Crafting Your Path: Leonard Allen-Smith on Cultivating Success in Commercial Real Estate
Welcome to the latest episode of the A.CRE Consulting Podcast, focused on finding commercial real estate success! This time, we’re honored to host Leonard Allen-Smith, Founder and CEO of Allen Smith Equities, a trailblazer reshaping New York City’s real estate landscape. Leonard’s story is one of passion, resilience, and relentless learning. From his beginnings in the tax division of KPMG to founding a development firm specializing in revitalizing historic properties, Leonard’s journey is a masterclass in cultivating success through adaptability and tenacity. Fresh off earning his master’s degree in Real Estate from Harvard, Leonard shares insights from his career, including his transition from corporate finance to entrepreneurial development and the launch of his groundbreaking projects in Harlem.
In this episode, Leonard offers a wealth of wisdom for aspiring developers and seasoned professionals alike. We explore his strategic approach to building a firm from the ground up, the pivotal moments that shaped his career, and the lessons he’s learned about raising capital, navigating zoning, and delivering value to communities. From his early investments in Virginia to his current work transforming New York City’s urban fabric, Leonard’s story is a testament to the power of grit, vision, and lifelong learning. Join us as we delve into the journey of a leader redefining what it means to thrive in commercial real estate.
Leonard Allen-Smith and Michael talk about Cultivating Success in Commercial Real Estate
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Episode Transcript
Leonard Allen-Smith – CEO and Founder of Allen Smith Equities
[00:00:10]
Michael Belasco:
Hello everyone. And welcome to another great podcast, um, brought to you by Ventures in CRE and ACRE Consulting. Today, as usual, we have an extra special guest. We have Leonard Allen Smith with us today. And Leonard. Has almost a special place in my heart here because, uh, you know, when, when adventures in Syria was quite nascent, not totally nascent, but when we launched our training program, Leonard showed up in the early days was part of our. Our almost trial group. Um,
[00:00:44]
Leonard Allen-Smith:
Data testing days,
[00:00:46]
Michael Belasco:
That’s right. The beta testing days and he was part of that first initial cohort and we connected back then we stayed in touch. You know, we lost touch a little bit, but never totally. And, um, you know, I’ve watched Leonard’s career pivot and change and he’s doing some great things. In the industry. And I’m really excited, uh, to have Leonard here today. So Leonard, welcome. Um, and I’d love to kick it off. You have a great background and I know there’s so much to talk about, but I’d love for you to just give a brief update for everyone or intro to yourself, what you’re up to today, and we’re going to dive into a lot of this in more detail, but very high level would be great to kind of hear from you about your background and where you
[00:01:29]
Leonard Allen-Smith:
Michael, I’m thrilled to be here with you guys today, right? Um, I’ve been part of the ACRE network now for, I guess about five years. And really at a time when I was at a pivotal moment, trying to figure out how to make real estate. a career. And so the conversations with you, the conversations with Spencer, some of the educational materials that you all provide on your on your platform have been, you know, instrumental to my success in the space.
And so today I’m the founder and Ceo of Alan Smith equities. We are a development firm. Firm focused here in New York. In New York City, uh, primarily at this moment in time focused on rehab opportunities and repurposing, uh, old buildings, changing cos, um, putting them into residential luxury residential use. Um, most recently. coming out of the Harvard Masters in Real Estate program we’re filming today. It’s, uh, it’s the beginning of October. I just wrapped that program up at the end of August. So I just moved back to New York from Cambridge, have been up there for the past year, and it’s been a tremendous ride and a really pivotal moment in my career, uh, and taking things to a whole new level.
So it’s been a lot of fun.
[00:02:43]
Michael Belasco:
And you’re part of the initial cohort, correct? Uh, this program, I’d love to get into more of that and let’s, let’s get there. I want to take our listeners on a journey, um, of your, your story so far. So when we first met, we got on a call and you were at KPMG,
[00:03:01]
Leonard Allen-Smith:
Right.
[00:03:02]
Michael Belasco:
Right. And you were in the tax space and you were, you were, you already knew where you were going.
It’s like you had a clear vision. Um, so walk us through that. Walk us through your transition. You know, I’d love for, you know, a lot of people that listen are in that period in their lives where they’re trying to bridge the gap and make that leap and you’ve done it, and so why don’t you start from there, your mind frame, where you were at that time, and walk us through that journey of how you kind of got to where you are today, and I’ll stop you in between and we’ll, we’ll get
[00:03:31]
Leonard Allen-Smith:
Okay. That sounds good. So it’s a long journey. So let’s see how quickly we can, we can get through it. But I would start by saying this was unintentional in a way, if you will, real estate was never supposed to be a career. It was something that I kind of just found some interest in and in time that interest continued to develop and is now full fledged career and how I spend my time. And I remember having conversations with my buddies in my apartment, right? We’d sit around, we talk about buying stocks, we talk, we talk about buying bonds, we talk about real estate. And creating wealth, generational wealth. And so real estate was just supposed to be a part of the portfolio, not necessarily how I spent my time on a day to day basis. So at that time started looking at real estate, was trying to figure out, okay, what markets can I afford? Where can I look at things? I was looking at things in Hampton, Virginia. I went to Hampton university for undergrad and my MBA, I did a five year MBA program down there. So Hampton was a, was a very, pivotal, uh, moment for my, for my real estate career, because that’s ultimately where I bought my first piece of real estate. So, you know, transitioning out of college, I went to KPMG at the time. I had two different offers. I had one for their audit group, one for their tax group. And I decided ultimately based on some of the books that I had been reading, you know what, this tax thing is very enticing. It is, uh, it’s a little mysterious and causes a lot of controversy. Um, political conversations on a, on a day to day basis. So I need to understand what’s going on here. And what I did not realize at that moment in time was that I was going to be placed in our real estate tax group. So you combine that experience with the personal interest that I had been developing and that blossomed into a career and, and
[00:05:17]
Michael Belasco:
You were just by chance place.
[00:05:19]
Leonard Allen-Smith:
By chance, completely by chance.
I wasn’t even supposed to be in the tax group and I got there by chance. And when that opportunity presented itself, I jumped all over it. And so when I show up on day one and they’re like, Hey, we need you to start working on these tax returns. It is some of the largest real estate investment trusts and private equity, uh, firms, both domestically and internationally.
I’m going through the tax returns. And I remember like, My mind kind of exploded because I said, wait a second, what, what is the strategy behind, uh, what’s going on in these tax returns? And, and, and the bottom line looks very different from my bottom line. We know that there are a lot of tax benefits to real estate.
And so that exposure to the largest corporations made me start to think, you know, there’s probably a way to do this at a much larger scale at the time. As a, you know, young 20 year old. I’m looking at these single family houses, I’m thinking about fix and flips. I’m thinking about, you know, buying a home for personal ownership.
I’m not
[00:06:19]
Michael Belasco:
Was that your first investment, uh, when you were back in Hampton, was that
[00:06:23]
Leonard Allen-Smith:
Absolutely, absolutely. So I had been looking at things in New York. I had been looking at things in Stanford, Connecticut, ultimately where I was working and I was looking at things back in, in Hampton, and I ultimately settled on Hampton because one, it was much more affordable and two. I had just lived there for five years.
Right. And so I knew the market very well. And I decided the strategy was going to be to rent to college students.
So I actually ended up buying the townhouse immediately next door to where I had been living. And that just completely took things to a whole new level. And I remember at the time people saying to me, no, you don’t want to buy stuff in Virginia.
You’re too far away. You want to be close to it. You need to see it, touch it, feel it in order to properly manage it. And I was like. Nah, no way. I’m doing this because I’m going back to New York and I’m going to be at a distance and I want to understand what it means to be an owner from afar. And so I took that, that experience at KPMG married it with what I was doing and decided, you know what I’m going, I’m going, uh, Full fledged at this moving forward.
[00:07:25]
Michael Belasco:
Well, so that is common, common wisdom, right? You, you, a lot of people manage from afar, but students, student housing, managing that from a distance where you don’t necessarily have a large enough portfolio to aggregate now, or maybe you did, maybe you did bring in, um, local property management. So why don’t you give us a little insight?
Do you still own this
[00:07:48]
Leonard Allen-Smith:
Nope. Nope. I sold it. I took the capital and reinvested it into some things that I was doing here in New York. So I sold that after a few years of ownership, maybe three or four years that I had held onto it, but it was so Pivotal, right? And I remember it, it completely changed the dynamic of conversations that I was having.
Right. And something that’s always been very important to me is getting in the game.
And so Hampton had a much lower barrier to entry as a 23, 24 year old who had never purchased a piece of real estate compared to trying to buy something in New York. And so I said, I know the market. I can figure out how to finance this thing, right?
Because it’s not an astronomical price compared to what I was seeing up in the Northeast. And ultimately, once I get in, now it goes from, I have an interest to now I’m an owner, right? And there was some stumbles along the way through, through, through ownership, right? Like college kids are going to do what college kids want to do.
I was one of them. So, but there was no surprise there.
Uh, and these things started to pop up. But once I got in the game, now I could approach conversation, say, I’m an owner. This is where I own things. This is how I’m managing it. This is the results of my management and my portfolio, right? And what I’m yielding.
And now I could approach, okay. Banks differently. I could approach investors differently. I could approach just networks in general, right? The professional groups that I was in differently. Um, and that dynamic then evolved. And it’s something that I continue to bring to conversations. How do you get in the game?
How do you access that? That new deal that that next level, right? Figure out how to get in. And then once you’re in there, you can extrapolate and try to take it to a whole new level.
[00:09:32]
Michael Belasco:
Leonard, I think this is such an important point for so many people because, you know, a lot of people have this feeling, you know, they’re, everyone’s shooting for the stars, you know, that we all have our, we all have our motivations. And a lot of people may pass over a lot of things. Maybe it’s not, it’s too small or I need something bigger or I want to do this.
And your point is very important. What you said, and I just want to reiterate, get in the game. Just start you by you doing that gave you not only you’re cutting your teeth, you’re getting experience. Yes. It’s small. You’re, you’re kicking off. But you’re creating that, that ability to manage that confidence, that all that stuff, you’re learning the language, you’re learning the, the trials and tribulations, right?
Especially with students. And, and, you know, a lot of people will wait and pass over things, right? You are like, I know this market. Yes. It’s it, maybe it’s small to start. I know I’m, I’m, my ambitions are larger, but I’m not wasting my time. I want to get in the
[00:10:33]
Leonard Allen-Smith:
That’s right. That’s right.
[00:10:33]
Michael Belasco:
You know, and I just, I love that because some people might feel like. You know, you could come from wherever, right? And you know, your ego might prevent you from getting into things like that, but that is such a great foundational base, right? You took that, you managed it, you sold it, you leveraged it, you’re moving bigger and you’re growing with that, right? And I just find that to be, I find a lot of people get tripped up, right?
With that first deal, they want bigger and you did it right. Like you started off, you just got in, you cut your teeth and you did it. So, okay. So you’ve had this property. You’re at KPMG. You and I talked at this time, I remember, and there was this, like, this drive, this passion, like I saw it in your eyes. We had a great conversation. Trying to push on to the next level. You know, as far as I recall, I mean, this was years ago, but you know, you weren’t discontented at your job, but you wanted something more, you wanted, you wanted that growth. So let’s keep going here from KPMG, that feeling you had inside that a lot of us have when we’re in our day to day and trying to push on into our, for you, this entrepreneurial passion, which I have the same feeling. So, so take us
[00:11:50]
Leonard Allen-Smith:
So in short, I would tell you the day that I got my first rent check from that property in Virginia is the day I knew I’m, I’m, I’m headed in a totally different direction, right? Like this sense of empowerment that I got in that moment was like, okay, here’s We can, we, you figured it out, right? Like you have figured out, you can get paid.
Mind you, this property was not making me a millionaire, was not by any means going to allow me to, to retire, right? At, at, at an early stage, which before you get in the game, sometimes that is your impression. If I just get that one piece of real estate.
[00:12:25]
Michael Belasco:
This is not get rich quick. Most people, it is not I mean, most people in this industry, it is not get rich quick. It is just.
[00:12:31]
Leonard Allen-Smith:
And so, you know, it gave me a sense of empowerment.
And so I said, all right, I need to finish my journey here at KPMG. I need to stay and I need to get my CPA. So there was a, you know, I ultimately worked at the firm for two years. Um, you know, I had acquired the property kind of August 2018. And I said, by September 2019, that’s it. And we’re, we’re, we’re transitioning on to something else. And so, you know, I left the firm and, uh, Yeah. October, right? Mid October, 2019 went, did some, some study abroad opportunities, uh, not study abroad, but traveling abroad. Right? Because I never had a study abroad opportunity,
[00:13:09]
Michael Belasco:
Yeah, where did you go? Where did you
[00:13:11]
Leonard Allen-Smith:
Southeast Asia. And it was an incredible experience. And so I remember leaving the firm.
I was like, Hey, where are you going? Are you going to another accounting firm? And I was like, no, I’m actually packing up and I got a one way flight to Vietnam in about two weeks. And, and, and that experience was also something that I was, You know, that was really meaningful for my ability to do business in this space because we are in a people business, right?
Like it’s all about relationships. It’s about network. Yes, there you need to have technical competence, but how well do you connect with people and leaving the United States for a four month? expedition, a journey and adventure, right? Where there was no prescribed itinerary. This was the first moment in my life where I could wake up and on a daily basis decide exactly what I wanted to do, who I want to do it with, where I wanted to be right. And so The, the number of people that I came into contact with over that period of time, the, the cultures that I got to experience, whether that’s, uh, parts of Asian culture, going through Vietnam, Cambodia, the Philippines, Indonesia,
[00:14:17]
Michael Belasco:
Did you go by yourself
[00:14:18]
Leonard Allen-Smith:
I was, I was with one friend, I was with one friend and he and I both quit our jobs kind of same time and off we, off we went. Um, and that, you know, that experience came back to the U S with me. So there was a game plan when I left KPMG. Right. And the game plan was Go travel for four months, come back. You’re going to do this accelerator program, a training program called project reap. I had previously, before I left, already gone through the ACR re accelerator. So I had a leg to stand on, right? I had CPA and I go, I do this four month expedition. I come back, I have a plan plan gets absolutely obliterated due to something called COVID 19. Right? And so, you know, I come back and the plan was do this program and ultimately transition into another Uh, excuse me, into another corporate type role in the real estate space, acquisitions, development, what have you, that went out the window.
And so I knew at that period of time, okay, there are things that you want to learn. You want to learn about construction. You want to learn about architecture. Uh, you want to learn about fundraising. There were all these skills that I had lined up right and identify that. Hey, I want to learn these things.
These are areas that I’m weak. I have a lot of technical competence as it relates to accounting and finance, financial modeling. Now, at this point, um, I need to identify these other skills. So I started to align myself with groups that I could do that with, you know, a big shout out to my uncle who has an architectural firm.
I was supposed to work with him kind of, you know, Like a short term, eight week, 12 week basis just to be in the office, be in the space, start to understand what is architecture, what is construction in New York City, right? What is design? All these things that then turned into a three year stint because now COVID happens and I completely have to readjust my game plan.
Nobody’s hiring. Nobody’s doing anything. But it was fine. And at the same time, as I’m going through the experience with him and now being hands on with projects in New York City, um, I started working with some guys that I knew from, from, from Hampton, right? Who had launched a private equity fund and they were buying short term vacation rentals of two partners.
And I came on board was the third person now on the team. And that gave me a lot of exposure to Investor relations, fund management, um, you know, portfolio construction, and also some of the business operations that were involved with this small team. And how do we now build out our, our, our, both the company and our investment strategy to be able to go wider.
So those two experiences were both about three years, three and a half years a piece. Um, and
[00:16:55]
Michael Belasco:
Okay. So, so that’s with your uncle. What were you doing there? What were you, what were you working on? What was that? What?
[00:17:04]
Leonard Allen-Smith:
Oh, so that experience started kind of just. Come to the job sites, right? Be on the job sites, come to the meetings, hear some of the language, get to understand the relationship between the different stakeholders involved, the owners, the owners, reps, the contractors, the architects, um, you know, I’m, I’m, I’m walking the job site.
Never walked the job site before. And here I am at these, you know, these, these multifamily tenement buildings around the city, parts of the Bronx, Brooklyn, Harlem, and I’m walking job sites. And that started to quickly evolve, right? We had a, um, we had a client, one of my neighbors, actually. We had a storm in April, 2020, a tree came down through her roof, right?
And so she hired us to help get the house repaired, manage relationship with the contractor, obviously get things approved with the town. And I would go by every single day. So I became a project manager, if you will. and was keeping a very close eye on what was going on our projects that then turned into actually leading construction meetings, doing our meeting minutes. Um, it also turned into me going through the expediting process in New York City. So dealing with all the city agencies from, uh, Department of Buildings, landmarks, uh, D. E. P. Right. H. P. D. There’s a whole alphabet soup. Of agencies that exist, and I was starting to put together the applications and file paperwork for all of them.
So I got to see the process kind of start to finish as we were doing construction administration and design work as well.
[00:18:41]
Michael Belasco:
So I’m here. So in all of these things that you’re talking about, there’s this underlying theme. I don’t know that we haven’t talked about it previously. It’s just coming to my mind. You have this tenacity for learning. You have this Insatiable appetite to keep learning. And it’s almost like the results are second.
And I find this with people who I like, who I find aspirational. There is almost like the results are secondary to a passion. No, it’s not about the end game. You know, anybody that gets into real estate to just to make money. Sure. Some, some do it and, uh, they, it works out well for them, but those that just have a passion, the money falls.
[00:19:26]
Leonard Allen-Smith:
It comes,
[00:19:27]
Michael Belasco:
It’s passion. So here you are, you got the finance side, the look back accounting, the look ahead, you know, underwriting forecasting. Now you’re getting into the construction piece of this, right? And these are all different size projects, you know, now you’re getting to the, you know, approvals, entitlements, permits, things like that.
All right. And so here comes another group now that’s doing short term rentals, Airbnb type stuff. I imagine geographically, where are they
[00:19:57]
Leonard Allen-Smith:
We were doing things, uh, as North as Martha’s vineyard in Massachusetts, as far South as Orlando. I mean, we were buying stuff in Virginia beach. We were buying stuff in Tennessee. We were buying stuff, uh, Orlando, Florida, and we started doing some stuff down in Texas. We were buying things everywhere that we could.
[00:20:18]
Michael Belasco:
So you were just buying one off, one offs wherever you found
[00:20:22]
Leonard Allen-Smith:
Absolutely. We were, we were looking at a lot of different markets. We were looking at things, um, vacation destinations where you might be able to do, uh, uh, golf trips, ski trips, places that might cater to bachelor parties, right? Bachelorette parties. Um, Family style vacations. Orlando being a prominent one for us. And so we didn’t touch anything that was in an urban market. We wanted things that were within maybe a three or four hour drive of major urban centers.
Um, and and we did particularly well there. And one thing that I want to note, you know, as we talk about the tenacity in the drive, a lot of these things that I would raise my hand for, I was willing to do it without being paid. Right? Like goes back to just wanting to get in the game. Hey, I have an interest. I have a passion to learn. I want to do this. I will do it for free. And that has served me very well throughout my career of, you know, if a door gets shut, somebody says, No, you know what? I’ll just come. I’ll just show up.
Right? Don’t mind me. I’m just here. So I don’t get fined. And it has always, it has always then grown and transformed into something that I could not have even imagined. And that was the case with the private equity group too.
[00:21:42]
Michael Belasco:
You know, we tell, we tell, um, we have Spencer and I both have conversations all the time, uh, with students and, you know, very much like we did back in 2019. Right. Um, And, uh, you know, people in their career, all walks of life, you know, wherever they are. But a lot of times what we say, and especially the students is when you’re out networking and you’re out doing what you’re doing, you know, you go and you have these coffee conversations or you meet up with someone for drinks and you’re not, your skills aren’t totally marketable yet.
Right. You’re just cutting your teeth. You might not be worth the dollar yet to be paid. But always offer say, Hey, you know, I’m just trying to get into the industry. I’m just trying to learn anything, anything I can do for you, even if it’s for free, it would be very beneficial for me. We give that advice all the time, you know, especially while you’re in school, because whether you’re getting paid, you got student loans, you’re still covered a little bit, right.
So that the, there’s some safety net there, but you know, if you demonstrate that passion. Things will not only will you get the skills and learn, but you will get the reputation of somebody that’s just passion and who doesn’t want that person on their team, a guy who’s passionate, capable, a girl, guy or girl who’s passionate or capable that’s showing up without even necessarily caring about the money.
That is the dream. teammate in my mind.
[00:23:06]
Leonard Allen-Smith:
That’s right. That’s right. And you got to be willing to put in the work right up front. Yes, there are things that you don’t know. There are people that you don’t know, but just that daily grind right of I’m going to improve a little bit each and every day. I used to do the accelerator before I’d go to work. Right. I get up four or five o’clock in the morning and be working on this thing for hours at a time before I would go when I study for my CPA. Same thing, right? So it’s just how do I improve along the way? And then how do I position myself with the people? Nobody’s gonna want to hire you. Like you don’t know anything.
You haven’t done anything. You haven’t proven yourself. But if you show up consistently and you are persistent and you are passionate to your point, it, it, it, it it just comes together every single time.
[00:23:55]
Michael Belasco:
that that mentality is so much like that man you got in your picture back there
[00:23:59]
Leonard Allen-Smith:
That’s right. That’s
[00:24:00]
Michael Belasco:
waking up. He’s up at two in the morning going to the gym. So it’s funny you’re saying that. And I was looking at your Kobe Bryant picture in the background. So all right, so let’s keep going. I think people, I think people who are listening are getting a ton of great insight from this conversation.
Just hearing your story. And the lessons, like there’s just a lot of lessons coming out of this from where, and by the way, Leonard had just for the audience, Leonard has done some awesome stuff and he is still like, still going, there’s so much left. So I imagine us having. You know, whether it’s once a year, whether it’s coming back and he’s onto the
[00:24:36]
Leonard Allen-Smith:
it. That would be incredible. I would love that.
[00:24:39]
Michael Belasco:
we’ll probably do that.
I mean, just, you know, I can just see how this goes. Um, so, all right, so now we’re here, we’re at, we’re at your, um, your uncle’s shop, we have, um, this, this sort of vacation, short term rental strategy going, keep bringing us forward here.
[00:25:00]
Leonard Allen-Smith:
So, you know, all along the way, uh, I’ve still got the property in Virginia. I’m still wanting to invest, right. And I’m. Right now it’s it’s all about acquiring skills. There’s something that I call the bamboo season, which I picked up a couple of years back. I don’t know if that was the end of 2019 or start of 2020, but I identify this season as bamboo season.
Right? And it was all about how do I how do I just water. these plants every single day, right? The plant being myself. And you know, if you know anything about bamboo, it can take a very long time before it actually comes up out of the ground, um, years often, right? And so it’s growing underground this whole time.
And then eventually when it sprouts up out of the ground, it starts to take off. And so what was that moment then that bamboo season, right? for me. So I’m, I’m working with these, these different firms. I’m doing things at this point. I’m not really even looking for a new investment opportunity for myself. And all of a sudden one lands in my plate better than I could have asked for better than I could have been searching for on a daily basis. It literally fell out of the sky into my lap. And someone gave me a call. They said, Hey, we remember you right from, uh, from, from, from a couple of years ago. And you told us that you were looking for.
Opportunities here in New York. Well, our next door neighbors are getting ready to sell their building. They gave buildings, actually it was two of them. We don’t want it. They gave us first right of refusal. Are you interested? I said, absolutely. How soon can I get there? How quickly can you introduce me to these people so I can actually come take a look? And so, you know, fast forward, long story short, there was a church, um, been around since the fifties own some property in Harlem. Um, and they were They were ready to sell their, their church flock had been, uh, decreasing in size over the years. I think COVID kind of pushed things over the edge and I was ready.
I had now built up enough skills that I had started to attract the opportunities to me. I did not have to go pursue it in this moment. And so this is the, the, the, the start, right. And the launch of Alan Smith equities, the development company. So this deal gets. Brought to me. I like it. I go see the properties.
It’s a complete gut, right? But I had just done one on behalf of someone else as their owner’s rep. And so I’m, I was confident. I knew I had all of the skills necessary to get this thing done, but I had no idea how I was actually going to be able to finance right to buildings in New York City. So, you know, start of, uh, 2022 is when the company actually gets launched.
And it was, it was an incredible, uh, journey in trying to acquire these buildings, putting the financing together, ultimately, uh, getting that project all the way through the rehabilitation. We changed the certificate of occupancy from church building to residential, um, and getting that. Done. And now we are at a moment in time in the, in, in the journey where it’s like, okay, now how do we rinse and repeat and do this at a much larger scale across the city?
[00:28:15]
Michael Belasco:
Yeah, so this did not fall out of the sky. I know it felt like that, and you know this too. This was all the work you were doing, not just the technical work, but getting out there and just putting yourself out there. And then it feels like it falls out of the sky. But you know, it did. I mean, you talked to these people before they, they saw you, they met you, they understood your character and they remembered you two years later, right?
It sounded like two years later. Um, and all of that is to just, you know, not to, not to, you know, get you, you blown up here, but to tell the audience that like, that was not. Falling out of the sky. You don’t just sit on the couch all day, you know, playing video games and somebody calls you up, right? You’re
[00:29:03]
Leonard Allen-Smith:
Happened, but it doesn’t go down that way.
[00:29:05]
Michael Belasco:
there, right? It always comes around at some, you know, and this, this story, it’s never the same, but it’s, it rhymes with so many other stories of success in this industry and others as well.
[00:29:17]
Leonard Allen-Smith:
That’s right.
[00:29:17]
Michael Belasco:
Um, so, okay. So, so you’ve, you’ve, you’ve raised the capital. We can talk about that. You brought this. Through a rezoning, you got this
[00:29:31]
Leonard Allen-Smith:
No rezoning. Thankfully it was an as of right,
[00:29:35]
Michael Belasco:
Okay,
[00:29:35]
Leonard Allen-Smith:
is one of the beautiful things about. New York, right? We’ve got some, some favorable zoning code here. So it was a residentially zoned already, but under a commercial use, um, formerly as a church. And so what we were doing was we were going in, we were gutting the entire building, right?
We even took out the, a lot of the structural elements that were in place. Um, and we completely transformed it into new luxury single family home. And we even, Ripped the roof off and did a vertical extension on the building, thus increasing our square footage. So it was a complete transformation of this old dilapidated building, transforming it, uh, into something new and bringing it back to life and thus improving, you know, quality of life on the block because they had fallen into some pretty rough shape and, uh, this completely brought up the neighborhood.
[00:30:25]
Michael Belasco:
I want to talk about the capital raise for this. I also want to talk about
Harvard and that and, and your experience there and, and you can, you know, promote that program, although, you know, it’s Harvard probably doesn’t need much promotion in and of itself, but you being in that first class. So you get a call, you now have to go raise, there’s, there’s a price. You did the underwriting. We’ll gloss over that. You, you found an opportunity at pencil. We’re just going to put it there. Now you have to go out and raise capital. How are you raising?
[00:30:55]
Leonard Allen-Smith:
Raising capital for that project was. It was crazy because it’s the, it’s the first one, right? That I, I was really going out and trying to figure out how to put capital together. And I mean, I called everybody. I was calling contractors that I had worked with before to see if they wanted in on the deal. I was calling neighbors across the street to see if they wanted to buy a larger property and upgrade from their condo into something big. I called every friend, every family member. I was calling college roommates and, and like, fraternity brothers, everyone trying to figure out how the heck do I put together millions of dollars for this deal? Right? The first thing that I had done down in Hampton. Was 100, 000 deal. Now we’re talking about you’re doing a multi million dollar deal.
That’s very different. And obviously there had been experience along the way with the private equity group, um, understanding how to go out and raise capital. So that was really critical for me. But. It was not easy. I had to call a lot of people and it really did take standing on all of the experience and the relationships that I had accumulated over my entire life to prove to people, not only the equity investors, but then also the debt financing. I can get this done. Just give me a, I had to convince the sellers to sell me the building because when I was showing up on their doorstep, I was 26 coming up on 27 at the time. And I had to convince them that I could get this, this deal done. So it was, you know, it was a heavy lift and every single day I would wake up and just, who can I call today?
Who would be interested, right? Like how do I position this thing? And after many a phone calls, It was done. Now I tell you, it came down to the wire.
It always does, but we got it done. And so
[00:32:47]
Michael Belasco:
this was a numbers game.
[00:32:49]
Leonard Allen-Smith:
it was
[00:32:49]
Michael Belasco:
words, you call, it was just dialing for dollars until you got and convincing and yep.
[00:32:54]
Leonard Allen-Smith:
Absolutely. And you can’t be afraid to ask
[00:32:58]
Michael Belasco:
And let me. You know, and I want to say this from personal experience. The first one is always the hardest. And if you do a good job, it’s infinitely easier after that
[00:33:08]
Leonard Allen-Smith:
That’s right. And mind you, let me let me let me talking about things that circle back, right? The woman, my neighbor, who the tree fell down on her house, and I was there every day checking on her home. became an investor in the project.
And then she brought two of her friends along with her because she said, I know this guy, I’ve seen his work.
I know what he’s capable of. And I’m willing to not only bet on him, I’m willing to bring a couple of people along with me. So the, your interactions with people matter. Your, your, your, uh, technical competence matters, how you show up every day. really matters. And it, it always comes back full circle. You just don’t know when it’s going to come.
[00:33:56]
Michael Belasco:
All right. Let’s, um, so give us an update. Where is this project today? Um, what’s going on with it? And then let’s move on. We’ll wrap up. I want to talk about Harvard. Um,
[00:34:05]
Leonard Allen-Smith:
So, so today, you know, project is, is done. New York city projects are, uh, they’re slow sometimes. Uh, so the project is done projects on the market. Um, probably going to transition and put one of those into a rental, um, operation and the other one being listed for sale. So at this moment in time, we are, we’re, we’re sailing towards a exit on this deal right now and gearing up for a couple more.
Thanks.
[00:34:33]
Michael Belasco:
Congratulations. All right. Final segment of this, this conversation. Harvard. Um, what made you go back there? Why now? Um, let’s start there.
[00:34:47]
Leonard Allen-Smith:
So as you’ve already called out on this episode, you and I had a conversation back in 2019 when I was still corporate and we had a conversation about, uh, an MBA versus a real estate specific grad degree. And I can’t recall the specifics of what we touched on, but at that moment in time, my assessment was, you know what? I’m good. I don’t need to think about another level of, of, of education at this moment in time. What I need to be doing is, is just working, right? And I did that. I was working, working, working, working, working, working. And I arrived, I remember we were raising capital on the, uh, the private equity fund and we were raising money and we wanted to pivot from family and friends and pivot into, um, institutional capital. And I remember how difficult that process was and get one, finding the institutions and the right relationships to pursue in order to even make the pitch. And then two, I remember the feeling during some of those conversations where it, it was clear that we were not, um, positioned. to play at an institutional level, right?
Everything that I have done in real estate up until this point was kind of like I was very scrappy. We, you know, I was just learning things on my own, figuring it out as we go, right? That same with the team. We were just doing the work and you come to realize that there’s a different level of sophistication when you want to start to scale. uh, into commercial real estate and do it at the highest levels. And I remember leaving a conversation one day like, you know, I don’t really know some of the terminology that he just used with us, right? And some of the questions that were asked, it was clear to me that there was a gap in the level of understanding and ultimately operations and execution that would need to be filled in order to play at the highest level. And so I left that conversation thinking myself, okay, I’ve got two options. Either a you can go to some sort of large firm that really understands uh, this at the at the institutional level or You can go back to school at a place that understands it at the highest level. And so it was through doing all of the work and having all these experience, both on the investment front and the development front, um, that led me back to the conversation that you and I originally had.
And I said, you know what? I think the right way to go about it, to build. the technical competence to build the credibility and to establish the relationships to help open some of these doors is actually to go back to graduate school because it’s gonna be packaged up in a way that, you know, it’s like drinking from a fire hose, but you get so much exposure right across the entire industry, um, that it’s going to help you open up some doors and take things to a whole new level.
So it was through some trial and error, but just being in the game that I was like, I’m going back to graduate school. And it was an incredible experience.
[00:38:00]
Michael Belasco:
Yeah. Okay. So you, you had to apply, you get in. Well, gloss, just in the interest of time, tell us about it. You’re the first class. You’re, you’re the, you’re the first cohort of this program that just kicked off. How did you find it? Why, like why Harvard? Why? I mean, there’s a lot of reasons why Harvard, why that program, and then get into like, pitch it, tell, tell the
[00:38:24]
Leonard Allen-Smith:
Oh, so
[00:38:26]
Michael Belasco:
consider it.
[00:38:26]
Leonard Allen-Smith:
when I had initially thought about grad school and done some research, Harvard didn’t even pop up on, on the list, right? Like I had looked, there was no program. And I remember, um, Calling up one of my mentors and like, you know, I’ve got this, this thought about wanting to go back to grad school. And his like, literally the words out of his mouth were, have you thought about Harvard?
And I was like, they don’t have a program. What are you talking about? And I went back to my desk, got on the computer, looked it up. And lo and behold, all of a sudden they had a program. And I was like, are you kidding me? So, you know, the, it, it just popped up by chance, right. It just popped up by chance. And the minute I found out about it, I said, I’m going. And not only was it, you know, made up in my mind, I literally got in the car the next day and drove myself up to Boston to go introduce myself in the admissions office.
I don’t know if I’m supposed to, you know, give that idea to folks, but
[00:39:21]
Michael Belasco:
Actually, that’s great advice. I mean, that shows initiative. Yeah.
Yeah.
[00:39:24]
Leonard Allen-Smith:
initiative, right? And I remember getting there and like, they were, Hey, work from home Fridays. Nobody’s here. And I was like, I don’t believe it. I’m going to go find out for myself. And I remember like being at the door, like a, like a New York city delivery person, just buzzing every single door trying to get in. And, but I very much believe in. creating your own right journey. And you need to just show up sometimes for these things to happen. And, you know, the idea of why Harvard, right? Um, going back to things I talked about technical competence, credibility network. It’s it’s it’s got all of those things. That is certainly a given. Um, and I like the idea of it being the first cohort. I think that aligns really well with my spirit and just who I am. And I was like, you know, this is an opportunity to forge a path not only for myself, but all of those that will then also enter into this program, right? It’s gonna be crafted a little bit based on what this first cohort looks like.
And I think the people who show up in the first cohort are all going to be Go getters, right? Super entrepreneurial because we’re taking a risk on something that is unproven. Now, you can’t go wrong with the name Harvard, but this program was unproven. But when I started to meet the professors and who they were right as I’m going through the admissions process, it became very clear to me that everybody there was extremely competent and was playing or had played previously as a practitioner at the highest level. Levels, whether that means they ran their own firms and funds, or whether that means they were doing it at an institutional level, they knew everything about the industry. And it was a really broad experience that gave me insight into different asset classes that I had previously worked with different investment strategies, right?
Like, and the program being housed in a design school, my background had always been in the business world, right? So now I’m getting to apply this new lens of. design and architecture and urban planning, which I might not have been able to get had I been at a real estate program in a business school. So it gave me a compliment to my skillset and my understanding that I might not have gotten somewhere else.
So. I thoroughly enjoyed it. I loved it.
[00:41:48]
Michael Belasco:
Amazing. Well, Leonard, I think we’re about out of time. This has been, you’ve been a wealth of just knowledge and there’s been a lot of great insights here. Um, and I just can’t wait, you know, so you just recently got out of this program, by the
[00:42:02]
Leonard Allen-Smith:
Like a couple weeks ago. I’m freshly back from Cambridge back to to to New York. And one of the thing that I would say about this program briefly before we wrap up is the practicum that we did was also something that attracted me and a lot of the other students to this program. It’s a little bit different than than some of the other programs that I’ve looked at. And so what is the practicum? Right? So we spent nine months on campus doing all this coursework and it was intense and then come summertime, all 35 of us who are in this program. It was a really tight knit group. We’ve got half of the group was international, half the group was domestic from from the U.
S. Right. And um, The 35 of us got paired with 35 companies and we actually got to spend two months within their organization, um, getting to understand their business models, their investment strategies, their operations, right? Um, getting to apply the learnings that we’ve had both professionally and academically bring it to their organization.
And then when it was all said and done, we brought all that knowledge back to campus and got to share it with one another. So you got perspectives. That you might not have gotten in other places. And that’s one thing that I really appreciate about this program was the wealth of information, perspective, exposure that I got to the entire real estate industry.
[00:43:24]
Michael Belasco:
Amazing. What we do at a CRE, we do a whole You know, graduate real estate profile section. So you got to get one up. I don’t know. I don’t think we have yet. So, uh, we’ll get that up. Anyway, Leonard, thank you so much for coming on. We’re going to post if it’s okay with you. I’m sure people are going to want to reach out and connect with you after this. We’ll post your contact info, Alan Smith equities website, all that stuff. So, if anybody wants to reach out to Leonard and discuss more. Um, I, you know, he, he’s a, he’s a fountain of knowledge here. So, um, you know, I appreciate this and, uh, to everybody listening out there. Thanks for listening. And we’ll see you on the next episode.
[00:44:04]
Leonard Allen-Smith:
Fantastic. Thank you, Michael. And thank you to all of the audience. Looking forward to talk to you guys soon.
