Ten Lessons from 15 Years Running Summer Street Advisors

It has been a wild ride. In 2009, during the height of the Great Financial Crisis, Summer Street Advisors was founded. Fifteen years later and we would not be where we are today without our clients, partners, and team members. We are proud to have worked with over one hundred clients and underwritten over fifty billion in transactions. As we enter the next fifteen years and beyond, we will continue to work hard to exceed our clients’ expectations.

Today, I want to share ten of the biggest lessons I have learned over the past fifteen years about business, people and working toward success.

1. Recognize that business is about people, and people are important.

My focus has always been on using our services to a) solve problems or b) present new opportunities. But we cannot do this without first establishing trust.

I approach each interaction as an avenue for understanding what the need really is. I often say to my team, “Drive the train.” Understand first; then execute and deliver. This strategy helps our clients gain greater trust in us and nurtures long-term relationships.

2. Understand the cyclical nature of real estate – the booms, downturns, and uncertainty of CRE.

Having a clear framework for evaluating markets and specific investment opportunities allows a potential participant to determine if the CRE opportunity aligns with their particular risk appetite.

It is often difficult for an investor to objectively evaluate risks and returns. I use a framework I gained while working at GE Capital Real Estate to evaluate real estate opportunities and investments (more in Lesson Four). When considering investments, whether in debt or equity, it is essential to adopt a systematic approach that considers risk and alignment with an organization’s objectives.

3. Every day is different, and nothing is certain.

Every year, we create a defined business plan for each line of business, with specific metrics around volume, margins, and personnel. But market dynamics change, and we have to be ready to adapt. We need to have a strong but flexible mindset and organizational structure in place to accommodate a growth or down market, and the different client needs that come with those.

When Summer Street Advisors was founded during the Great Financial Crisis, we adapted our approaches to meet the challenges of that time, where market dynamics were uncertain and questions about asset valuations were prevalent. Initially, we focused on distress for banks – helping them evaluate and fix their problems. But we were also working for private capital, looking to buy these opportunities.

After a period, the financial markets improved, and SSA pivoted to a different service offering. We have always focused on hiring talented, diverse team members who embody a “finding solutions” mindset and know how to play different roles during a pivot. Everyone from analysts to senior team members is asked to think this way. Today, as we face an uncertain geopolitical, economic and interest rate environment, being prepared to pivot remains one of our key focuses.

4. Know your numbers and be able to explain them as if you are talking to your grandmother.

It is essential in this business to master the art of financial analysis for real estate investments. This does not mean just knowing the numbers. It means understanding what they really mean – for Main Street and for Wall Street. You may not like the result – but better to know early than to act on flawed numbers or flawed logic.

We use a framework inspired by the legacy of GE, known as the Asset, Market, and Execution framework. This framework guides our evaluation of projects and investments, providing a common ground for analysis. It enables us to consolidate and interpret all relevant data effectively.

The goal is to analyze assets, whether real estate or loans, regardless of the amount of information available, and to draw accurate conclusions about whether a situation is favorable or unfavorable.

5. Focus on revenue first, then dive deeper into your process.

Get your first deal on the board, prove your worth, and then build a better process.

I talk with entrepreneurs every day, and what I have seen is that many new business owners have great ideas but get hung up on the process. They struggle with defining their market or getting their first sale.

While we all believe that what we are doing is special and unique, we need to be objective and careful not to drink our own Kool-Aid. I love my ideas, but will anyone else? Will anyone pay for these services or products? Getting that first sale is a critical validation for a company. The postmortem evaluation might indicate that there are things that can be done better, but at least you know that others will pay for your service or idea.

Having revenue helps validate your company in the marketplace and build for the future. Businesses do not work if there is no revenue.

6. Understand the risk before taking on any project or investment.

Managing risk requires a structured approach. I utilize a risk spectrum ranging from one to ten, where one represents minimal risk and ten represents considerable risk. This framework helps me understand the level of risk associated with each initiative I undertake.

Once the risk is rated, we ask if the potential reward aligns with the risk taken (both our team and our clients should receive appropriate compensation). This approach allows us to make informed decisions and effectively manage risk across all our endeavors.

7. Marketing is important (even to a finance guy like me).

It is important to stay in front of your clients and in the marketplace. Define the marketing strategy – define target audience, execute plan, measure results and update-modify plan, as necessary.

Since 2010, we have actively promoted our services through various channels, such as roundtable events, frequent article publications, and leadership contributions.

Additionally, we engage extensively on social media to share insights and gather client feedback. I use LinkedIn to stay in front of my clients by sharing my thoughts on events and the market.

While we have updated our logo and redesigned our website a few times, our core focus has remained unchanged – to remain a leading boutique firm dedicated to providing tailored services and exceptional client service.

8. Everyone needs to know how they are being measured.

My primary leadership focus is providing our organization with a clear vision and direction, so that we can deliver outstanding service that aligns with our core values and mission.

This means laying out the mission; defining the tasks; creating a framework; and establishing metrics. Recently, we have refined our mission and values at SSA to emphasize our commitment to building long-term partnerships. We value getting to know our clients, understanding their businesses, and anticipating their needs in order to provide custom solutions that consistently exceed expectations. SSA values include – create moments of magic, commitment to excellence, adaptability to change, taking responsibility and long-lasting loyalty. Our boutique advisory firm focuses on being a partner to our clients throughout all phases of their real estate journey.

I also believe that establishing clear career paths for team members is important, so that they can understand and work towards these advancements. As one manager once told me, career development is a two-way street – incumbent on employee and employer.

9. Build a strong network to make up for your blind spots.

I will be the first to admit that I do not have all the answers. That is why it is important to make sure you have a network that supports you (and vice versa). I learned many years ago from a failed startup that having an outside advisory board can be critical to providing insight in areas where you may have weaknesses.

Understanding your core competencies is key. I try to nurture and develop relationships, aiming for ongoing engagement rather than treating interactions as one-off events. By understanding what matters to individuals or organizations, I seek opportunities for collaboration and periodically check in to explore areas where we can work together effectively.

10. Stay up to date on the legal and regulatory changes that affect your business.

While I am not a lawyer myself, I have friends who are, and I recognize the importance of understanding what I do not know. The rise in interest rates and decline in real estate values has led to uncertainties in the banking sector and a more cautious regulatory environment.

Considering these types of changes, it is important for me to stay informed about the latest rules and regulations, especially concerning banking operations and employee relations. This awareness helps ensure compliance and sensitivity in my company’s interactions, whether in dealings involving different jurisdictions and real estate nuances, or internal staffing procedures.

As we navigate this phase of the CRE market, I am proud that Summer Street Advisors continues to be a reliable and respected resource for our clients. Thanks again to our team, clients, partners, and network for an incredible fifteen years and I look forward to the future and the new adventures to come.