Statistics show that more than 90% of new businesses disappear within 5 years of launching and less than 5% of businesses survive over a period of 10 years. Naturally, a question arises: what allows the remaining 5% to stay afloat, prosper and move forward?
Business is like a ship on a choppy sea, and like any ship it needs a skilled and experienced captain to lead it on a long and dangerous voyage. Today, using Paul Daneshrad and his company StarPoint Properties as an example, we will present a short overview of how his business has been able to thrive in the real estate market for over 30 years. Let’s start with a short biographical note about this California based real estate businessman:
Mr. Paul Daneshrad is the founder and Chief Executive Officer of StarPoint Properties, a private real estate investment firm, specializing in both commercial and multi-family properties. Mr. Daneshrad’s experience in the real estate field is broad and deep, involving development, management and ownership of real estate since 1990.
After graduating from California State University Northridge, Mr. Daneshrad founded StarPoint Properties and grew the company steadily over the years to include large apartment complexes, retail centers and office buildings, as well as establishing a fully integrated property management division. Since its inception StarPoint has acquired over 8,000 apartment units and 2.5 million square feet of commercial properties, totaling in excess of $1 billion worth of real estate.
The company currently has a portfolio of approximately 2,800 apartment units and 2 million square feet of commercial properties. StarPoint was built on the foundation that property operations, management and proprietary, disciplined acquisition strategy are the core competency of the business. Mr Daneshrad has built a vertical company in which management and departments excel at real estate execution.
This is best exemplified by the firm’s track record and historical performance – which is 3rd party reviewed and published, – which deliver investors returns that far exceed most industry averages and alternate investment strategies.
This is quite an impressive list of achievements but this information doesn’t answer our question: What qualities should a real businessman possess in pursuing the success of his enterprise? After careful analysis, we have found three core qualities that meet the criteria for a successful real estate developer.
1. Analytical skills
How do you measure analytical skills of a business person? One way to do it is to observe if a businessman is an established figure in the field of his expertise and is cited and published.
Mr. Daneshrad is considered an expert in the real estate investment community. He speaks at national conferences, is frequently quoted, and has written articles for various real estate publications including: Net Lease Forum, Multi-Family Executive, California Real Estate Journal, Multi-Housing News, National Real Estate Investor, Real Estate Southern California, and Commercial Property.
One would argue that article publication is more characteristic of an academic or an economics analyst. To this we can only say that a truly successful businessman is distinguished by theoretical knowledge and practical experience. Indeed, it is a critical quality to be able not only to read immense volumes of information, but also to analyze it and make plans for further strategic moves.
2. Investment style
We can characterize Daneshrad’s investment activities as model of “engaged activism”, which is longer-term in nature with correlated benefits to the real economy, and distinct from shorter-term “financial activism.” As many sources indicate, Daneshrad firm’s expertise and niche is acquiring under-valued and mismanaged assets and dramatically increasing the value of these properties through repositioning, strategic leasing, rehabilitation, and professional management.
The ability to adapt to rapidly changing environments, as well as capacity to adjust in time and, sometimes, ahead of time. It is the ability to withstand a blow and respond to a crisis that, in our opinion, is key to business success in any area. We can verify for at least three life-changing events in Paul Daneshrad’s business history.
● Los Angeles earthquake ruined one of his buildings, also endangering his not yet fully-fledged entrepreneurial future. Daneshrad quickly adapted his firm to new standards of property development related to legal codes of construction resistant to earthquakes. As a result, StarPoint Properties gained more deals and contracts.
● The 2008-2009 economic crisis hit the real estate market hard. Yet his company survived and advanced despite the economic downturn by following the protocol and not falling into a trap of making profitable and risky mortgage deals that brought many firms and banks to bankruptcy. As a result, StarPoint Properties acquired the reputation of a reliable company and attracted new investors.
● COVID-19 pandemic has been a challenge for many and its consequences for the real estate market are not yet understood. But we can conclude that Daneshrad’s long-term strategy to invest in the development of the undervalued properties looks like the right pathway to come out of the unchartered territories of the current economic backdrop.
It may be proper to end this article with a quote from Herbert Spencer, an outstanding but often forgotten sociologist, made famous by his social Darwinism theory.
“Society advances,” Spencer wrote, “where its fittest members are allowed to assert their fitness with the least hindrance.”
Social Darwinism might be an arguable topic in relation to human interactions in society but it remains very relevant in the domain of capitalism.