As part of my series about the “Five Things You Need to Be A Highly Effective Leader During Turbulent Times,” I had the pleasure of interviewing Patrick Carroll.
Patrick Carroll is an American entrepreneur, philanthropist and CEO and founder of CARROLL, a prominent real estate investment company.
From a young age, Patrick Carroll had a vision to build a real estate company from the ground up. What started as a multi-family and retail assets company, quickly turned into managing over $5 billion worth of assets, including owning over 30,000 residential and commercial properties across the east coast. Patrick built his company into a multi-billion-dollar real estate empire, without the need for a college degree, and emerged as one of America’s youngest real estate developers.
CARROLL is one of Patrick’s greatest successes and he remains humble by prioritizing being a positive role model for his three sons and being incredibly philanthropic. Donating to more than 50 charities worldwide, Patrick has a commitment to health, wellness, and early childhood development. As a supporter of the Boys and Girls Club, he wants to show high school students that there are multiple avenues to success and with the right combination of grit, ambition, and self-worth you can achieve anything you set your mind to. As a motivational speaker and health activist, he inspires the next generation of young entrepreneurs to prioritize a lifestyle of health and wellness while also pursuing their dreams.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I started my real estate investment and development career in December of 2004, founding Carroll Organization and investing in residential properties in Georgia and Florida. I was just 27 years old and really didn’t have much of a track record, but I saw a huge opportunity to make a play in the apartment business. With the success of those residential developments, I turned my focus to commercial real estate development and investment, successfully developing a retail shopping center, a mixed-use property, and student housing.
In 2008, I sold my development projects. The next year, I acquired three property management companies; creating a 20,000-unit Property Management Infrastructure for Carroll Organization. In 2010, in partnership with institutional investors, we began acquiring Multifamily Properties throughout the Southeast and Texas. To date, our company has acquired over $6.6 Billion in Multifamily Properties.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
When I was first starting out, I came up with the original company name (Carroll Organization) after reading Donald Trump’s book that called his company The Trump Organization. I basically set out to model the business outlined in the book. I quickly realized that each business situation is different and just because something appears to be successful and all figured out, that isn’t always the case.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I have been very fortunate to have a few great mentors. Tom Shannon, without a doubt, is my most important mentor. Tom owned the shopping center where my dad had a clothing store while I was growing up, and he’s been my mentor my whole life. Tom remembers when I was around seven years old and I would to take Coca-Colas out of my Dad’s store, walk around the corner and start selling them to people. At that point he thought to himself, “this kid is going to make a good entrepreneur.”
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
Rather than strictly focusing on business metrics to guide business decisions, we put the customer at the center of everything we did. This started with a deep dive into who the customer is, not just demographically, but a study into what they care about. What we found is that the “product” we sell is not the most important thing to renters; experience is. What matters is a sense of belonging, security, understanding, and the freedom to build a life in a community without being weighed down by the normal obstacles of apartment living.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?
All of us have experienced the effects of COVID in some sort of way, whether it impacted your or a loved one’s physical or mental health or affected your business or work life. Earlier this year, I tested positive for COVID-19. Despite my fears for not only my health, but my family and my company, I proceeded to present attitude and took a step back to focus on my health. As leaders, I think this is the most important thing we can do during uncertain or difficult times — show your employees that your life is most important and that health, safety and happiness are the number one priority.
Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?
Giving up is not part of my DNA. Never has it even crossed my mind. Initially, in my early 20s, my motivation was really to be “the best” businessman. That stemmed from my competitive nature growing up wanting to be “the best” athlete. I really believed, and still do, that you can do whatever you set your mind to do. I constantly looked for the best examples of who I thought “the best” businessmen and entrepreneurs were, then I would study how they achieved their success. I told myself, “if they can do it, so can I.” Now, my motivations are much different. My biggest motivator is setting a good example for my three sons and making the most out of this amazing opportunity that I have been given to lead and continue to grow CARROLL.
What would you say is the most critical role of a leader during challenging times?
Above all, the most critical role of an employer and business leader is to communicate and be transparent with your team. Reassure them and make sure they know everything will be fine, especially during challenging or uncertain times. You must also be understanding and considerate as employees navigate the “new normal” and take care of their physical and mental health. Always take your employees’ wellbeing into account first.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
There is nothing more important than coming together as a team to overcome the challenges that we are faced with during the pandemic. As leaders, we must reassure our teams that we will get through this together. Encourage your team to check-in on one another and recognize each other for their hard work and accomplishments. If you’re in an industry where the pandemic has caused work to slow down, offer up opportunities for professional development. Most importantly, challenge your employees to find the opportunities during these unprecedented times — where can they shine or what new skill can they adapt? Finally, prepare and remind your employees of the bright future ahead and after the pandemic.
What is the best way to communicate difficult news to one’s team and customers?
The best way to communicate news to employees or customers is to be direct and clear. It’s important to always put yourself in their shoes — would you want to receive bad news in a confusing way that leaves you wondering, well what next or what does that mean? It’s crucial that leaders be as transparent as possible and always share the “why” behind the news that you are sharing with them.
How can a leader make plans when the future is so unpredictable?
As much as we’d like to know what the future holds, it will always be unpredictable, whether we are experiencing a global pandemic or things are “business as usual.” In business, the fundamentals still apply in good times, but especially in bad times. Leaders should always have a ready-made plan in place so that they are prepared for whatever might come their way. My advice would be to set your company up to weather any potential downturns or challenges. If you are prepared then you will be able to pivot and turn to your Plan B, when needed.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
Persistence. If there is anything that 2020 has reminded us, it is that you cannot and must not freeze up. If you do, the world passes by and there’s a chance you miss out on an opportunity. One of the most important things you can do is to stay motivated and not just settle for returning to the status quo once the pandemic has passed.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?
- You don’t want to be in a car when someone cuts you off and the driver freezes. Essentially, you don’t want to be stuck in a position where you cannot pivot during a time of major change, like the COVID pandemic. Always be prepared, always have a plan.
- One of the biggest mistakes a leadership team can make is not investing in good people. Lean on your employee base — this is their time to shine and really step up to participate. Pick employees that are passionate and consider themselves self-starters.
- Failing to communicate to your team. It’s important to always communicate with your team, but it’s especially important in a time of uncertainty when employees are struggling to wrap their heads around a new normal. At CARROLL, we provided weekly updates via email and video during COVID sharing updates and plans for marching forward during the pandemic.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
The best investment you can make in this time of uncertainty is to hire good people. Let them know your company is growing and that you’re only looking for the best and the brightest. This, in part, sends a strong message to investors. It is part of the story you tell about where your company is now and where it is going to be. Investors want to hear how you will meet the new demands of a changing world.
Also, set your company up to weather any potential downturn. Due to the current makeup of CARROLL’s portfolio, a strong balance sheet, and our employees’ passion for excellence, we are set up to weather the current and any future financial crises. Our current portfolio is moderately leveraged (typically 60–70%) and largely consists of Class B/ A- assets that are affordable to the masses. The moderate leverage allows us to operate with a margin of safety without running into issues with our lenders. We believe the Class B/ A- assets will outperform due to relative affordability and strength of the resident base. Our April collections were 96% and May is tracking to a similar level, both of which are well ahead of industry average. The company is well capitalized, and we think there will be opportunities to acquire distressed assets from owners who are over levered, in need of cash, or do not have the operating platform to successfully navigate the challenges presented by COVID-19.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.
1. Communicate effectively.
2. Invest in hiring good people.
3. Pay attention during times of change because opportunity could be waiting on the other side.
4. Be aggressive, but always protect your downside.
5. Be human.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Commit to becoming a little wiser everyday — Warren Buffett”
This has been a great life lesson for me. It really works if you stick with it. The things I have learned throughout the past 20 years from daily habits like reading business books, news, and biographies, and asking for advice from more accomplished entrepreneurs, have helped me tremendously.
How can our readers further follow your work?