Sara Queen:

What is important to this organization? How can I bring my current skillset to help with that? And how can I develop other skills that can be, to use a hockey analogy, how can I skate to where the puck is going, as opposed to just looking at where it's been? And what can I do to either expand my network, or take a class, or just volunteer on a project and put my hand up to say, "Can I do that?"

Nancy Lashine:

Hello, and thanks for tuning in to Real Estate Capital. I'm your host, Nancy Lashine of Park Madison Partners. Capital is the 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.

Our guest on today's episode is Sarah Queen, managing director and head of equity strategies for MetLife Real Estate. MetLife is one of the world's largest insurance companies with around 90 million customers in over 60 countries. Their investment management arm comprises about 600 billion dollars in assets under management with 89 billion of it in real estate equity and debt. Sarah's team oversees the 24 billion dollar real estate equity portfolio and spans the risk spectrum from core to opportunistic and includes funds, separate accounts, and other structures. Sarah is an industry veteran with over 23 years of real estate investment experience. She's held senior roles at prominent shops, including Mapletree Investments, Brookfield Property Partners, and Clarion Partners. We discuss real estate portfolio management, MetLife's current investment posture, how to succeed in a larger real estate organization, Sarah's approach to leadership and culture, and the impacts of tariffs and so much more.

Sara Queen:

Well, first off, I just want to say, this is such an honor and privilege for me. And as we've talked about before, I'm a huge fan girl and have been for a long time. And all the conversations we've had have always made me feel like, okay, there's so much going on in the industry, and you have such a great pulse on everything.

So anyway, thank you so much for inviting me today. To give you a little bit of background, so I actually grew up in Titusville, Florida, which I'm sure, where is that?

Nancy Lashine:

Yeah.

Sara Queen:

Everybody's Google mapping right now. Titusville is east of Orlando and 13 miles from Kennedy Space Center. So my dad worked for NASA. I've seen over a hundred launches, grew up on the Space Coast. So decided I was interested, at the time when I was in high school, I really wanted to be a journalist, and I had read a Vanity Fair article about Diane Sawyer, actually, and she had gone to Wellesley. And that had piqued my interest in Wellesley as a college.

And so my mother was highly supportive. She had gone to a woman's college, and felt like it would bring me some discipline in my life, that heretofore she had not seen. Had a little too much fun in high school, but did get into Wellesley, and spent four great years there. Got an econ degree and really wanted a business experience coming out of that.

I eventually decided I didn't want to do journalism, wanted to go into business, and so looked for a business role that would give me a taste of a whole bunch of different areas. And ended up recruited by MetLife, actually, and joined their management training program. And so that was my first job out of school.

Nancy Lashine:

Amazing. Full circle.

Sara Queen:

Exactly.

Nancy Lashine:

So we'll get back to that. But then after some time at MetLife, you went to Brookfield?

Sara Queen:

Yeah, so I was at MetLife, and then eventually ended up in the real estate group. Discovered a passion for real estate, combining everything that I thought was interesting about investments, but having this real asset that you could manipulate, and you could redesign, and you could look at in a physical setting, in addition to looking at the cash flows.

And loved that, but decided I really needed to go to business school. And so left Met, went and got my MBA. And then coming out of my MBA program, Jeff Barkley actually hired me at Clarion.

Nancy Lashine:

Oh, okay.

Sara Queen:

And I spent 10 years at Clarion doing asset, and then portfolio management for them. And Brookfield was a partner of ours on 245 Park. And they recruited me away from Clarion to come run asset management for them, right as they were going through the acquisition of Trizec.

Nancy Lashine:

Oh, really?

Sara Queen:

Yeah, so it was-

Nancy Lashine:

Ooh, that's interesting. Oh, that's a whole other story. When I was at O'Connor, we looked to buy Trizec. Yes. Yeah.

Sara Queen:

So it was really interesting, because I joined, and then you had this group that was Brookfield, and then you had this group that was Trizec. And I spent a lot of time helping with the integration of the two teams. And because I didn't come from either one of those, it was much easier for me to figure out how to build some of those bridges and figure out best practices. And so, then started almost 11 years at Brookfield.

Nancy Lashine:

What did you have to learn, just from a culture standpoint, going from a place like Clarion, which even though at that point was probably a fairly large AUM shop, but still kind of run a bit like a family?

Sara Queen:

Yes.

Nancy Lashine:

And a partnership to Brookfield, which if you can explain the company in an hour, you'll have a hero's welcome.

Sara Queen:

So at that time, Brookfield Properties was publicly traded, so immediately shifted to an FFO occupancy mindset, as opposed to the way that we ran for most of our pension fund business when I was at Clarion. But also, very Canadian. And so, for instance, one of my first meetings I'm in, they're talking about a building's location, and somebody says, "This is a center ice location." Not 50 yard line, center ice. And I-

Nancy Lashine:

Sorry, it took me a minute. I'm getting there now. Okay?

Sara Queen:

So I realized-

Nancy Lashine:

That's what we learned is the hundred percent location. Yes.

Sara Queen:

And lots of meetings would start with a discussion of the hockey scores from the night before. And I realized I could either start to follow hockey or I would have to be quiet for the first 10 minutes of the meeting. And I'm not somebody to be quiet. So I started.

I'd always been a Rangers fan, I became more of a Rangers fan. I got my scoring updates so I could participate in the conversation, even if I was not as die-hard as everybody else. But it was incredibly smart people, really interesting, large mega projects. And, because we were controlling, in some cases, assets that were very close together, really thinking about place making in a different way than when I had a single building for Clarion that you were managing for a client. You were controlling a whole neighborhood, so how do you impact that? How does the ground plane impact? Thinking about what you're doing on that ground plane really driving the upstairs rental revenue on the office side. But it's some very interesting approaches.

Nancy Lashine:

So if you're dealing with a comparable office asset, CBD office asset, let's say, and you're working for an investment management firm that presumably is thinking about net asset value, and ultimately IRR, maybe multiple to its equity investors, versus a company that's ultimately taking the performance of that asset, running it through the balance sheet, and thinking about FFO, and dividend yield, and share price. Did you actually see differences in the way you've managed the asset on a quarter-to-quarter basis?

Sara Queen:

I will say there was much more of an emphasis on timing, on getting your lease deals done. There was a real, you had this quarterly outside pressure that you had to manage to that was different than just talking to a pension fund, and saying, "Yes, we're getting closer. We need a few more weeks to get this lease signed."

It was very different when you had to report to the street was your occupancy where you thought you were going to be. So sometimes there was more emphasis on that. Also, there were a couple of times, like we were leasing up a building where we'd done a renovation, and you have your projections, but in the case of a building I'm thinking of, we ended up doing much longer leases than we had originally underwritten. And part of that was because we needed to spend more on TI, and that was part of the way to get there. But it did impact your IRR. So if you're IRR-driven, it was different than if you were FFO-driven. So sometimes there were some nuances around that.

Nancy Lashine:

Right. And so if you fast-forward, not to be a spoiler, to your time, say, at Mapletree, different still?

Sara Queen:

Yes. There, most of the assets were being dropped into funds with a very heavy emphasis on cashflow. So it was really about managing that cashflow and trying to manage your capital expenses as far down as possible. One of the things that also made it interesting was much more alternative asset classes. So data centers, student housing, and then logistics made up almost the bulk of the portfolio. So particularly having come out of being so focused on office for so long, it was really nice to stretch back to some of those different asset classes. And that has served me well going forward.

Nancy Lashine:

Right. Can you think about a deal or a project during your early years at either Clarion or Brookfield that really was a pivotal learning lesson for you?

Sara Queen:

Oh, yes. My first big redevelopment deal when I was at Clarion, I took over asset management of a large regional mall in Virginia Beach, Virginia. Had to renegotiate the REA, bring in two new anchors, do an AMC deal at the time, which was very exciting for the mall, and do this large renovation and build a parking deck, and negotiated the first TIF financing-

Nancy Lashine:

It wounds like you completely re-tenanted the mall.

Sara Queen:

We basically did.

Nancy Lashine:

Wow. Was it a mall before where the tenants went to work?

Sara Queen:

You had one tenant, one of the anchors was... Well, there was an open box, and so re-tenanted into that. Then part of the issue had been, it had always been the strongest mall in the MSA, and then Taubman had built a new mall in Norfolk. And so we lost tenants over to Ed, and so we needed to revitalize the mall. And the City of Virginia Beach was actually very receptive to working with us, so we negotiated a TIF to help pay for everything.

Nancy Lashine:

A TIF is a?

Sara Queen:

A Tax Increment Financing District, which helped pay for the parking deck, which we needed to then free up space for another box to be able to come in. Did deals with, at that point, May Company to do a Lord & Taylor and a Hex store. Well, there was a Hex store, but to do the Lord & Taylor and expand the Hex store into a new box. There was a Belk, which we negotiated with, and then Belk sold to Dillard. So then we had to renegotiate with Dillard. It was-

Nancy Lashine:

There are people listening who have no idea what you're talking about.

Sara Queen:

I've never heard of these stores. So it was a little bit like musical chairs as you moved everybody around. And you're having to think about retail, so it's all about, tenant X wants to be close to tenant A, B, and C, and how do you move all those around? And so, really got both a crash course on malls, retail, complex negotiations, and presenting all of this to my pension fund client, and getting them comfortable with this very large investment, on top of the large investment they'd already made in the center.

And I think part of it was just the sheer willpower of not realizing how hard it was. It was so interesting and challenging. And I always like to say, you never forget your first one. And that was my first big redevelopment.

Nancy Lashine:

So when you think about what you learned from that, aside from just the total immersion, how do you think about the lessons from that today?

Sara Queen:

I would say, first off, very clear strategy of what you're trying to achieve, and then breaking it down into all the components, and figuring out the path that works. And thinking about how do you get help for the different parts along the way. And sometimes it's about listening to people who are very opposed to what you want to do, but then working with them to identify, well, where are the commonalities of what you're envisioning? What do you want? How can we both get to something that is better? Maybe it's not quite what I want. Maybe it's not quite what you want. It's close enough.

Nancy Lashine:

Right, if everyone's a little bit unhappy, we probably came to the right conclusion.

Sara Queen:

Exactly.

Nancy Lashine:

Yes.

Sara Queen:

And so also, just the thinking about, how do you tell a story of a development when you have particularly a very large asset to begin with, that you're doing a very large value add project, but 75% of this big behemoth asset isn't really changing.

And so, it is, how are you creating that incremental value on what is the return on the incremental dollars you're spending, not just the return overall. And so thinking about that concept, and how you're building value as a waterfall model. And the reverse of, here's your base model, here's your incremental spend, here's the return on that incremental spend. And so you're lifting the overall return, but maybe not as much as a flat out startup from scratch.

Nancy Lashine:

So I would think that must have a lot of applicability to today, certainly if you owned a regional mall where you had problems with the tendency.

Sara Queen:

Yes.

Nancy Lashine:

Many of them have just gone dark or becoming something else.

Sara Queen:

Yes.

Nancy Lashine:

Or if you own a B mid-block office building and you have to put a lot of capital into re-tenanting it. So maybe give us some examples of how that's played out as you've continued on in your career?

Sara Queen:

Sure. I think it really comes down to, first off, as a mindset about value creation. And one of the things I loved about asset management was, my mindset was every morning I'd get up, how am I creating value for this asset, short-term and long-term value? And if you approach, sometimes people talk about core as well, "It's a core asset, it isn't that tough." You've got to be working those core assets day in and day out, or they're no longer going to be core assets.

Nancy Lashine:

Right.

Sara Queen:

So I teach-

Nancy Lashine:

Which is actually a dirty little secret of core, right?

Sara Queen:

Yeah. So I teach up at Columbia at the Masters of Real Estate Development School, and I teach a class on asset management. And one of the things I do is I show pictures of movies, and I talk about, what is the asset management lesson learned from that? And one of my guilty pleasures is I have a deep love of the Fast & Furious franchise. It is a ridiculous set of-

Nancy Lashine:

What is the Fast & Furious franchise?

Sara Queen:

Oh, Nancy, we have to go.

Nancy Lashine:

Okay.

Sara Queen:

The next time one comes out, we will go, we'll watch it with popcorn. Vin Diesel, there's a group of people, they used to-

Nancy Lashine:

Wait, is this a movie?

Sara Queen:

Yeah, this is a movie. The Fast & Furious, there's like one through nine.

Nancy Lashine:

I'm a pop culture moron, so just chalk it up to that.

Sara Queen:

So they used to steal trucks to hijack trucks with their fast cars to steal videotapes. Now they're literally shooting cars into space and working for a spy agency. But they drive really fast, and it's stupid.

But in one of the movies, they steal a safe from a police station that is filled with contraband cash. And I like to talk about, that is how I think about core assets, that if you ignore them, somebody is going to come into your police station and steal your safe.

So I would say the biggest lesson that I got out of the experience with the mall is just that constant working the assets. And also, as you were talking about, looking at your B and C now, looking at B and C office, or even commodity A, and thinking about, what are the steps that you're doing to improve that asset? Does it make financial sense in the context of the overall return? But also, what is that incremental return that you're getting on what you're spending?

And really, how you're putting all those pieces together, and constantly thinking about the small and large ways that you can add value. And look, there's a lot of, my daughter's a big softball player, playing from T-Ball, all the way through college. There's a lot of small ball in real estate, and that's the little things that you can do to add value. Sometimes you do need to hit a home run, but a lot of times, if you just consistently get on base, it will add up to run, after run, after run.

Nancy Lashine:

Singles and doubles.

Sara Queen:

Exactly.

Nancy Lashine:

Yeah. So before we start diving into what your challenges are at Met today, and the opportunities, maybe can you give an example of mentors that you may have had, or situations that have helped to mold your leadership style as you've moved on to more senior management roles?

Sara Queen:

Sure. So I think one thing I've always tried to take away from anybody that I've worked for is there's pluses in the way they've run things and negatives. And even when you have a particularly challenging boss, and you're like, ugh, I don't want to work for somebody like that, there are lessons in that, right?

Nancy Lashine:

Sure.

Sara Queen:

There are, what not to do can also be an instructive lesson as what to do. I get asked about mentorship a lot, and I was incredibly fortunate in my career that I had a lot of people who took time and spent time with me that they didn't have to take. And one of them, Charlie Grossman from Clarion. Charlie was such a great guy. And one of the things that I really appreciated about Charlie was that he wouldn't give you an answer. He would ask you questions to show, "Wait, how are you thinking about it? What have you thought about it?" As opposed to just, "Yes, that's right." What else have you thought about? How sure are you?" Very professorial.

And that was so impactful, and also gave me confidence over the decision making. So as I grew, our conversations were very different than they were at the beginning. So just an incredible mentor. And Marjorie Sang, I love Marjorie. I would do anything for Marjorie. Just one, such a leader in our industry, and always so generous.

Nancy Lashine:

Did you know Marjorie when she was a lawyer, before she was at New York?

Sara Queen:

No, but I met her for the first time when she was at New York, when I

Nancy Lashine:

New York Common Retirement Fund.

Sara Queen:

Yeah, New York Common Retirement Fund. She was a client of ours, and I was doing a presentation for her, and others, and I, at the time, had two buildings with very similar names. One was owned by New York Common, one was not. It was like 1800 Market and 1800 M Street, something. So one was in Philly, one was in DC.

I was talking about, now I don't remember which one they own, but I was talking about the building they own, but I kept using the wrong name. And somebody made a kind of negative comment about, "Oh, Sarah, you need to know the name of the building that you're working on." And Marjorie made one of those very gracious, kind of like, "We're just glad Sarah's working on our asset, and has all these issues under control."

And it was a very small thing. And I told her about it later as we became friends, and she was like, "Oh, I don't even remember that." And I was like, "But it was deeply impactful for me." And so I do try to think about that, particularly now in my role, is that where are those opportunities when you can be kind, when you can be generous, and try to do those?

Nancy Lashine:

Oh, that's a great... Oh, I get chills when I think about that. It's really true, because you can be so much more impactful than you realize.

Sara Queen:

Yes.

Nancy Lashine:

So let's fast-forward to MetLife and the portfolio that you're responsible for today. Tell us a little bit about the structure of it, debt versus equity, how it's organized?

Sara Queen:

Sure. So overall, MetLife has about $600 billion in assets under management across all of our strategies. Our real estate and ag portfolio is about 120 billion, with debt and equity being about 105 billion, call it. The real estate equity business is, call 36, 37 billion dollars.

About 45% of that is our separate account business. 20% is our fund business. And then the remaining 35% is, we manage on behalf of MetLife's balance sheet. And really, MetLife started its real estate investment management business about 12 years ago. Been a successful real estate investor for a hundred and almost 50 years. They had the original debt on the Empire State Building, that you can see from your window. And so a long history of real estate.

When they decided to launch a third party business, this was a natural place for us to lean into and expand. And so we've been doing that for the last 12 years. And we have some wonderful clients that we work with every day. And really invest across, from core, to development, and everything in between.

Nancy Lashine:

So for the balance sheet, is it tend to be more core asset? How do you think about the liability stream of each of those different segments?

Sara Queen:

So whether it's for MetLife, or for another one of our clients, we will spend time with them understanding, what are they trying to achieve with their real estate portfolio? What are their returns? What are they trying to look for on a risk spectrum?

And also, for the non MetLife clients who are managing a piece of their money, how does what we're doing fit into their overall piece? With MetLife, we understand what we're doing because we see the entire portfolio. There is definitely more core in the portfolio than anything else for MetLife. And part of that is we've also done a lot of build to core over the years. So it was development and now it's a very stabilized core product. And overall, we're looking at how do we achieve their investment returns?

Nancy Lashine:

The age-old question, is real estate an income vehicle? Is it a diversifier? Is it an inflation hedge?

Sara Queen:

Yes.

Nancy Lashine:

Has that evolved?

Sara Queen:

I would say it definitely has evolved. And I think for a lot of us these days, we've talked about it as an inflation hedge, particularly in these inflationary times. Some products are more inflationary, more of a hedge than others. Certainly, logistics, where your expenses, you're passing back triple net. So as you get that as things go up, versus say, like a New York City office building where you have, particularly if you're a gross lease, it's a little bit tougher. Multifamily, we have seen a lot of interest in, it has the, you're not passing back the expenses through it. So as they have risen more quickly, you have that problem. But since you are getting to reset the rents every year, you can push those. But in some markets, what we've seen is we don't have the ability to push rents as much as maybe overall expenses have risen.

Nancy Lashine:

So broadly, in the institutional market, you've seen the percentage of office go way down, maybe from 50 or 60% to as little as 15 or 18% in the indexes.

Sara Queen:

That's right.

Nancy Lashine:

And the percentage of multifamily go way up, and industrial as well, to be sometimes 50 to 80% of the portfolio for the two. How has that evolved at Met?

Sara Queen:

So look, our portfolio, particularly because we had a lot of legacy assets, was more heavily weighted office. And we have managed that down over time. But there's, between some legacy holdings and some of our mandates, which are office only, we still have more office in the portfolio, than certainly, our Odyssey fund has much less as a percentage than we do overall.

And look, I've spent a lot of time in office. I've drunk the office Kool-Aid. I come in five days a week and I like being in office. But I understand that the nature of how we have used office space has changed. And the amount of capital that's required for those, it's not as great a fit as it used to be.

And I will say that, coming out of the GFC when I was at Brookfield, that was a very tough time, but you had this sense of, as the economy recovered, people would lease office space again. Where we are in today's market is, the economy was recovering, but you still had this trepidation around what was going to happen to office.

And you've had some cities, like New York, which is vibrant and kind of feels like it's back, at least certainly in the middle part of the week, maybe not on Fridays, but you have other cities that are still kind of lagging behind that. So I think we continue to work through those issues, like a lot of owners do.

Nancy Lashine:

If you have fresh capital, where do you see the best opportunities today?

Sara Queen:

So we have been most active in deploying it across the living space. So really thinking about living, broadly, everything from student housing, through senior housing, including traditional multifamily and BTR. We have a BTR fund that we launched almost two years ago, and we're in the active deployment stage with it. And that's been really interesting to be active in that asset class, and see where some of our stuff is now starting to deliver. And it's really exciting to see how that leasing market's going.

Nancy Lashine:

Where in the country are you delivering?

Sara Queen:

So we've delivered outside of Indianapolis and we've delivered in Houston.

Nancy Lashine:

So Midwest, it's a good demand?

Sara Queen:

Midwest. Mostly focused southeast, but we ended up with a project early on in the Midwest. And it's interesting, it is a little larger format than some of our others. So it looks more like just a traditional suburban community. So three and four bedroom, detached houses, little larger lots. The leasing has really picked up in the last two months, so that's been great to see.

Nancy Lashine:

Is it economically more efficient to rent than to buy today?

Sara Queen:

Absolutely. And for a lot of people, the down payment still is a struggle. And so you have that component, plus you also have some renters that are looking for, they want to be near a specific school district. Those houses are even more difficult to afford. And then you also have a component of people who have been looking to downsize, or they've sold their house, but they don't want to go into an apartment. And this is a way to bridge that gap.

Nancy Lashine:

Do you pencil a higher return to your position for BTR than you would for a build to core multifamily project? Or do you see them as comparable and just a diversifier?

Sara Queen:

We see them as comparable and diversifier. I mean, as you know, there's a lot of factors that go into each underwriting.

Nancy Lashine:

Sure.

Sara Queen:

But we really look at some of them as more horizontal apartments as opposed to more vertical.

Nancy Lashine:

And what's your thought about senior housing? You see that as an operating business? Or...

Sara Queen:

It is an operating business. And particularly, how much you're spending on assisted, and memory care, and what's that breakout? Even 55 plus, it's closer to straighten up multifamily, but it still is a little different. So we have been spending a lot of time really trying to get more educated on that. And so I think that is an area that we continue to focus on.

And then, when I was at Mapletree, we had a lot of student housing, so I have a lot of war stories to tell on those. And we have not been active on that front at Met on the equity side, although we have been more active on the lending side.

Nancy Lashine:

So a lot of investors are starting to think about buying platforms, as well as, either as a way to get access to more deals, or to dis intermediate for fee purposes. Have you thought about that?

Sara Queen:

Of course.

Nancy Lashine:

Okay.

Sara Queen:

And continue to look at opportunities. We have a small investment in a multifamily operator today, but it is something that we would look to diversify, and grow, and really think about where we're seeing, both the opportunities, but where do we also think that we don't have as much of operating expertise on a certain asset class than others? And so that's also been part of the nexus of what we go through as we think about those opportunities.

Nancy Lashine:

So would you do it mostly to gain access to the operating expertise so you could grow out a portfolio in that space?

Sara Queen:

Yes. And so a couple of things. I mean, one could just be, look, they're great operator, and having somebody who, say, is a larger, more well-known multifamily operator would just be great to add to the overall stable of what we can provide. But particularly, with the interest in alternatives, and really thinking more broadly around what real estate is, having somebody who has some of that operational expertise and those alternative sectors gives you both depth that you don't have on the team today, plus access to their capital partners and a built-in portfolio and so that you can start playing at scale much quicker.

Nancy Lashine:

And would you do this, I mean, hypothetically, on your balance sheet? Or would you do it in a fund? Because we see, for example, we'll see fund managers who will buy an interest in a platform in one fund, but then they own that interest and then future funds are doing deals. Maybe it's not that material, the value of the platform, but it creates a potential conflict. How are you thinking about that?

Sara Queen:

We have been thinking about it more in using balance sheet money for it. That could change over time, and part of it, there are a lot of factors that would go into that. But I think that's probably the way that we would look at it initially.

Nancy Lashine:

Do you just invest in the US?

Sara Queen:

Yes.

Nancy Lashine:

Because?

Sara Queen:

Well, so that has been where our operating expertise has been. Now on the debt side, we're outside the US as well, and we have been looking at how to expand geographically outside. But for the moment, we are really just investing in the US.

Nancy Lashine:

I'm sure that served you well, as a general rule. Have you, I'll just ask the question, given some of the tariff turmoil of the last couple of weeks, has that changed your investment perspective in terms of what you're interested in, or the pace at which you want to deploy?

Sara Queen:

It's definitely made us on the pace.

Nancy Lashine:

In what respect?

Sara Queen:

As we consider, we have been more active probably in the development space over the last 18 months than we have on existing assets. And so with the uncertainty around tariffs, we're spending time, well, let's really understand, where do we think there's tariff exposure? And granted, it keeps moving, so that's not helpful.

Nancy Lashine:

Yeah, say, good luck.

Sara Queen:

And also, you have to talk to your clients on getting them comfortable, where, how much contingency have you built in? At what point are you going to get pricing working through that? So that has slowed things down. I would also say that many of our clients are, well, they're not full stop, or maybe tapping the brakes a little on, let's see where things go out.

I will say, I was at Mipham a couple of weeks ago and a lot of investor sentiment there was, from the European clients, and that's European clients, broadly, was, "I'm not sure I really want to be investing a lot in the US right now." And so that is something we have to work through. Now, some of our clients feel very differently, and so we're fortunate in that respect. But it is something that, the uncertainty is not helping the environment, and not helping the sense of recovery that I think we all had at the end of last year. It's like the air is being let out of the balloon again.

Nancy Lashine:

When you think about if you do have the capital and the appetite to go forward, what do you find most interesting right now?

Sara Queen:

So I will say, we have been seeing some very interesting multifamily deals where you can buy significantly below replacement cost in markets that you want to be in. It could be a core fund needs to raise liquidity as they're satisfying their redemption queue, but that is creating some opportunities for others. So that's been interesting. On the BTR space, we are continuing to see opportunities there. Although, probably a little bit more cautious this month than we were two months ago on continued development in that space.

Nancy Lashine:

Because of the cost of construction, the inflation risk, or the interest rate risk?

Sara Queen:

Well, actually both. Probably a little bit, the construction risk feels a little bit more moderated for them, because you've got the timber issue, you also have the trade issues, but the trades, the people who are going to be building the projects. But we have not seen a huge uptick yet on construction costs there. But it's early days, so we're continuing to monitor that.

Nancy Lashine:

Is there any deal that you guys have invested in the last, say, year or so that's, you think, a good example of what you think makes sense right now?

Sara Queen:

Well, we bought a really exciting multifamily core deal on the West Coast. Great location that, now I can't remember the exact discount to replacement costs, but it was like one of those deals in one of the markets outside of San Francisco that doesn't come along very often. And we were able to get it for our client and feel very good about that deal.

Nancy Lashine:

That's great. So switching gears a little bit, I'd love to hear about your approach to leadership. You manage a team across the US?

Sara Queen:

Yes.

Nancy Lashine:

Tell us a little bit about your leadership, your management style, and what has most influenced you?

Sara Queen:

I would say, so I try to really build a collaborative management style, and more operate as a... There's been a lot of times in my career where I was a player coach. And there are places where I'm more of a coach than a player these days. But still kind of coming out with that mindset of both how to help deliver what we need to our clients, how to help people grow and develop. And talking through things, I think it makes me think of Charlie, just again, encouraging people to think through things.

Like yesterday, we had a call on, we were having a difficult issue with a partner, and there was the moment where you have the hot take of... "This is what we need to do." And then it's like, "Okay, well now that I've gotten that off my chest, let's all think about how do-"

Nancy Lashine:

Constructive? Constructive?

Sara Queen:

Yeah, "Let's be constructive. You know them better than I do. How do we get them to an outcome that is going to work? And then let's strategize about how are we going to do the back and forth to get there."

And I also think that, having had so much experience at other investment management firms is also helpful, because every place you go, you see a different approach to investing.

I mean, Steve Fanari is an amazing investor. There's a lot you can learn from Steve, and there's a lot I did learn from Steve. And so taking some of those lessons, and you combine those with the lessons of working for Rick Clark, also a student investor-

Nancy Lashine:

Yeah, amazing people.

Sara Queen:

Yeah. Very different style than Steve. So thinking through what those different perspectives are on how you think about how to deliver interesting and accretive investment opportunities for your clients. And then, really trying to help the team understand the real focus is on value creation in the short and the long term. And just really, how do you work those assets every day so that you end up maximizing the value that you can overall?

Nancy Lashine:

So this is a hard question, is there a challenge that you can share with us that happened to you in your career that really shaped you as a leader?

Sara Queen:

That's an excellent question. So when I was coming out of business school, I really wanted to go into acquisitions. I had seen enough of the industry to know there's a lot of value to that. I'd had time in asset management, really wanted to take an acquisitions job. I could not get an acquisitions job to save my life. And I heard everything from, "Oh, you're an overpriced Harvard MBA." And I was like, "Well, make me an offer and we can negotiate on that part." To a whole series of other things. And just ended up, had a door slammed in my face probably, I don't know, 60 times.

Nancy Lashine:

Wow.

Sara Queen:

Just could not get-

Nancy Lashine:

Wow, that's the definition of learning resilience.

Sara Queen:

Yeah. And then, of course, you're combining with the fact that everybody in business school at that point was, lots of people were doing consulting and iBanking. So they all had jobs in the first semester of your second year. And I ended up taking the job with Clarion three days before graduation.

And so, believing in yourself through all of that, and continuing to figure out how do you move forward, and how do you continue to be agile in the face of all of the rejections, and continue to work on the margins for what it was that you wanted to achieve, was a very valuable lesson.

And then, I will say when I left Brookfield and was thinking about what was next, I kept hearing, "Well, you can't take the most senior job someplace because you haven't run a very large team. You don't have investment experience." Even though I had 20 years of running large portfolios for-

Nancy Lashine:

Institutional firms?

Sara Queen:

... big firms. And then the last one was, "Well, you don't have a lot of international experience," like dealing with the Canadians apparently didn't count.

Nancy Lashine:

Or say, the 52 state?

Sara Queen:

Yeah. So when I was looking at offers, Mapletree hit all of those things for me. So it was like, okay, I'm running North America, I'm running the entire team. I'm running both investing and asset management, and everything in between. And being the senior most person in North America, but dealing with this large institutional Asian investor. And so, thinking about stepping back from, you may not like some of the advice or some of the things you hear, and you may disagree with them, but when you hear it enough, it's like, okay, I have to realize that is unfortunately what I'm having to deal with. And so, how do then, I solve for those issues?

Nancy Lashine:

Right. Dealing with what other people see, even though that that's not the full reality.

Sara Queen:

Exactly.

Nancy Lashine:

How have you maintained a balance in your life? As you've had these very challenging jobs and work really hard, what do you do to maintain balance?

Sara Queen:

Well, what I do today to maintain balance is very different than what I did 20 years ago. And I will say, I was not so great about balance in those years. Look, being a working mother is very challenging. I always felt like, okay, working makes me happier. And so if I'm happier because I'm working, then I will be a better mother. And I still firmly believe that.

But there were times when that was very tough, and my me time was the cab ride home from the office, as I was frantic to get home before the nanny gave me a hard time that I was late again. And in those years, what I did for fun was, on the weekend I would take my kids to the Natural History Museum. Now, it's much more about, I do a lot of walking. I've kind of become this crazy walker. And so a lot of time walking and thinking about some of those things.

And then the other thing that has brought me a lot of joy over the years is, my parents really instilled in me the sense that service is something that's very important. And so, one of the great things about being a real estate person is every nonprofit in New York City has a real estate problem.

Nancy Lashine:

Yeah, it's true.

Sara Queen:

And so, over the years, I've done some really interesting nonprofit work that's really also enhanced my real estate skills. And so, for instance, for my kids' school, I ran the real estate committee, big surprise. But we added a high school division, so I had to help find the space, negotiate the lease, run the construction, delivering it on time and on budget. So it was like 20 hours a week on top of my job that I was doing.

Nancy Lashine:

And it happened to be in New York City-

Sara Queen:

Yes.

Nancy Lashine:

... which is a really tough place to do all those things.

Sara Queen:

Yes. But my kids got used to, we would have to get to school early on Wednesdays every morning so that I could go to my construction meeting. And when my daughter got a little older, I would drop her at the corner to get my coffee, and then she would bring me in my coffee-

Nancy Lashine:

I thought she was going to, you make her come to the meetings.

Sara Queen:

No, but she did do some tours with me over the years. And now I get to serve on Trinity Church's vestry. And that has been immensely satisfying, as they have a large real estate portfolio.

Nancy Lashine:

Huge portfolio, yeah.

Sara Queen:

And the money that we're earning is going to do amazing, wonderful things in New York City and make our city better. So that is so satisfying, as well as teaching. And so, giving back in those ways, they're are a lot of work, but they're very satisfying.

Nancy Lashine:

I'm going to ask you a question Someone asked me today at lunch, which I really didn't want to answer, so I'll let you answer it. Are you seeing a real rollback in DEI and opportunities for women in the organizations that you're working with? And are the opportunities for women or people of color, are they different than they might've been a couple of years ago?

Sara Queen:

I will say, broadly, yes, they are different than they were a couple of years ago. And I'm hearing snippets of a rollback in attitude. And that is really a gut punch, frankly.

Nancy Lashine:

Yeah. When you say attitude, like behavior that's acceptable versus not acceptable?

Sara Queen:

Yes. And a commentary around, "Oh, well, you got your position because you're a woman," type of thing. And that is like, at this point it's like, "Wait a minute, I've worked really hard to get where I am, as have a lot of people." And so I would say, that's some of what I'm feeling is permeating in the air a little. Looking at the organizations that I'm involved in, I've not seen a change. But there is a greater sensitivity. I think, I was at a WX event last night and somebody was talking about that the core of-

Nancy Lashine:

WX is Women Executives in Real Estate.

Sara Queen:

Yeah. That the core of the fundamentals around having diverse voices delivers better results, whether that's educational background, gender, race issues. Just the more different voices you have in a room, you get to a better solution. And she was talking about how the fundamentals around the core values of DEI are not changing, but the way that people are referring to it is. And that, hopefully, maybe is the case. But what I am hearing, occasionally, is a sense of people feel freer to make comments that are really fly in the face of that.

Nancy Lashine:

Yeah. Yeah. I wish I could dispute you, but I can't. You are one of the most successful women in the real estate business in multiple large organizations. And when you have, obviously, you've seen a lot of people go through those organizations, what advice would you give people who might be listening about what you need to do to be successful in a larger real estate organization?

Sara Queen:

Oh, that's a great question. I think, so in some ways, it's like doing a large value add project. It's understanding, okay, what is important to this organization? How can I bring my current skillset to help with that? And how can I develop other skills that can be, to use a hockey analogy, how can I skate to where the puck is going, as opposed to just looking at where it's been? And what can I do to either expand my network, or take a class, or just volunteer on a project and put my hand up to say, "Can I do that?"

Nancy Lashine:

Right.

Sara Queen:

But I also think there is some... I used to think it was a lot of, look, if I just do a great job, my great job is going to get noticed. And I remember when I read Lean In, Sheryl Sandberg's book, she talked about there's this tendency for women to, "I'm going to put my head down, I'm going to work really hard, and then somebody's going to put a tiara on my head." Which I was like, okay, that's not exactly where I was going with it.

But I think that remembering you do have to work on that networking within your organization, as well as without, is important. And I think a lot of times, particularly mid-career for women, because you're being pulled in so many different directions, it's hard to remember that. And I actually remember, Mitch Rudin, who I worked for when I was at Brookfield, had sat me down at one point. He was like, "Sarah," he's like, "you have 15 opportunities a week to network, breakfast, lunch, and dinner." He's like, "I'm not looking for you to do that." He's like, "I think you're doing maybe one a week and you need to be doing more than that." And-

Nancy Lashine:

That was great.

Sara Queen:

That was great advice.

Nancy Lashine:

Great advice.

Sara Queen:

And it then introduced me to, I made more of an effort, made a lot more contacts in the industry, and I'm forever grateful for him for that advice.

Nancy Lashine:

Yeah, that's fantastic. Well, clearly, you've spent a lot of your career listening, and being agile, and then working like a dog. It's a heck of a combination.

But I love what you said about this first very big project that you worked on, and one of the things you learned was really picking apart the things that needed to be done, figuring out what your team was, who you needed, who to help you. That's just valuable for anything you set out to do. So thank you for that. I'm going to, as we wrap up, just ask you some quick questions.

Sara Queen:

Yes.

Nancy Lashine:

Who's had the greatest influence on your career?

Sara Queen:

Actually, I would say Mira Graetz-Ball.

Nancy Lashine:

Wow, that's a name from I haven't heard in a long time.

Sara Queen:

So I worked for Mira when I was at Met the first time. First senior woman I ever really saw. Had two kids, was a very devoted mom, I mean, is a very devoted mom, and was so good at her job. So I had worked for the head of the real estate department, and then had moved into asset management at MetLife. And I showed up in the northeast region and they assigned me to Mira.

And I was 24. I knew nothing, really, about real estate, but I had been the analyst for the department head. And she really took me under her wing and showed me how to do stuff. I learned how to negotiate, watching her negotiate. I learned a ton of stuff from her-

Nancy Lashine:

Oh, so good.

Sara Queen:

And I would not have had my career without her.

Nancy Lashine:

Oh, isn't that fabulous? That's cool. Do you watch a lot of movies?

Sara Queen:

Oh, I do.

Nancy Lashine:

Okay. Favorite movie?

Sara Queen:

Bringing Up Baby.

Nancy Lashine:

Oh.

Sara Queen:

Carey Grant, Katherine Hepburn. It's a classic, everybody should watch it.

Nancy Lashine:

Bringing Up Baby. Okay, cool. If you could have dinner with anyone, dead or alive, who would it be? And you can have a dinner party if there's multiple people. I've been asked that.

Sara Queen:

Oh geez, I got to pass on that one. I don't know.

Nancy Lashine:

Okay, fair enough. You'd say your husband. We'll just say you said that.

Sara Queen:

So it's hard. There's a lot of people going through my head on the dinner thing.

Nancy Lashine:

Right. Fair.

Sara Queen:

And so I'm like, yes, no, I could just start rattling people off. But I'm trying to think.

Nancy Lashine:

I'll let you off the hook.

Sara Queen:

Okay.

Nancy Lashine:

Any parting words for the audience?

Sara Queen:

Yes. So times of uncertainty and difficulty in our industry are great learning opportunities. And I think a lot of times people get like, "Oh, this is so hard." It's hard for a reason. But if you figure out how to perform now, you will build client relationships, and trust, and you will learn things now that will help you through your entire career. So particularly, if you're just starting out in real estate, I'd say this is an amazing moment. Like dive in, learn everything you can. Work on all of the crappy assets, because those learnings will carry you through for the next 35 years.

Nancy Lashine:

Wiser words could not be said. Thank you so much, Sarah. What a pleasure to have you. Thanks very much.

Sara Queen:

Oh, thank you. This was so much fun.

Nancy Lashine:

I hope you enjoyed this episode of Real Estate Capital. Before you go, I have a quick favor to ask. We've 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. So 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.