This past Thursday, January 30th, 2020, the Cornell Baker Program in Real Estate hosted Warren de Haan of ACORE Capital. Mr. de Haan is a Managing Partner at ACORE, which he founded with his long-time partners Boyd Fellows, Chris Tokarski, and Stew Ward. De Haan is a storyteller with a knack for developing relationships and a keen understanding of the ebb-and-flows of the capital markets. Throughout his presentation, it was clear that he is adept at taking complicated subjects and reducing them to simple matters of fact. During his lunch at the Statler Hotel, he spoke about the importance of “EQ” and “IQ,” referring to the necessity of both technical skills and interpersonal skills to truly be effective in the real estate finance industry.
Mr. de Haan spoke of the days he worked in the hotel industry essentially managing the back-of-house staff in the basement of a London hotel. That was not quite cutting the check he needed to buy the three-seater McLaren that he had his eyes on as a young man. During his presentation, he recalled a down-to-earth story about seeing that very supercar at a dealership in London, and after crunching some numbers in his head, it quickly became apparent that even his lifetime earnings were not going to put him behind the wheel of his dream. Something had to change. Having a friend enrolled at Cornell, he decided to join the educational pursuit and better himself. He spoke fondly of his time in Ithaca, noting that he sometimes found himself focusing more on the social aspects of college than his academic responsibilities. While attending the undergraduate program in the Hotel School, he worked part-time at the Statler Hotel as a valet, a tradition of hoteliers that is maintained to this day. Standing in the Statler lobby, he commented on the familiarities of the space. In a somewhat reminiscent tone, he laughed about the tricks he learned about spotting the “big tippers.” Nonetheless, Mr. de Haan put his shoulder down when it mattered and graduated with peers that became lifelong friends and business partners periodically throughout his career.
Upon graduating from Cornell, Mr. de Haan went straight into investment banking at Nomura in its commercial real estate finance division in New York, NY. In this role, he would meet three incredibly valuable people in his life: Boyd Fellows, Chris Tokarski, and Stew Ward. Together, these four went on to be serial entrepreneurs finding great success with every endeavor. First, the group founded Coastal Capital Partners, LLC, a firm focused on acquiring distressed debt and advising clients on restructurings. Next, they founded Countrywide Financial Corporation’s commercial real estate finance business that was launched in 2004 and grew into one of the largest lending platforms in the United States focused on middle markets, closing over 1,250 commercial real estate loans totaling over $11.5 billion. Mr. de Haan spent this time there as the co-head of loan originations, a role led to his eventual move to Starwood Property Trust, Inc. as Chief Originations Officer. Starwood is a household name in the real estate industry—a heavy-hitter so to speak—that has seen many Cornell alum in its ranks.
Mr. de Haan and the rest of the team that had also moved to Starwood (Fellows, Tokarski, and Ward) left after four years to found ACORE. ACORE currently has ~$17 billion of assets under management in real estate credit strategies and has closed over $21.5 billion in transactions averaging $73 million+ since its inception. Mr. de Haan cited five projects during his presentation, one of which he was particularly fond of in Beverly Hills, CA across the street from the infamous Montage Hotel. This is a luxury condominium development branded by Mandarin Oriental, a highly regarded luxury hotel and resort management group known for delivering superior quality and taste. While this project is indeed awe-inspiring, it is one of many within the caliber of projects that ACORE finances. The debt industry can sometimes prove to be obscure and misunderstood by the masses. However, it is vital to the health of the real estate industry and can be a catalytic force for new development.
When asked about the financial structure of a typical deal, Mr. de Haan rolled up the projection screen to reveal the whiteboard and immediately began drawing diagrams of the various pieces of the capital stack that ACORE funds. While many students in the Baker Program come to Cornell with backgrounds in finance and were familiar with some of the concepts, many of those with design backgrounds found the illustrations incredibly helpful. Having an industry veteran describe this concept in a concise manner was enlightening for a class that often gets bogged down in the technical aspects of cash flows and IRRs. In this Speaker series, Mr. de Haan embodied the educational philosophy that brought so many of us to the Baker Program. That is, Mr. de Haan helped to strengthen the link between academia and professional practice.
Mr. de Haan left students with ten of his life lessons gained throughout his career:
1. “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about the solution.” – Albert Einstein
2. Place value in partnerships.
3. There is beauty in simplicity.
4. Get comfortable being uncomfortable.
5. Respect time.
6. Be aware of those who warp reality. Let intellectual honesty prevail.
7. Be fit.
8. Polish the back of your shoes.
9. Being an entrepreneur is hard. If it was easy everyone would do it.
10. Get miles in the saddle… Earn it!
