Jared Kushner on why real estate resists change

There's "not a lot of pain" in the industry, CEO of Kushner Cos. says
By Tess Hofmann | May 20, 2015 03:09PM

Jared Kushner isn’t an upstart trying to claw his way into the real estate business — quite the opposite. He inherited a multimillion-square-foot portfolio from his father, Charles Kushner, and married into the Trump real estate dynasty.

But on Tuesday, the 34-year-old CEO of Kushner Cos., dressed casually in a button-down and gray jeans, riffed on why he actually fights against old-school real estate paradigms.

“Change usually happens when there’s pain. And in real estate, there’s not a lot of pain,” he said at a summit hosted by Honest Buildings in the Financial District. When rents are coming in and property values are going up, owners don’t actually have to work that hard to ensure that revenues keep pace.

Describing many landlords in the industry as “arrogant” and stuck in their ways, Kushner said the real estate industry is ripe for disruption, and that he backs tech startups that aim to do just that.

In March, Kushner and his brother Joshua, co-founder of venture capital firm Thrive Capital, launched Cadre, a real estate investment vehicle catered to institutional investors. So far, Cadre has raised $18.3 million from investors.

Kushner said he sees endless opportunities to automate tasks at Kushner Cos., which is developing the massive Dumbo Heights complex. “If you’re paying people a salary, you want them to spend their time on high-value things, not low-value things,” he said.

[vision_pullquote style=”1″ align=””] “Change usually happens when there’s pain. And in real estate, there’s not a lot of pain.” [/vision_pullquote]

He looks for flexibility in the personality of potential hires, and even sometimes prefers hiring people for positions unlike their old ones, keeping them on their toes and out of their comfort zones.

“The general theme is we look for people who don’t have functional fixedness,” he said.

There are two reasons to buy a building, he said. Either you have access to cheap capital — which he said never happens to him — or you see an opportunity to grow a building’s value.

His firm is now focused on acquiring properties in areas with what he described as “embedded growth,” areas that “have the ability to make you look smarter than you actually are.”

He is especially bullish on Jersey City, where he said the lifestyle cost-benefit analysis just makes sense. Kushner Cos. is planning a 50-story rental tower in Journal Square and recently picked up another site across the street for $27 million. 

There’s just one thing holding the area back, he said. “It’s got the word Jersey in it.”