Robert Morgenstern wears many hats. He is the founder and strategic leader of Canvas Property Group, a property, construction and asset management firm with a portfolio of 40 mixed-use properties in New York City plus third-party management assignments. He is also the managing principal of Morgenstern Capital, where he leads multifamily acquisitions and operations. Since its founding in 2015, Morgenstern Capital has acquired approximately 1,500 units in New York City valued at $500M. He recently launched Juliet Technologies, a proptech firm for multifamily asset managers.
Bisnow: Tell us about your leadership philosophy and what experiences, words of advice or mentors shaped it along the way.
Morgenstern: “Give a man a fish, he eats for a day, teach a man to fish, you’ll feed him for a lifetime.” This adage can be applied to anywhere in life, and I use it with my kids more than they want to hear it. As a leader and mentor, I consider this frequently as the best members of my team have always been those who want to learn and grow beyond their current role. Having a manager perform a task instead of guiding and teaching younger team members will take more time, but is the best way to scale an organization and build culture.
Bisnow: How has the role of CEO/business leader changed over time — especially when considering the early days of your career to now?
Morgenstern: In the mid-’90s on Wall Street, I had a sales manager at my first job who was classically trained by IBM as a sales manager and he stood in front of his team every morning at 9 a.m. and told a story that seemed hokey at the time, but got to a business concept. Many of those still sit with me today. I think I’ve worked hard to spend time with every member of our team. As we grow, that gets harder, but the message of communicating with every team member to learn what matters to them and how that feeds the organization is very important.
Business leaders are facing a crisis of talent. It has become especially challenging in low-margin businesses, where the answer of “just pay more” can break the economics of a business. Understanding how to retain talent and build culture is more important than ever.
I became a multifamily owner-operator, with no employees, well before I would have ever considered myself a CEO. Growing into that role by sitting in nearly every seat in the company allows me to understand my teams’ issues and work through complex problems at every front. When you’ve been the bookkeeper, leasing agent and property manager, you can speak to the heads of those teams with experience and confidence on what they need to improve.
I’ve never been on a salary. From an eat what you kill sales guy to a company founder, I’ve always survived on the results of my work. This may be why I don’t sleep particularly well, but it is a part of what drives me.
Bisnow: What will the role of CEO look like in 10 years?
Morgenstern: Like it is now, it will forever be in a period of transition and growth. The best leaders will prioritize working hard for their teams, cultures and companies more than most. Jim Collins, in Good to Great, discusses leadership in a pyramid, with level five leaders focusing on the companies and less about themselves, with limited ego. Hopefully as people in the CEO seat get younger, we’ll start to see more take on some of these qualities.
Bisnow: Was leading a company always a goal for you? If so, why?
Morgenstern: I formed my first real estate company in 2010 when I saw an opportunity coming out of the global financial crisis. I’ve always had an entrepreneurial side, mowing lawns, spray-painting street numbers onto curbs in the Jersey suburbs, etc. Being the principal has always felt comfortable.
I have always tried to lead the company in a slightly different direction. I’ve wanted to merge technology and real estate experience to create a uniquely positioned firm in the market. Having three vertically integrated companies now allows us to take advantage of different opportunities in the market. I’ve always had an investment firm, Morgenstern Capital. I’ve been building a third-party management firm for several years called Canvas Property Group. Now, we’ve launched Juliet.
My new software firm, Juliet Technologies, allows us to provide significant value to the assets we own and manage. As a software-as-a-service business, we’re offering those benefits to the entire multifamily industry, while scaling a data business intelligence software platform nationally. These three businesses feed each other and will create a unique opportunity for our stakeholders to benefit.
Bisnow: What has been your biggest mistake as a leader?
Morgenstern: I had an intern in the summer of 2017 who wasn’t working very hard. We sat down to discuss it and his response turned into a 20-minute lesson on why he was jazzed up about Bitcoin. At the time, he sat 10 feet away from me and tried to explain it — but I wouldn’t listen. I hope he is on a beach somewhere and never going to work again. Paying attention to ideas without knowing where the great ones will come from is always hard.
Bisnow: Has your thinking changed about the workplace between 2019 and today? How? What will your office strategy be moving forward?
Morgenstern: Imagine someone seeing this question and answering “No, this is a business-as-usual environment”? The world has been turned upside down and it has created interesting challenges and opportunities. We’ve analyzed each area of the company. Our office strategy has morphed to hybrid. Certain teams work better when they are together. Acquisitions and asset management solves problems collaboratively. Property managers and operations teams work to solve issues daily surrounding our portfolio of 2,000 units in NYC. Being completely remote makes that nearly impossible. We utilize the best technology at the firm, including Slack, Airtable and other software — but sitting at a conference room table to collaboratively solve problems creates interaction that can’t be replicated.
However, concentration-based work and individual tasks have found a place at home. Certain team members that have the space to afford them personal privacy believe they work more efficiently without the rest of the team asking them questions. It will continue to evolve, just like our business itself. I’m working under the assumption that 100% of employees in office 100% of the time is over.
This all circles back to collaborative real estate operations. We have developed a web-based platform that supplements existing accounting software to provide a set of visualization and reporting tools that allows business owners, asset managers and investors to provide transparency into operations. Juliet Technologies also creates a data storage, abstracting and calendaring feature to allow for business intelligence within operational documents. It is a web-based platform that allows the C-level executive or real estate investors to avoid learning accounting software and have key performance indicators at their fingertips in real time.
Bisnow: There is a massive conversation underway regarding advancing more people of color and women into the C-suite. What are you doing to address those voices and that movement within your own organization?
Morgenstern: This conversation should have been underway long ago. I believe that diversity in all respects, which includes not only diversity as it relates to race and sex, but also diversity of background and diversity of thought, among other things, is critical to the success of a business. Ultimately, when it comes to hiring, actions speak louder than words. Fifty percent of our team is represented by people of color and 50% are women, including women as heads of accounting, operations and acquisitions. Overall, I am pleased with the talent and diversity of our team.
Bisnow: What do you think about the recent focus on sustainability and climate change? Is it overblown? Insufficient? Is your company tackling climate change in any way or taking it under consideration in your planning?
Morgenstern: I believe climate change tech and the solving of the issues around climate is one of the next great investment opportunities. There will be many losers in this space, like all great opportunities, but the winners will not only help shift what is now an existential crisis but get fantastically wealthy while doing it. I don’t believe there is a way to overstate the issue, but the approach on solving it in real estate as it relates specifically to aging properties while simultaneously trying to pass universal rent control, makes compliance, specifically for small to midsized landlords, a major challenge.
Bisnow: What is something CRE gets wrong in your eyes?
Morgenstern: Commercial real estate could do a better job of getting the message out to the public about the positive work that landlords, owners and managers do for the housing stock and their tenants. I understand that landlords behaving badly is always fun to read — but when the political messaging continues to push a very vocal minority toward policies that will destroy our housing stock and drive rents up, something needs to be done that can shift the conversation. CHIP does a wonderful job of educating the market and they work tirelessly, but they are swimming upstream. Given where the political winds are blowing, it is a challenging task.
Bisnow: What asset class or location will perform best over the next five years? Why?
Morgenstern: I’m incredibly bullish on a specific type of multifamily asset and deal in New York City. I believe we turned a meaningful corner in the pandemic by the end of January, our mayor is putting safety first, and despite the news to the contrary, some of the strongest firms in the world are leasing significant office space. When demand growth is coupled with short-sighted statewide policies with good intentions but no vision, the results will be outsized rent growth and significant opportunity if you can find assets that control taxes and compliance. When comparing cap rates and trades nationally, I feel very strongly that 2022 will be one of the best times to buy in multifamily real estate in NYC over the next five years. This is the most nuanced market in the world, so quality operations, data analytics, management and acquisitions talent will win in the end.
Bisnow: What book, article or TedTalk meant the most to you? Why?
Morgenstern: The book that means the most to me is still Atlas Shrugged by Ayn Rand. Rand’s masterpiece outlined a world where government got so deeply involved in our day-to-day lives that the creators and leaders began to disappear to a place where talent, work and honesty was not valued. Creation of jobs and the spirit of being rewarded as an entrepreneur is at the core of who I am. The fear that this is being taken through government regulation in the form of universal rent control, seemingly endless income and property tax increases, and the cancel culture makes the novel worth rereading for everyone.
Bisnow: What is your all-time favorite TV show? Why?
Morgenstern: Game of Thrones is the best show of all-time, this honestly should not even be up for debate. Over our most recent family vacation when hotly debating the five shows you’d bring to a desert island forever, I included Lost, Sopranos, The Office and Seinfeld. I’ll take that starting lineup all day.
Bisnow: How do you spend your Saturdays?
Morgenstern: I recently bought a house in Atlantic Beach, Long Island, that serves as the weekend home base for my wife, two kids and me. Raising a family in the city has been wonderful for us. Unfortunately, much of that was lost with our last mayor and Covid. The ability to spend weekends in our yard kicking a soccer ball, shooting some hoops and allowing the kids to explore on bike rides on their own while I mess around trying to make my heirloom tomatoes grow allows all of us to decompress. Usually, we’ll then fire up the Solo Stove and the Ooni Pizza Oven (I’m a sucker for the Instagram ad purchase) for s’mores by the outdoor couch after a homemade pizza — I make a strong kale & sausage Parmesan pie. One bite.
Republished with permission from Bisnow