Trusting Your Intuition For Growth and Success with Deborah Smith, Co-founder and Principal of the CenterCap Group, LLC

About this episode:

Deborah Smith, Co-Founder and Principal of The CenterCap Group, LLC, joins us on the podcast. She started the only female-founded boutique investment bank for ‘All Things Real Estate’, and heads the firm’s Strategic Capital and M&A and Execution efforts. Deborah shares how she works with clients to find unique and creative solutions to ensure growth and success. Over her career she has been involved in more than $100 billion of mergers, acquisitions and restructuring transactions.

Topics Discussed:

• How growing up on a dairy farm impacted Deborah’s work ethic

• Her advice on trusting your intuition and not second-guessing decisions

• Why client retention is so important and what she considers her greatest success 

• How Deborah helps her clients with creative and forward-thinking solutions to drive success

About Deborah:

Deborah Smith is Co-Founder and Principal of The CenterCap Group, LLC and heads the firm’s Strategic Capital and M&A and Execution efforts. Prior to forming The CenterCap Group, LLC, Ms. Smith was Co-Head of M&A and a Senior Managing Director with CB Richard Ellis Investors (CB Richard Ellis's $40 billion AUM investment management business).

She joined CBREI in July 2007 to co-head the build out of the firm's M&A efforts and led the firm’s negotiation and acquisition of a majority interest in Wood Partners (one of the largest multifamily developers in the United States) in 2008. From 1998-2007, Ms. Smith worked on mergers and acquisitions with Lehman Brothers, Wachovia Securities and Morgan Stanley.

Ms. Smith has been involved in more than $100 billion of mergers, acquisitions and restructuring transactions. Ms. Smith has a Bachelor of Economics, with honors, and a Bachelor of Law, with honors, from the University of Sydney.

Read a raw, unedited transcript of this episode:

Thank you for joining us today, Deb. You are the co-founder and CEO of the Center Cap Group, We cannot wait to learn more But first, tell us more about who you are and your early career path.

Thanks for having me. it's great to meet you. I grew up in Australia on a dairy farm. I thought I was probably going to be a tax attorney at some point towards the back end of my high school. Prior to meeting a fantastic teacher, my economics teacher, when I was in Grade 11, I didn't think I ever contemplated even going to college. It was just not something that dairy farming children did. And so I am one of my many, many, many first cousins and my family to go to college. And I think it was it was certainly different than what anybody else in my family had contemplated. So it was a long list of firsts that have gone on since then. I end up going into an investment banking out of college, and it was the only bank that I put in for and I was very fortunate to get a job with Morgan Stanley in Australia and then I was transferred over to the United States, and I've been here ever since I was a loner from the Australian office, and I stayed and I love it. I think I'm one of few people outside of my two business partners that is still doing what we did when we finished college. We're all investment bankers and we all still do investment banking, and It's probably more fun now that I've been doing it for twenty five years than when I first started and I didn't know a lot. And for people who are looking into a career in finance and it seems really scary and in some ways it is. But once you get into it, it's if you like to learn you like to be challenged. It's amazing. And I did that for many years before I branched out with my current business partners now and we now have our own craft. So that's what got us where we are today.

Do you think that growing up on a dairy farm taught you business? And it's interesting because I had a previous guest last week she is helping tobacco farmers change to more organic and sustainable food, And so she hopes that we can introduce farming as a more viable career. I'm curious if it taught you some business lessons before you made the leap to college in the U.S.

Yeah, it is a good question. I look back and as a dairy farming child, everyone has a job from very early on and which is different than the concept of today, grades and GPAs and college scores. And where I grew up, Nobody cared about any of that stuff. And I up until I went off to college I was responsible and I had a job and I'd come home from school and it'd be the same thing. I had to lift hay bales and drive tractors. My first big guy drive was a tractor and a stick shift But from a very early age, we and all of my siblings were raised to do multiple things at the same time. And so we didn't have the convenience to just do one thing. We grew all of our own food, and so we did live off the land quite a bit. And I guess I look back there is a skill to that. So while some others may be focusing on grades, I was focused on working. And I do that all the way through high school. I had to work, and then when I went to college, I maintained three jobs at a time to put myself through college. And I don't think I ever thought it would be any different. The other thing is, we have to complete everything. We stop. You don't get the you don't get the luxury of doing half a job. You have to do the whole job or no job and you have responsibilities. And so you learn very early that this has to be done and this is your job and what you what you have to get all this stuff done before you go to school. And that's the way it is. And so when you're raised with a very hands on mentality, I do think it impacts the way you look at bay. And I think there's combinations of things together is, now, you know, I have kids. I married, I sit on boards, I do volunteer work, I'm involved in the kids' schools. And yet I have two wonderful business partners and we run an investment bank. I never thought I spend a whole lot of time saying, Is that normal? It just is. It's just the way our life is.

And do you think that work ethic gave you a sense of confidence I think that you start to think about it. I just do it. And so I don't spend a lot of time wondering if I can or can't do it. I just do it. And so once I have something in front of me, even if it's something new, there is no concept that I cannot. I change, achieve something. It's more control. What do I need to do to get this done? And similarly, when we started out the fun and through with my entire career, I've never stood back and thought, Well, am I good enough? Am I qualified enough? Do I just don't think in terms of these metrics, I just think, Well, this is what I want to do. So how am I going to do that as a story about how am I going to do that? And so I'm constantly thinking what I need to do to get from A to B and start, and I don't spend a whole lot of time thinking about whether I should be in the first place. And I think with that mentality, it's contagious because and maybe that's a confidence that I don't appreciate. But I think when you take that perspective, others around you will go with you. Right? If you're asking if a mini enough to think it's any different, then then I tend to find people will move along in the direction you're going.

And I'm sure when you get to be, it feels good, because you have you have used that curiosity to figure out how to do it and accomplish what you set out to do.

Yeah. And I think that that's interesting is I think regardless of the task, I take enormous enjoyment in. Completing it and whether it's cleaning my kitchen or washing a floor or getting the kids ready for school, or whether it's completing a huge deal or, I do a lot of writing, I publish a lot of articles in just a matter what it is. I take enormous enjoyment and pride in a job well done. And so it's the continual inspiration. I think that's what ends up tying in with wanting to get from A to B is I just focused on the B. And what do I need to do to get a job well done? Timing a little luck. some smarts has helped me figured out how to navigate through life to get to where I am.

The Senate kept group is a boutique investment bank providing strategic advisory, capital raising and consulting related services to private and public sector companies, and has been involved in more than $400 billion of M&A and capital market transactions. Share with us more about what you do and what you like the most about it. CCG, which we call it, is we are all things real estate, which I think is our mantra. And we tend to hold on to it pretty tightly. We have not gone off focus on the real estate industry since we started the fire. And so we've held to be an industry expert around either doing corporate M&A, which is strategic advice to add to whether it's rates, operating companies, investment managers on helping them think how to grow. So if you say, well, I want to buy something or I want to solve a succession planning issue, or I'm trying to figure out what my best is to think about me, or how do I go about capital raising those kind of questions we deal with and then we can follow through on the transaction. We also have a capital raise business that raises capital for a mainly for one off deals. Some programmatic people say if you want to acquire a portfolio of properties or truck stops or office buildings listing your housing, we help find capital flows. And then we have a consulting business that it's strategic about us, and so it is focused on either repositioning companies. It's helping you get public company readiness. We provide opinions, valuation advice out of that business line. And each one of those business lines, we have grown at different times, spanning way to markets. So when we started the firm in 09, it was much more capital raising because that's where the market was. But over time, that's rotated. And now we think we're one of the top tier advisors to the investment management space in the real estate sector. And so we do a lot of buying and selling of investment managers and advising on those transactions, as well as consulting with them. And so together. And then the consulting business, we've built that out over the past few years. In response to a need, we realized that there were a lot of managers in our space who just need a strategic advice. There was no deal involved, growing up as an M&A banker, it's not a buy, you're a seller, but there is actually a segment of the market that is neither one of those things. So we we do consulting as that third element and we've really grown out that business, which helps balance out some of the mix and that business. But I tend to run myself. I love it. It is so much fun going in and meeting new companies, dissecting them, figuring out what makes them great and then how to grow them and to give them some recommendations and advice. It is a lot of fun. I love to do it because no two companies are the same. And it's actually really interesting how many companies we meet that don't know their own strengths from an investor standpoint. If you were looking in, we've come out with a list of things that are just different and they just don't even think about. And so it makes a lot of fun. So that's the part. I absolutely love to do that. That's true because sometimes when you're in the everyday life, you don't see those strengths and sometimes from outside perspective, can see things that maybe you don't.

Yeah. And I think that's right. We've been exposed hundreds of managers over time and not two are the same. But it often astounds me that when I can look at someone's deck and how they position themselves, I'm like, These guys are incredible investors. They've made a lot of money. And yet this step, it needs work and needs a lot of work. But that is the fun part. And for us, the challenge always is how can I make this company look special? So it doesn't look like the other 50 companies I've worked with, right? How do I create a whole new marketing pitch, a whole new strategy? How can I position them to raise, for example, capital to buy multifamily properties? How can I make them look different than the next guy who does that? There's hundreds and hundreds of managers to do it. And that is part of the whole experience that I guess you get when you've been doing it for a long time is that you can borrow ideas and then ideas build and build in Bell to come up. The end product looks nothing like, you know, the foundational pieces that you originally were thinking about when you got started down and in the process. But that's the fun part.

And that's such a fun way of looking at it. You have been named an industry trendsetter who provides solutions to clients and overlooked sectors like cold storage and logistics that have become a huge success since COVID. Share with us more about this and how you saw the advantage for the overlooked sectors.

Yeah. we publish CCG perspectives and that's usually driven by a trend or something we've seen in the market or something we see kind. Coming down the pike in the future, sometimes we're ahead of ourselves and the markets are just not there yet, but it eventually gets there. Even before I chat about logistics and cold storage, the multifamily space I remember 10 years ago when we were first talking about amenities, departments and people having smaller footprints for an apartment. And and that people don't want huge apartments. They will try to smaller space if they can get pool rooms and pools and bike racks and car spaces and all these other amenities along with their property. And that concept was new. And as a result, we really struggled to get people to buy into it as an idea. And now that's the standard. That's how apartments are built today. And so the world has moved along in that regard. And on that juries, I think the next time coming out and I will probably be writing about it relatively soon. So, you're hearing it first is on the senior living space. You know, so much of you know, we have a massive housing shortage for seniors is probably going to be 85 million seniors coming in the next 10, 20 years and we need to house them. People have always focused on affordable housing, and that's and that is very well covered. I think the really cool part of it is to look at active adult living, which is almost like retirement type villages. they don't want to own their own house, but they want to do more than just play a take. And so thinking around that that product, I think, is really cool and it's something that's coming, and we're now starting to see a lot more people talking about it, and it'll be interesting to see where that goes. But it's something that I know I'm excited about to see that segment of the market. And then just coming back to your first one logistics and cold storage, once calved it's really pushed e-commerce and e-commerce. And I've written about this many times, e-commerce and getting exposure to the internet. People did online shopping sporadically. What happened with COVID? Is it institutionalized? Everybody does it, and whether you doing curbside pickup or whether you're now you, you were an online shopper, now you do a lot more. I think the reality is the consumer of today is focused on convenience. Number one thing convenience. Now, by telling you that it's convenient, where do you do curbside or where do you get delivery? Is I? How do I get it to, you know? Yes, I've done a survey not long ago where something like sixty five percent of online shoppers who order before lunchtime expect it the same day, and it's like seventy five percent expect it the next day if I order the day before. These stats are crazy. Think through the logistics of getting something to you that is made in Oregon, right? How does that subject you in such a short period of time? And I think the logistics around solving big warehouses and those concepts are fine, but we need to redefine how industrial works, office works, logistics works. All of these things worked in response to that because people will return to stores. Right. I don't think people are going to give up their convenience now. They've got it. They're just not going to do it. And so, then the question is, what? How am I going to get you what you want? And so I think the concept of last mile logistics is now important, which is instead of dealing with the big Amazon warehouse in the middle of nowhere and then according to two of our regional distribution, now we're talking about converting maybe car parks as stores, dock shopping centers, turning them into logistics hub that will last mile and using those spaces to store product to get it to you when you want that same day or when you want it next day. Amazon Logistics Challenge in but that would redefine how the entire industrial market works. Now, of course, what plays into that is called Storage eight, because we don't have enough of it, we're woefully insufficient in the United States. But if you want your blueberries delivered to you, how are you going to get your blueberries. And so it's not only that it's pharmaceuticals, it's biotech drugs. All of these things require cold storage and people's focus where you were talking before a. Our farming and people wanting fresh food, but they want it, even if you're already gone. I still want it. And so, you expect the expectations around that have dramatically changed as a result, three calls it that. I think some of these trends are not going backwards. And then how you solve that and then the technology obviously comes in because if you have a last mile dock shopping center now spilling, what is the blueberries, how do you know who's blueberries belong to who? Just the technology and the logistics to go around these things, the millions of products, it's how you deal with that. There's an evolution that is going to roll through our industry. And that issue of convenience is going to hit every single segment.

So true. So much goes into it. Such a complex problem to figure out. And I'm smiling because I am one of those people even going to Walgreens or CVS, you can now get those things delivered. So of course, the other day I thought, Hmm, should I just pop out and do it? But no, I do it. Do you really are going in that direction where we want everything delivered if it's possible? So right. So right. I absolutely don't. I order from Walgreens, from Target, from one, from every store. I thought at my fingertips and I've gotten really bad. It could just be one thing, and I just don't have time to go to the store.

I'm smiling because I have the same thoughts and I know a lot of our listeners who are working and, juggling very busy lifestyles nodding their heads, right?

Think about that next time you get something delivered, what it took to get it to you and the amount of people and the amount of real estate and logistical foot work that took for you to get that product when you just click a button. Yeah. And it's remarkable what this country's been able to achieve in adjusting to these things. And we've got some ways to go and the industry is still evolving. But one thing I'll say about real estate, chaos is great for real estate markets. If it's not credit driven, it's not lending driven because it just means opportunity. When there's chaos, there are winners and losers and real estate people we think are smart enough to figure out where the opportunities are. When you have change like this, they're real estate investors love it because now we've got the whole industry of the industrial real estate sector is going through so much change. It just means there's enormous opportunity to make something happen in it. And you can go through every one of the sectors and you'll get a similar answer where there's investors there who are willing to take risk and take a bet on themselves that they know what to do and they will figure it out and sorry. And that's how the industry keeps going around and round and round.

So exciting with all of the transactions that you have facilitated. You have experienced incredible success. Share with us one of your favorite client or customer success stories.

I'll put a few in the same category. It's we have been very fortunate as a fan that a lot of our business has either been repeat clients or referrals. We take a lot of pride in that that we feel that we're banking trained people can trust and that we get really involved with our clients. We know a lot about them and we talk to them an awful lot. And so some of our clients, we've had almost as long as we've been in business. And the really great thing about it is we've had clients where we started off with one tiny capital raise just for a little property that went on to go on to a big capillaries that went on to go on to multiple corporations. Then it went on to selling the company through finding a strategic partner. And we've ran track them. And so now some of those clients are saying, Well, what are we going to do next? We need to go buy something else. And when it works for the same client for 10 years, it is so great because their relationship is so strong and it's really built on trust and you can have a very open dialog with them and you get to be candid, it's one of the benefits of long term clients. And the crazy thing is, we have a lot of those clients, kinds of rehab, and those clients go on for other clients to us. And so it goes round and round. And that's part of the fun I think of what we end up doing is we have amazing clients who've been with us for a really long time and this business is very competitive.

And that's great for the clients, too, because then you know, their personalities, you start to know their wants, and it's much easier for the client to.

Yeah, I think that's right. The clients know different people across the firm and my time, it's my very, very different. As people, we bring different strengths to the table. And what's really great is that clients get to see, you know, depending on what they're looking for. They have access to the three of us and get something different, depending on who it is. And the beautiful thing about it is, unlike where I think at other firms that are transaction oriented, yes, but they also tend to be focused on themselves. It's what you care, and the three of us is also one on one for all. So, I do well if my cornerstones are doing well and if they're not doing well, that I don't do well either. And so, it's also one.

You raised kids and credit your success to having a supportive partner at home and as you just mentioned, supportive partners in business. For anyone with a busy lifestyle and as a mother of young twins, I know firsthand how difficult it can be navigating it all. Share with us how you were able to continue your growth and make it work.

Yeah. Good question, someone said something to me very early in my career, and it has stuck with me, although I didn't appreciate at the time because I was not married, nor did I have any children. I know in a quiet moment it was actually another woman who had said to me, “you know what, Deb? As you go on in your career, don't ever second guess the decisions you make. Don't do it. Why don't you make a decision? You move on. If you don't, it will eat you alive.” And given the volume and for any woman who's the busy mom and have kids, I offer the same advice. You know, we have great women's intuition. Go with it, right? Don't second guess the why if your first reaction is to do something. You just go ahead and you do it because and if something goes sideways, you'll figure it out. Trust yourself. You'll figure it out. Why you don't have time. I do not have the time to keep making the same decisions over and over again. If you actually ask any of my children, I have four. If you ask any of my kids, they would tell you moms most common words are, Do we really talk about this? Why are we still talking about this? Do we already make a decision? The decision was made and I really do believe that because the amount of things that come across my schedule in a day from all the different factions that I have to deal with, I don't have the time. So give me the facts. I will make a decision and I move on, and that's how I live my life. And I think it's good advice for anyone, not as woman, that anyone who's got a lot of stuff going on. It's great advice. And I and not only that, you'll be infinitely much more happier because if you don't second guess your decisions, you'd give yourself an F. That's true. You're right. You just have to be happy. Don't second guess and assume you're right. And you know what? If something goes sideways in the future, OK, you'll figure it out, right? But that's I think I hold that very firmly. And I think it gets me. It's saved my bacon many more times than I care to think, right? Because otherwise I couldn't get through my volume in a dime.

There's no way

It's so true because every time I don't trust my intuition, I regret it

When it's interesting. It's great that women really do have great judgment and I don't want to get too much on a gender point, but I think women have really great judgment and we do ourselves a disservice by not trusting it right? We have a tendency to second guess and you don't need to do that. Trust your gut instinct is usually right. And if it's not, you're good enough and you're smart enough. You will figure it out because that's what we do, right? We just figure stuff out. And I think, you know, we more of us need to go with that. And I can say my partners are the same as me, and that's how we all have kids. And that's how we get through our regular days is just being very deliberate. But making judgment calls, making judgment calls and sticking to them and then believing that it's the right course of action to take.

Magic happens, and we focus on the part of ourselves and our business that brings us joy. I love to ask this at the end of every episode because I believe joy is so important to bring into our daily lives. What is one way that you make sure to find and live your joy? So from a personal perspective, it comes with that never look back. Thing is we when we have wins, we should enjoy our even if you've moved the goal post, right? I just had a conversation with my daughter a week or so ago, she had finally achieved all of her goals. as a swimmer and I said to her, Look, this is what you've achieved. But she says, No, it's not mom, because I didn't achieve this new goal. That didn't exist last week because we're already at new ones. I said, you can set new goals and you can set them high, but you got to cut yourself some slack if you don't reach it. But you always have to remember to smell the roses, right? Enjoy those little moments when you've had successes, even if that’s all, right? Because you know it's you deserve it. Everyone deserves to be happy. And so I think that's one way of doing it. But I think from a career perspective, I always think find something that makes you happy, find a passion. It doesn't matter what it is, find a passion that you really, really care about. Make a difference. And then you get to call whatever you're doing a career and it really doesn't get much better than that. I wake up every day and I love what I do, and I never feel like, Oh my gosh, what am I going to do tonight? I don't have that. I give it up. I'm excited to do what I'm doing, but I have a long list and it's like, How am I going to get through this list today? And I just start at the top and I plow on through, and at the end of my days, I'm like, Wow, I don't let them tonight. I always think that I got a lot done today, but that sense of accomplished accomplishment and enjoying the hitting of my goals that I've set gives me enormous joy. It really does, regardless of them. And I just think whatever that is, that's my passion. Whatever makes people happy. You have a right to be happy and so pursuing you only get one shot. This one second is here and it's gone and you don't get it back. And so, you got to enjoy wealth here because they're not going to last forever.

It's like so true because so often we accomplished something and we move on to the next thing without really feeling it. And sometimes I even say, OK, this cup of tea, even that small little moment, you know, as long as I can motivate you for the next.

How do you get to enjoy it? Because. And that's a problem when you're particularly where in your high achiever and you're doing a lot, you have a lot going on. We have a tendency to focus on what's next and when your goal oriented, we all do it. And I think when we hit that, just even if it's for a minute, it was four minutes. But you know what we did for an hour? Wow, that's really awesome. But just to enjoy it just for a minute because you've earned it right? Because if you don't do that, you'll be perpetually unhappy and dissatisfied because you're always chasing the next goal. And by the time we get it, you've already moved the goalpost. And if you keep moving the goalposts,

You can never reach it. And so as a result, you've got to take it back and those goals are great. You should always have them. But just a little success. A little milestone. Yeah, you just have a little pat on the back because you weren't

So true, you have experienced so much success. I have loved every minute of talking to you today, please share with us how and where we can find you.

Sure, Center Cap Group dot com and we're also on LinkedIn and I'm on LinkedIn. I'm happy to connect.