Paying it Forward: Terry Brown of Asana Partners

I think one of the most impressive things someone can do in their career is pursue a new passion outside of their comfort zone after doing the same or similar thing(s) for decades.  Peter Drucker (father of management thinking) wrote one of my favorite Harvard Business Review articles called Managing Oneself.  In it, he talks about this idea and how one can re-invent themselves for the second part of their life and career.  Unfortunately, many people aren’t proactive enough earlier in their lives to set themselves up to pursue what he likes to call “second life endeavors”.  Drucker says,

 “People who manage the second half of their lives may always be a minority.  The majority may “retire on the job” and count the years until their actual retirement.  But it is this minority, the men and women who see a long working-life expectancy as an opportunity both for themselves and for society, who will become leaders and models.”

I had the great pleasure of spending time with a wildly successful commercial real-estate executive who is in the midst of living out his second life endeavor.  As impressive as his accomplishments were at major large organizations earlier in his career, starting his own venture (that has also happened to be wildly successful) resonates with me on a different level.  Sure, I’m biased. I love stories of entrepreneurs starting things from scratch and creating value for others in the process more than the average person. However, when you meet someone who created their business to help other people and future generations of industry professionals be successful, you cannot not be inspired by their pursuits.

Meet Terry Brown, Managing Partner and Co-Founder of Asana Partners, a fast-growing retail real estate private equity investment platform that owns some of the more distinct retail properties across the U.S., including those in Atlanta.  Terry achieved incredible success at Arthur Andersen, becoming the CEO of Andersen’s U.S. Merger & Acquisitions Subsidiary – and then with EDENS, one of the largest retail real estate companies in the U.S., as its Chairman and CEO for 13 years.  To the average person, finishing his or her time as CEO of one of the largest institutionally capitalized real estate companies in the U.S. might have led to years of relaxation, travel, golf, etc. For Terry, at age 53, he wanted much more. His desire to position others for success and to inspire young professionals led him to re-invent himself and take on a challenge he had never experienced before: starting a business from scratch.  Now, in less than five years, this business (started from scratch) has raised more the $2.0 billion of equity for investment and has invested more than $3.5 billion in real estate in more than 40 urban neighborhoods across the country.

We sat down with Terry to hear more about his experience running companies both large and small and some of the lessons he’s learned along the way through leading others and investing in future opportunities.  Fortunately for all of us, our transcript below is a picture into an incredibly wise business mind and forward-thinking leader in the commercial real-estate industry.

Terry Brown

Managing Partner and Co-Founder – Asana Partners

Charlotte, NC

Tell me a little bit about your upbringing and how that influenced your desire to do what you’re doing now?

I was born and spent my childhood years in Elberton, a small town in Northeast Georgia. No one in my family had ever gone to college. My father was with the postal service for more than 45 years, and my mother was a stay at home mom. It was always important to my parents that I stay focused and accomplish those things neither of them had the opportunity to achieve.  And so, my father pushed me aggressively early on to set goals, to achieve, and work harder than others at everything. My parents also infused in me a belief that if I did those things, I could outcompete, outperform and succeed at whatever I dared to dream.

As importantly, my parents really believed in serving others and treating people in all walks of life well.  Elberton is a small town. Community is important; a person’s reputation is everything; taking care of other people is really important; family is important; and being spiritually grounded is critical.  In fact, my basic core values were instilled in me long before I left Elberton for college. 

Growing up in Elberton, the only people there that had great educations, who traveled and were financially secure, were doctors and lawyers.  So instinctively I believed the right professional path for me was to become a doctor. I went to the University of Georgia to study pre-med until I realized that I could not handle the sight of blood.  As I gained an understanding of all of the professional opportunities in the business field, I quickly switched my major.

How old were you when you started at Arthur Andersen?

I went to UGA on an Army ROTC scholarship and it was a great way to pay for college.  After graduating from UGA, I completed my active duty service obligation at Fort Sill, Oklahoma, and then returned to work at Arthur Andersen in Atlanta. 

My undergraduate degree was in accounting, but I had no idea what I wanted to do (I would argue at 57, I still don’t really know what I want to do).  Accordingly, I always took an approach of leaving as many professional doors open as possible. Arthur Andersen created more opportunities than I could ever have envisioned when I began. Quickly I discovered, or at least my supervisors did, that I was not a very good accountant – when you have ADD, accounting is a tough discipline in which to excel.  I also discovered that I had much more of a passion for strategy, business, finance, and organizational development.

After a few years at Andersen, I transferred into a new business the firm was launching globally.  The new area would provide merger and acquisition and capital markets advice to middle market clients on a global basis.  I was one of the first people inserted into this new division – and certainly the most inexperienced – but it provided an amazing platform for me to grow professionally. Over time Anderson named me CEO of the U.S.-based broker-dealer organization and part of the global executive team of a business that grew to more than 1,500 professionals.

I was fortunate at Andersen to have several mentors over the course of my tenure that took a very active, personal interest in me.  I frequently tell people, “No one is smart enough in life to succeed without the help of many others.” There are a few Bill Gates or Steve Jobs types, but I certainly was not one of those.  I was the beneficiary of the inculcated training and mentoring culture at Andersen. It was my first view of generational succession and sustainability.   

During my 17 years at Andersen, it seemed like I had 10 different professional roles.  I never for a day felt that I was not learning and growing, personally and professionally.  Many people around me helped me succeed there – most of whom I remain close friends with today.

So, fast forward a little bit, you move into a role as the CEO of EDENS. How did that come about?

Starting in 1994, EDENS was one of my clients at Andersen. I worked directly with the CEO/Founder between 1994 and 2002, advising the company on a number of large transactions to raise institutional capital to recapitalize and grow the company.  Over those years, I developed a strong relationship with him, gaining his trust and earning credibility. In late 2001, when he was 60, he asked me to succeed him as CEO to develop a new strategic plan and create value for the shareholders. 

As the opportunity with EDENS was developing, Andersen began to unravel in the wake of the Enron scandal.  It was clear to me that I would need to move on to a new opportunity. Doing so with a Founder/CEO who was a known commodity and a company that I knew well from the outside seemed the most logical to me.

Also, as much as I loved Andersen, the pace and especially the international travel was starting to take a toll on my health and life at home.  So the opportunity to move to a bit smaller city and exit the client service business (because clients really control your time) was attractive.  Furthermore, the ability to focus my energy on creating strategy, rebuilding and transforming an already successful organization and yet have more control over my own schedule was important. All of this made the move to EDENS an easy decision.  Because I was so intimately involved with the company, I knew exactly what I was walking into. I had a strong sense of what we should do strategically to change directions, elevate our game, build a generationally sustainable business, and create much more value for our stakeholders.

Speaking to work/life balance, what advice do you have for young people about trying to manage that?

Work/life balance has consistently been the single biggest challenge for me.  It seems Gen Z and the millennials generation do a much better job with this challenge and make the necessary sacrifices to have better balance. In hindsight, the single career attribute I would change would be related to work life/balance.  Physical fitness, exercise, nutrition, being “present,” investing in relationships with friends and family – these are the ingredients for a better and happier life.

Realistically, starting and building a successful business requires sacrifices by many people – those involved directly and peripherally. You have to work harder, think more, and invest your heart and soul into driving a successful business. Creating a successful business and growing it will never be a 40 hour a week job.  So just remember that work/life balance has to be measured over a period of time, not in a day. 

The advice I give to others is this: define who you are and what you want to be about professionally and personally, then go from there.  One thing I learned early is that people actually need real vacation time. When you’re young, you don’t grasp the importance of recharging. You think you can just keep working and working.  Professionals need physical and mental recovery and periods of restoration.

How long were you at EDENS?

13 years.

When you were there, did you ever have the itch to leave and start something?

I would like to say that I always had an itch to do it, but that’s not true. I grew up in a family where my dad worked at the same place for 40+ years. If it were not for the Enron related demise of Andersen, I probably would still be there. I loved the place and it created huge opportunities for me. I envisioned myself as a “company” man.

After leaving Andersen, we began to quickly transform the EDENS business, modified our investment strategy, decentralized the operations, and shifted the culture. We transitioned from a family-owned business orientation to a performance-oriented culture, while retaining those legacy attributes that cause people to want to work with each other and to genuinely care for each other.   That shift was a tough, tough process to lead. I was extraordinarily lucky. The people at EDENS both then and now are amazing. Those people were talented, ambitious, creative, and committed to becoming a company recognized as high-performance – but with a differentiated approach to doing business. We tripled the size of EDENS and delivered very strong returns for our shareholders.  We maneuvered our way through the financial crisis from 2008 through 2010 and positioned the business for the post GFC era.

But over time, my focus and time became consumed by dealing with investors.  I had very limited time to be out in the marketplace. And I became further and further removed from the things that I enjoyed – developing external relationships, motivating and mentoring our people, driving strategy, and spending critical time with retailers and property owners.

Reflecting back on that period, 13 years is a long time to lead a single business. My energy, passion, and conviction were impacted by longevity and those things I was forced to focus on.  Now I see that I needed renewal. I needed recovery. I needed to think through what I wanted to do with the last chapter of my professional life. I wanted to get back to the things that I enjoyed and that gave me such satisfaction.

And so, in late 2014 and early 2015, I started to think about what I could do, where the opportunities in the marketplace might be, who I wanted to be in business with, and which opportunities would allow for economic success and personal contentment.

Interestingly, EY named me a finalist for Entrepreneur of the Year in 2011 in the real estate industry. The EY recognition was around changing and shifting the strategy of EDENS and being an entrepreneur within that organization.  However, four years later, I was forced to deal with the reality I had never been responsible – directly responsible – for making a payroll. I never had spent a night wondering where the capital was going to come from to invest in a business in which I owned a significant stake.  I was considering doing something that I had never done.

Regardless of this inexperience, we launched Asana Partners in the fall of 2015 with only the capital of the three founders. We had confidence that we could create a lot of value for investors and a valuable platform.  We had a strong track record recognized within the industry. We had confidence that we could raise significant capital. We believed that we had a differentiated and compelling investment thesis. And we believed we could do business differently from our peers.

Our objectives were simple.  We wanted to have fun.  We wanted to have an amazing reputation.  We wanted no drama internally or with our partners in the marketplace.  Our objective was to create a platform where talented professionals could grow and succeed and work there for a long time.  We wanted to build a business that could evolve as investment opportunities change and as the ambitions and goals of the Asana stakeholders change and evolve.  To be successful, our integrity and performance standards would have to be high, the Asana reputation pristine, and the economic outcomes for our investors and people superior.

I really like those values or ideas you mentioned you infused into the business right from day one. What were some of the other things you did early on and day-to-day that helped establish that structure of those characteristics of the culture?

Well, when we started the business, we thought we’d have about 10 or 12 people. We wanted to fit everybody who worked at the company in a minivan.  Now, we have more than 70 people in offices on the East Coast and in Los Angeles. So, the business has grown more quickly than we initially expected, and the investor support has exceeded our early expectations as have the quality investment opportunities.  We also have evolved to meet the requests and expectations of our investors.

What’s key for us is trust among our people.  Our partners, the entire executive team, our staff and associates – our interests are aligned. I trust the judgment of our people. I trust that my interests are the same as our people. We may disagree on the things we need to do or how things should be done. But I do believe the intent of our people is pure — let’s call it “purity of purpose. “ 

I think I’m the only person at Asana Partners who is over 50 years old, so it’s a very young culture. We almost always take potential over experience when selecting the members of our team.  If we have really bright and ambitious people with aligned interests who do business the right way, we will certainly do great work. We will make mistakes for sure. But we enable people to make decisions in the marketplace at a very early age.  For our senior people, we spend much of our time supporting the younger professionals. That support could be as simple as a request to make a call, fly to a meeting, send someone an email, or providing real time deal transaction advice. There’s much joy in watching people build their own place in the business and build their own industry reputations. 

Not every day has been perfect, and we certainly have our issues. But compared to when we started, I have way more confidence today that our approach to building a high performance, sustainable organization will work.

You talked earlier about success and how that looks different for different people. What does success mean for you and how has that changed if it’s changed?

With age and time, success seems much more a matter of contentment and satisfaction, a happiness with who you are, and where you are, much more so than financial success.  My definition of success has evolved to be much less about business headlines, much less about personal belongings. Today it’s about people who make an impact. Teachers, coaches, doctors, nurses, missionaries and others who really do important things to change lives and communities – the work of these people helps keep success as a business CEO in perspective.

At this point in my career, what gives me the most joy is seeing young people succeed in business and life. I told you before I had five or six people who made an extraordinary impact on my professional career. I talk to most of them about every month. These long-standing relationships are very important to me. These are people who have changed the trajectory of my life and in many respects the lives of my children. I work hard to make sure they understand my appreciation and loyalty.

And this is what drives me to do the same for others.

Do you think in order to create that environment and sustain it, that hiring is more important or the actual systems and culture that’s in place?

Yes – hiring the right person is more important than processes or systems. People make the culture.  Every hire influences and changes the overall organizational culture. We cannot change who people are, what they believe, their integrity, their ambition, their intellect, their personality, or their engagement. There are some amazing people who are looking for a place that supports and enables long-term professional growth and opportunities.  Finding those people who will flourish in our environment is important. If a professional needs to sit with a supervisor each day, needs a to do list, is timid about decision making, or is afraid to fail, then Asana is likely not the right place for him or her.

What has been the greatest failure you’ve experienced at this point of time in a business sense?

I was one of some 1,700 partners at Andersen.  Being part of a business that goes away, a place that you love and where you love the people, that would have to be the most significant business failure I’ve experienced. I did learn from that very difficult period.  I learned about leadership during periods of crisis, economic alignment, being a partner, the power of the media and much more.

Leading EDENS during the financial crisis of 2008-2010 and my failure to see the financial crisis coming was also a failure on my part.  One of the most difficult things you have to do is down-size a business in a challenging environment.  Terminating employment – people whose families counted on them for their livelihood – is so tough. Knowing that there were not a lot of other jobs or opportunities available to those people made the decisions more difficult.  I tried to handle the necessary decisions in a way that minimized the damage to those families. At the business level, we managed through this period successfully, but it was very painful and certainly caused me to feel that I had failed.

I’m guessing there’s a lot of emotional and mental stress and anxiety that happened after the financial crisis. How did you work through that?

As much as I agonized about the decisions I was forced to make, a lot of talented people actually found themselves in better professional situations over the long run.  As an organization, we had many resourceful people. They were very entrepreneurial and could find opportunities in distress. A lot of them bounced back quickly, capitalized on great opportunities, and achieved good success. 

As a business, we could not linger in the pain of those decisions.   We had to move forward and immediately focus on how to execute our strategy and create opportunity in a recessionary environment. We acted quickly and decisively with the support of our investors.  By 2010 and 2011, we were developing real estate at a time when there was not a lot of new development. We weren’t heavily leveraged, and we had investors who believed in our strategy. We were able to build when others were not building and deliver new space to retailers as the economy recovered.  Our strategy across the downturn created a lot of shareholder value in the ensuing years and energized the organization. We also went through a branding change and organizational shift – a re-evaluation of who we wanted to be and what we wanted to be about – that energized our people. Looking into the future is always more energizing than reevaluating history.

What are some of the thought processes you use to decide whether or not you want to get involved in something – whether it’s a real estate deal or the business to invest into?

Making a decision about real estate investments is a lot easier for me than non-real estate investments. Outside of real estate, I have had enough winners and losers to at least know what not to do. I have a couple of rules I always try to follow:

First, I don’t invest in things that I don’t understand or cannot explain.  So, the things I invest in are simple things like ice cream or packaging or vitamins or other businesses whose products or services I can see and touch. Second, I invest alongside smarter people, and I choose not to be the only investor in a business. Third, I only invest in businesses where I believe in the people. The people have to have the right strategy, and they need the experience to execute and the capacity to attract other good people.  Finally, I must be absolutely sure my interest as an investor aligns with those of the people driving the business.

You’ve partnered with a lot of successful brands either through real estate or as an investor. What are the common characteristics that you see across those companies that have been really successful?

The one factor that is absolutely required for successful brands today is emotional connectivity to consumers.  Those emotionally connected brands have a story that resonates and is communicated consistently with clarity. Consumers expect a story, whether it is in the food they eat, the shoes they wear, the cars they drive, their exercise methodology, where they travel, etc. 

It’s this story that makes the business interesting. I was with the founder of an extraordinary high growth business a few weeks ago. The founder told me that she spends 3.5 hours per day on social media connecting directly with her consumers. Think about the story she’s creating!

Stories drive the retail industry today. Take fitness attire – Lululemon, Outdoor Voices, On Cloud, brands that are proliferating. Each has its own unique and well-known strategy built around a story.

There was no prerequisite for this connectivity with the consumer a decade ago, maybe even just five years ago.  Much of the consumer is social media driven. Think about the power of it, the ability to create and communicate a story way more quickly, with much less capital.  But the price for having this opportunity to connect with our consumers is expediency. You have to continually evolve – quickly – because consumers will disconnect emotionally as quickly as they connected.

You think all those things you just mentioned will hold true in five or ten years?

I believe that brands and consumers will be connected emotionally even more so in five to ten years.  Nimble, well capitalized brands are going to have a lot of success. Businesses, especially mega businesses, that do not continually reinvest in their brands, do not stay true to their consumers, or do not live up to their brand promise will not survive. The millennials have driven much of the brand story demands over the last decade, but the next generation of consumers is demanding and will require even more customization and more connectivity.

What are some resources or things that you use on a weekly basis to kind of stay in touch with what’s going on and what’s not?

I am a voracious reader. We do business in more than 25 MSAs across the United States.  As a result, I spend the first two hours of each morning with a cup of coffee and my iPad.  I plow through ten or more city business journals/feeds from across the country a day. In our industry sector, we have to read a variety of business magazines and news.  Travel magazines, fashion magazines, restaurant magazines, etc. are all part of the business. We have to absorb and process that information to be able to determine what is relevant and what is not relevant. So, I bury myself in this material to stay on top of constantly changing consumer demands, much of which is technology enabled. 

Separately, I believe that every experienced, older business person’s worst fear in life is becoming irrelevant.  To remain relevant, you have to work harder and smarter. The worst thing when you are 57 years old is to have some 25-year-old think you’re a dinosaur.  Staying relevant at work and to my family is one of the primary drivers of my motivation.

Last question, what non-business thing are you into right now?

The thing I am going to be into (which no one believes) is a farm.  I want to have a farm with a greenhouse, a tractor that I get to drive, and a place with a few animals. I want a place where I get my hands dirty and one where there are no mobile phones.  Of course, I plan to grow and market a few premium, award-winning food products – ones with great stories, no less.

For information on Terry Brown and Asana Partners, be sure to check out their website below:

Asana Partners