Each semester, UW-Madison’s Real Estate Club and the Graaskamp Center for Real Estate jointly present the Innovator Award to a proven innovator in the real estate industry. On October 3, I had the privilege to witness the presentation of the award to Jay Shidler, founder and managing partner of Honolulu-based The Shidler Group.
Jonathan Brown (REC Co-President), Michael Brennan, Jay Shidler, Anthony Huerta (REC Co-President)
I was impressed with Shidler’s long-list of career achievements, including his founding of the following five public companies:
- TriNet Corporate Realty Trust (no iStar Financial)
- First Industrial Realty Trust (with Graaskamp Center Executive Director Mike Brennan)
- Corporate Office Properties Trust
- Primus, Guaranty, Ltd.
- Pacific Office Properties Trust
I was equally impressed with some industry strategies he pioneered that are fairly common today including master ground leases, sale/leasebacks, and industrial REIT’s.
Not too many people have a business school named after them either, a distinction Shidler received after donating $25M to his alma mater, the University of Hawaii, in 2006. It was through the U of H, where Shidler developed a relationship with our Center’s namesake, the late James Graaskamp. Professor Graaskamp guest lectured at the school in 1983, at which time Shidler’s innovative abilities were already apparent. The two met several times after that at Shidler’s office, where they really enjoyed debating real estate strategies with one another.
Between Shidler’s successes in the industry and his connection to UW-Madison through Professor Graaskamp and Brennan, I think it is obvious that he was a perfect recipient of the award. Watching him receive the award was great, but I especially enjoyed hearing from Shidler himself. Some of the highlights I took away included:
- Market inefficiencies driven by the prejudice of the big industry players (e.g. focusing on core markets) provide opportunities for entrepreneurs.
- Get into the worst business you can find. It is easier to buy into a business on the cheap than to build it from scratch.
- The level of leverage applied to real estate investments depends on the investor. Mr. Shidler would be fine with buying the Sears/Willis Tower with a very high level of leverage, while a private equity fund might not take the same approach if they are paid equity put to work.
I do not have nearly enough blog space to share everything we learned from Shidler’s career and from the short time he spent with us. If you want to learn more about Jay Shidler and The Shidler Group, I suggest you check out www.shidler.com.
Chad Messer is a first-year MBA student in the James A. Graaskamp Center for Real Estate. Chad is excited to be at UW-Madison where he can build on his previous experience in store development with Kroger. Post-MBA, Chad aspires to lead a career in real estate investment or development.