Heather Border:

If I was going to give advice to a manager, I would say that if you're focused on the high net worth and the RAH know, just be ready to deploy quite a bit of resources within this area because you're going to need to spend a lot of time on the ground to figure out how each of these investors are accessing or deploying their capital and wanting to work with the managers.

Nancy Lashine:

Hello, and thanks for tuning into Real Estate Capital. I'm your host, Nancy Lashine of Park Madison Partners. Capital is a lifeblood of the real estate industry, but the decisions on where and how it's allocated are driven by people and personalities. Who are they? What motivates them? What can we learn from their experiences? On this show, we introduce you to some of the real estate industry's most influential thought leaders and decision-makers, and we talk about what is important to them, how they make critical decisions, who has influenced them and a lot more.

Heather Border and Jen Stevens are the founders of Alliance Global, one of the edgiest consulting firms in our business today. They are industry insiders, vibrant, knowledgeable, and data-centric. They have great access to information that is often opaque, hard to find, and incredibly valuable to investment managers and real estate investors. We talk about how the general partner-Limited partner relationship has evolved over the last few years, the evolution of the consultant's role, the increasing appeal to limited partners of investing and operating platforms, how long it takes to be profitable as an investment manager, secondaries, open-end funds, and the appraisal gap. We also get personal and Heather offers some amazing advice. If you are a real estate manager, investor or consultant, you won't want to miss the insights in this episode.

Jen and Heather, you guys have built a great firm, so you have so many fans out there in our industry and I'm happy to stand at the front of the cheerleader. It was really fun about almost four years ago to do a podcast with Jen, your partner, and I guess you are now going on about to be five years old as a business, which is super exciting. Just for our audience who may not know you, because even though you've had an incredible presence in the business, maybe there's a few folks who you'll be introduced to here, tell us a little bit about your background before you started Alliance.

Heather Border:

Sure. Nancy, thanks again for having me today. I look forward to this really fun conversation. Prior to forming Alliance, which was formed on April 1, 2020, and we can talk about that at some point in time, I started my institutional real estate career at Townsend Group prior to the global financial crisis, and essentially, that was the onset of my career. Extremely diverse experience right from the onset. I'll never forget when the presentations were handed over and said, "It's your turn to deliver the bad news." Quite a bit of boardroom experience right on the onset of the career, very much diversified in the sense that at that time we were representing, my team was representing nine different LPs and about each of those LPs had bad exposure to an average of 50 different managers at that time, so a little different than some of the consolidation efforts that we'll talk about today.

I was at Townsend for about seven years and then went on to raise capital for a couple of different platforms. The latest platform that I worked for was an organization out of Washington DC called National Real Estate Advisors. Then, following National Real Estate Advisors, I decided to launch Alliance Global Advisors with my business partner, Jen Stevens. Really, the concept of the Alliance platform is prior to 2020, we didn't believe that there was a third-party perspective when it came to the managers that was available to the investment management community.

There was lots of resources for the LPs, the investors. The consultants, at that point in time, were representing mainly the LPs. We were seeing this onset of questions and dialogues where we would just get these very vulnerable phone calls, if you will, where the managers would come to us individually and say, "Hey, Heather, what do you think about my platform?" Or, "How should I really be thinking about the succession plan?" Or, "Am I really servicing the investors to the fullest capacity? Do I have the right team members in place?" Just having that place in which the managers could go to where they ultimately weren't going to be on the other side of a due diligence performance test, that's really where we saw this void in the market and Alliance was created in 2020.

Nancy Lashine:

You had the perfect background for doing that, because we see other groups who've done various things, but because you had spent so much time representing the investors, that is the voice and the perspective that these managers needed to hear and to understand. It really was a brilliant concept of your flipping it on its head and saying, "Yeah, we know what the investors are looking for and we can give you advice that ... " There was a woman in our business named Susan Hudson-Wilson, and she would always get up in front of people the conferences and say, "Here's news you can use." I feel like you do have news you can use because so much advice is easy, but really, advice that makes a lot of sense to implement not so easy.

Heather Border:

Well, and that was one of Jen and I's major concern as we entered this market is having the background from an organization like the Townsend Group, where you have so much exposure to the information and exposure to real-time information and the understanding of the investor's needs because you're right in the middle of it all. We were very much concerned that we were going to be removed from that and not have as much exposure to the resources out there. We were very grateful to see that the complete opposite happened. At this moment, one of the main pieces and focus and intentions within our platform is to stay as relevant as possible and constantly be in the communications with the LPs within the advisors, be speaking with all the service providers and constantly trying to get this updated dialogue of what is actually going on, what is coming down the pipeline, and what are the investors' major concerns and how are they handling it.

Nancy Lashine:

How has your business model evolved since you started?

Heather Border:

On the onset of Alliance Global Advisors, to be completely transparent, we really thought that we'd be servicing more of the emerging managers. In 2020, I would say that that was accurate. As the market has changed, the conditions have changed, the capital raising environment has changed significantly over the last four and a half years, so has our client base. We've had the pleasure to serve managers. We've had about over 50 different managers come to our platform with a total AUM of about $870 billion this moment in time just in the last five years. That really shows the evolution of our business model in the sense that we're not just servicing the emerging managers, we're servicing the mid-level managers and the very large global allocators as well. They all have different needs. We're servicing them all very differently, but that's really been our greatest change.

In order to do so effectively, we've really had to staff and grow our team in a very intentional manner, and Nancy, that's one thing that I always applaud you and your efforts for is the way that you have evolved your own team and the way that you have brought on some of the very significant players within our industry. That's always our goal as well, and we've had the chance to bring on some very strong vice presidents. We just brought on Mia Dillon from KKR as our COO about a year and a half ago. That's where Jen and I are spending a lot of time is bringing the right people to our platform and make sure that, especially in this environment, that we're over servicing our client base.

Nancy Lashine:

How would you say the manager's needs have evolved in the last five years? Or maybe asking it a different way, when I spoke with Jen, say four years ago, a lot of what you were doing was focused on ESG and ESG policies. What are the most common phone calls you get today from managers? What are they trying to figure out?

Heather Border:

What they're trying to figure out is how do they service their investor base today? Also, by diversifying their investor base today and tomorrow, and then positioning their platform for the long-term changes and evolution of the investor community both near term and long term, while also maintaining strong relationships with the advisors and the service providers as well. Those culmination of events is really where I think we add the most value to any type of manager. The Alliance team can enter into a life cycle of an organization in various places. I would say that four and a half years ago, we were spending more time on the launch of products.

Today, we're spending a lot more time on the re-invigoration of a platform in an organization. We're spending a lot of time with the managers on the questions such as, do they have the right products in the marketplace? Are there fees in line with market? Are there strategies adapted for the long-term market conditions and the way in which the conditions have changed most recently? Do they have the right people in the right seats within their organization? Is their strategy defined and ultimately represented by their historical track record and backed by their historical track record, is it in alignment with what they say they're going to accomplish?

One of the things that's really been occurring in our industry is this concept of strategy drift. You talk to the investors and you ask them, what's the major reason for not moving forward with an existing manager? That answer is always strategy drift. We spend a lot of time challenging our managers on their historical track record and whether it's in alignment with their current strategy and the way in which that they would like to define their strategies going forward.

Nancy Lashine:

Is that strategy drift just a one note about the fact that so many managers were investing in office, and today, that's not attractive, and so they're pivoting from that, but they may not have the level of expertise? What are some other types of strategy drift that you're seeing?

Heather Border:

Yeah. I would say that's one concept and obviously, the highlight of where our industry has been spending its time and focus on strategy drift. Ultimately, that property type does not look and feel the way that it used to by any means, and so there are some major decisions that need to be made and will continue to be made with that piece. I would say, the other ways have to go in line with the investors movement in needs and expectations evolving around the stronger operators and more niche plays, more very focused strategies. In order for those managers to compete, they need to figure out how their historical strategies are going to be in alignment with those expectations of the investors. This focus on very niche strategies, well-defined strategies backed by operators who can absolutely execute, not just in an up market, but we're spending a lot more time focusing on the downside scenarios. You want a manager in place and an operator in place who will be able to make those difficult decisions and be able to pivot in times like these and in times of uncertainty to come as well.

Nancy Lashine:

You talked about long-term changes among the investor community. What do you see as the major changes among the institutional investor community as you look forward a year or two or more?

Heather Border:

Yeah, I think we're looking, if you took a look at more of portfolio modification, what I believe investors are spending a lot of time on is their career portfolio needs any workout scenarios. He talked to the consultants today and they're saying that they're now putting together their workout teams, and that seems to be a commonality of discussion when it comes to current portfolio needs, so very similar to coming out of the GFC. Then, you take a look at these very, very mature investor portfolios that seem to be diversified in nature because we've had such a significant run-up in real estate in the last 20 years. Now, investors are spending more time trying to add to what they've already created. If they have a very mature diversified portfolio, where are the gaps? Where have they not invested before? How can they be more creative? How can they push the managers to bring something that's a little bit more different and exciting?

I'm sure that you've seen the same thing, so I'd love to hear your thoughts on that piece as well. But that's really where I think I've seen the most evolution in the investor mindset, and then, how do we do things differently? How do we put different strategies in place? How do they look differently? We could talk a little bit more of some of this Opco investing that we're seeing quite a bit of as well. But I would say, those are the major drivers and changes that I'm seeing from the investor base perspective.

Nancy Lashine:

Do the consultants look pretty much the same as they were five years ago?

Heather Border:

Absolutely not. We've seen a ton of consolidation in the consultant base. We're seeing more of this one-stop shop approach, where the advisors and then consultants are trying to take a all-encompassing look on how they can represent the investors, and then many of them have become investment managers themselves. That's clearly been the evolution for the past 5, 10, 15 years, if you will, for some of them.

Nancy Lashine:

That's pure economics, right?

Heather Border:

Absolutely.

Nancy Lashine:

Let's talk a little bit about some of the new market themes that you're seeing. You mentioned entity level investment and Opco/Propco structures. We've seen, I wouldn't say a proliferation, but certainly a couple of handfuls of funds that are being created to invest either with operators at the GP level. They provide GP capital to the operators and then the operators go out and do joint ventures around that, or they actually invest in the entity. But you're also seeing amongst the very large investment managers, especially the public companies, where they're trying to buy these operators so they have full control and access to deals. It is a broad range of things going on. How do you see this and how is it impacting the questions that you're getting from the managers who are coming to you?

Heather Border:

Yeah. If you take a look at, I'd say the overall transactions in this space have increased about 30% year-over-year for the past three years. The investors in the LP base is still trying to figure this out and figure out how to access some of this new way of investing. You and I talked about this before, it's not technically new, but I would say that it's gained more exposure in our industry recently. Alliance Global Advisors took a deep dive into this space about a year ago, and what we thought was the investor base investing in this space was going to end up with about 40 names on the list, we ended up with about 95 names, and as we interviewed each of these investors, we found that they were really accessing the space differently.

But in general, I would say the pros of this is that, as you mentioned, the capital provider can negotiate preferred access to deals in the pipeline, then they've got the sharing in the [inaudible 00:16:33] by investing in the GP. Then, ultimately, they're looking to gain access to the Opco, which should drive appreciation and should absolutely represent a more of an opportunistic return for the investor.

Now, where the challenges are is that we're all real estate people for the most part, and these are no longer real estate deals. Then, the challenge of why take a long-term minority interest in something that you have much limited control of, you mentioned control in your question and in our previous conversation, and so that's one of those challenges that the investors are trying to get their heads around, I would say, because there's typically limited control in these minority transactions.

The other main piece on this is that you're trying to match long-term capital deployment needs of the investor with long-term organizational capital needs of the manager. Those at times go together and at times don't match up. That can make it very difficult to underwrite. Then, I would say, if you wrap it in a bow, these are very highly complex transactions and they don't all look and feel the same. They're extremely difficult to underwrite. A main example is it's very difficult to place a value and the promotes can be valued independently and differently among each organization. Then, as I mentioned earlier, is that we're real estate people and we're technically used to underwriting the deals and the portfolio and the transactions themselves, and this is now on an organizational level, so much different than we have performed as an industry historically.

Nancy Lashine:

You make it sound so hard like why bother? I think we talked about this, but I remember so many years ago, somebody came and proposed this to us way before it became in vogue. I thought it sounded cool, but then I thought, "Why would you want a minority interest in an illiquid investment with no control?" That has to be such a small part of your overall reason for making a broader investment. Perhaps it's just access to pipeline and that's just a cost of capital. But some of these structures have figured out some clever ways where you don't have to deal with that. We have seen some structures that really just focus on the fee sharing being at the project level, the GP promote level, if you will. That doesn't necessarily solve all the issues of a manager, but it certainly can solve their need for GP capital. How would you advise an LP investor coming to you saying, "Is this a good idea? Should I do it?"

Heather Border:

We get those phone calls all the time.

Nancy Lashine:

Well, we're looking for some free advice right here right now.

Heather Border:

I think, once again, you go back to the question of the investor's long-term capital needs, and can it fit within an organization's long-term capital needs, for their various growth solutions and needs? I think that's the biggest piece. The other piece that where I've seen these relationships seem to evolve is where there's been a long-term relationship that's already been formed and this level of trust and understanding of one another and having worked together collectively for many, many years. That's another one where I think that should go hand in hand with this type of investment strategy.

I think the other piece is you just go back to investor's longer term goals, and if they're really trying to add and differentiate their strategy and do something a little bit more diversified than they have in the past, I think that's where these investors tend to start as well. But really, scoping out the universe and understanding the various ways in which to invest on an Opco level I think is very important and that's where the investors are spending much their time, and then also diversifying the experience within your own team. As I mentioned, these are not just real estate deals anymore, so making sure that you're comfortable with the underwriting abilities and expertise of your own team members within this space or then leaning on a third party with this expertise that you may not have in-house.

Nancy Lashine:

When the industry got started, it used to be that a manager needed, first they needed a billion in AUM to break even, and then they needed $3 billion in AUM to break even, and there were sort of like a rules of thumb. I was just thinking about data, because obviously, data pervades all of our lives now. What are you advising managers with respect to ... the reason I'm asking this question is, when you think about the cost of setting up systems and having access to software, possibly AI systems that are proprietary, so that you can be competitive in the market, what are you advising managers as a budget for data and for AI? How are you thinking about how the smaller guys can compete?

Because one of the things that we're seeing is, I was talking to another group that focuses on emerging managers, and they've probably launched 75 emerging managers, most of them, since they've launched, have taken on some outside capital. Partly, it may be for their GP promote, but they also wonder how much of this is really just to build the internal technology that you need to run one of these businesses today.

Heather Border:

Yeah. No, good question. I think we can take this back to the broader emerging managers and first-time managers and the challenges that they're having, especially in today's marketplace, because I think it all goes hand-in-hand. GCM does their analysis every year of this break-even concept that you mentioned. A few years ago, the break-even typically occurs within five years. Then, the latest GCM report represented now that the break-even period for these first-time managers is more like 10 years down the road.

Nancy Lashine:

Holy moly! Really?

Heather Border:

Yes.

Nancy Lashine:

Okay. Anybody listening who's thinking about doing a first-time fund, 10 years from now, you might start to make some money on it. Oh my goodness.

Heather Border:

Hence, the need at times for outside capital. I think this concept of buy it versus build it has evolved in our industry as well. Then, you take a look at the re-up rate where the re-up rate has decreased significantly over the last five years.

Nancy Lashine:

Why is that? Why can managers not rely on re-ups from their existing investors when they raise a next fund?

Heather Border:

Well, it goes back to the evolution of the needs of the capital base and how they're changing. There's a consolidation, and I apologize, we're jumping around a little bit, so we'll try to go back to the original question, but the consolidation of managers is a key theme that's happening in the investor portfolios right now. They're looking at their current managers and those that they've been able to lean on historically and in past downturns and in past times of uncertainty. Those managers that have truly outperformed and have stuck through the thick of it all.

They're going back to those managers and say, "All right. Let's look at different ways in which we can work together, because clearly this has evolved as a very strong relationship and this is something that I'd like to focus on long-term." They're taking their managers and they're saying, "How else can we invest within these managers?" They're consolidating their list of managers from that point of view. Rather than, as I intro this call, 20 years ago, it was very common for the investor to have a portfolio of 40 to 60 managers at any given time. I think as the investor's expectations and needs evolve, this theme of manager consolidation will continue to evolve as well.

Nancy Lashine:

Are we going to a barbell of managers? Because one of the things that we see is there's the very large managers who have multiple products and they can provide many things to their clients. But there's also an interest in the specialists. Typically, they're operators in a particular property type, and they may need a vertical integration of their own fees because of your comment about it takes 10 years to break even in the investment management business. Are you seeing that barbell? Do you think it will continue or is something else going to happen?

Heather Border:

No, I do believe it'll continue. Look, the very large managers raised about 53% of the total capital in last year and in the first half of 2024. That represents a much smaller delta for the rest of the managers. The emerging managers and first time managers seem to have an allocation to them at times that's available, which absolutely, as you mentioned, makes it much more challenging for these mid-level managers. I believe the mid-level managers that have a track record and have a very strong performance will be the ones that can evolve and benefit from this environment because they're able to stand out from the competition.

But I think that this piece of the barbell, I think it's going to continue to remain in effect, and I still believe it's going to be very, very challenging for these first time managers. The first time fund managers probably have the most challenging fundraiser environment that they've ever had previously, and I'd love to hear your thoughts on that as well, Nancy. But they're getting a lot of pushback on fees. They're getting a lot of pushback on a lack of execution and track record, and so those that can show previous performance, those that can show a very strong team in place are going to be the ones that will ultimately be successful.

Nancy Lashine:

Yeah. I guess what we're seeing, and we love to be heroes, but we have learned to pick our spots to be heroes, after the GFC, I think you saw spin outs from a lot of the firms of strong investors who wanted to start their own shop, and obviously, there was very little incentive to stick around, promotes were gone, and so, it was good opportunity for people to start new firms and they were successful. Quite a few were successful in doing that. The funnel gets smaller and smaller. It's harder and harder to start a new firm if you were coming out of another investment management firm.

What we are seeing is something you referenced earlier, which is that to the extent that investors are continuing to look to fill in the gaps in their portfolio. They're filling the gaps typically by property type and operating expertise. Operators out of certain sectors, those who are able to build both the mindset and the team for investment management are the ones who are able to raise the first time fund, and that's the way we've seen it evolve. But I'm sure, and I can think of a couple of examples, that's not absolute. I think there will be more and more folks who leave investment management firms over the next couple of years. We haven't seen that much yet, but I think it's going to come and we'll see a proliferation of first time funds.

Heather Border:

I would think too, the first time funds that are able to be successful on the capital raising front then also are very creative in the way that they're offering differentiated of product types and access to pipeline as well. A first time fund investment typically comes with another co-investment opportunity in access to pipeline versus some of these other allocators and where you may not get that benefit.

Nancy Lashine:

Yeah, so it's a good opportunity for investors. What are you seeing in the secondary space?

Heather Border:

Ooh! The secondary space has gotten quite a bit of focus. You're seeing a lot of the consultants spend more of their time in the secondary space than they ever spent time previously. Right now, the conversation is around the delta and valuations. The consultants will typically say ... I think the consistent feedback is now the delta that they're seeing and executing on in the secondaries market looks more like 20% to 25%, and so, they're being very aggressive in their secondaries investing. Then, those secondary conversations tend to roll into the role of ODCE.

That was another conversation that you and I had at the onset of this podcast is, where does ODCE fit in a long-term play for the investors' portfolio? I was just at a conference last week and a few of the investors stood up to have a conversation about this, and it reminded me so much of post-GFC, as the ODCE conversations are very similar around valuations, and are we comfortable with evaluation metrics? How are the investors, then looking at their own benchmarks and long-term benchmarks, if they're already questioning the way in which ODCE is valued today in some of these redemption cues and how they're valued.

I would say that one of the conversations around the ODCE is that it's not consistent in the way in which the managers are handling these redemption cues. Some are going out with significant fee discounts to rescind the redemptions. Some are staying strong and holding strong and not moving in their redemption cue efforts. There's just quite a bit of dislocation in how each of the managers are handling the cues, how the investors are looking at the long-term focus point of ODCE and the investment in ODCE going forward. Overall, I'd say the conversation was that ODCE does remain and have a place in the investor's portfolio. I think that, from a global nature in general, the US investors have said, "We'll probably invest more in the US using the ODCE funds versus globally."

Nancy Lashine:

Heather, for the purposes of our listeners, can you just define ODCE for everybody?

Heather Border:

Yeah. It's the open-end core equity index.

Nancy Lashine:

Got it. I think the first time I ever heard that, which was a while ago, I spelled it like Ulysses might have. I didn't know what it was. It's ODCE is, I guess, the way people do spell it.

Heather Border:

There you go.

Nancy Lashine:

What's your gut sense? And this could be opinion. Do you think that there is a long-time place in their business for these open-end funds? Or do you think that people have just decided, "Look. It's liquid when you don't need it to be liquid. It's not liquid when you need it to be liquid. Why am I investing in these open-end funds?"

Heather Border:

Yeah. Well, ODCE serves as a very strong benchmarking tool for the investors. Majority of the investors use an ODCE plus as they're indexing their portfolios. I don't believe the ODCE ... well, let's put it this way. I believe the ODCE investing is here to stay. The conversations that are being had today are very, very similar to post-GFC, and it all surrounds around our confidence in the valuation metrics and the conversations that the advisors are having with their LPs, is there still a delta today in where the ODCE funds are valued versus where they're going to be transacting as they clear up these redemption cues? Very, very similar conversations post-GFC. Some of these managers will be aggressive in filling these redemption cues, and some of these managers will take their time or offer incentives as I mentioned for rescissions.

Nancy Lashine:

Let's just switch gears a little bit and talk about the growth of the high net worth and RIA channels and what that means for the investment management community. Our use getting a lot of queries about that, and we often hear investors say, "Gee, we'd love to access high net worth capital, but we can't quite figure out how to do it." It seems like it's there for the very large managers, but very episodic for smaller managers.

Heather Border:

Spot on. I was looking at the growth numbers of the RIA channels, and because we've had significant growth in wealth, we've seen such a big uptick in these platforms. I think, if you look over the last three years, it's like a 20% increase year-over-year for their high net worth and the RIA channels as far as the amount of capital that's available to deploy. Just as you mentioned, where the challenge occurs is they haven't quite institutionalized their process quite yet, and so it's very bifurcated on how they access or how they deploy their capital. It's very bifurcated on the way in which their needs of their portfolio has evolved. It's not a one-size, fits-all, they're not moving in a herd-like mentality, and the trends around this type of investing haven't really stabilized quite yet.

What we are seeing is that, historically, the RIA channel was very focused on being efficient with their taxes, and so the tax efficiency was the focus point, and now as that growth has evolved and that capital has increased, I would say the way in which they look at this has also changed and diversified as well too. If I was going to give advice to a manager, I would say that if you're focused on the high net worth and the RIA channel, just be ready to deploy quite a bit of resources within this area because you're going to need to spend a lot of time on the ground to figure out how each of these investors are accessing or deploying their capital and wanting to work with the managers because it's very different, and unfortunately, we just haven't found an efficient way to do it quite yet within our industry.

Nancy Lashine:

Yeah. One of the things that I'm looking to is the consolidation in that business, so that ultimately, there may be a fewer number of very large RIAs to be connecting with. Great. Well, one of the things that Alliance has been so incredible about is just your give back program and your focus on promoting women as a women-owned business. Talk to us a little bit about what you're doing on the Alliance Give Back.

Heather Border:

Yeah, thank you. When Jen and I first launched in 2020, we had actually used a business coach and really set a lot of intention around our platform and what we were looking to accomplish in year one, in year three, and year five, and we're very specific with our goals. In year one, rather than going out with a revenue goal, we went out with a give back goal and some charitable initiatives that we focused on our efforts and made that a priority versus really our net. With that program, we've represented quite a few organizations, one being an organization called Wellfit Girls. Wellfit Girls is where we spent quite a bit of our charitable initiatives on the onset of Alliance. I bring that because it is a woman-focused organization, where the organization is focused on pre-teen and teenage girls and a connection to mind, body, soul.

Our team spends time on-site with Wellfit girls, as well as our charitable efforts. Then, a lot of our programming is evolved around thought leadership and around mentorship within our industry. We spend a lot of time with the pre-organization and they give back to our efforts within the Pria Foundation. Jen and I, she sits on the board of directors, I sit on several of the Pria committees as well. Then, our team gives back to various universities as well, and so, we sit into the classes, we give a lot of the presentations on the evolution of our industry, some themes within our industry, and so we try to coach these students on how they can access our industry and the benefits and challenges of doing so.

Nancy Lashine:

Amazing, so fantastic. I have to ask you, as a piece of advice for our audience based on your experience, what advice would you give somebody about how to pick a partner when you're starting a business?

Heather Border:

Okay. It's a good one. One of the pieces within the history of Alliance is that I had left my organization and was really working alongside managers, just one-on-one from a consulting capacity before Jen and I institutionalized this concept in 2020. As I was contemplating who the right partner is in this endeavor, you think about somebody who matches up with your core values, you think of somebody who's going to have your back during the good times and the tough times. Partnerships has its ups and downs, and so I think the core value piece is the biggest key and what has led to our successful partnership, and so I would always advise somebody to kind of go back to the basics.

I remember, when Jen and I were forming our operating agreement and we're putting all the legal language down, we put pencils down for a minute and just looked at each other and said, "I don't know where this is going to go or what's going to happen or how this could evolve, but at the end of the day, you have my promise that I have your family's back and you have my family's back." I think that handshake deal of 'no matter what, you have each other' is something that at times you just can't put on paper. You do the best you can, but the level of trust and core values, I think, is really important.

Nancy Lashine:

What are the key core values for Alliance?

Heather Border:

I think, for us, the concept of giving back is such a piece of this, the concept of remaining relevant and focusing on creating this thought leadership within the industry, the concept of evolution and pushing our industry to do better and be better and present a better version of ourselves and our organization, I think is absolutely key and critical. We always go back to that when we have questions on where we go from here or how we service our clients or should we launch a new vertical or how are we going to grow from here? We always go back to that evolution. How do we push this industry? What void can we fill next? What are we missing?

Nancy Lashine:

Wow! That's so rings true with how I see you and who you are, so congratulations for living those core values. Any other general advice for entrepreneurs who are looking to start a real estate business, service business, investment business, any kind of real estate business?

Heather Border:

Yeah. I would say, one of the pieces that I mentioned is that Jen and I went and got a coach right away. I think having a coach is key. The other next thing that we did is we developed a very impactful advisory board. We went to our mentors in the industry and those that we knew we could lean on and trust and said, "Come here and challenge us and be part of this strategy and thought leadership piece and take a look at our organization and tell us where the gaps lie and what we're missing and how we can do better."

I think leaning on those that have mentored you in the past, leaning on industry professionals who will challenge your thought process, and then going back to continue to solicit that advice from third parties, I think, is really important. I think that's something that Jen and I have done really well. We continue to offer advice to others, but we also solicit back. We'll always take feedback and we always are very much appreciative when somebody that just becomes and challenges our platform and gives us another way to think about things.

Nancy Lashine:

Who's had the greatest influence on you personally in your life?

Heather Border:

Many don't know, but I did lose a brother in 2005. He was 18 years old, I was 21 at the time.

Nancy Lashine:

Oh, I'm so sorry.

Heather Border:

His name was Kyle. He was my only brother, my only sibling at that time. To lose a brother, who was 18, but was living life so big and full, he has absolutely been my greatest influence as I go and live my day-to-day. He still challenges me to be bigger, better, stronger, faster, more efficient. He lived every day with a smile, he played full out. I would say that he lived max capacity even though he only lived until 18. It's such a solid reminder for me every day is that, you just wake up and you give it your absolute all. You're not going to always get it right, but that is the biggest piece of ... when I leave this Earth, I really want everybody to say, "Hey, she really gave it everything she got and didn't leave anything on the table."

Nancy Lashine:

All right, Heather. I don't know how I come back from that. Wow! I'm going to ask you a ridiculous question to come back from that.

Heather Border:

Go for it.

Nancy Lashine:

You're such a beautiful woman and you travel all the time and you have a busy life and family. Any tricks for traveling that you want to share with people that you have found super useful?

Heather Border:

Well, the trick for traveling that I always say is that, and this is as I'm traveling commercial, when a problem starts brewing, just get out as fast as possible. I've learned to have multiple plane tickets. I've learned to go to different cities that I was maybe not on the way, but at least get you out of that patterning. I'm saying that right now as I'm sitting in Florida and there's a hurricane coming our way. But that's something that I've learned and I've absolutely traveled quite a bit. The other piece that I've learned is, don't be afraid to ask for help. As you're traveling and you land different places, you're taking on more meetings, you're trying to be very efficient with your time, lean on your supporters and don't ever fail to ask for help. I think that's always, especially in our industry, everybody's so helpful. We're so lucky, we're so fortunate.

Nancy Lashine:

We are all connected. Great advice. I had never really thought about that, but it is instinctive. When in doubt, get out of dodge.

Heather Border:

Exactly.

Nancy Lashine:

Any other parting thoughts for us?

Heather Border:

I think the biggest piece as I was sitting there thinking about how I could be impactful during this conversation, I think what I'd really love to leave the audience with is just, no matter where you sit in our industry, at this moment in time, if you're not challenging your thought process for your organization or your strategy or possibly your product differentiation, it's going to be so difficult to compete today. That's where I would just like to leave the audience is keep challenging yourself, keep challenging your organization, keep asking questions, keep leaning on third parties, and just don't expect the same results that we've had previously because it is different out there.

Nancy Lashine:

If you're not growing, you are probably falling behind.

Heather Border:

There you go.

Nancy Lashine:

Yeah. Heather, it's such a privilege and a pleasure to have you as our guest today. I wish you and Alliance Global so much success. More success, you've already had so much already, but thank you also for everything you're doing for our business. Thanks for joining us.

Heather Border:

Absolutely. Thank you, Nancy. Thank you so much.

Nancy Lashine:

I hope you enjoyed this episode of Real Estate Capital. Before you go, I have a quick favor to ask. We put a lot of thought and effort into this show and making sure we bring you insights from real estate leaders that you don't normally find in the mainstream media. If you're enjoying this show, please remember to follow it on your favorite podcasting app, so you never miss an episode. We'd also love for you to share it with others or give us a review on Apple Podcasts, so others can find us. Thanks again for tuning in. For more information about our firm, please visit our website at parkmadisonpartners.com.