This series gets into the heads of the decision-makers of CRE, the people shaping the industry by setting investment strategy, workplace design, diversity initiatives and more.
Turner Impact Capital CEO Bobby Turner said he has always believed that workforce housing can also be a business that generates solid returns. But it has to be done right, with an eye kept on controlling costs and making careful choices when it comes to location.
His Santa Monica, California-based firm just acquired the 1,155-unit Ellyn Crossing Apartments community in suburban Chicago for $137M, the firm’s fourth workforce housing buy in the metro area and the largest-ever Chicago suburban apartment sale based on number of units and sale price.
Many investors don’t see workforce housing — homes that aren’t subsidized but are affordable to teachers, firefighters, postal workers and other essential employees — as a profitable enough business. That leads many to demolish such homes in favor of more luxurious units. Turner said he wants to help reverse that trend.
Courtesy of Bobby Turner
Bobby Turner and Eva Longoria, an investor and ambassador for the Turner Multifamily Impact Funds, speak with a resident at Legends on Lake Highlands in Dallas.
His firm has been generating profits within the workforce niche for years, frequently in communities heavily populated by immigrants and people of color. In addition to its Chicago-area properties, the company also owns developments in the Atlanta, Austin, Texas, Dallas, Houston and Las Vegas metro regions, including Portola Del Sol, a 350-unit workforce housing community in Las Vegas.
In some ways, Turner’s strategy is simple. The firm’s biggest expense is turnover, all the work that goes into refilling empty units. It keeps units occupied by providing free employment assistance, community health facilities, homework help for local children and other services, sometimes through local community groups, such as food banks, or by building its own facilities.
Turner said he sometimes feels he is in two businesses, providing both real estate and services. But it keeps turnover low and the rent flowing.
The following has been lightly edited for style and clarity.
Bisnow: Tell us about your leadership philosophy and what experiences, words of advice or mentors shaped it along the way.
Turner: A great deal of my leadership philosophy — and my overall life philosophy — was shaped by a homework assignment I gave myself when I was a young man feeling listless in my life. I was looking for wisdom that would stand the test of time, so I reached out to people from older generations and asked about the most important things they had learned during their lives. I wanted to know about their careers, as well as friendship, marriage, raising kids, being a good neighbor and how to lead a meaningful life. I called it “50 Over 50” — 50 people, each over 50 years old. I consider many of these people to be my mentors, and they gave me a gold mine of insights.
They taught me that when it comes to your career, you spend about 80% of your life at work, so it’s critically important that you love what you do, and that you do it with people you respect. In a work setting, the happiest people are those with genuine passion for their jobs and believe they are making a difference in the world. That’s a major reason I’ve devoted my career to impact investing — to help create lasting, positive change and help improve people’s lives.
As CEO, my job is to be “chief cheerleader” and empower my team to convert their passion into action, channeled in a productive way. I want to help them light their flame, and then get out of their way.
Bisnow: How has the role of CEO/business leader changed over time — especially when considering the early days of your career to now?
Turner: The role of CEO has changed a great deal in recent years. One reason is that the workforce continues to change. I don’t want to overgeneralize, but when I was younger, most of my peers and I saw wealth as the primary measurement of success. It was the era of Ivan Boesky and the Wall Street movie, when “greed is good” was a common refrain. Today, many millennials and Gen Z members are driven by values just as much as wealth. They want not only success, but significance, too. That’s a great development for a mission-driven firm like Turner Impact Capital, which is built on combining profits with purpose and creating durable, scalable changes in underserved communities.
To be clear, we compensate our team very well to make sure we’re attracting the best and the brightest. But our team is interested in even more. I like to say that our firm is diverse across every measurement except one: We are 100% fanatical about our mission of making scalable and durable change, both financial and social.
Courtesy of Bobby Turner
Bobby Turner on the road
Bisnow: What will the role of CEO look like in 10 years?
Turner: I think being a CEO in 10 years will be a more intense, more accelerated version of being a CEO today. The pace of change in the world is increasing rapidly, and that trend will only continue. Challenges are becoming more complex, but exciting new opportunities are also emerging in almost every sector. One of the key tasks for the CEO of the future will be to manage these unprecedented levels of change and uncertainty, while also maintaining the organization’s core values and fundamental business strategy.
Bisnow: Was leading a company always a goal for you? If so, why?
Turner: Leading a company wasn’t so much a goal for me as it was a necessity. I started impact investing more than 20 years ago, long before it was a recognized investment area, so I had no choice but to be out on my own. I’ve always had a clear vision of where I wanted to lead, and I’ve never hesitated to challenge the status quo, so leading a company was a natural result. Fortunately, I’ve been joined by a fantastic team that shares the same vision and the same passion for harnessing investment as a force for good.
Bisnow: What has been your biggest mistake as a leader?
Turner: It’s hard to point to a biggest mistake, but I’m sure I make mistakes on a regular basis. The key is to learn from them, and hopefully not make the same mistake twice. Working in underserved areas with people like my former partner Magic Johnson, and others with backgrounds very different from my own, has taught me an enormous amount about the importance of humility and appreciating other people’s views and perspectives. The old adage is true: The more you learn, the more you realize how much more you still have to learn. A good leader needs to balance strength and decisiveness with a willingness to listen and learn from others.
Bisnow: Has your thinking changed about the workplace between 2019 and today? How? What will your office strategy be moving forward?
Turner: I think every leader sees the workplace differently now than they did in 2019. All of us are grappling with the new world we’re in as a result of the pandemic and the technological advances that have made remote work so much more viable than it used to be. On the one hand, employees value autonomy and flexibility. Remote work has been very valuable in terms of accommodating working parents and helping people avoid painful commutes, especially here in LA. On the other hand, being together in person helps promote team-building and collaboration, it builds culture, and it enables much better education and mentorship for younger employees. It’s difficult to grow and mature as a professional when you’re alone looking at a video screen all day. I think many of us are still looking to find the right balance on this issue.
Courtesy of Bobby Turner
Bobby Turner and students at Grand Concourse Academy Charter School in the Bronx, developed by the Turner-Agassi Education Facilities Fund.
Bisnow: There is a massive conversation underway regarding advancing more people of color and women into the C-suite. What are you doing to address those voices and that movement within your own organization?
Turner: We are incredibly focused on this issue. Unlike many firms that see diversity as a box to check or a reaction to public pressure, we view diversity as a competitive advantage. We don’t pursue diversity just for its own sake. From the leadership level on down, having a richly diverse team makes us better investors and more reflective of the communities we want to serve. We have a sustained and focused effort on recruiting great team members from underrepresented backgrounds and following that up with support and mentorship.
Bisnow: What do you think about the recent focus on sustainability and climate change? Is it overblown? Insufficient? Is your company tackling climate change in any way or taking it under consideration in your planning?
Turner: The focus on sustainability in commercial real estate is absolutely vital, and long overdue. Some measurements find that the real estate and construction industry is responsible for 40% of global carbon emissions. The “E” in ESG is very important to us — we implement a wide range of sustainability measures to reduce our carbon footprint and promote energy and water conservation in the new buildings we develop, as well as to retrofit the existing buildings we acquire. We monitor and track these metrics very carefully. On top of that, residents at our Turner Multifamily Impact Fund housing communities have received thousands of hours of enrichment programs dedicated to the environment and sustainability. Core ESG values aren’t just something we talk about — we live them.
Bisnow: What asset class or location will perform best over the next five years? Why?
Turner: We are more bullish than ever about investing in community-serving infrastructure in high-demand metropolitan areas. When it comes to vital facilities like school facilities, community-serving healthcare facilities and affordable workforce housing near job centers, the demand is huge, it’s growing and it’s not close to being met. Trends in real estate as well as demographics show us that these facilities will only become more valuable over time — and are not correlated to the performance of the economy, the stock market or other economic indicators. This thesis has been verified throughout the pandemic: Even when the economy took a turn for the worse, our performance has been excellent. One hundred percent of our healthcare and education tenants have paid rent during the pandemic. Meanwhile, tenants in our housing portfolio have paid rent at a rate of 96% — that’s 4 percentage points higher than the national average.
By helping to meet the demand for these facilities, we’ve made a lasting difference for thousands of individuals and families in communities all over the United States. Meanwhile, the strong returns we generate for our investors enable us to continue scaling up and expanding our impact.
Courtesy of Bobby Turner
Bobby Turner with Andre Agassi, co-manager and partner of the Turner-Agassi Education Facilities Funds, with students at an Aspire charter school in Modesto, California, developed by the fund.
Bisnow: What book, article or TedTalk meant the most to you? Why?
Turner: Brené Brown’s TED talk on the Power of Vulnerability resonated with me very deeply. She talks very powerfully about how making yourself vulnerable is a crucial act of courage in order to step out of our comfort zones, connect more deeply with others and reach our fullest potential. I’ve learned a lot from her about how to live more authentically, which I want not just for myself but for everyone at Turner Impact. I believe we can be our most powerful and productive when we bring our full, authentic selves to our work. Brené Brown does a wonderful job of articulating what that really means.
Bisnow: What is your all-time favorite TV show? Why?
Turner: I don’t watch a lot of television, to be honest. I’ve always enjoyed going out and doing things more than staying home and watching things. But if I had to choose, I’d say Friends. It makes me laugh, it satisfies my nostalgic streak, and it’s a good way to take a break from reality for about half an hour.
Bisnow: How do you spend your Saturdays?
Turner: On Saturdays, you can usually find me with my family or a group of close friends. I may be on the tennis court (or pickleball court, as I’ve gotten a bit older), or just at home playing the guitar. I also enjoy getting away from it all and heading to our home in Idaho, where I love to motocross and mountain bike. These are all forms of meditation for me. The work we’re doing now at Turner Impact Capital is the most important work of my life. The stakes are incredibly high. Being able to step away occasionally and immerse myself in a totally different environment helps me stay energized and motivated for the work ahead.