CrowdStreet’s Darren Powderly is joined by Chris Mfume, Managing Partner at CLD Partners, to talk about how he broke into commercial real estate, why he decided to start his own business at 27, and what kinds of opportunities he sees in Baltimore and Washington D.C.
Darren Powderly, Co-Founder & VP Capital Markets
Darren founded CrowdStreet in 2012 after identifying the need to radically improve people's access to commercial real estate investments via technology. Over his 20+ year career, Darren has transacted billions of dollars’ worth of commercial real estate investments and enterprise software contracts. Darren is a driven leader who loves building relationships based on mutual success. In addition to building businesses, leading teams and advising a prestigious list of national clients, Darren has personally owned commercial real estate, syndicated investment groups and developed properties from the ground up.
00:00:03 Hello everybody. I'm Darren Powderly. Welcome back to StreetBeats. Uh, today I'm joined by Mr. Christopher Mfume, and I am really pleased to have Chris with us today. Chris is a managing partner with C l D partners in Baltimore, MaryAllander. Uh, Chris, tell us a little bit about yourself and, uh, just your story. Tell us how you got into real estate.
00:00:26 Sure, Darren, thanks for having me today. Um, I'd say my, uh, my interest in real estate really started when I moved to Washington DC following college. Uh, was working in the Navy yard, which is an area of that experience, just massive growth. It's the most dense neighborhood, residential neighborhood in DC actually right now. So I was able to see that firsthand and I decided that it was an industry that I really wanted to be a part of. I then went and, uh, persistently pursued, uh, the largest developer in my hometown of Baltimore, MaryAllander, uh, was a boutique firm, which was super important because I was hands on in the whole process. There was about a six person development team, total, 12 person company altogether. So following that, uh, at the age of 27, I went to go start my own company, uh, CLD Partners. And, uh, we partnered with, uh, local private equity investor who manages about a billion dollars worth of capital on our first projects. And that experience was really instrumental in broadening my understanding of the finance aspect of the business. I was able to really see the inner workings of how to make a deal, how to find a deal, and how to finance it effectively.
00:01:40 That's awesome. So it sounds like three, uh, main chapters of your career to date. Uh, let's go back to the first one. You mentioned persistence. I mean, obviously we wanna talk about, you know, entrepreneurship here. We wanna talk about some of the, the themes that, uh, allow or, or sort of, are necessary for entrepreneurs to succeed. And we definitely wanna talk about what it's like to be, you know, black in, in today's, you know, real estate industry in, in today's entrepreneurial environment. And, but yet, this was already a ways ago. So, so tell us a little bit about how you actually broke into the real estate industry, uh, through persistence and what that adventure was like.
00:02:18 Sure, yeah, it's, it's actually a great story. So I have been searching for opportunities in commercial real estate, and I got a ton of nos. Um, if you've ever talked to somebody about real estate development, it's a very high barrier to entry, um, business. One, because it's capital intensive, and then two, because you normally need a ton of experience in order to do it. So I wanted to go straight to development, and maybe it was hubris. I don't know what it was, but I thought I could get it done. Um, I got laughed out of a couple rooms, uh, but eventually I was able to find Michael. So the story is I went to an event, uh, that he was speaking at, I pulled him aside after the event. I told him I wanted to learn more about the business. Um, and I ended up meeting him in his office.
00:03:03 I walked through all the current projects he was working on, and I immediately just fell in love with it. I knew it was for me, I knew it was a perfect balance of creativity, um, analytical ability, uh, community relations. There's just so many different aspects of the business that the business touches. Um, that was interesting. Uh, you, you mentioned the African American piece. I think it's particularly close to me because I'm big on entrepreneurship. As far back as I can remember, I've always wanted to be an entrepreneur. Uh, and originally it was car dealerships. You know, as soon as I graduated from school, I started looking into that. I was like, nah, maybe that's not exactly who I want to do. And I Allander on real estate development and, uh, it's been a perfect fit.
00:03:45 What led you to decide to go out and, and, and start your own company at 27? I mean, obviously at a 27 year old you have some experience and you know, you probably, you know, feeling like you take on the world, but boy, that's a brave move at 27 years old. Tell us a little bit about what led to, you know, you to be able to make that move.
00:04:03 The way I've really structured my career is that I've mapped out successful entrepreneurs in the past. So I've looked at Steven Ross, uh, Sam Zell, Barry Sternick, uh, Don Peebles, um, Robert Smith, just a ton of entrepreneurs that I've really looked at how they've done it. That's what I did. And I started mapping out their journeys and I looked at, okay, how did they get to where, where they got to? And I started working backwards. So I said, if this is my goal, what do I need to do now in order to get to that point? What age did they hop out there? And I said, okay, 27 seems to be the age. Uh, Steven Ross is 27, Don People's 27. I said, I'm gonna do it at 27 no matter what. I'm gonna do it at 27. Um, so I, I decided to do it at 27 and, uh, kind of figure it out as I, as I went along. And it was worthwhile. I, I grew so much within that period, um, to really be able to get to the point where I am now, where I feel like I finally have a hold of everything and we can really pursue larger projects. So we're scaling up every project at this point.
00:05:07 Yeah, great, great example. What's it like developing in Baltimore right now? It's your hometown and you know, you've worked with, uh, some big developers in Baltimore, your se a sole proprietary at one point. Personally, I hear two stories, uh, kind of like, one is that there's great improvements going on. There's, you know, employment, you know, growth, uh, in, in certain sectors and industries, right? Uh, I hear wonderful things about Baltimore. And then, and then I also hear some of the, you know, obviously some of the more negative press. What's it like on the ground right now in Baltimore, identifying opportunities and taking the risk, uh, putting your own money to work as a developer and the money of, you know, some of your LP investors?
00:05:50 The big key to developing Baltimore, I would say is meds and ads. Our growth, our employment growth is really driven by our anchor institutions. And so what we try to do is invest as close to those anchor institutions as possible. The quality of life in Baltimore is unmatched. I lived in DC before this, and I actually just had some friends in d from DC down last night, and I took them outta the waterfront, really showed 'em around. They said, wow, I didn't know all this was here, and I didn't know this quality of life existed. I love it here. Um, I love urban life. I love being close to amenities. And that's another thing that we're really looking forward when choosing sites we try to develop in the path of progress. And the other great thing about Baltimore is that you can find really unique opportunities to buy Allander at a low Allander basis if you know the market.
00:06:38 Where do you see the, some of the opportunities, uh, going, going forward? Like what's, what's coming up next, uh, in Baltimore as well as with your business?
00:06:47 Sure. So we, we invest in Baltimore and DC right now. So we're, we're looking at both of these markets and I think that right now it's a little bit of wait and see in terms of newer projects. Mm-hmm. <affirmative>. So we are trying to understand really what Covid means. Luckily for us, um, all of our projects are development. And, uh, so we're talking about either 10 months or 24 months out between 10 and 24 months out. And so I do think that the world will look a lot different in 24 months.
00:07:19 Oh yeah.
00:07:20 I do not believe that sellers have adjusted their expectations on price based on what's going on. I've actually seen the opposite. So they've held their pricing strong, whereas all the buyers are looking for some type of covid discount mm-hmm. <affirmative>, um, when they're, when they're purchasing an asset. And I don't think that those two things will be aligned for another six to 12 months at least. Mm-hmm. <affirmative> within that six to 12 months. Though I am eager, eager, eager to find some opportunities because I do think that we were due for a correction. You know, COVID came along, but if you were following the market, you knew that we were there already. And so we started hunkering down way before that cuz we were expecting some type of down downturn. So we've, we've made sure all of our assets, one were bought at a great Allander basis.
00:08:10 Um, two were located in great neighborhoods, and three were, were flexible in terms of how they could be used in a post covid environment. So we have desks in all our new units. We ha we actually have desks, we did this before, but we have desks within our new units so that people can work from home efficiently. We have co we have co-working spaces or co-working type spaces that are really designed and modeled after we work. So you have efficient places to work during the day. Uh, some days I decide not to come into the office and I'll work for my apartment, which has a WeWork like space. And I really like that. I say, you know what, I'm going to start incorporating that into all my projects from now on. And so we are making those type of changes and adjustments and uh, we think that we'll have, have a great response in the market because of it.
00:08:57 Good. Great to hear. Well, Chris, is there, is there anything that you'd like to sort of, uh, in closing some closing thoughts about, you know, um, in, you know, diversity, um, equity inclusiveness in, in the real estate industry?
00:09:14 I think that for a long time I've seen, uh, notes on diversity. I've seen intents on diversity, but I have not seen, uh, measurable results and I haven't seen adjustments based on performance. And I think that if we really, really want to make a change, we need to set measurable goals within all levels of the co of, of companies, including the C-Suites. Uh, Willie Walker was a great example of that, A Walker webcast. I saw that he actually set priorities within his executive team. He said, you know, I want women and minorities represented within my executive team. I thought that was important. And he said that I'm gonna revisit it every quarter and and see where we are and, you know, make adjustments as needed. And I think that that's important. So if you really intend to do things and entrepreneurs, we get stuff done. You know, we do when we wanna do something, when something is a priority, it gets done right. And so I think we need to use that, that same bigger and that same excitement, um, towards the diversity, towards increasing diversity as well.
00:10:20 You know, we're together in this journey to create a, a more diverse and equitable and inclusive, uh, business universe and especially here in the commercial real estate world. So Chris, thanks again for joining us today on StreetBeats. Really appreciate it and we will be talking with you
00:10:36 Soon. Thanks a lot Darren. Talk to you soon.
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