This past Thursday, the Baker Program in Real Estate’s Distinguished Speaker Series (DSS) had the pleasure of welcoming Cornell alumna Erica Henning back to campus. After leaving Cornell in 1997 with a Bachelor’s in history and a Master’s degree in public administration, Erica held consultant and financial analyst positions in New York City while also participating in the leadership of an early stage non-profit startup. These real estate experiences inspired her to pursue a MBA at Wharton in real estate and finance. Starting out in a series of positions with both home builders and commercial developers, she has pursued opportunities across the United States throughout her career in numerous positions, most recently joining ApexOne Investment Partners in Houston as Partner and Director of Portfolio Management.
Erica introduced attendees to her background, including some key decisions and lessons learned along her path to ApexOne. Having moved three times throughout her career, she stressed the importance of actively seeking opportunities. Time spent in other markets, she suggested, allows one to develop long lasting relationships while bolstering technical skills. She stressed that relationship building is an essential investment in any professional career as reliance on technical skills diminish and professional networks become more valuable. She reminded students that career paths must remain versatile to changing situations, even so at higher strategic levels, it is therefore imperative to focus grow outside of comfort zones. Lastly, she reminded the audience that integrity is vital to have industry as professional relationships depend on trust.
In the aftermath of the Great Recession, Erica moved from Pennsylvania to North Carolina where she directed business strategy and the disposition of $180 million of foreclosed real estate assets for SunTrust Bank. This experience helped her transition in 2014 to Houston in the real estate private equity space where she focused on value-add and opportunistic investments. After four years successfully leading Lionstone Investment’s $200 million opportunistic and development fund, she joined ApexOne.
Discussing her approach to investing, Erica strongly advocated for the importance of spending time on the ground assessing real estate investments. She stressed that fund managers frequently fall into the “Google Earth Trap,” however, there is hardly a substitute for physically experiencing a market to confirm the dynamics you suspect in your research. How you prevent situations from deteriorating determines success evidenced through a case study she presented involving a recently completed transaction.
Having purchased an underperforming golf course, She and her team intended to rezone and entitle land for big box retail use and to realize the property’s bond revenue . Still, delays in entitlements and the failure of the development team to receive approval for a signalized intersection coincided with the big box retailer paring back its growth expectations amid a changing retail landscape. Faced with significant headwinds to achieve the project as conceived, Erica’s team was able to pivot by re-zoning a portion of the site for townhome development. Capitalizing on a strong local residential market, her team was able to exit the project and return 90 percent of the expected gain to her clients.
In closing, Erica left Baker Students with a few thoughts to consider. First – it is important to pursue what is intrinsically interesting to you – there is no “right” firm or asset class. Second, always put the investor first (this goes back to integrity). Third, always be inquisitive about what is possible, but don’t forget about risk. Finally, and perhaps most importantly, embrace and value diversity as having a wide variety of people with different backgrounds and approaches is key to avoiding groupthink. You want to be able to understand assets from several different unique perspectives and diversity is the key to achieving this understanding.
The Baker Program would like to thank Erica for taking the time to engage with students and provide her perspectives on real estate investing. We hope to continue our engagement with her and look forward to her return.