Scott McKibben: 17:19
Yeah, so that’s an interesting one. So when I was about 50. So I just turned 56 yesterday. And so when I was about 50, I had told, you know, some of the different owners of, you know, I was a co-founder of an investment group that I was probably going to tap out around 55, not because I didn’t want to work anymore. It’s just that I didn’t think that, you know, running.
We had 18 offices. We had 30. I had about 35 people doing deals in some fashion, whether they’re analysts, associates, capital markets, people, all the things that, you know, that I was working with and you start getting removed from actually doing the deals day in and day out. And I really wanted to get back to being a deal junkie. I do other deals, too.
I just bought an eight unit building in Avondale like a week ago with one of my neighbors, you know, and we’re going to renovate that and stuff. So that’s the type of stuff I do. And so I knew I wanted to get back to touching deals. And then, you know, I was on the road between personal travel and business travel about 130 days a year. And so it was a lot of travel.
And then to add all my wife, she has decided the kids had kind of gotten out of the house and she wanted to move back to the city. So I worked in Rosemont, lived in Park Ridge. I had a five minute commute pretty much my whole career, 5 to 10 minute commute, and all of a sudden, with all the construction going on in the Kennedy, I ended up having 2.5 hours sometimes or more. And so, you know, I did that for two years. And so there definitely was a part of me that was thinking, okay, maybe I will continue to, you know, you know, do this type of job because, you know, I was good at it, but I just wasn’t what I think I wanted to do for the rest of my career.
And so, you know, when I added that commute, I think two weeks into it, I actually told my wife, I wrote down all the reasons why I should leave and move on. And it’s kind of funny because I still have that. It was back in April of ‘22, and then by April of ‘24, I made, you know, this, you know, I left Brennan and I really wanted to just, you know, I wasn’t looking to get away from working. I just wanted to work in a different capacity. And so I started the company up then.
I grabbed the people that I wanted to, you know, start this new venture with people that I like and respect, that are smart, good at getting deals done. And I got the chance to kind of have a fresh start, which is amazing. Not everyone gets to have this opportunity to kind of do it again, but I get to do it in a different fashion. It’s not the same structure. I don’t want to have 18 offices. That’s not what I aspire to be. So we’re doing it in a different way, but a lot of the same type of deals that I was doing at Brennan.
Dr. Jeremy Weisz: 20:00
I want to talk about talent and recruiting talent, because when you mentioned, we talked about some of the people that you work with now on the team, you know, they could have stayed where they were at also. Right. But somehow you were compelling and persuasive. I’m just curious. Well, how that conversation goes when you’re recruiting talent to come over to your company?
Scott McKibben: 20:32
Well, you know, it’s really funny. It’s a funny story with Tina Ramos. I remember, like I had said to her for years, that I was like, I would love to work with you. I actually tried to bring her in to head up our capital markets at Brennan.
We offered her the job, but it just wasn’t the right fit. She was a CIO of Mizner. She accepted that job and I was hoping someday to work with her and so when I said, I’m leaving, I want to start my own company.
We actually went to dinner together. I almost felt like a date, but it was a date of someone that, you know, like because we both were like, I knew I wanted her to join, she wanted to join. And what did I say? One thing I found, I was a little flattered in general about how many people wanted to join me.
Like, I literally probably had probably no exaggeration, 50 people reach out in some fashion, say they want to join. Some people with some fairly big positions at companies, but the trade off of starting a new company is you can’t. I’m not paying salaries. I’m like, hey, you’re going to get ownership, you’re going to get money on the come. But you got to be able to do that.
And that doesn’t fit for everyone. So some of the people were like, well, I’ve got two kids. I can’t do this right now. I would love to, you know, but if things change in the future, reach out to me. But, you know, I definitely had a few people that volunteered to leave their positions.
And so it was very flattering, to be honest, you know, because I just didn’t realize that I would have that type of pool of people. But, you know, I’m very enthusiastic, outgoing and I’m aggressive. You know, working on relationships with equity, with debt, with, you know, sellers, with brokers. And so I think, you know, I’ve built a good reputation and I guess that’s the fruits of that. But I didn’t realize that.
And the other thing I’ve done my whole career is and this is really kind of helped me is whenever anyone’s ever asked, say, hey, my kid wants to go into real estate like this. You know, someone wants to go, whatever I would, I’ll spend an hour with him. I’ll go have coffee with him. I’ll have him come to the office or I’ll just jump on a call. And I don’t know how many people I’ve over the last, I’ve had a lot of breakfast meetings. And over the last 14 months since I started the company breakfast meetings and lunches and where people, you know, have said, and I don’t even remember, sometimes they’d be like, oh, you know, you talked to me for like an hour one time, you know, eight, 11 years ago. And you know, this, this kind of told me, you know, what’s the difference between you got to figure out where you want to be entrepreneur, or if you want to be a corporate person and, you know, finding the right fit for what your personality is and what you want to do, and just those type of conversations I had with them and like a lot of them, were like parrot back things I said, which it sounds like me, but I didn’t even remember having the conversation. But by virtue of doing that, by extending myself whenever I was asked, it’s kind of come back and I’ve been rewarded from it. So it’s been great.
I’ve been able to really kind of see the fruits of planting those seeds throughout the course of, you know, just my entire career and how it’s been 30 years or so.
Dr. Jeremy Weisz: 23:25
So it sounds like recruiting obviously. And this goes into if someone checks out MatterhornVP.com, they do have a core principles page, which kind of goes into one of your core values, which is like focusing on people and just trying to help, which kind of helps with culture as well. And it just sounds like also ownership, right? People want to be an owner and that’s compelling as well. Is there anything else that when you look back in recruiting top talent?
Scott McKibben: 23:58
Well, so now what’s interesting is, you know, I’ve partnered with a couple gentlemen in Texas, two gentlemen in Atlanta. I have a partner and then, you know, and he has a couple employees in Florida that we’ve done several acquisitions that I’ve been doing. I started that company probably about three years ago. You know, and just kind of grew that. But the two gentlemen in Atlanta, I was just there last week and I actually met him in person for the first time.
I got connected by someone that I know that they’re all part of this Princeton alum group. I’m not a Princeton alum, but they were. They connected me with them, I met them, I felt like they would be a good fit. And so what I’m able to do now is they get ownership in every deal. We’re 50-50 partners.
And instead of them being employees of Matterhorn Venture Partners, they’re their own company. It’s called Firestone. And Mark and Michael are really great. And I have Casey and Logan in are my guys in Texas I’ve done deals with and you know Kareem in Florida. And these guys are 50-50 owners with us on the deals.
We bring the debt and equity to the table. We help underwrite the deal. We do. You know, we do. We kind of legitimize it from sometimes an institutional capital standpoint? A lot of times these tend to be younger people. You know, most of them are in their 30s or early 40s. And so and you know, they need to maybe a little bit of a helping hand to kind of get over the hump there. And so that’s been great. I’ve been able to work with these guys.
They can now grow their own brand and eventually they might not need us. That’s fine. We’re going to be working with them for as long as they do. And then, you know, if it’s time for them to move on and us to move on, we’ll find someone else within those markets to potentially do the same thing again. So it’s a really good way of approaching the business.
And instead of having 18 offices I can have, I’ve partnered with guys in New Jersey, I partnered with someone in Vegas, and we’re doing a deal in Denver right now. We just got a deal awarded to us, which is a really great deal. We’re working with, you know, a brokerage group out of Denver to partner with. I’ve, you know, partnered with a group out of the Carolinas before. We actually didn’t get the deal done, but there was a reason for that. But we were talking about doing deals going forward.
So, you know, those are the types of things I’m able to do with, you know, not having them necessarily be employees.
Dr. Jeremy Weisz: 26:25
Yeah. It’s really interesting. I want to get into doing the deals a little bit and some of the mistakes you see in lessons. But when you start the company, Scott, do you have to raise capital or is there just you have lots of relationships with banks? How does it happen? Were you just start up and obviously you’ve grown really quickly over a very short period of time?
Scott McKibben: 26:50
Well, part of it is I’ve had a history of doing it, so it made it a little bit easier. But the last year, you know, 14 months since we started have been a really tough climate to do deals in. You know, a lot of development deals have kind of stalled, industrial primarily. You know, there’s not a lot going on. There’s still some, but not as much.
And even acquisitions. There’s a lot of people waiting on the sidelines for the dust to settle. Whether it’s the election or whether it’s, you know, the tariffs or whatever, there’s always different reasons for people to kind of pull back. And so it has been a little more of a difficult environment to do this. It’s not quite as bad as the Great Recession.
But you know, when I partnered with, you know, with Mike Brennan in 2009, we started up a company. We were in a similar environment where it was really difficult. The first couple years, we only did one deal, the first year, two deals, the second year. That’s how few we did. So for probably two and a half years, we might have done 4 or 5 deals.
You know, like in total for the first two and a half years of existence, maybe even three years. We probably didn’t hit our 10th deal until probably the fourth year. And so that’s really it took a while to get going. I had a little bit of a head start because I had a couple, you know, as soon as I got out there, I went and chased a couple deals down and I started, you know, finding partners on it. But I think we’ve been fortunate, I mean I think I’ve got a good team around me.
And we had a good team at Brennan. But you know, it was a more difficult environment then. But it’s a very, you know, difficult environment, but I think because of my track record and all the deals I’ve done, I’ve been able to, you know, get some of these institutional groups and some, you know, high net worth investors to invest in deals depending on the size of the deals. And so we’re really starting to kind of, I think, get to that next level where we’re starting to do some larger deals, where we’re going to be able to kind of really see the fruits of all the everything we poured into the last 14 months.
But even if you look at what we’ve done so far, I’m satisfied. We’ve done a bunch of deals. I still would have liked to do more. It’s just probably my competitive nature.
Dr. Jeremy Weisz: 28:55
So what about you know, when we look at deals there’s a lot of factors involved. What are some of the mistakes you’ve learned either just observing or you’ve seen up close and personal with doing the deals.
Scott McKibben: 29:13
I’m sorry I lost you for a second. I was trying to ignore a call. Say it again. Sorry.
Dr. Jeremy Weisz: 29:17
Oh, no, I was saying, what mistakes have you seen people make when they’re doing deals?
Scott McKibben: 29:24
What mistakes have, boy? Well, you know, I think a lot of people. Boy, there’s so many mistakes I see. I think right now the big mistake, I think, is people are tying up deals without having their equity in hand. And you know, we’ve made that mistake a little bit.
And I think because the environment is a little choppy, that if you and especially some of these smaller companies that are just starting out, they’ll tie up a deal and then they’ll go around and try to search for equity. And we’ve talked to several groups, especially in development deals where they got $100 million development that is absolutely made with pencil out in an environment three years ago. Four years ago. Right. You know, coming out of Covid would have all day or even before Covid would have absolutely made sense.
Those deals right now, so they tie it up. They get, you know, get the time to try to do this. And then they don’t have the equity lined up. I think right now in this environment, you need to go into a deal bringing your equity to the table and then do the deal.
And I’ve noticed a lot of people have done that, you know, are starting to learn that lesson because, you know, there’s a lot of starts and stops and failed pursuits. And so that’s I would think is the biggest lesson right now in this current market environment.
Dr. Jeremy Weisz: 30:45
How did you even get into real estate in the first place? Because I know you studied law. You could have just gone off and probably been a lawyer, I imagine, at some point. Why real estate?
Scott McKibben: 30:59
Yeah. Well, you know, I guess I always had a business mind, you know, even as early as, like, fourth grade, you know, I remember I was, you know, like, remember those now later candies.
Dr. Jeremy Weisz: 31:12
Sure.
Scott McKibben: 31:13
Yeah. So you could buy like a six pack of those.
Dr. Jeremy Weisz: 31:16
I think I pulled out a couple cavities with those.
Scott McKibben: 31:19
Yeah, exactly. The worst candy in the world. But you could buy a six pack of them for a dime when I was a little kid. And so I remember I’d buy, like, ten packs of them, and you break them apart, and I’d sell them for a nickel each. Or if you bought the whole pack, you get six of them, you get a break, you get a quarter, you know.
So I get dimes or quarters, and I thought I’d be making like $2 a, you know, a day or something. Two, $3 I paid for my baseball card collection, whatever. And then I remember, I think, well, I got the fourth grade market corner, but I got to get the third grade market corner. So then, like, I recruited one of my neighbor friends to do it, and he started selling to the third graders, but I didn’t pay him. I said, here’s the deal.
Whatever’s left over, at the end of the day, you can eat, but you need to give me all the money. So. So I was always a business guy in high school. I was doing that, and I didn’t know if I was going to go into real estate. I worked for a company called Draper and Kramer in college.
I was playing tennis at DePaul, but also working, and my cousin worked there, and he ended up, an older cousin, and he got me a job there. And I just realized I liked real estate. So I started taking the real estate financing courses, and then I went to University of Wisconsin and, you know, and I knew I was going to go into real estate. I did the law degree just because I thought it would help supplement. I never wanted to practice law.
I just got some advice from a couple of, you know, people that were in the industry, one person that had a joint degree. He said, you know, I would absolutely recommend him doing both and you’ll never regret it. And I don’t. I don’t regret it. I was able to get my master’s of science in real estate and my law degree. I was 24.
I got it all done. I was able to get into the workforce at the same age as most anyone that was coming out of law school, even a little younger. And so it worked out really well for me. I knew right away that, you know, I was going to go into real estate. I didn’t even really interview. I talked to 1 or 2 law firms, but I really wasn’t what I was doing. I was looking for a real estate, you know, job, and I got one in a tough environment in 1994, and that company ultimately merged into Prime Realty Trust.
And I got to be VP of acquisitions as a 27 year old, only because the one guy that was running the FFO model to take him public quit and they’re like, well, you’re pretty smart at doing analysis. How about you learn to do an FFO model? And so I was working with, you know, the analysts in New York and, you know, DC to help, you know, take us public.
And I got to learn that. And along the way I said, hey, you want to buy this building, you want to buy this building? And they said, yes. And I became VP of acquisitions as a 27 year old at Prime Trust, which was a New York Stock exchange company. So it was a good start. A little bit of a little bit of luck. Someone quit right before and gave me an opportunity to kind of prove my medal there.
Dr. Jeremy Weisz: 33:49
Scott, you know, I love hearing the stories and the journey. I have one last question before I ask it, I want to, you know, point people. They can check out the, you know, Matterhorn Venture Partners, which is MatterhornVP.com to learn more. My last question is just mentors.
And the mentors could be actual personal mentors in business or distant mentors. Like there’s certain books or resources that you like. Who are some of your mentors and maybe some of the lessons that you learned?
Scott McKibben: 34:25
Yeah, you know, different lessons from different mentors. You know, in DePaul University, when I was an undergrad, there was their brother, Leo Ryan. He was a professor of a couple classes of mine, wrote me recommendations, letters. He was a big encourager of me. And just, you know, someone that was kind of a good advocate saw that I had, I think, some aptitude in the business world and really, you know, was there to support me and write letters and call or whatever. So he was great. And, you know, he passed many years ago, but he was a great mentor.
You know, when I got my first job in ‘94, coming out of grad school, there was a gentleman named Kevorkian. He was a great mentor in a different way. I mean, he’s a business guy but not someone that had gone through all the education and schooling. He was just more and he had a just good way with people and a good way with just kind of, you know, doing, you know, like so I’ve learned different things from different things and his like, ability to communicate with people and just kind of, you know, kind of be there for people. He was that type of person. And I still still to this day, you know, talk to him.
And so, you know, throughout the course of my career, you know, you know, I love working for Mike Ricci. He was the most optimistic person in the world. And, you know, and sometimes, you know, especially because this business has these ups and downs and pitfalls. It’s good to have that. I mean, sometimes I look at it and go, I don’t know how you can be so optimistic all the time about everything. But you know, he really like and it’s not something he just says. I think he truly believes it. And when you believe things and you make it happen, you know, like if you told me he was going to buy that, you know, that State of Illinois building was going to get Google in there, I was like, you’re out of your mind. Like, I would have never told anyone to ever even go near that. But, you know, he is an optimist. And somehow throughout his career, you know, he’s had his ups and downs just like anyone else. But he came through with that.
So, you know, there’s been a lot over the years that, you know, I’ve had different people that have have really helped support me and been good, you know, you know, like Mike Brennan treats his investors so well. He always was. That is paramount to him. And I was not as good a communicator with my investors when I started my first company, Madison Partners Realty, and I learned at Brennan to be a much better communicator with investors and let them know what’s going on. And it’s not always good news, but you got to communicate with them and be open and honest with them, and they’ll come back to you. And that’s, that’s that’s the reward I’m reaping now too, because I did that, you know, I learned that from him. So, you know, there’s probably 50 more I can name, but those are a few examples of some people that have helped me throughout my career.
Dr. Jeremy Weisz: 37:17
Scott, I want to be the first one to thank you. Check out MatterhornVP.com to learn more and more episodes of the podcast, and we’ll see everyone next time. Scott, thanks so much.
Scott McKibben: 37:28
Thanks so much, Jeremy. Appreciate it.
