Propertyshe podcast: Roger Orf Partner & Vice-Chairman, Apollo Global Management

Posted on 20 July 2021

For all of us we’ve got to adapt, we’ve got to change, we’ve got to make guesses about what’s going to happen in the future and there are going to be people that are right, you know, and people that are obviously wrong and we are still, we’re still in the middle of it to some extent.

Susan Freeman

Hi, I’m Susan Freeman, welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya, in association with the London Real Estate Forum, where I get to interview some of the key influencers in the world of real estate and the built environment.  Today I am really delighted to welcome Roger Orf.  Roger joined Apollo in November 2010 and is a Partner and Vice Chairman of Apollo’s principle finance and real estate businesses segment focussing on transaction development for both real estate equity and debt. He serves on the investment committees of the Apollo North American Real Estate and the European Principle Finance Funds. Previously Roger was responsible for Citigroups global real estate investment activities.  He spent the majority of his career investing in the European real estate markets since he arrived in the UK in 1991 whilst working for Goldman Sachs. Following his retirement from Goldman Sachs, Roger pursued an entrepreneurial career highlighted by the founding of e-shelter Gmbh, a German-based data centre business which he and his partner sold for 1.1 billion Euros. Roger is also a former Chairman of the Urban Land Institute Europe and was recently selected as a ULI Life Trustee which is reserved for ULI’s most dedicated and respected members.  And now we are going to hear from Roger Orf about the ups and downs of forty years of investment in European real estate. 

So Roger morning, thank you for joining us and it’s great to have the opportunity for a chat and I was thinking about when we first met and I can just remember seeing you in the early days of MIPIM arriving in Cannes late at night, I think from Russia, looking like somebody from a Clint Eastwood movie, very mysterious.

Roger Orf

Morning, laughs,

Susan Freeman

Does that ring any bell with you?

Roger Orf

It does, you know many years ago I invested in a cigarette factory in Moscow which was the equivalent of… working in the equivalent of Berkley Square and we moved the Berkley Square cigarette factory in Moscow to Reading, effectively the equivalent of Reading and then build all these office buildings in the centre of Moscow and everything went swimmingly except at the end of the day we hit the Asia crisis, the ruble collapsed, we had difficulty attracting tenants because there was a big recession in Russia and fortunately we sold the cigarette factory at the end of the day to Gallaher and actually made a pretty nifty profit on the whole episode.  But it was lots of swings and roundabouts to get there and my first and last introduction to Russia.

Susan Freeman

So I don’t know, I don’t know where, where one would place that in terms of… in terms of timing but it just sort of going back to the beginning I think you started with Goldman Sachs in Chicago and perhaps you could sort of explain what brought you to the UK in 1991 and what you found when you, when you arrived here?

Roger Orf

Yeah.  Well Goldman Sachs at that time, it’s a while ago as you know, reached out in New York and asked you know, I had moved from Chicago to New York with Goldman and asked the best and brightest in each business division to move over here.  So you had the guy named John Thornton, then 4.19 unclear and a guy named Donald Patroney in corporate finance and I was asked to lead the real estate effort and you know, I thought first I was honoured because Peg Poulson had asked me to do this and I also thought it would be a tremendous adventure you know, I am from a small town in the mid-west of America and never dreamed in my wildest days that I would end up in Chicago or New York or for that matter, London and I thought it would also be an opportunity to emerge from the recession that had embraced the United States of America so I came here and within six months realised that the trauma in the States was also a trauma here and so I spent years, as we all did, sort of muddling through and I think Sam Zell said, ‘stay alive until 1995’ and that was more or less what we had to do so you know, in the real estate if you were anywhere in the world at that time but Goldman brought me over and I am so thrilled they gave me the opportunity and I’ve made the most of it.

Susan Freeman

So how long did you stay at Goldman’s?

Roger Orf

So I retired from Goldman in 1996 having started with Goldman in 1981, so I was there for about 15 years and that was, at that time we were merging from the real estate crisis as you know and I set about creating my own company and if I could bring American capital alongside my own funds to invest in the UK and on the continent, I thought I had a business and you know, at the time there really was only Goldman Sachs, Morgan Stanley and you know, me.  That was about it to be honest, I am sure there were one or two others I can’t remember but investment banks had funds but all the hedge funds that are involved now and I mean even 6.35 unclear at that time did not make investments, neither did Blackstock to my knowledge so it was, it was a great time to invest in real estate, it was also a great idea at the right time.

Susan Freeman

So when you left Goldman’s you pursued an entrepreneurial career so you, you co-invested with others and were, I mean were there any sort of highlights from that time, so as you say, you had a sort of quiet a clear field because there wasn’t competition that there is now?

Roger Orf

Yeah, yeah it was... it’s hard to describe but you know at the time there was very limited debt as many of the clearing banks in the United Kingdom were on their knees and the German banks had became so expensive like 7.29 unclear and also Hippo Real Estate really weren’t involved in the United Kingdom and there weren’t the… there wasn’t the reservoir of bank capital aside from GE Capital which was lending extensively at the time, some with equity, there was very little equity so you know, we started in the UK and then quickly looked beyond that on to the continent in Spain and in, in France and I mentioned earlier, Eastern Europe.  I really had a big vision of what could be done in central Europe and a friend of mine from America had moved to Estonia, his dad was Estonian and his mother was French and started building a business in the Baltic states and I love this area, one is it is just a natural beauty, it wasn’t destroyed by World War 2 in the same way a number of places like Germany were in terms of the architectural features but you just… it’s hard to describe, I mean people were moving there from the United Kingdom, they were moving there from the States and if they were young, meaning in their 30s or 40s, they really were on a mission to recreate Prague and Bratislava and Budapest and Tallin and you could buy property at the time for less than the equivalent of €50 a square metre which is the most extraordinary thing.

Susan Freeman

And obviously you spent your whole career investing in European real estate markets, is there anywhere that you see as the sort of Estonia of today or have those sort of opportunities gone?

Roger Orf

You know it’s a really, really good question.  I think that you know the difference between Prague and Munich, you know in the 9.37 unclear terms is probably 50 basis points so you know if you are the centre of Munich, assets of a certain 9,44 unclear size may trade at 2.5 or 3% than in Prague, maybe it’s 3 or 3.5% so very, very difficult to find value in those markets and I think that Turkey, which is you know of course technically part of the EU and people talk about but the volatility in the currency and the politics are such that you know, I wouldn’t personally go there.  I think the opportunity today is more in assets classes and I was talking to someone earlier this morning about, about retail in office which are places that no one really wants to go today but you know, I have made some private investments in this area in the recent months.  I think they are extremely interesting because this is a demand side recession, you don’t really know who is going to come back so I think in the case of retail it has got to reprice, rents have got to drop probably 50%, there’s going to be a lot of blood on the streets in terms of either banks taking losses or equity owners taking losses but I think in some circumstances after we get through this the demand will be strong once again and people who are bold can buy in these sectors and, and make some interesting profits.

Susan Freeman

So Roger you were talking about a 50% drop on retail, I mean that’s, that’s pretty, pretty fundamental and would you… are you talking about UK or across Europe?

Roger Orf

Well I was referring to the UK but and one of the reasons for that is like America there is too much retail.  If you measured in square foot terms compared to a population, America’s replete with too many shops and stores and retail and some in the UK it’s not as bad as the States but it’s bad.  The continent is a little bit less so as you are probably aware they didn’t have the capital, they didn’t invest in retail to the same extent so I don’t think it is going to be the same opportunity in, in France or in Germany less so in Spain, I think there is probably too much retail in Spain and by the way I do think these countries will suffer because Amazon and others are eating into some out of town retail but the in town I think will be fine but the UK is, you know you measure it in Oxford Street between not having the tourists that let’s say 30% was you know, from America, abroad, China, Saudi Arabia, all these places, they are certainly not here now, it’s very, very difficult in Oxford Street.  And okay you know, if you are in the north you are not maybe going to have the same amount of tourists in a northern city but Amazon for some is going to be, especially if it’s a convenience item, is something people will embrace and… but there are certain things like hard goods you know, whether it’s a car or whether it’s a washing machine or dryer, you know, you are not typically going to buy that over Amazon, you are still going to shop for it, talk to people about it and do things of this nature so I think it depends very much on what you are selling, whether it’s a convenience item and then of course what your location is.  So it will very much depend on location, very much depend on the product and then as always it is going to depend on the amount of retail that’s out there today.  There is too much retail space here and in the States, that’s for sure.

Susan Freeman

I agree with you, I mean I love shopping and consider sort of retail a leisure activity but you know, some of it had become boring so you know, as with sort of offices, we are going to have to entice people back, retail has got to be interesting and we’ll turn to the Urban Land Institute because you have been, you have been a member I think for most of your career and I think you have been a member of the European Retail and Entertainment Product Council you know, since 2003 which gives you a real overview of what’s going on across Europe.  I just want to talk a little bit about Urban Land Institute because I know you were recently selected as a ULI life trustee which is quite a special honour because I don’t think it has been accorded to many people and of course you are a former Chairman of ULI Europe so why did you join the Urban Land Institute originally and I think you were also involved in actually setting up ULI Europe, so what’s the value been to you?

Roger Orf

Well that’s a great question.  There was a friend of mine, a partner at Goldman Sachs, the gents name was Claude Ballard who was in his day, a legend in the United States of America and Claude was from the State of Arkansas, he worked for years for Prudential, Goldman was lucky enough to hire him to run our real estate asset management business and he was a big, big, big believer in the Urban Land Institute.  So he convinced me to join all those years ago and why did I do it?  Because you know, I think real estate at its core is an entrepreneurial profession where everyone you meet you know Susan, whether it’s you or me or you’ve had such remarkable characters and individuals on the show, on your podcast, you know you love to meet these people and often our life is… you’ve been a great practising attorney for years and you can’t meet everyone through your professional life, neither can I as good as the Institutions I’ve been involved with is, and you or I open me up to a network of individuals that weren’t just financiers and I am calling myself a very fancy term, I wouldn’t think of myself in that way but you know, you meet developers like Stuart Lipton or Scott Malkin who you will know, you meet architects like Richard Rogerson and others here and around the world and it was fascinating, you know, I could never have done that in my own little bubble, you know, not you know, my bubble like yours is vast, you get to know everyone but firstly you are meeting with them in a different setting so it’s not a business setting, it’s like you are in some instances you are at someone’s home right and they are going to divulge things to you that they wouldn’t in a business setting and they are going to chat in a different way and they are going to have perspectives on things whether negative or positive that are unique and we are all a little bit more guarded in a business setting.  But the thing I love about your ULI is its swathes of individuals from all walks of life within real estate so you’ve got Mayors of cities, you’ve got architects that are involved, you’ve got financiers that are involved, lenders that are involved, developers that are involved and my life touches often you know, on the deal maker side of things but less so in some of these other areas and I made it a mission and the other thing that is interesting about the organisation is about 40,000 is it’s global right so it’s not just America where it was founded 75 or 80 years ago, but the UK we were 18.20 unclear within myself, Gerald Parkes, others, we were pioneers in those days carrying the torch over if you will and it’s also in China and Japan and other places so I love seeing the world through the prism of each person’s unique challenges and opportunities and they are different where you are and this allowed you to express yourself in different ways and see things through the lenses of different people so it has been very rewarding.

Susan Freeman

And were you, when you joined, it was very much an American organisation and it wasn’t in Europe so were you instrumental in setting up ULI Europe and how did you, how did you go about doing that?

Roger Orf

Well I think firstly you know, like anything Goldman, it’s hard to believe but you know, we had the same challenges there I mean it was a, it was a strong brand if you want to all it that in the states but if you roll back 30 or 40 years ago, it wasn’t well known at that time and I think the first thing is to integrate yourself into the community.  So you know, I’d like to say, think I’ve done that in the United Kingdom and to an extent in Europe and that doesn’t mean you know, going to the usual institutions you know, it means putting your kids in places that might be a little bit unconventional from an American perspective but it allowed me to make the lives of the you know, the Susan Freeman’s and others that were looking at the world through a different prism, you know, it wasn’t an American prism and then reaching out to guys like Stuart Lipton and Alexander Otto you know, who owns retail in Germany and encouraging them to engage in ULI because why?  Because if they do it there will be other people that will do it because they will trust Stuart and Alexander in their judgment about getting into these places so we made a concerted effort to bring individuals like that from that walk of life and other walks of life like Richard Rogers to help I think that started it going and of course you know, we never saw ourselves in, in competition with other property groups, it just was an expansion of things and I think what we offered was you know, a more international perspective and an opportunity to travel the world and interact with people at a different level and with different ideas.

Susan Freeman

Well you’ve done, you’ve done very well.  The last event, international event I attended was the ULI Europe conference in Amsterdam, just as Covid was kicking off and it was a very impressive group of people and I am actually on the tech product council so I get, you know, I understand absolutely what you are saying about you know, hearing from people from you know, different parts of the world and you know, different backgrounds and I think the ULI has also been quite important in nurturing the next generation of real estate leaders and I think you’ve been involved in that as well?

Roger Orf

Yes it’s so important I mean you know, I grew up in a certain time, there were certain assumptions that were made about you and as an individual and as a professional and you know I think the awareness now in the United Kingdom and everywhere of bringing in young people, instilling them with some of the same entrepreneurial zest and you know for so many years I think you know, my generation looked at the world in a certain way and made certain assumptions and the world is changing, we’ve got to stay at the forefront.  You mentioned technology, it’s incredible you know, when you talk about modular housing or industries that have come from out of nothing, the data centre industry and on and on and on, the hotel industry where you can check in you know, you don’t even have to have someone at reception in certain instances to do it and it can be very convenient for you know, if you or I are coming in late, our flights delayed and you know we are checking in at 11.00 o’clock, we may not want to go through everything so these changes are revolutionary and young people are the quickest to adapt them and see opportunities through their eyes and not through my eyes and it’s a different set of assumptions and I think ULI has done a terrific job embracing and opening it up you know, we’ve had now leaders across the world that come from different walks of life you know, at the very highest firmament of what we do and that’s very important.

Susan Freeman

And just staying on the subject of, of Europe, I know in the run up to Brexit you said that you thought we should stay in the EU and obviously things have moved on.  What effect do you think Brexit will have on UK real estate?

Roger Orf

You know it’s a very good question and I was a passionate remainer.  I think everyone was passionate about it, whether you were a Brexiter or a remainer, I was passionate about it in part because my, my grandfather and my father had been over here in World War 1 and World War 2 and I had a perspective of you know, bringing peace was partly integrating us into the community of Europe and I thought it would harm the UK economically for us to be detached from Europe from a trading perspective and I still believe Brexit is not a positive from an economic perspective because of the trade frictions.  There are compensating balances I see now, I mean I see in this Covid challenge, I sort of almost thanked the good Lord that you know, we weren’t… that we could adapt quicker to buying drugs that would combat this disease you know, I think it would have been burdensome to be in part of the EU for that.  In terms of how does it affect us, look I think, I think that the cost of labour will go up because there are going to be in my opinion, fewer immigrants and that’s good for workers you know, if you are a worker one would think to have what you sell which is your, your hourly wage becomes more of a scarce resource.  I think also the cost of products will go up because there will be trade frictions associated with that so while I don’t currently think there will be you know rapid inflation, I know when I came over here interest rates were 16% on the short end so they were in my lifetime they’ve gone from 16% to 0 over here and I think that I do have this concern that while things aren’t rapid maybe they are a lot different than what they have been in the past so I would say the cost of goods, the cost of building materials go up, labour costs go up and I think the margin is probably going to be more inflated in this system than what there as in the past.  I think all that’s relevant to, to new build and it makes, if you are an owner of real estate today, and you’ve owned it for 5 or 10 years, you are not going to have the same level of inflation right because you own a standing asset whether its retail, office or industrial and I think being long real estate may turn out to be a good thing because building new real estate is going to be costlier.

Susan Freeman

Yeah and you mentioned the cost of, of labour and I think everywhere you look… if you look at retail hospitality at the moment and everybody is complaining of you know, the difficulty of getting, getting staff and I don’t know if that’s Brexit related but you know, there is going to be a lot of pressure on I think all those sectors.

Roger Orf

We are certainly seeing it on developing a hotel recently opened in America’s west coast, in San Diego county with a friend of mine, Mr Malkin and we just opened in May and it is traumatic to get staff for ordinary things whether its housekeepers or bartenders, just you know, the stuff we all make assumptions when you go to your room you are going… your bed is going to be turned and you know the sheets are going to be taken off and if you go to have a drink on the sunset bar  you are going to be able to get a drink and it is super challenging and you know I, I… everyone is speculation about it because I am on these weekly calls to talk about this and we don’t know if its people who are still being paid by the Government who you know, are comfortable and they feel that until that stops they are not going to go to work or if there has been a fundamental change in how people interact with work.  I think you know, Covid has accelerated so many trends you know, whether its retail obviously a lot more is being done over the Internet, whether it’s offices where we haven’t been in the offices in some instances in my case, for 18 months or in hospitality and I don’t think anyone knows… you know, I’ve got opinions about this but no one knows, you know, we have opinions and I think we will have to see what happens.  If you are a fly to hotel meaning you know, you are London-based it’s traumatic because you know, 30% of your customers can’t get here and that makes it very difficult to survive and you know, if you are opening up a hospitality business as I am in, in America and people are here, firstly its challenging to get the tenants but then are they customers, or the guests but then even if you do you know, you want… back to your point about retail, you know, I like shopping as well but it has got to be a positive experience right, you can’t… you don’t want to go someplace and no one is waiting on you and it’s irritating because you know, you are standing in a queue for 2 hours to get attended to.  So there is going you know, these things are going to unfold all of us have to make bets, that’s why I think this time is so interesting you know, I think as an investor, I mean for all of us we’ve got to adapt, we’ve got to change, we’ve got to make guesses about what’s going to happen in the future and there are going to be people that are right you know and people that are obviously wrong and we’re still, we’re still in the middle of it to some extent, yes it’s winding down with Boris’ announcements but I think we will see the, the remains of this for years to come you know, I think that will be very interesting.

Susan Freeman

Yeah it certainly, it certainly is interesting in both a sort of positive and negative way and actually I didn’t realise that west coast America was also experiencing the same problems with, with getting labour which is interesting.

Roger Orf

Susan it’s, it’s everywhere, it really is everywhere.

Susan Freeman

And just turning… we haven’t talked about residential, we’ve talked about... and I know that this is you know, this is a another Sector in which you have been involved in some of the largest, largest deals but we’ve been talking about housing crisis in the UK for as long as I can remember.  Do you have any thoughts as to why we don’t seem to be able to fix the housing crisis, we just seem to be able to talk about it?

Roger Orf

Yeah I do.  I think there are several strains.  One is whether its labour or the Tories, they talk the talk but they don’t walk the walk, meaning you know I’ve been over here you know for 30 odd years and there’s probably been 30 housing ministers right and everyone talks about how important it is, well you know, if it’s really important everyone that seemed to come in to that position is angling for another job right and you know, I can go down the list of people but I won’t but you start with that you know, and then I think if a really serious position you know, you know you’re Tony Blair or you’re David Cameron or whomever, you are going to have the guy, man or woman, be in that job for a long time.  Secondly, I think that what’s on offer often is a financial solution to a demand size problem so it’s all well and good to give Susan Freeman or Roger Orf an interest free loan to buy a house right but if there are no houses you know, what good does it do to provide an interest free loan.  It makes no sense.  I mean the real issue is there aren’t enough homes and I think that’s the combination of the green belt which you know, I was driving over the weekend, I adore England’s verdant forestry and all these things, you know I absolutely adore it but let’s be honest, you know, given most recent election results a lot of people feel they don’t want the green belt touched.  Understandably it’s a nimby you know, I don’t blame them economically you don’t want competition but to an extent it’s harmful of producing homes and I think the other thing is that if you could wave a magic wand, Council taxes here are super low you know so I live in London and what we pay for property taxes, Council taxes compared to what the value of the house is, is drastically lower than what it should be if I am honest.  The point in saying that is I think if Council’s incented through this revenue stream to build more they would you know and again you know, I think that who wants… it’s difficult to concurge future tax but I think that would also help people do this and you know I’ve become rather cynical about this because I’ve worked here for so long and nothing seems to happen and I think it’s an interesting industry to be in, the home building industry but if I could wave a magic wand those are two things I would change to get a move on.

Susan Freeman

Well hopefully somebody will listen and I just wanted to go back to really your, your career because you have been with Apollo since 2010, you were European Head of Real Estate.  What prompted you to move to Apollo from you know, your sort of entrepreneurial career and what prompted you to go back into a big organisation and can you tell the listeners a little bit about Apollo?

Roger Orf

Yeah sure, I had moved on from my entrepreneurial career to become the Global Head of Citigroup Property Investors and I never ever, ever thought I was going to get back into a big company but there was this guy at Goldman Sachs named Bob Ruben who at one point ran Goldman along with Steve Freedman and Bob rang me, he had retired from Government, he was Secretary of the Treasury under Bill Clinton, rang me and said ‘I want you to come to Citi’.  He had jointed Citi after his distinguished Goldman career and I said no twice but Bob can be very persuasive, he convinced me to come and low and behold I was at Citi, never expecting to be there and during the midst of the GFC, the Global Financial Crisis, Citi sold all their alternatives businesses including our business to Apollo and you know that’s how I ended up.  I end had a say of sorts because I was running the business but the reality it was a financial business judgment and Citi had invested a lot in all these funds, we probably had 6 billion under management, that’s where I ended up and Apollo at the time that I joined, this is only 10 years ago, but 10 years is a long time I suppose, felt very much like Goldman Sachs when I first started you know, it was a family company.  You had, you know, and you could hire your kids to you know, join Apollo, join Goldman Sachs, no one complained about it because it was sort of natural, they assumed it was Susan Freeman’s kid you know, you’d have the good genes to be a superstar and then over time… and it was very, each culture is a little bit different.  The Apollo culture was heavily weighted towards guys that had worked in the fox holes of Drexel Burnham you know and these guys were change makers, change agents.  They had invented the so called jug bonds, the non-investment grade bonds, Leon Black, Mark Rowan, Josh Harris all came out of the firmament of that.  Drexel Burnham as you probably know blew up and out of this tiny acorn these guys created this business and you know it expanded but it was nowhere near the size it is today and I think, how do I describe it?  You know I think when I joined it was a family company, I think that the three guys that run it were very… they thought of, of the company in kind of family terms you know so if your work had a challenge personally whether you are going through a messy period of your life or you know you had a new baby or whatever, I think they were sympathetic to those sorts of things in ways that some big institutions you can imagine maybe they wouldn’t be.  On the other hand you know, they were driven and ambitious and hardworking and you know they were one of the people that started the private equity business.  Now we are going through a big change Susan so it’s become, as you probably saw, Apollo is merging with its sister company, Athene which is an insurance company and this is the brainchild of Mark Rowan who is now running Apollo as you probably know and integrating those we have the potential becoming a so called Berkshire Hathaway Warren Buffett type vehicle here we have evergreen capital and I think that’s going to be the future you know, I think that all our competitors and certainly us are going to be investing not just for the medium term but for the long-term over time so it’s an interesting place, it’s going through enormous change, the merger has been announced but it hasn’t gone through yet and I think it will be yet another successful iteration you know, of a power in the cards as we continue to grow.

Susan Freeman

That’s really interesting because of course Apollo has been in the press over the last, over the last couple of days so that is really interesting to know the background.  So Roger clearly you are a deal maker and that is something a lot of people in real estate aspire to.  Is there any key to being a good negotiator and getting these you know, these deals done?

Roger Orf

Yes I think you need to be relentless, in a positive way.  I wake up every morning and I think of whatever I am working on in deal terms and aside from finding out you know, how my American baseball team did which I check in the morning, that’s the first thing I think about so I think it is relentless, I think it’s also a… reconciliation may be the wrong word but you’ve got to think about how… put yourself in the shoes of the person you are negotiating with and think about what he or she wants because you really all going to get there if you are prepared to compromise and take half a loaf right and I think as much as we would like to own 100% of something in some ways, you are always going to end up with 60% or 40% or 50% so you’ve got to figure out a way to get through that and I think the other thing is, is passionate is what I am about property and deals.  You can’t show that, you can’t show sometimes the anger that you’d like to show because the person on the other side of the table is emphatic or you know, could be a jerk, could sometimes you get insulted personally about things, you can never show that and I mean I think the other… the final thing is timing right.  I mean deals can slip away if you don’t pace them in a way that you are heading to a conclusion and I’ve seen this a million times.  I mean there is a time for things to happen, there’s a time when all of a sudden it drips way and nothing happens and you’ve got to… you are like an orchestra conductor leading things to a crescendo in the crescendo’s got to happen within a month or two months otherwise it just dies off and I love the deal making skill and you know one of the things I love, some of my dearest friends have come out of that, you know I mentioned earlier some of the people in the property community in the UK but they are all over the world you know and once you’ve been in a fox hole with someone whether it’s there as opposition or whether they are alongside of you it’s, it’s very, very rewarding.  I’ve made great friendships out of deal making.

Susan Freeman

And of course over, you know, over the years you’ve been in real estate you have been on a number of Boards and one of them was, was Regis, I think in the late 1990s and I just, I wondered if you had any observations on that, so much of what Mark Dixon was saying then about not needing to commute to an office has, well seems to have become accepted some 25 years later so you know, he seems to have been something of a visionary?

Roger Orf

Yeah I think, I think Mark certainly is and in the same way and from a financial point of view, I think we were too.  We invested 100 million in the Regis, it was then private and expecting it to go public and Mark saw this clearer than anyone you know, the merger of real estate with the service business on top.  So we have seen that in hotels, we see this in retail.  The best retail landlords or one of the best certainly is Value Retail and they really see their tenants as partners and Mark saw this too and I saw it in a different sort of way, in a financial way and we invested in a certain valuation when it was private, the company went public you know, I’ll never forget the time it went public at you know whatever, £2.70, it soared up to £4.00 and then because we were in the tech wreck, the shares went as low Susan as £0.02.  Because we had made a merger which was ill-timed and a lot of the merger was in constituted assets and estates, tenants they blew up because they were TMT sections, sectors, technology and media telecoms and Mark showed great character over that period in leading us and people on the board through an incredibly traumatic time you know and seeing through that and getting us and the Board to the other side of it was quite extraordinary and with each passing year I think that the markets come to him and his serviced office continues, we all know you know, WeWork, which is going to continue as a strong brand and there is countless brands in the United Kingdom that are offering this service today.  The business model, sometimes you are just a tenant and effectively you are a retailer in office space which is the Regis model, other times you own the property and offer these services to people but like British Land and Land Securities and people like that do and so there is no one business model but I think it is merging and offering a concierge service to your tenants in office is increasingly important.

Susan Freeman

Yes I think we are going to see, we are going to see a lot more of that and so Roger your career, I mean the career I suppose is almost 40 years now since you started at Goldman’s in Chicago.  I mean if you were asked you know, what are the main lessons that you have learnt during that career that might be useful sort of particularly for some of our younger listeners who are just embarking on a career in real estate, what would you say are the main lessons you’ve learnt?

Roger Orf

I think one lesson is identifying a mentor and someone who can look after you and it is not easy, you know, you’ve got to get on with whoever that is probably and they’ve got to be willing to help you and some people are good at that and some people aren’t but you’ve got to spend a time to invest because it’s not all about hard work you know, it really isn’t, especially in property you know, hard work is you know, it’s quite a big percentage of it but then that remaining bit of personality and zest and seeing around corners, this whole element of other is so, so, so important but you know, all of us in our career you reach a point, you want to make sure that you are leaving a legacy and one of the ways you do that is defined by who follows you and you could be as a young person one of those people but you are not going to do it just by you know, turning in the homework assignment at the right time because business is you know, it’s more fluid than that and it’s not just about getting the A star, you know, it’s also about getting on with people and putting yourself in a position where you can influence.  I think that’s one thing and then you know, I had the good fortune of let’s call it timing, you know I did put myself, Goldman wanted me to come here, I wanted to come but it was a perfect time to import capital from abroad to come into UK in Europe and timing is so important to what you do and then I think the final thing is you know, you’ve got to have an idea and we’ve talked about plenty of them here, you know whether it’s central Europe, whether it’s serviced offices, whether it’s what’s happening in the demand side, in office and in retail and you know of course the idea has got to be right, you’ve got to execute it right but I think those are some of the things that will constitute success in today’s… and you see that in, in you know vision that someone like Stuart Lipton you know, he saw round corners and he developed Broadgate and you know it changed the whole character of where the city thought it needed to be, you know to the east and now you see it extending even further, it was a great idea he implemented well and saw the benefits of that.  So those are some of the things I’d say would help.

Susan Freeman

I am glad you mentioned Broadgate because one of the first things I did as a trainee lawyer was to work on the first phase of Broadgate so I know exactly what you mean.  So Roger I think that is probably a good place to finish because we’ve covered, we’ve covered a lot of ground and you know, I hope we do get back to seeing each other very soon.  It sounds as though…

Roger Orf

Me too.

Susan Freeman

…it will be soon.  I think the networking events are going to start and there is going to be a lot of pent up demand so hopefully I will see you very soon so thank you so much for your time today.

Roger Orf

Thanks Susan.  Much appreciated.

Susan Freeman

Thank you, Roger, for some fascinating insights into four decades of investment in European real estate and for sharing some invaluable lessons learnt along the way.  So, that’s it for now.  I hope you enjoyed today’s conversation.  Please join us for the next PropertyShe podcast interview coming very soon. 

The Propertyshe podcast is brought to you by Mishcon de Reya in association with the London Real Estate Forum and can be found at Mishcon.com/PropertyShe along with all our interviews and programme notes.  The podcasts are also available to subscribe to on your Apple podcast app, and on Spotify and whatever podcast app you use.  Do continue to subscribe and let us have your feedback and comments and most importantly suggestions for future guests and of course you can continue to follow me on Twitter @Propertyshe and on LinkedIn for a very regular commentary on all things real estate, Prop Tech and the built environment.

Roger Orf joined Apollo in November 2010 and is a Partner & Vice-Chairman of Apollo’s Principal Finance and Real Estate businesses segment focusing on transaction development for both real estate equity and debt, operating partner outreach, significant limited partner matters and general ambassadorial work across the platform. He serves on the Investment Committees of the Apollo North American Real Estate and the European Principal Finance funds. Previously Roger was responsible for Citigroup’s global real estate investment activities.

He has spent the majority of his career investing in the European real estate markets since he arrived in the UK in 1991 whilst working for Goldman Sachs. Following his retirement from Goldman Sachs, Mr. Orf pursued an entrepreneurial career, highlighted by the founding of E-Shelter GmbH, a German-based data centre business which he and his partners sold for €1.1 billion to NTT.

Roger serves on the Board of Policy Exchange and has also been a member of the Chicago Booth Council since 2015. He has previously served on the boards of Atrium European Real Estate, Urban Land Institute, Regus PLC and Ambassador Theatre Group.

He is also a former chairman of Urban Land Institute (ULI) Europe and was recently  selected as a ULI Life Trustee which is reserved for ULI’s most dedicated and respected members.

Mr. Orf earned his bachelor’s degree from Georgetown University and MBA from The University of Chicago.

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