joseph Addison has guided him throughout his professional life. According to the phrase, “There is nothing more requisite in Business than Dispatch.”
Swearing by it as his mantra, Zeller divulges his job description as the company’s Chairman and Founder:
“My primary role is to assist in crafting policy, strategic targets, knitting of relationships, infusing energy and then getting out of the way of execution. But prompt execution as fast as possible is a lost commodity in business today. Perhaps a casualty of not working in the office, and this needs to change. It is a ‘Best Practice,'” briefs, Paul.
Thus, he is a hands-on leader. The most crucial part of his job entails assisting in formulating policy, strategic goals, and interpersonal bonds while injecting energy and stepping back from execution.
Secrets of Team Zeller’s inspiration, integrity and innovation
According to the Chairman, spotting, recognizing, and recruiting individuals who love hard and intelligent work is the key to keeping employees motivated. He elaborated that they practice open communication. There is also tough but fair bargaining, and the focus is on the long-term goals of their families through the pursuit of personal wealth. The trick is to hire people who need to give a 100% before they consider themselves successful. In addition, the entrepreneurial spirit and high energy levels typically associated with real estate tend to draw people who like to take the initiative. As Paul puts it,
“The key is finding individuals who must finish the job 100% to be satisfied. Real Estate also attracts a certain more kinetic energy person who is a self-starter.”
The task doesn’t end there. Finding the right talent is one side of the coin. The other side highlights the ability to keep the talented team true to the company and swearing by veracity. “Integrity is only maintained by calling out the BS and less admirable conduct hard and fast; be with our program or be out.”
Rather than accepting things as they are, the Zeller team encourages people on the front lines to share their ideas on how things might be done differently, better, and more efficiently.
Here, Paul recalls a quotation from German poet Johann Wolfgang von Goethe that his grandfather gave him when he went to college. The lines read:
‘Lose the day loitering, ’twill be the same story.
To-morrow, and the next more dilatory,
For indecision brings its own delays,
And days are lost lamenting o’er lost days.
Are you in earnest? Seize this very minute!
What you can do, or think you can, begin it!
Only engage, and then the mind grows heated.
Begin it, and the work will be completed.’
He has clearly demarcated strategies for each aspect, and this approach streamlines the functioning of the firms. Talking about novelty, he breaks it down and says:
“Innovation comes from the bottom up. So, we work to encourage those people on the firing line to tell us what we can do differently, better and more efficiently, rather than accepting conditions as-is -The Zeller Way.”
What’s in store?
Paul mentions it as ‘Different and Same.’ The same careful research, tough but fair negotiations, and priority on the client are maintained despite the shift in emphasis from products to geographies to financial structures. Because Zeller is an investment firm, the capital it co-invests with is its clientele.
What makes this brand different is its emphasis on more traditional values like “pride in work,” “hard work,” “fair deals,” and “integrity in promise and conduct,” all of which have equal importance because both parties must benefit from the transaction.
Paul’s words of wisdom
Leadership entails more than just taking charge of a group. A leader steers the ship, fires up the troops, and constructs the blueprint for success. For aspiring leaders, Paul Zeller advises:
“Be impatient with poor results, unfinished work, faulty logic, or strategy, but make this a coaching moment, not a tantrum session. Define the customer or client, and do not lose sight of the service to this person(s).”
One must ensure that each party walks away with something from the negotiation or transaction; he suggests they must try to find a middle ground. One should not be shy about being open and honest. Paul sums it up by saying,
“Be brutally direct and candid. Don’t waste time beating around the bush. Have fun or change jobs.”