Deborah Smith is Co-Founder and Principal of The CenterCap Group, LLC and heads the firm’s Strategic Capital and M&A and Execution efforts. Prior to forming The CenterCap Group, LLC, Ms. Smith was Co-Head of M&A and a Senior Managing Director with CB Richard Ellis Investors (CB Richard Ellis's $40 billion AUM investment management business), served as co-head of CBREI’s M&A build-out and negotiation and acquisition of a majority interest in Wood Partners (one of the largest multifamily developers in the United States), and also worked on mergers and acquisitions with Lehman Brothers, Wachovia Securities and Morgan Stanley, having been involved in over $100 billion in transactions. Ms. Smith has a Bachelor of Economics, with honors, and a Bachelor of Law, with honors, from the University of Sydney.
Can you tell our readers about your background?
My name is Deborah Smith, I am the CEO and co-founder of the boutique investment bank, The CenterCap Group (www.centercapgroup.com). I have been an investment banker since I finished college. I actually fell into finance by accident, and I had no idea what investment banking really was until I landed my first investment banking analyst job out of university.
To be honest, I wasn’t sure I would last as I quickly discovered that I didn’t have the financial training or knowledge, even at a rudimentary level, to perform the job (I had planned to be a tax attorney). I look back and wonder what my interviewer saw in me to want to take a chance on a girl from my very unsophisticated dairy farming background. Yet, here I am, 25 years later, I outlasted most of the college peers I started with. Turns out I have pretty good math intuition but most importantly, I still truly love what I do.
What inspired you to start your business?
Like my unplanned entry into investment banking from university, the early beginnings of our firm were not that much different. It has the shared history that an opportunity presented itself and we chose to go with it and let it play out. I am a big believer that life is full of open and closed doors, and to be successful, it’s about understanding the difference when you see it.
The opportunity for us? We viewed ourselves as “All Things Real Estate”. When we decided to build CenterCap during the great financial crisis, it was really on the back of the thought that a lot of organizations in the middle market needed an advisor who also really understood real estate itself. We had been working for CBREI Global Investors in charge of their global M&A practice, and we felt that advisors who had boots on the ground knowledge were lacking. We also had amassed a huge network of both users and providers of capital, so felt we had a unique role to play. We were independent, with no research or trading capability, and we took no outside money. What we had was a boatload of real estate knowledge, expertise, relationships, and analytical strengths to secure clients. Time has allowed us to play that out and here we are. It has been quite a journey.
Where is your business based?
We are now based in Stamford, Connecticut with satellite presences in both Florida and Utah. We were opportunistic and moved our headquarters from New York City just ahead of the pandemic. Each of my partners and I had been working in the city most of our careers and it was time to re-evaluate whether we even needed to be New York City or not. We decided we didn’t for a whole host of reasons and made the move. There was definitely a city v. suburb office debate but the significantly lower rent and locational benefits to where we each lived at the time won at the end day. Stamford has also become an increasingly attractive hub for a growing number of financial institutions. It was also symbolic of how far we had come as a firm. We would never have made the move five years prior on the belief that we needed a New York City address as an investment bank. We simply didn’t believe we needed that locational branding anymore. We had built a reputation that superseded that.
How did you start your business? What were the first steps you took?
My co-founder and I had been working together for many years before we founded CCG. In fact, CCG is our fourth firm in which we have worked together. Therefore, by the time we got to creating CCG, we had already been used to working alongside each other, so it wasn’t such a leap for us.
Sometimes I think we were crazy to start a real estate advisory firm in the middle of the great financial crisis, but more often I think we were just brazened. Upon reflection, I realize the idea that we couldn’t succeed never crossed our minds. It has always been ‘this is what we are doing' and then focused on what we needed to do to make it work. We were ambitious, creative, and thoughtful – but most importantly we didn’t mind working hard; and working hard is exactly what we did. We worked many a late night buried in excel spreadsheets, building financial models, coming up with corporate strategies and then turning our ideas into presentations. By day, we would be building new relationships, sourcing new opportunities, negotiating deals, and communicating our nightly work to clients. I think we might have aged an extra few years in the early days, for sure. We started with one assignment at a time and went from there. But as with any start-up, once you get the first client, you need a corporate bank account, a company name, and the next thing you know, we have an office location and a sign above the door. It definitely helped that through our combined years of experience, we knew a lot of people in the industry, so we let people know what we were up to and our service offerings, and then stayed on top of it.
What has been the most effective way of raising awareness for your business?
I think the real estate industry has historically been grounded in relationships - personal connections, business connections, knowing people. You don’t have to look too far within a real estate organization to see an owner, a founder or someone truly connected to the lifelong history of the firm. So historically I think boots on the ground has been important - traveling, calling, and meeting people. It’s also fair to say that when you have been around long enough, the analysts we used to sit next to in a bullpen are now in a C-suite office.
As we look at our business today, I would say almost all our business is from repeat clients and from referrals. We have been working with some of our clients in some capacity for a decade, whether it’s capital raising, advisory services and ultimately strategic alternatives. In that sense, we are lifecycle advisors. Our relationships are strong and built on trust. That, in part, is because we get things done, are forthright in our advice, and our success ratio is high. An interesting trend to watch is the role of technology. I do think technology is impacting the industry in so many ways – including through social media. To us, social media acts as a platform to create awareness of our brand, our services, and the strength of our team and culture. It is an effective way of getting word out about what we are up to and provide a forum for those to learn more about us, if our message resonates. What it translates into is an ability to leverage technology to create sourcing economies of scale – at levels beyond our personal reach. It’s incredible. Increasingly when we meet people these days for the first time the first comment is – I have heard of you. Pretty powerful. Very rewarding.
What have been your biggest challenges and how did you overcome them?
Our biggest challenge in today’s market is how we continue to grow and recruit talent without
compromising culture. I suspect this is probably an issue for many other firms, too. It was already tough finding good talent that would fit in with our culture before the pandemic. We are in the services business, so we can’t afford to get hiring decisions wrong. Our top line is growing strongly but we need to continue backfilling the ranks. We are focused on it. We have been aggressively focused on hiring at all ranks the past twelve months across all our business lines. But every hire must feel right. We want to invest the time, resources, and energy into training our team to the best they can be, and that is a real commitment. So, as I said, we have to get it right.
How do you stay focused?
It’s easy to stay focused when you love what you do! I love my job. I love this business. Nothing is more exciting and rewarding than working with companies to develop and execute growth strategies. We always have a lot going on, and I think that makes me more productive. It also means I have to be laser focused on the essence of the ‘deliverable’ or the ‘ask’ whenever something crosses my desk, as I get a lot of those each day. As a business owner, there is no room to be indecisive.
I often get caught saying “why are we still talking about this, the decision is already made.” Focus and productivity go hand in hand. On reflection, I guess I can look back and thank my long train commutes to university for the ability to concentrate with an intensity that is hard to shake. I did a huge amount of studying, writing, and research on those train rides, and there are plenty of distractions that test you – as all kinds of people come and go, and peak times made my little corner of the train a little too tight for comfort sometimes. But I learned to have very strong concentration skills. I joke with my partners that I can pretty much work through absolute chaos.
How do you differentiate your business from the competition?
I believe that the firm I co-founded is the only female-founded and operated boutique investment bank in the real estate sector. I also mentioned that we define ourselves as ‘All Things Real Estate’. I think something that makes us unique is that when it comes to real estate market dynamics and knowledge, we consider ourselves market leaders. Sometimes that makes us contrarian, but we aren’t afraid of taking on an opportunity that doesn’t fit the standard mold or seems complicated. For example, during the pandemic, we closed on a deal in the shared office space and secured growth capital for our client, too. The collapse of WeWork permeated throughout the industry and made things extremely difficult for the companies in the space, but we still got it done.
Same story for our successes in the contrarian retail sector. But talking about a total overlay, we believe we were pack leaders in thinking about the role of technology in the real estate space as well supply-chain oriented sectors such as cold storage and logistics – two more widely favored sectors now. Our knowledge translates into informed advice and ensures we can deliver customized, well-informed guidance as companies look to raise capital, pursue inorganic growth options, or simply look to us to help them develop new product lines, establish new geographies, or make investment allocations with partners that will stand the test of time. We are also a women owned firm. I think that as women, we care more, we work harder, and we feel more vested in doing the right thing and achieving the best outcomes for our clients. We also think our analytics tend to be quite advanced and I will blame that on our big-bank training. I was blessed to spend all my early years at Morgan Stanley, and our firm was built utilizing that big bank analytics mindset. A similar path was chosen by each of my business partners, too. We believe we are sophisticated in our approach and complex in our analysis. We don’t use template models or structures. Every transaction – capital raising, or M&A starts with a fresh piece of paper and an empty spreadsheet.
What has been your most effective marketing strategy to grow your business?
A good question with a very simple answer – our team. The backbone of any organization is its people and the culture it represents. We are our firm’s marketing backbone every day – when we talk to clients, potential clients, and people we know. That said, we have been leaning more into social media and allowing technology to help us build our brand and touch corners of the industry that we can’t reach because there aren’t enough hours in the day – even for us.
What’s your best piece of advice for aspiring and new entrepreneurs?
Be adaptable. Being an entrepreneur requires many skills, but the one that stands out to me is the ability to be adaptable. The world is always in constant flux, the market is constant flux, and everything is subject to change. The world is loaded with never-ending shifts in variables. You can’t control them, so you have to learn to go with the flow, step back, observe and adapt your game plan. For an entrepreneur, that may mean accepting that your great idea hasn’t come off the way you thought. So, you know what - adapt, be nimble and adjust accordingly. Having vision is a fantastic trait for an entrepreneur but being wed to what isn’t working, waiting for the world to adapt to you, may see your dreams come to an unsatisfying end.
What’s your favorite app, blog, and book? Why?
I have lots of favorite books, apps, and blogs, just depends on the context. I recently enjoyed To Rule the Waves by Bruce Jones. I love information and I learned a huge amount about the critical role that oceans play in the daily struggle for global power. A little closer to the office, I enjoyed Billion Dollar Loser by Reeves Wiedeman which chronicles the rise and fall of WeWork. Lots of takeaways from this book. But personally, as a parent, I can’t go past Room on the Broom by Julia Donaldson. I have read this book so many times to one child or another in our house that I almost know the words off memory. It is a silly story about a kind witch and her cat who invite three other animals (a dog, a bird, and a frog) to join them traveling on her broomstick. We turned it into a jingle that is the foundation of a lifetime of memories.
What’s your favorite business tool or resource? Why?
My favorite resource are my colleagues. Our team at The CenterCap Group is phenomenal. As I said above, we are ‘All Things Real Estate’ – if I want to know something that I don’t know already, I only have to pick up the phone. If our team doesn’t know, they will find the answer. How great is that?
Who is your business role model? Why?
This is a tough one. Throughout my life, there have been a whole host of people that have played a role in guiding my path, not sure where I would start, or finish, for that matter. That said, I had a truly wonderful professor in university that gave me three pieces of advice that I still live by – if you don’t have something nice to say about someone; then don’t say it, never tell anyone how much money you make, and don’t ever change. The last thread a tribute to my journey from cow paddocks and hay fields to graduating with first class honors from university. A simple reminder that I can achieve anything if I put my mind to it. A big thank you to Professor Hogan who has since passed away.
How do you balance work and life?
As with any career mother, it only works if you have a team alongside you – I have an amazing family at home and amazing business partners in the office. I wouldn’t be where I am without them. It works because we are all focused on lifting each other up when the going gets rough and sharing joys and successes when things are great. A good support network is one that unwaveringly supports you – even though they may have as much on their plate, or as much going on in their own lives, as you do. I am truly fortunate to have that strong, unwavering support network. I think it is hard to be successful without a team behind you. Besides, we only get one shot at every moment in times, so we each have to make the most of it. Can’t go back for a do over.
What’s your favorite way to decompress?
Anyone who knows me is aware of how much I run! I run for miles and miles every week. I have been running since I was a little kid and some of my fondest childhood memories are of crisscrossing through the cow paddocks of rural Australia, where I was raised. Running serves so many purposes for me – but oddly enough, one of the unexpected benefits is how many ideas and problems I have solved while not thinking about them all as I am putting one foot in front of the other on the pavement.
What do you have planned for the next six months?
We have three core business lines – capital raising, mergers & acquisitions, and a corporate advisory practice. Our goal is to continue with building success upon success in those practices. We are also looking to expand our fairness opinion and REIT advisory services. My business partners and I all came from public REIT sector backgrounds so we have enormous experience in that sector. It has historically been tougher to compete because we don’t have a balance sheet, but we are receiving more inbounds because in today’s world, being completely independent has huge value. We are also looking at independent sponsor opportunities. We excel at underwriting companies and figuring out their strengths and weaknesses. My partners and I all worked on the principal investing side as well. We are excited by the opportunities that exist to invest alongside our clients and become part of transaction aftercare and management.
How can our readers connect with you?
You can find us on LinkedIn. Please feel free to reach out to my personal page HERE or CenterCap Group’s page HERE.
