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Hugh Hilton |15 Minutes With A Billionaire · Think Uncommon

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  This is Think Uncommon, a message for those who refuse mediocrity,
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  where clarity replaces chaos and composure instills authority.
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  Hosted by Joe Jackson, author and creator of The Wolf Protocol.
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  It's not every day you get an opportunity to spend 15 minutes with a billionaire.
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  However, Hugh Hilton was kind enough to give me his time recently talking about
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  mergers and acquisitions,
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  some of the character traits that has made him different from a very,
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  very young age, and lessons from his father that set the stead for him as an
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  adult that he has passed on throughout the years.
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  This is 15 Minutes. It's a short, sharp interview with Hugh telling us some
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  amazing stories that I know that you'll absolutely love.
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  Keep an eye out for the six seas and listen out for what he tells you that his
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  father taught him, that he will never, ever forget.
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  Hey, Cheryl. Hi, Q. How are you? Wonderful. How are you?
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  I am well, thank you. Thank you so much for your time today.
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  Really appreciate you taking time out of your busy day to speak to me.
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  Thank you so much for supporting the book as well.
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  It was an excellent book. Definitely a brilliant read, and it gives us a great
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  indication of exactly what it takes to be in business.
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  I definitely learned a lot, and it's on the bedside table for a good period of time.
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  Great. Good. What would you like to talk about today, Cheryl?
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  So talking about the book, Hugh, I have read your contribution,
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  obviously, and everybody's story begins somewhere.
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  It seems that in your case, as early as college, you had grit.
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  And even after being denied entry to grad school, you didn't let that stop you.
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  In fact, you went back and you studied again to increase your score and ultimately
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  had the satisfaction of having the dean that denied you entry having to approve
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  you entry the second time around.
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  Exactly now that's that's a pretty big experience for somebody so young and
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  I imagine that that set you set the stead for you moving forward so how did
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  that experience as a young adult shape your views on failure.
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  You know, it was fascinating. It really made me feel to not be afraid of failure,
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  but rather to just outwork or overcome it and not just take it and think I'm a failure.
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  And I was fascinated because what happened after that was when I went to law
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  school was interesting.
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  I actually had a job to work for the largest regional shopping center developer
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  in the country, and everybody was interviewing for job offers.
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  So I thought, you know, I'm just going to sign up for an interview with a law
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  firm just to get a job offer to say, oh, yeah, I got one too.
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  So I go to the interview. I sit down, and we're talking.
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  We finish up the interview, and the guy goes, well, I'd like to talk about offering
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  you a job. And I said, great. Well, let's talk salary.
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  He goes, there's nothing to talk about. Everybody starts at the same salary.
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  I said, now, wait a minute. I said, I'm not some poli-sci major who didn't know
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  what to do with my life, so I decided to go to law school.
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  I said, I've got a BBA in finance and MBA in real estate finance and a law degree
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  in real property law. I could run your real property practice.
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  He goes, yeah, well, that's why I want to hire you. I said, yeah,
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  but you've got to pay for that.
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  He goes, no, I told you, everybody starts at the same salary.
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  So I looked at the guy, I said, you know, I'm done with this interview.
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  He kind of looks at me with a start of look on his face. I said,
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  I believe in meritocracy.
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  I said, this is no way to run a company.
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  I said, have a nice day. See you later. So I get up and I walk out and I go
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  down to the admissions office and they had everybody's starting salary posted
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  on a board with the name of the firm and their student ID number for confidentiality purpose.
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  So I looked at the highest starting salary and I was so upset with the interview I just had.
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  I said, I'm going to show that guy, I'm going to double the highest starting
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  salary out of this law school.
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  How dare they say that, you know, I'm worth the same as anybody else just getting a job.
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  So I went back to my little study booth and I had the Wall Street Journal and
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  they had a job offer for a firm called Jones Lang Woot, which is now Jones Lang
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  LaSalle, which was an international real estate advisory firm.
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  And I thought to myself, you know, I'm pretty naive. I said,
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  well, they seem international. I said, maybe they'd pay me that much money.
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  So I sent my resume over and I get invited out for an interview.
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  So I go to Los Angeles. I've never been to California in my life.
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  I sit down for the interview, the interview, go through the interview.
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  And then at the end of the interview, guy that goes, I want to offer you a job.
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  I go, good, let's talk salary. He goes, okay, I'll pay you X.
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  I looked at him. I said, that's not going to get it done.
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  He goes, what did you say? I said, that salary isn't going to get it done.
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  He goes, really? Well, what exactly is going to get it done?
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  So I took the number, multiply it by two, and I said it to him.
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  He looks at me, he goes, are you crazy? And without blinking,
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  I looked at him. I said, do I look like I'm crazy?
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  He goes, I can't pay you that kind of money.
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  I said, you know what? That sounds like a personal problem to me.
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  I said, if you can't afford me, that's your problem, not my problem.
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  So he's looking at me, goes, just a minute. So he gets up, walks into his office,
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  makes a phone call, comes back out in like three or four minutes.
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  He sits down. He goes, fine, I'll pay you that.
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  Now I'm thinking like the dog who caught the car. I didn't really anticipate
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  that I was going to be able to get double the highest started salary out of law school.
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  So then I had to act really kind of casual and nonchalant about it.
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  And so he goes, okay, now let's talk about when you're going to start.
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  And this was the classic.
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  I looked at him. I said, yeah, I'm thinking sometime after Labor Day,
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  I'm thinking about taking the summer off.
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  He goes, if I'm paying you that
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  kind of money, you're starting a day after the bar exam. I said, okay.
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  So that was one of my better ones in terms of just pushing the limits.
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  And then what was fascinating is I had worked for this firm for nine months
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  and they were a British firm.
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  So I had bought a British appraisal practice and they were losing money in the appraisal practice.
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  And we were making money on the investment side. So out comes the head of this
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  global firm with his two lieutenants.
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  So they come in, and I figure they're going to fire the British appraiser guy
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  because he's losing money.
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  Instead, they fire my boss. And then they call me in to discuss,
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  you know, what happened.
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  So the British head of this firm goes, Hugh, we're running a global firm.
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  You know, we can't have an office losing money.
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  So by God, we had to make a statement. So we fired your boss.
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  And, you know, most little junior people would have thought,
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  like, okay, thank you for telling me, Mr. Very Big Important.
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  I looked at him. I said, you ought to be ashamed of yourself.
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  Now, he goes like this and looks at the number two guy in the firm.
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  I just have to say, did you hear what that colonist just said to me?
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  And he looks back at me again. I go, that's right. Ashamed of yourself.
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  And he has this unbelievable look on his face again. So he's stunned.
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  He doesn't know what to say.
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  So I'm looking around the room. Nobody knows what to say. So I look back at
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  the guy and I said, you know, I spent a fair amount of money on my education.
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  I have a pretty good idea how to run a company. This is no way to run a company.
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  This is nothing more than a cheap skate go move. The guy you should have fired
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  is sitting right there. I pointed to the British appraiser guy. He goes like this.
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  So everybody is stopped. So I look back at the head of this global firm.
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  I said, I'll tell you what, when you figure out how you want to run your company, you let me know.
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  In the interim, I'm going to go back to my office and go to work.
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  Have a nice day, gentlemen. I turned around and walked out of the office.
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  So two minutes later, there's a knock at my door. It's the North American part.
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  He closes the door. He looks at me. He goes, I've never heard anything like
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  that in my entire professional career.
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  And I go, great. What do you want to do, fire me? He goes, no.
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  I just hope if I ever get fired, somebody has the balls to stand up for me like
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  you did for your boss. Have a great day.
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  He walks out. He leaves. my boss gets hired to run bank of america investment
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  real estate a big one of the top four banks in the country what do you think
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  happens first thing he does is he hires me because i stood up and did the right
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  thing in terms of supporting him because it was an.
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  Inappropriate thing to do fire him for no reason so i learned one of the things
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  i learned is i when i was a little kid my dad used to talk about the corporate
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  ladder and i thought oh there's this ladder.
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  You got to climb up. I said, it must be really hard to get on the bottom rung
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  because I thought it was like a little, literally the ladder,
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  you know, cause I was like eight or nine.
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  So I thought to myself, I said, I know, and this is where, you know, I use my.
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  Curiosity and creativity and part of the 60s, I said, I'm going to leverage
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  education to just drop in like a quarter of the way up the ladder so I won't
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  have to elbow everybody out to try to get them the bottom rung.
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  So, you know, I decided that like when I was eight or nine.
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  And so that's one of the things I always thought that my father,
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  then when I was like 12 and I was black topping the driveway,
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  he comes over and says, hey, there's a couple of things you need to know.
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  And I said, what's that? He said, listen, there's only two things that society
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  can't take away from you. So you need to protect them with your life.
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  And I said, what's that, dad?
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  He said, your education and your integrity.
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  I said, okay. And, and I really felt like with my education,
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  I never had to compromise my integrity or compromise at all because I always
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  felt like, Hey, I'm well enough educated.
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  I could go do anything I wanted to. I could start my own company.
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  And that actually happened.
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  I mean, after I left Bank of America, after four years to become president of
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  a $2.5 billion real estate investment platform, in the late 80s,
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  we had the savings and loan crisis.
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  And what happened is the savings and loan industry way over leveraged.
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  And so there is a real estate collapse.
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  And what happened is the interest rate went all the way up to 9%. It was like down at six.
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  And so, and the real estate yields were six. So I went to the CEO,
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  I was the president and I said, Hey, listen.
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  T-bills are nine, which means real estate, risk-free real estate yield should be 11.
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  I said, and there are six. So I said, this is not going to end well.
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  We need to sell all our nine core assets, go to cash, wait for the market to
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  collapse, and then go back in and buy everything on the cheap.
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  And he said, well, why would we do that? We'd lose all asset management fees.
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  And I said, have you ever heard the word fiduciary? And he goes, yes.
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  I said, that's why. He goes, I appreciate the thought, but I think we'll stay the course.
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  And I looked at him. I said, okay, let me know how it works out for you.
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  He goes, what'd you say? I said, let me know how that works out for you.
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  And he goes, what does that mean?
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  I said, that means I quit. He goes, you can't quit. You're running the whole thing.
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  I said, no, I just told you a minute ago, I quit when I said,
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  let me know how that works out for you. And I said, I won't be out of here in 30 days.
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  I'll be out here by the end of the day. He goes, why would you do that?
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  I said, because I sleep really well at night knowing I'm doing what's in the
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  best interest of our client, not what's in our personal financial best interest.
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  So good luck. So I packed up all my stuff and left and started my own company
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  and then called a good friend of mine that I went to college with named Brian Marcel,
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  who had a burgeoning company of six people at that time called Alvarez and Marcel.
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  I said, Brian, do you have any real estate component to these corporate restructures
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  you do? And he goes, yeah, they all have real estate. I said,
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  okay, I'll start my firm.
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  You can hire me as a stringer and we'll go from there.
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  So he did. And then a year later, he wanted to open up a West Coast office.
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  So he said, hey, I want to buy your company.
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  I said, you can't afford your company. He goes, what are you talking about?
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  I said, I have a real expensive copier lease. I think it's like $1,200 a month.
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  So I'm not sure that you could afford that. He goes, oh, yeah,
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  right, right, right, right.
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  So anyways, I joined as employee number seven. Now the firm's 11,000 employees.
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  So it's been an interesting journey where I've always been true to myself,
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  my core beliefs, and I've just never compromised, and it's just held me in good stead.
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  There's such a lesson in there, Hugh. My gosh, for so many people that just
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  bend and sway with the latest thing, trying to people please and make sure they
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  stay on the right side of the people that matter at the time.
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  That's not just about failure for you. That whole story is based in integrity.
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  I think your dad taught you very well, even from a young age.
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  Yeah, he learned something black-topping the driveway that day, right?
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  Random lessons from dad in the driveway. I love that. Exactly.
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  I'm glad that you referenced the six Cs, actually. I did a little bit of a chat
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  about that and did a bit of research.
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  And you've spoken about a scenario where you persisted with a deal and noting
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  that your commitment led to that being accepted as what you referred to as the
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  largest lease in Colorado at the time.
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  Now, at the moment, we're in a world where self-doubt is practically a diagnosis.
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  So how do you know when to stay committed to a deal and when to walk away?
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  Well, it's a great question. It depends on, there's a lot of different aspects
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  of deals, when to walk away or this or that and another thing.
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  But I try to anticipate the outcome.
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  And I try, for example, in real estate, some of the best deals I've done are
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  when I've not been super greedy.
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  And the way I say it is, hey, you need to know when to hold it and hold them
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  and when to fold them. So we had a deal.
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  Building, it was fascinating that we bought from a savings credit union,
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  then we then fixed it and we're,
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  we white boxed it, but we hadn't really done any tenant improvements and stuff.
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  And somebody approached us about buying a building.
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  So we could have done one or two things. We could have said,
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  no, we're going to wait until we have a tenant sell it when it's leased.
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  But the price they offered us was about a 30% return and we didn't have to spend
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  the rest of the capital to complete the renovation.
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  And they wanted to buy it and then they, and have enough upside so they could
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  lease it and sell it. So I, I sold it to them then.
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  And some people go, why didn't you do the whole thing? I said,
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  because you need to know, we have an innate feeling is now the best time to
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  hold, or do I wait until I've completely finished everything and sold it?
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  And I thought the price was fair.
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  I didn't need to, it's, there's an old saying that pigs grow up to,
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  piglets grow up to be happy and hogs go off to slaughter.
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  So rather than being a hog, I was being piggy.
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  So I got, you know, a nice price. Then what happened is I bought this other
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  building, started the same thing.
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  The same buyer came up to us on that deal and said, Hey, will you sell it to us before it's leased?
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  Five million, six million. And we sold for like almost 30 million.
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  So it was like 160% IRR, six times on our money. And I said, sure.
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  So we sold it. And then what happened is fascinating.
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  Then the market collapsed and they got stuck holding the building.
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  So if I had held that, continued doing it, then I would have got caught holding the building.
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  But instead of being greedy, i was
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  just thoughtful in terms of being profitable and
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  what's an adequate return that happened to be just
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  beyond belief return but i still sold
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  it with at the time with enough offside so he could make money on it too so
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  that's an example yeah just i love that yeah we're out of time i had so many
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  questions to ask you but i'd just like to wrap it up with one so the people
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  that are part of this podcast have what we call an uncommon mindset.
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  And looking back on your career, there's definitely been a lot of uncommon choices that you've made.
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  Yes. One mindset or belief that's never failed you that you'd like to share with everybody.
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  I, to develop your curiosity and creativity, and this is meant for right-handed
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  people that it's absolutely critical.
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  And the best way to explain it is I'd like to say is, hey, think about if you're
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  in a street fight and you have to tie one hand behind your back and the person
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  you're fighting is using two hands, meaning both sides of the brain,
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  who do you think is going to win?
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  They go like the person with two hands. And so I said, so you need to understand
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  that if you're right-handed innately, you're not curious and creative.
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  You have to consciously develop that skill set.
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  And once you do and you're using both sides of your brain, you have a tremendously
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  increased probability of success. And I can look back in the six Cs.
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  That's why the second and third C is curiosity and creativity.
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  Because, as a matter of fact, when I gave a speech in South Africa to about
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  5,000 people, you know, at JT, afterwards, the wealthiest person in South Africa gave a speech.
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  And somebody asked him at the end of the speech, what do you attribute your
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  success to? And he said, curiosity.
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  So people that are right-handed really underappreciate or undervalue the importance
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  of creativity and curiosity.
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  And even in a non-business environment, hey, we're only here for a short period of time.
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  You know, you should be as curious as possible and enjoy the journey as much
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  as you can and not get caught in like this little narrow roadway through life.
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  Because there's so many fascinating things here to experience and enjoy.
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  Those are the two things.
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  I love that infinite possibility.
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  You've been listening to think uncommon a series of life-changing strategies
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  that produced inevitable results to listen to men that matter like and subscribe for more.