BrownHEN Interviewed Louis Grossman, Brown '71, President of The Grossman Companies, Inc., Quincy, MA.
1. Most people in New England associate your family with building supplies and lumber. What are the biggest differences between that business and real estate?
Actually, my immediate family focused on real estate even though other relatives were involved in the lumber business. In my opinion, the lumber business was a retail business where the customer was always right. It’s a very people-intensive business. The real estate side, we deal with physical assets such as buildings, structures. It’s not a consumer business with repeat business; we’re locked into longer terms.
2. When did you know that you wanted to be involved in real estate?
Honestly, when I was a sophomore, I thought I was going to be in the lumber business, which was my birthright. That business was sold in 1969 and my father went into real estate with some relatives. I was very good in math and business-oriented. I worked with real estate firms after business schools. Every day was a different experience and I really enjoyed my job, dealing with tenants, vendors, and bankers. My father made me acquire real world experience before I could return and succeed in the family business.
3. How do you evaluate a property before purchasing it?
We look at income-producing opportunities—office buildings, industrial buildings, retail, and some land; we assess leasing risk, construction, permit and interest rate risks. We evaluate the risks that appear in each deal and figure out how to obtain the appropriate rewards.
We also try to diversify our asset base, by products and not geography. Long ago, I’ve decided to stay within two hours from our home office, so this is a factor in my decision-making process. We will buy office buildings, industrial, retail and all types of land.
4. Do you see business potential in New England?
In New England, we are known for technology and biotechnology growth. Indeed certain sectors are growing, but the jury is still out, given the current housing industry’s situation.
The population in New England is what drives the real estate development. I believe the growth potential is better than other parts of the U.S. It is not easy to get into markets here, so when you go through an arduous process, your investment become much more valuable.
5. In Rhode Island some people are concerned about "urban sprawl.” Do you share these worries?
I have been through that here in New England and I must admit I have mixed emotions about this. On one hand, one needs to be conscious of green environments. On the other hand, I see in an emphasis on bringing back into urban environments incentives to get residential housing projects going against urban sprawl.
A good example, we are involved in a project in Hingham, MA, where they want to bring residential housing to the center of town and allow developers to build retail space on the first floor and residential housing above, with relaxed parking requirements and fewer restrictions on parking space to accommodate both residents and shoppers.
In my lifetime, I’ve seen the families with kids move to the suburbs and the empty nesters come back to urban settings. Towns and cities do want people back and are developing 24/7 communities, with incentives to developers to provide convenient transportation and affordability for residents.
6. How can an aspiring entrepreneur interested in real estate best get started?
I believe that one needs to start from the ground up. I have two sons in real estate; they both started at the bottom. One son is learning the lingo and the industry through different perspectives, moving from one department to another, from construction to property management, from financing to brokerage and acquisitions. Another son is working on the lending side. I recommend that you learn as much as you can in a structured program within a large company.
7. What advice you would give aspiring entrepreneurs?
• Be happy in what you are doing, help others and give back to the community
• Follow your passion
• Be open and honest
• Life is too short; relationships with one’s partners, tenants, bankers, and suppliers are more important than money.
• You can be entrepreneurial within an established company. The level of entrepreneurial activity depends on that company’s leadership and environment.
8. Would you speak about fear as a motivation or hindrance toward accomplishment?
Fear is important as long as it is not excessive and incapacitating you. It is motivating to view one’s fear(s) as a challenge, to tackle it and jump over the hurdles to success.
9. As you know, the entrepreneur’s path is filled with trials and errors, and also failures. What’s a valuable insight for entrepreneurs to keep in mind when they’re experiencing setbacks?
Every challenge is an opportunity.
You don’t learn if you do not take risks and make mistakes.
All successful entrepreneurs have made mistakes and have failed at times.
10. Your father and two uncles went to Brown. Both you and three sisters went to Brown. You have had four children graduated from Brown and a daughter is a senior at Brown now. Why do you believe Brown is an attractive institution?
I am a New Englander. Brown is close to home and yet far enough away. Brown fostered inquisitiveness. I knew I was going to school with bright kids who are from socially and economically diverse backgrounds. I knew I would be academically challenged. As for my children, I knew they would be challenged and have opportunities to create their own curriculum and pursue their passions.
11. What is the latest insight (about life, work, play) that you picked up and would like to share with BrownHEN?
It is important to search one’s own soul for the right balance between work, play and family. It is important to take time out from daily life and focus on one’s spiritual side. As I mentioned before, it is important to find and follow one’s passion.
12. Your cousin Mike Grossman was well known for skiing well into his 70s and 80s. Do you ski?
I don’t ski as much as I used to even though skiing is my great family sport and we all learned how to ski in New Hampshire.
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