As part of my series about the “5 Things You Need To Know To Create a Successful Service Business,” I had the pleasure of interviewing Rand Sperry.
For more than 40 years, Rand Sperry has been a highly recognized and influential leader within the Southern California and national commercial real estate industry. In 1987, Mr. Sperry co-founded Sperry Van Ness International Corporation, a national brokerage organization (Disclaimer: Rand Sperry does not have any present ownership interest in Sperry Van Ness International Corporation and since 2009 he is no longer affiliated with Sperry Van Ness International Corporation or Sperry Van Ness ®). Rand Sperry is an owner of Sperry Commercial, Inc. and Sperry Equities, LLC, a real estate investment and property management organization, and continues to grow these companies, as well as well as a global franchise brokerage business, Sperry Commercial Global Affiliates, founded in 2016, with partners Burton Young and Jack Carroll. To date, these companies and their affiliates have acquired more than 65 commercial, industrial, and office properties, exceeding $1 Billion in value with over 10 million square feet under management and six million square feet owned.
Thank you so much for joining us! 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?
The back story to SperryCGA and the family of companies that exists today is I got interested in the real estate business from an early age in terms of a business career. I was in college, and I had to make a choice about what I was going to do with my life. I was considering law school and my dad actually was an influencer in that decision because he said, ‘Gee, corporate lawyers or commercial real estate brokers both make a lot of money.’ And honestly, I don’t know where that came from. He didn’t have much of an educational background, but he had a great deal of good business sense, and he was his own self-made entrepreneur in his own right. So, this happened in the mid-1970s when I was about 19 and was a junior in college. The real estate market was starting to tick up a little bit, especially in the residential market. And so, I decided to buy a fourplex multifamily property. I was looking at properties with four to eight or 10 units. I tried to buy an eight-unit and a 10-unit property. I got beat out and I ended up acquiring a fourplex in Long Beach, CA, near California State University Long Beach, where I attended school. I graduated with a bachelor’s degree in Business, and a minor in real estate. I had ten thousand dollars saved up from working during college and in high school, so I put my own money down. I didn’t borrow it from anyone else. My parents had to sign on the loan because of my young age. But other than that, I was my own man and I had succeeded in buying this fourplex for $45,000 with $10,000 down. I sold the property a year and a half later when I got out of college for $57,000. So, I more than doubled the money that had taken me until I was 20 years old to earn in a matter of a year and a half. And I realized I was earning two hundred dollars a month, or $2,400 a year, which is 24 percent return on my money. So, I thought, why isn’t everybody doing this? It was absolutely enlightening to me, like I just found out about the secret to success in real estate. And so, that experience led to my decision to become a real estate broker. My plan was to take half of my commissions and start buying fourplex’s. I targeted eight- to 10-unit properties and duplexes. I envisioned investing commission dollars as well as the money that I had just earned when I closed the fourplex during my senior year. I landed a job and it just happened to turn out that I was a pretty good salesman. I worked the phones well and that was the key to my success, getting on the phone, making friends, meeting with people that were considering selling, convincing them to sell, finding buyers and brokering the deals and then taking the money and investing it. I ended up living at home until I was 25. I took the money that I was saving by living there and I invested it all into real estate. There were several business leaders I had heard about who started with ten units in 1957 and built large portfolios of apartment properties over the decades. They made money syndicating. Now at that point, I was doing ok and got into the brokerage business. I love the brokerage business. I love training others. So, I got into training. And before you knew what, I was managing the office and that grew into six offices. Today, under my latest company founded in 2016, Sperry Commercial Global Affiliates, we’ve built a sizable footprint in the U.S. that’s quickly expanding internationally.
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?
That’s a great question. As I look back personally and professionally, I know who I’ve helped and seen the results of so many people I’ve helped that have become successful. And it’s only because, frankly, that I had help to become successful. To give back is so important. We should all be doing that as we grow and become successful, as, you know, pay it back. I know that was the title of a movie, Pay It Forward. That is exactly what this question is all about. When I look at it, many people say, ‘Well, my dad was a big part of that.’ My dad was really there for me in terms of giving me some direction. But that was as far as he could take me. In terms of the business, I was really fortunate. The first manager, Terry Donahue, which, by the way, you can Google him, he was a huge success, a college football quarterback at UCLA in the 50s, and they won four years in a row. He was a big part of that winning team. Boy, he brought that to the business, and he was the one who taught me failure only makes you better. He was the one who taught me get on the phone constantly, meet new people, make new friends, make connections, call Coca-Cola. Don’t be afraid. Don’t be disappointed. If people don’t get back to you, don’t take it personally. Those are all things you need to know to be successful in business. Terry shared that with me, yet he never gave me a lead, but he gave me a path. Terry helped me really get going in the business and be successful. Then some of my clients were influential in guiding my journey. I had two clients that really liked me from day one and decided to be very loyal to me and they were incredibly loyal. Whenever they bought or sold their real estate, I was there, loyal to them too. Loyalty is important and it goes both ways. Without them, I don’t think I would have earned the money I did. They were very helpful. Along the way, I also had my father-in-law who introduced me to people that he knew were considering investing or wanting to sell their property. He pointed me in the direction of some social clubs that I should join. Before you knew it, I was pointing him in that direction because I found other areas that he wasn’t in. He was great and he was very supportive.
My wife, Rosemary, has stood by me in the good times and tough times. She encouraged me and kept telling me ‘It would all work out.’ She had and still has a very positive attitude about what I can do in the world. My family and spiritual life are keys to helping me balance out the CEO role. You can have all the business success in the world, but if your personal life is a shambles, I don’t consider you to be a successful person. Money should not be the only gauge of success of a person. And in life I think you are only living half your life if you don’t have a good spiritual and personal life to go along with it. I’ve worked very hard on finding a balance and I think it’s very important. It’s very important at small or large companies for the CEO to have that balance if they want to be happy in their life. I also had supportive parents. I had supportive investors and I had supportive in-laws. Both my father-in-law and my mother-in-law just cheered me on every time I had a success. Now, I do that with my children and my son-in-law’s as well. There were so many people along the path. It’s kind of like when you’re running a 5K race or a marathon, every so often someone hands you a glass of water or some Gatorade along the way. That’s kind of how my life’s journey was with people. It wasn’t one person, but every kilometer or so there was somebody there with a glass of water for me and giving me the inspiration, the leads, the direction that I needed. I can’t say it was one individual. It really was a whole group. It takes a village, as they say. And that’s really what I had. I had a village.
Thank you for that. Let’s now pivot to the main focus of our interview. Extensive research suggests that “purpose driven business” are more successful in many areas. When you started your company what was your vision, your purpose?
Collaboration was the key, absolutely. That approach was unusual and still is unusual in the commercial real estate world today. I have always been guided by the principle of trust. I know this may sound cliche, but integrity is so important. We want good ethical brokers on the team because that is so important in the success of a real estate company over time. That is because one unethical broker can take you down. They could do something under your license, and you end up in a lawsuit that could damage the business. We really prided ourselves on hiring the right people because brokers that were more successful and honest stand out compared to those that had a bad reputation in the community or with other brokers and sometimes often with principals. We knew that bringing on a bad apple could be a challenge. Our platform really led to bringing in ethical brokers because of the fact that we were willing to cooperate, meaning that we want to represent the seller in the best light possible. The only way you can do that is to make sure that every commercial broker in the community and even nationally know about that particular listing. If you keep it to yourself or within your own organization, you’re really not being fair to that owner because you do not know every owner in the United States that might be interested in that property. That approach turns off people because when you don’t cooperate you’ve essentially cut off all the brokers outside of your company from seeing the opportunity. In part, just by our platform, we basically had people who really wanted to join with us because they saw us as being reasonable and being fair to our clients. They saw we were not out just for the almighty dollar but to make sure we represented the best interest of clients. That’s one of one of the ways to handle the ups and downs faced in the real estate business. Another way is to always have a positive outlook and figure out the best action when challenges come your way, as Covid-19 did just a year and a half ago. The question is How do we figure our way out of it this and frankly, how do we capitalize on it? I think that’s so important that you never have that doomsday scenario in your head when you’re running a company, when you’re the leader, you can never show that that you can’t handle a challenge and yet you can still admit there’s a challenge ahead. I think it is best to say, ‘Gee, I want to do the best for you, are you on board?’ How can you continue to run a successful company without seeing beyond the challenges? You must figure your way out of challenges and navigate your way through collaboration with your fellow teammates and executives. It also requires having a positive attitude and trying things that haven’t been done before. It takes trial and error, and not being afraid to fail. Failure is a learning process. Most people that know what they know today have failed in that sector of their life, and that’s how they learned not to do that again. You must learn to fail and learn from your failure. It’s just part of success. People don’t realize or think successful people have never failed. Everything they did was successful. That’s simply not the case. Anybody that has been a CEO, or an entrepreneur can tell you about the deal they lost or the listing they should have gotten, and they didn’t get. We can talk about if you get into politics, Donald Trump is a perfect example of someone who failed many times and ended up on top most of the time. And, you know, he just experienced another failure, losing the election. But I bet that guy is going to jump back, not saying I’m for or against him, but it’s just an example of an entrepreneur that doesn’t take no for an answer. And that’s the way we have to be in the business we run.
Do you have a “number one principle” that guides you through the ups and downs of running a business? What do you do to articulate or demonstrate your company’s values to your employees and to your customers?
We have 10 guiding principles. These points of value are what we consider SperryCGA’s core covenants. It’s important for a company to have guiding principles. That’s what we live by. As an example of how I give back to my local community, this summer took a group of sick people from Orange County to Lourdes, a spiritual retreat in France to help them through a spiritual journey. It’s so interesting. I mean, this will be my 14th time, and, on this visit, I bumped into a couple of individuals who knew somebody that was on this trip years back. They said, ‘Hey, they want to say hello, you made a huge impact on them when they came to Lourdes five, six or seven years ago.’ I hear that often. Making an impact in our community is part of what I think we need to do to give back for all the good things that happen within our organization.
Following these guiding principles and acting them out is key, not just showing them to people or putting them on your website, but actually bringing them into action every day. Being the leader of the guiding principles is really how it trickles down from the top in terms of who SperryCGA is and what we’re about and how we behave in the community with our clients.
Based on your experience and success, what are the five most important things a founder or CEO should know in order to create a very successful service based business?
Once I got good at training and then managing the office it paved the way to success for me at an early age. In fact, by the time I was 26, I had risen to be the general sales manager of that company. We had six offices with 165 brokers, and I had bought ten properties and was worth a million bucks. So essentially, I was a millionaire while still in my 20s. Now, to accomplish that required me to be goal oriented. We often talk about that with our team. My goal was to make a million dollars by age 30. I was doing everything I needed to do to get there. I was very fortunate to get there, too. It took me roughly four years to achieve my goal in the early 1980s. That set me up for future success in the coming decade.
The next chapter of my real estate career took me into an ownership role. I read an article that said if you want to be successful, a good way to do that was to open your own company, but only after you had at least five years of experience in that sector. That would provide a solid foundation of knowledge, experience, and background before opening your own business. The article said those that followed that path would have a 90 percent chance of making it in the business. I still remember that article and the wording of it, and I refer to it. When I look at people who have failed in business, it’s because they didn’t know anything about the business before they opened it and that translated into a 70 to 80 percent failure rate.
For instance, if someone just decides to open a dry cleaner and they know nothing about the business, there’s a high likelihood they won’t do well. So, in my opinion, it’s good to have a little bit of background prior to opening your own business. Becoming a CEO is a journey to take that knowledge, remain acutely focused and diligent. I overshot the ideal timing by about five years and started my own business after about 10 years in the industry. I probably should have opened my company sooner. At only 32, I found a partner in Mark Van Ness. We opened Sperry Van Ness and we knew we had to have an angle and that was important as well. While I’ve subsequently divested my interest/ownership and am not affiliated with that company today, the angle was that we were going to cooperate with the brokerage community in a commercial real estate business. People don’t tend to cooperate. In fact, they don’t. Even to this day, it’s very difficult to get brokers who list a property to cooperate in the commercial world. Leasing does it, commercial leasing, they cooperate and residential, of course, they have the multiple listing services. They cooperate all the time. But if you’re listing an apartment building, a retail center, triple net properties (NNN), they don’t tend to cooperate as a company with other brokers in the industry. When we opened it was with the idea that ‘no, we’re good guys. We’re going to cooperate.’ That approach attracted many people and we started to grow from one office to six offices to a franchise company for the best in business. To have a successful business, you really need a platform. That means having a good set of policies, procedures, and training as well as many other tools and resources in order to be successful in that business. We put all that together and then we went out and recruited top talent. Slowly, but surely, we grew the company and then expanded into a national organization. It was amazing that, as we moved outside of our area of comfort, our comfort zone, which for us was Southern California, we faced a pretty challenging path as we went to the Midwest and expanded to the East Coast where they never heard of us or our company. Our platform, I believe, won us over when we would meet with individual brokers to talk about joining our firm. That’s that synopsis of my journey to the CEO role of Sperry Commercial Global Affiliates today.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I’m in that movement now. I think I would call it, Wells of Life. I was on the board and have contributed financially, as well as serving as an advisor to the board. There’s a Wells of Life located here in Orange County. We drill wells in Uganda for clean water, a third of the citizens in Uganda do not have clean water. One out of five does not make it to the age of five. They die from the bacteria in the water. We also are involved in a program called Wash, which is where you learn about hygiene, washing your hands, that type of thing, taking care of yourself. One well serves a thousand people. We change a thousand lives every time we put a new well into the ground. We are serving a great amount of people. I can’t think of anything greater than working to save lives. Keep in mind, 20 percent of them would have died by the age of five. We’re saving two hundred lives within the first five years of that well being built by the children that drink it. The mortality rate is extremely high. So that’s in process and I’m very involved in that endeavor. I am also involved in other organizations focused on improving education. That includes providing scholarships to young people that are working to break a cycle of poverty. The only way to break out of that cycle, which is the answer to so many of our problems here in the United States, is through education. The more educated you are, the less likely you are to be in poverty. If you can earn a high school education and move on to a college education, that cycle is broken in families that have been trying for years and years. No one has been to college in that family. Most of the scholarships I’ve provided are to candidates that their parents have never graduated from college, they are becoming the first member of their family to do so. I look for that because my goal is to try to break the cycle. That’s another kind of a mass movement around the country because so many people do what I do in that area. In my opinion, if you want a cleaner earth and a cleaner environment and everything, all the issues and challenges we have from drugs to quality water, it’s all about educating people. The more educated they are, the more likely they are to have a good quality life.
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