Connect with us

Real Estate

How The Breakup Will Affect Their Business Empires




Alex Rodriguez and Jennifer Lopez are major players in sports, Hollywood, music—and investing. What does the A-List break-up mean for fortunes?

Alex Rodriguez and Jennifer Lopez have officially called it quits, splitting up one of the world’s richest power-couples. The pair, who started dating in 2017 and got engaged two years later, wielded a pop-culture and commercial influence that rivaled other dynamic duos like Jay-Z and Beyoncé, and (while they were still together) Kanye West and Kim Kardashian.

J. Lo, 51, is one of America’s wealthiest self-made women with a net worth of more than $150 million from her music, film, and endorsements. Over her decades-long career, she appeared in nearly 30 films, has dropped eight studio albums, staged a series of world tours (her 2019 tour with stops in Egypt, Israel and Russia grossed $55 million) and earned money from a Las Vegas residency. She has also pulled in millions a year from endorsements from such brands as Versace and DSW.

A-Rod, 45, one of the top earning athletes ever, has amassed a fortune of at least $400 million based on Forbes estimates.  Rodriguez has used his star power, network of billionaire business leaders, and roughly $130 million in take-home pay (after deducting taxes, fees, and A-list spending and before compounded interest) to build A-Rod Inc—a sprawling portfolio with stakes in tech start-ups, trophy high-rises, construction firms, hospitality companies, and thousands of multi-family homes. “I came from very little,” says Rodriguez, whose family was often pushed out of apartments by rising rents. “I remember as a young boy, getting down to my knees and praying that one day, I would trade places with the landlord.”

Together the celebrity duo had started investing their astronomic earnings into a branding, real estate and investment empire that, if the relationship had held, could have made them America’s latest billion-dollar power couple.  “Alex made me realize as an artist, I was a scarce asset and the business world was searching for people like us so they can build billion-dollar businesses,” Lopez told Forbes in December. “He got me comfortable with investing my own money into other companies and into myself.” That includes skin care line, JLo Beauty, which launched in January online and at Sephora.

The romance is over, but A-Rod and J. Lo’s fortunes are likely to continue to boom on their own in the current frothy markets. The couple has joint investments beyond JLO Beauty including luxury real estate and venture-backed start-ups. Two early tech companies, in which they invested together, went public earlier this year, insurance company Oscar Health and telehealth startup Hims & Hers Partners, in whose ads she appears (A-Rod says he put $5 million into the latter, which is now worth nearly $13 million).

But the bulk of their portfolios are largely separate and focused in different areas (J.Lo in music and endorsements, A-Rod in real estate and tech). And because they were never married, the business split is simpler.

A-Rod, for one, isn’t missing a beat.  This week, before the break-up news hit Hollywood, Rodriguez shocked the sports world, announcing that he and founder (and former Walmart executive) Marc Lore were in talks to purchase a majority stake in the NBA’s Minnesota Timberwolves in a deal that would value the team at $1.5 billion.  (He and Lopez led a group of investors in an unsuccessful $1.7 billion bid for the New York Mets last summer.)  

In February, he listed his own SPAC, Slam Corp, which he started with hedge fund founder Himanshu Gulati. Investors gave Slam $500 million—and free reign to invest the cash in whatever business it wants. Rodriguez is Slam’s CEO and, in the strange calculus of SPAC structure, stands to reap significant equity shares (without risking much capital) if Slam finds a company to buy.

Rodriguez realized early on that he needed to start investing.  “Your baseball career will take you to your mid-30s, if you’re lucky. While you’re old on the baseball field, you’re a kid in the business community,” says Rodriguez, who, following the lead of many MLB team owners, has plowed his earnings into investment properties. “I loved that as your playing career winds down, your real estate should be appreciating.”   

For advice, he leaned heavily on other sports and business moguls, like NBA great Magic Johnson. “Alex was the first athlete I met who really committed to be a great businessman. He was really serious so we clicked right away,” says Johnson, who made a fortune investing in sports, food, entertainment and real estate. “It’s funny how we’re so much alike. We don’t gravitate towards mediocrity. We want to be the best so we get with the best and do what it takes to get into those rooms with powerful people that have accomplished things we aspire to.”

On road trips with the Rangers and Yankees, Rodriguez would reach out to the most powerful people in the city. “Magic taught me that when you go into all these cities, pick up the phone to see [if] the top business folks in town will meet you for lunch and you’ll be surprised at how many people will say yes,” says Rodriguez. “The trade was pretty simple. They taught me business. I taught them baseball. It was a good currency exchange.”

For two decades, A-Rod collected business mentors the same way fanboys accumulate sports memorabilia. In 2000, after learning that Berkshire Hathaway had insured part of his record-breaking $252 million contract with his then team, the Texas Rangers, A-Rod cold-called Buffett’s longtime assistant Debbie Bosanek. “I said ‘It looks like Warren and I are in business together,” says Rodriguez. The call launched a twenty-year long friendship.

A-Rod laughs when recalling how he wrangled his way into White Sox billionaire owner Jerry Reinsdorf’s office dripping in sweat, dragging orange dirt from the field behind him and still wearing his metal cleats after batting practice. “First of all, I probably smelled terrible,” says A-Rod. “Second, we never talked about baseball—it was all business.” 

A-Rod impressed Reinsdorf with his early portfolio and eagerness to learn. “He had been acquiring a lot of apartments in Florida and I told him the sunbelt was a good market,” says Reinsdorf.  “I also told him he should try to acquire his assets relatively in the same geographic region so it’s easier to manage.” 

Rodriguez says there is one lesson he still follows. “Jerry said ‘Alex, if your occupancy is at 99%, your rents are too low; 88% means rent is too high. You should always be dancing around 95%.’ And that’s been our policy over the past 15 years.”  

There’s also an eagerness to teach himself the ropes. “In all the years I’ve known him, Alex has never shown up for a meeting without a notebook and five minutes after he leaves I always get a follow up with a to-do list,” says Mary Callahan Erdoes, CEO of J.P. Morgan’s $3.8 trillion asset and wealth management division.

A-Rod has plowed much of his energy and money into real estate in now red-hot southeastern Florida.  Since inception, A-Rod Corp. has amassed a stake in more than 14,000 multifamily residential properties and developed more than 15 million square feet of real estate. The majority of the investments run through Monument Capital Management, which Rodriguez cofounded in 2012 to focus on multifamily developments. Monument’s playbook is to buy properties at a 15% to 25% discount, fix them up with its own construction team and, after years of appreciation, sell for a profit. 

“The thing that people don’t see is Alex has a relentless pursuit of being the best. It’s one thing to want it, and another thing to accomplish what he has already done.”

—Jennifer Lopez

It has since launched four funds, which hold properties worth at least $270 million net of debt, according to data provider Real Capital Analytics. Rodriguez won’t disclose how much of his cash he’s plowed into Monument’s funds, his stake in the firm or the company’s fee structure, but others say he’s hitting it out of the ballpark. “He convinced me to invest in his real estate funds, which have had incredible returns—amongst the best of anyone in the space,” says hedge-fund billionaire Daniel Loeb, who Rodriguez met at Art Basel in Miami over a decade ago.

Says billionaire Jonathan Gray, the COO of private equity and real estate giant Blackstone:  “It’s clear that he has this attraction to real estate and a very good instinct to do a lot of it in rental housing where there’s been a shortage of quality housing.” 

The cash flow from Monument has built a foundation for flashier bets. A-Rod has more than a dozen strategic joint ventures including deals with billionaire real-estate financier Barry Sternlicht of Starwood Capital, property management firm Stonehedge and Miami-based CGI Merchant Group. For the CGI deal, which was announced in mid-December, A-Rod is using his starpower to help raise $650 million to buy and develop hotel properties in white-hot Miami and other locales. (It recently announced a $30 million investment into Atlanta’s Morris Brown College with plans to convert it into a luxury hotel and training center).  

While he’s hung up his bat for good, A-Rod remains as competitive as ever. “The thing that people don’t see is Alex has a relentless pursuit of being the best,” Lopez says. “It’s one thing to want it, and another thing to accomplish what he has already done.”

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Real Estate

Seven Steps To Running Your Real Estate Business On Auto-Pilot



Architect working on computer in office

Kevin is the Founder of Marker Real Estate, an innovative firm with a transparent, inclusive, client-focused strategy.

If you grew up in the 1990s as I did, you might be familiar with a video game called Cruis’n USA, an auto racing game with multiple checkpoints. I once heard someone compare Cruis’n USA to running a business. 

In the game, each checkpoint has a time limit. If you don’t reach a checkpoint before the timer hits zero, the game ends, and you’re out of the race. Business is similar. There are checkpoints (business goals and objectives), and you have to reach them in time. But how do you navigate your way through multiple checkpoints as easily and quickly as possible? 

Here’s how to put more of your work on cruise control so you can fly through your checkpoints faster than ever before. 

1. Choose one CRM and use it religiously.

Choose one customer relationship management platform (CRM), investigate its features and customize it until you’re comfortable using it. Don’t worry about using all the features because it can be overwhelming. I focus on notes and task reminders.

There are lots of CRM options on the market. A good one will provide you with information from prospecting calls and assist with communications (e.g., auto texting, email drip campaigns, video messaging and follow-up scheduling). Also look for a platform with access to clear dashboards and analytics. Having a full line of sight on your past activity, current efforts and future activity is a must.

2. Automate communications with potential leads.

There’s a limit to what a single person can do, so if software can take over some of the repetitive, time-consuming work, let it. For example, every online inquiry we receive results in an automated text, email and live phone call. 

We also recently started testing a brand new software that uses artificial intelligence (mainly text and Facebook messenger) to communicate with prospects. In our case, we use it to answer buyer and seller questions like “What’s your price range?” and “What’s your time frame for buying?” The messages come from my account, so the client experience is seamless and it feels like they are talking to an experienced agent. 

3. Create a lead generation system.

The turnover rate in my industry is extremely high. I support my own agents and head off frustration and failure by providing them with quality leads. 

Whatever your industry, if you’re in sales, generating leads is essential. If you have employees, generating leads for your sales team is also crucial. The challenge is to constantly generate quality leads with the lowest possible investment. Thinking outside the box is the best place to start.

4. Make your first admin hire.

For office tasks that can’t or shouldn’t be automated, an administrative assistant will pay dividends. This person can process paperwork and manage HR-related tasks. With these jobs covered, you’ll have more time to step away or give your attention to dollar-producing activities. Also, a good administrator doesn’t just fill out forms. They also keep a finger on the pulse of the business, offer advice and alert you to problems.

Of course, some of us have a problem “letting go.” A good way to overcome this problem is by writing down all your tasks every hour for a week. Separate the tasks into two groups. Add all the tasks you want to keep to Group A. Everything else goes into Group B. Group B tasks will become the basis of your job description for an admin assistant. Depending on your workplace setup, also consider hiring a virtual assistant. They may be just as helpful as hiring someone to work onsite. 

5. Stay nimble and stay lean.

Managing a business is like a carnival act: It’s spinning plates while juggling chainsaws. You have to constantly stay on your toes and quickly move your attention and resources around. You also have to remain flexible and be prepared to take advantage of opportunities should they arise. Keep overhead low. For office space, use a small satellite office that is cost-effective. Also, rather than signing expensive long-term leases, make short-term arrangements. If consumer behavior dictates the need to “cut bait” at a given location, you’ll avoid being saddled with the expense of a space you no longer need. 

6. Take yourself out of production.

This step takes the most courage by far, and if you’re a control freak like myself, it may be the hardest thing you’ll ever do. But if you want to succeed, you need to give yourself the option of stepping out of production. If your business relies upon you doing all the deals, you won’t have time to automate and build an empire. 

7. Stay hungry.

Once you’re out of production, have leads flowing in and systems in place, it’s easy to get complacent. Things might seem good now, but you need to stay hungry. Costs might suddenly increase. Essential people on your team might quit. The market might shift. Stay alert and keep yourself sharp. Always be ready to jump back into the trenches if you feel the heat coming around the corner.

Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?

Continue Reading

Real Estate

How To Keep Your Business From Being Derailed By ‘Shiny Object Syndrome’



Woman working from home using laptop computer

President, Royal Lepage Connect Realty | CEO, Aligned Agent Academy, Top 50 Women in Canadian Real Estate REP Magazine.

From keeping up with multiple social media platforms to constantly changing algorithms and desiring to reach anyone and everyone in their market, real estate agents can get stuck in “shiny object syndrome.” I’m no exception — I’ve been eager to try every new marketing tactic that pops up in the digital world, too. But I often remind myself that just because it’s working for some people doesn’t mean that it’s going to be the right thing for me and my business.  

If you’re finding yourself constantly looking and comparing to see what others are doing, feeling the pull to jump on the bandwagon of what is new and hot or catching yourself wanting to make a change in brokerage/team because you’re not seeing the results you want, chances are what you’re experiencing is shiny object syndrome.  

There’s nothing wrong with exploring change and trying new things, but if they aren’t in alignment with your business and beliefs, they won’t do you much good. In fact, the end result might mean you end up derailed from your original goal. Let’s talk about what shiny object syndrome really is and how to align yourself when you find it happening. 

How We Get Derailed By ‘Shiny Objects’

Our brains are wired with mechanisms to keep us safe and efficient. When your decisions and actions are aligned with your goals, you experience ease and productivity. The problem with new, shiny objects is that your decision to act on them is usually driven out of impulsivity, which means you’re likely not working in alignment. Working in alignment with how your brain works best helps you to stay on track and achieve the results you want.

But we’ve all been there. You start your day with a rock-solid to-do list, only to find yourself scrolling through your phone wondering whether or not you should buy a greenscreen and start learning how to make Reels and TikToks. Before you know it, you’re caught in the web and instead of focusing on the pillars of your business that will help you achieve your goals, you end up with nothing to show for the time you put in. In the absence of clarity and focus on the goals that are meaningful to you, you’re easily distracted by shiny new objects. Is it you? Are you doing something wrong? Is it them? Are they really doing better than you? Maybe it’s a bit of both?

Grounding In Alignment

Here’s the thing. Everything works if it works for you. For long-lasting results, you have to ground yourself in what you want your career and your business to look like. When you feel pulled into the next hot thing, take a moment to ask yourself these questions:

• Where is your business headed?

• What operations systems do you enjoy?

• What marketing tactics do you enjoy?

• What social media platform are you most comfortable with?

• Where have you seen the most growth in the past?

Getting clarity on where your business is going is the most important. If you don’t have an end goal or vision, you don’t have a way to get there. You’ll be wandering aimlessly without a strategy. Once you nail down your vision, you can align any other systems or tools into your overall business strategy. This isn’t to say you’ll never change your tools or systems, but you should spend more time researching things and feeling out if they align with your strategy. If they do, you can implement them as part of your business plan at a later date, or delegate them when you hire someone. You don’t need to keep up with every shiny object out there. The latest thing might not be what you really need.

Clarity And Overcoming

So how do you get clarity and realize when you’re getting derailed? When you feel yourself getting pulled in a new direction, stop and ask these questions:

• What am I feeling right now?

• Am I feeling centered?

• Am I feeling grounded?

• Is this an opportunity for research or do I just feel pulled?

• Am I falling behind in my business, or just distracted?

• Am I comparing myself to someone else with no real basis?

If your answer amounts to anything other than “I am clear. This makes sense for my business,” you’re getting derailed. Take a moment and go back to the vision of your business. Confirm what systems and tools already align with your vision and feel doable for you. If the shiny new object does seem like it could fit into your business strategy and how you operate best, think on it and set a time to make a decision. With this method, you’ll stay on track with your goals and be intentional. It’ll make you a better real estate agent, and especially a better leader in the end. 

We can all get caught up in shiny object syndrome. It’s how we react, realign and get clear on our goals that matters. Separate the small success of a new tool or platform from the steady growth of businesses that have stood the test of time. There’s no magic wand to fix an issue in your business; it has to start with you.

Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?

Continue Reading

Real Estate

Can You Influence Your Own Luck?



House model and U.S. one hundred dollar bills on wooden background. Property investment, home loan, house mortgage, real estate concept

Andy Hochberg is the CEO and Managing Principal of Next Realty, a Chicago-based real estate investment and management firm.

More than a decade ago, I concluded that the adage “location, location, location” was outdated — apologies to its presumed author, Lord Harold Samuel. In the aftermath of the Great Recession, I made the case that other factors, specifically liquidity and luck, had earned their rightful place alongside location as key influencers for successful real estate investing.

Location will always be a critical component of any acquisition strategy. Without a good location, an investment could face insurmountable challenges. Liquidity is necessary for those times when unexpected capital expenditures may be required to fix a property defect or replace a relocating or bankrupt tenant. Finally, it never hurts to have a little luck on your side. Thus, the evolution of a new industry standard bearer: location, liquidity, luck.

Twelve-plus years later, the phrase is as relevant as ever. Yet in terms of investing, those three factors aren’t truly parallel, particularly when you consider control and predictability.

Real estate investors strive for predictability and control. It allows them to build and substantiate an investment thesis. Investors can control location by acquiring properties whose barriers to access limit competition or those that are directly in the path of progress. Similarly, savvy investors control liquidity, or at least take steps to make it more predictable.

Luck, however, is different. Luck is not a commodity to be bought or traded. Some contend you either have it or you don’t. I have concluded that while luck is unpredictable and cannot be controlled, there are things investors can do to be prepared for and enhance the ability to be a beneficiary of luck. Some of those things, based on an investment track record spanning more than 20 years, include:

• Being open-minded about potential solutions. Remember, unique times call for unique considerations. Evolve; don’t stay static.

Being visible and connected so that luck can find you. People aren’t mindreaders; you must be out there so people know you are an option.

• Adhering to your strengths and tolerance for risk. Don’t force things to influence your luck unless it is consistent with your core practices.

• Remembering the fundamentals. For all the evolving you and the market may do, the industry is cyclical; fundamentals will always be important.

Following are three examples of how our firm has created our own luck with these principles in mind.

Good and lucky with help from the government: There are scenarios in which good luck triumphs over bad. One of our assets had been leased for more than 30 years by a single tenant that ultimately went bankrupt. The 50,500-square-foot property occupied a premier location in the heart of one of Chicago’s well-established and highly sought-after residential neighborhoods.

While the property drew interest from traditional retailers, it also attracted the attention of the healthcare community, including one organization seeking to further establish a foothold there. A potential roadblock, however, was the pending potential merger between that healthcare provider and a competitor. We also understood that a governmental ruling could block the merger, increasing the importance and value of our property to the one healthcare provider. Luck was on our side: the merger was denied. Our site ultimately became the site of choice, and ultimately the flagship for a large healthcare system. We were open-minded and adhered to our tolerance for risk knowing that regardless of the merger, we had an attractive retail location.

Good and lucky with help from the tax code: One of the most successful deals we ever completed started with a +/-7 acre land acquisition in Alexandria, Virginia. The parcel was directly in the path of growth and progress, just ahead of a significant housing boom. The combination of the housing boom and the presence of a buyer with a need for a 1031 exchange — with limited time to complete the exchange — enabled us to sell the asset on favorable terms. In addition to a great site, we were visible and connected, which helped create a successful outcome.

Good and lucky with help from demographics: Sometimes the luck that happens results from the strategy you develop to overcome a potentially disastrous outcome. This may be best exemplified by the acquisition of a lifestyle center in Chicago’s northern suburbs. While fully occupied, our due diligence raised concerns over the future tenancy of the largest tenant, a national bookseller. We took a calculated risk, believing that we would be able to secure a new tenant with greater financial strength and stability to replace the original tenant. There were advantages and flexibility to the space as it offered a unique, two-story layout. Being open-minded about a potential solution, we helped shape the concept of medtail space in Chicago with a 40,000-plus-square-foot lease to a large, well-known healthcare provider within months of acquiring the center.

In the absence of certain levels of predictability and control — an increasingly common characteristic in today’s market — real estate investors need every competitive edge, and every bit of luck, possible. Just as you can’t predict when a large anchor tenant may have to file for bankruptcy and leave a significant hole in a property or portfolio, no one can tell when, out of the blue, a tenant comes along with a requirement that absorbs a significant block of space.

While luck can’t be bought or sold, investors should understand how they can influence it, or recognize the opportunities to seize it when it comes along. At the end of the day, sometimes success comes from being lucky rather than simply being good.

Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?

Continue Reading