John McLernon has been a major player in the Commercial Real Estate Industry for longer than the Vancouver Canucks have been an NHL team. NAIOP Vancouver recently got a chance to sit down with this industry figurehead to discuss his early career, life, golf, and what to expect at the October 20th Breakfast Meeting. This week John discusses how a turbulent economic climate catalyzed the formation of the Colliers Macaulay Nicolls Group of Companies. Tune in every Wednesday as we release new segments from this interview.
By 1977, John had already established a solid career, having spent his formative business years in Montreal with Canadian Pacific and later with its subsidiary Marathon Realty. He came to Vancouver in 1970 as Director of Development for Marathon in Western Canada and Western USA. In 1977, he joined Macaulay Nicolls Maitland as President and CEO and became a Director and shareholder of Hastings West Investments, a west coast holding company and the parent of Macaulay Nicolls. By the time 1982 hit, the recession was not only an eye-opener, but also a motivating factor as he had to decide between focusing his efforts on Hastings West (where he had been a director since day one) or instead, driving the growth of its subsidiary Macaulay Nicolls. Up until then he had been deeply involved with both arms of the organization, making it difficult to focus his energies. John explains:
So what happened is, like everything else in life it's good to have an early lesson in one's career - and thus we learned a lot when we were hit by the major recession of 1982-83. At that point I had to make a decision: do I continue to have one foot in one camp and another in the other, or do I drive Macaulay Nicolls to build it into something significant. That is when I focused entirely on commercial real estate.
From the onset, we brought our Management team together and agreed on our future direction:
- Own the company - buy it back from Hastings West
- Become a national organization
- Accelerate and leverage international relationships
- Get out of residential real-estate (previously had been 50/50 split) and focus entirely on commercial
Re-strategizing and establishing goals every 5 years was crucial to the growth of Colliers through difficult economic times, as John explains:
By 1985 we had bought the company back from Hastings West, we had merged with a Toronto company (Leasco) so we were national, we had connected with and set up Colliers with an Australian group, and we were focused on building our commercial business into the #1 in Vancouver - we weren't at that time as we were primarily known as a residential company before then.
By 1985 they had achieved all of their initial goals, with the new independent CMN bringing in $20M in revenue. "This seemed like a lot, but I immediately said that our goal should always be to double every five years," John recalls of his anything is possible mentality. "Everyone thought I was nuts," says John, "until we hit $40 million a year in advance of the five-year mark.
In light of today's economic climate, fear of recession can overwhelm even the most hardened investor. In such turbulent economic times, how are we supposed to react to (yet another) potential recession? The 1982 recession may have been John's first as a businessman, but not his last. He shares his insight on how to turn an economic decline into a business opportunity:
We've been through 5 or 6 recessions over the past 30 years - they concerned me less each time. Maybe they shouldn't, but we have been there before, taken fast action to lessen exposure, survived very well and been well prepared to move quickly out of the recession.
John McLernon will be the Icon Speaker for NAIOP's October 20th breakfast meeting, sharing information and insight he's gained during his extensive career. Come learn more from this industry leader over breakfast and network with your peers. Registration is available online here. Tune in to the NAIOP Industry Leaders Blog every Wednesday as we share more insights and knowledge in Commercial Real Estate.
What would you ask John? Please share your comments or questions below.