Hartford Business Journal

10 Hartford Business Journal • January 30, 2017 www.HartfordBusiness.com From Hartford, Barings' realty chief has a global investment perspective By Gregory Seay gseay@HartfordBusiness.com P lenty has changed since Scott D. Brown took the reins nearly two years ago as chief executive of the Hartford realty advisory arm of one of the world's largest investment-asset managers/advisors, Barings. Since succeeding good friend and mentor David J. Reilly on Jan. 1, 2015, at Barings Real Estate Advisers, formerly Cornerstone Real Estate Advisers, Brown has had a major hand in helping the investment-services unit of Spring- field insurer Massachusetts Mutual Life Insur- ance deepen its presence in Europe and Asia. He also participated in a restructuring, in which Cornerstone and three other Mass- Mutual units — Babson Capital, Wood Creek Capital Management and Barings Asset Management — were tucked under the Bar- ings umbrella. Collectively, Barings, based in Charlotte, N.C., has more than $275 billion in assets under management, and some 1,700 employees in 41 offices in 17 countries. In the reconstituted Barings, Connecti- cut and Brown have emerged as key players: Today, he oversees its global real estate busi- ness. Since coming over in 2014, from rival CBRE, where he was head of the Americas for CBRE Global Investment Partners, Brown says he has spent time meeting with Barings employees and customers in many offices. "I've been busy,'' said Brown. "I love my job. It's great to be in the real estate business. I get to work with a lot really smart people who challenge me every day.'' In Hartford, Barings Real Estate Advis- ers is still headquartered on the 17th and 18th floors of downtown Hartford's Gold Building, where Cornerstone and Reilly were housed. Meantime, Stamford is home to Barings' global securities team, which oversees a $2.14 billion portfolio. Overseas securities offices also are located in Amsterdam and Hong Kong. Where Reilly had 20 offices reporting to him, Brown has grown that office count to 26. "It's been an interesting eight years since Lehman,'' Brown said, referring to the collapse of Wall Street investment banker Lehman Brothers that triggered a near-global meltdown in financial markets and subsequent two- year Great Recession. The global eco- nomic downdraft forced MassMutual and its Barings cus- tomers to circle the wagons and reassess their current and future outlooks for real estate and other i n v e s t m e n t - a s s e t classes, he said. In the end, Mass- Mutual decided to consolidate invest- ment-advisory and asset-management operations into a more synergistic grouping under the Barings umbrella. In 2005, MassMutual acquired remnants of the once-fabled British investment banking house that fell on hard times following the reckless acts of a rogue trader who cost Barings billions in trading losses and countless client defections. In Europe, Barings has beefed up its pres- ence, opening offices in Madrid, Paris, and Milan, Italy, to augment its offices in each of Germany's five biggest cities. It's doing the same in Asia. Brown said Barings' expanded European and Asian presence will pay dividends if Eng- land follows up on its "Brexit'' vote to leave the European Union coalition of nations united around a common currency, the Euro. In Hartford, Cornerstone was rebranded as Barings Real Estate Advisers. In October, the final piece of the Cornerstone/Barings combination was finalized with Barings Real Estate's $93 million purchase of former ACRE Capital Holdings LLC, now Barings Multifam- ily Capital. The ACRE acquisition, Brown said, posi- tions Barings to originate and service multi- family, senior-housing and healthcare-facility loans. Barings Multifamily reports to Brown's lieutentant Jamie Henderson, who heads struc- tured real estate investments at Barings Real Estate Advisers. "We think the U.S. is in a pretty good place economically. We think it will be slow, steady improvement,'' Brown said, adding, "it's still a great environment to be a real estate investor.'' 2017 strategies/trends Brown's goal for 2017, he said, is "delivering on the strategy that we have in place in the U.S. and Europe. We're constantly studying markets.'' Some Barings institutional clients are creep- ing back into "speculative'' building, Brown said. In Seattle, for example, Barings co-developed the 750,000-square-foot Madison Centre office tower with West Coast developer Schnitzer West as "spec'' office space. Since opening, the build- ing has landed a lead tenant. The developers introduced several fea- tures meant to appeal to a cohort of younger workers, Brown said. One is "alternative work space,'' where tenants can "chill and network,'' on the mezzanine level that features a "great room'' with a fireplace, comfortable seating, and windows overlooking the Seattle library. "It's kind of become a collaborative building,'' Brown said. "We think it's something that will not only stick, but we'll see more and more of them.'' One niche investment opportunity also poised to take off, he said, is the self-storage sector. Enjoying a demand boost due to more people renting residences than owning, house- hold downsizing and other lifestyle changes, self-storage facilities tend to be more "mom- and-pop" run enterprises. Self-storage facilities also offer owner/inves- tors a surer bet for higher investment yields and strong cash flow, since rents can be either raised or lowered almost monthly, Brown said. "It's not fully institutionalized yet,'' he said. He compares self-storage's potential to the change in attitudes, starting in the 1980s, among insurance companies, pensions, equity funds and other institutional investors towards owning multifamily real estate. Beantown roots Born and raised in the Greater Boston area, Brown has spent his 30-year career in institutional real estate investment management. He received a master's degree in real estate development from Columbia Univer- sity and a bachelor's degree in economics from the University of Massachusetts. Over the years, his path often crossed with Reilly's. He said he and Reilly have had a longstanding friendship, even though the two have never worked directly together. So, when Reilly reached out to him about joining Cornerstone, it was an easy decision. Brown joined Cornerstone in April 2014 as president, eight months before succeeding Reilly as CEO. Brown said he's pragmatic in his outlook for the Hartford and Connecticut economies. "Look, it's a beautiful place,'' he said. "I think in the end, you can't tax your way out of anything. It's going to be common sense around budgets.'' n • Bylined articles. Demon- strate your competence with both short pieces and longer articles. Post on LinkedIn, and send to trade and general online and print publications. • Videos. 45 to 90 seconds. Dem- onstrations, customer testi- monials, but no talking heads. 3. How can you keep your marketing on track? Marketing tactics often begin with enthusiasm but quickly fade away. This happens when the purpose isn't clear. Keep asking, "Why are we doing this?" and "Is it helping us pull customers and prospects closer?" If the answer is no, evaluate and make changes. More than anything this is what helps keep marketing on track. But there's one more thing, as they say: The effects of market- ing are cumulative, not instanta- neous. Sure, early adopters are quick to jump aboard, but it takes more time for others. They want to be sure before they buy and that doesn't happen quickly. Unfortu- nately, too many marketers fall into the trap of quitting too soon. What's important is being there when customers are ready to buy. Even so, competitors are always ready to strike, and that's why consistency is marketing's "secret juice" that goes a long way in bulletproofing customers. n John Graham of Graham- Comm is a marketing and sales strategy consultant and busi- ness writer. Experts Corner ▶ ▶ ' We think the U.S. is in a pretty good place economically. We think it will be slow, steady improvement.' Scott Brown, global head of real estate, Barings Real Estate Advisers P H O T O | C O N T R I B U T E D Tourism Advocates "The difficulty you have is the dollars. You need the dollars to advertise," said Larry McHugh, president of the Middlesex Chamber of Commerce. "[State tourism staff] are trying the best they can and everybody knows the financial difficulty the state is in, so shared sacrifice is what everyone has to do." Nobody knows that better than Janet Serra, co-exec- utive director of the Western tourism district, which covers about 50 towns in the northwest and western central part of the state. She and her counterparts in the other two districts are still trying to maintain websites that get more than 30,000 hits a day, work with travel writers, tour opera- tors and meeting planners and support their regions, despite the funding cuts. Connecticut is the only state in the country without some form of publicly funded regional marketing for tourism, Serra said. Scoville said the majority of small attractions that rely on tourists to survive have been doing their own marketing since losing the bulk of regional district support. That is taking the form of self-promotion via websites, reaching out to print and television media, press releases, and social-media marketing, but also networking and partnerships with peers, according to Louise DeMars, executive director of the New England Carousel Museum in Bristol. "Our [visitation] numbers are on the upswing because we've put renewed energy into marketing our- selves," said DeMars. While some success is evident, DeMars thinks put- ting the districts back in place would bolster tourism regionally and statewide even more. Dan Jaskot, president and general manager of EMPOWER, a leadership, sports and adventure center in Middletown, says promotions that predate the region- al tourism district cutbacks continue to help — like the "Zip, Sip and Stay" package that combines zip-lining adventure at Empower with drinks, appetizers and an overnight stay at the Inn at Middletown. Whatever path the state and its districts take, he said, it will require "continued opportunities to make connections and network, both on a regional and state level, to cross promote businesses and offerings." n

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