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FEATURED FEMMES INTERVIEW WITH SARA SHANK OF PGIM REAL ESTATE

Interviewed on July 21, 2020

Interviewed by Yingying Zhu

Sara Shank joined PGIM Real Estate this year as the firm’s Global Head of Innovation to develop and implement technology solutions and data strategies across investment, asset management, operations and client servicing. She joined from Beacon Capital Partners, where she served as managing director and head of portfolio management. In this role, she was responsible for driving innovation across the firm and oversaw the review, screening and implementation of a number of new technologies and platforms. Sara is one of the pioneering advocates of proptech application in institutional landlords and has sat on the Advisory Board of multiple technology leaders including VTS, Honest Buildings, WiredScore, and CompStak. Sara holds a BA of Economics from the University of Virginia and an MBA from the Tuck Business School at Dartmouth.


Congratulations on joining PGIM Real Estate! Can you talk about how you made the decision to make the move? Before joining PGIM Real Estate, I was the head of portfolio management at Beacon Capital Partners. I had several roles at Beacon over the past 17 years and in my last six years there, I split my time between more traditional portfolio management and innovation. When PGIM Real Estate approached me, they were seeking a candidate for a global role that spans all property types that is 100% focused on innovation, and I knew it was an opportunity that I could not pass up. PGIM Real Estate is the third largest real estate manager in the world and—more importantly—is known for being a forward-thinking company. PGIM Real Estate has made tremendous investment in innovation and its hiring of a global head of innovation has bolstered its dedication to creating innovative strategies that benefit its business and set new standards for the real estate industry more broadly.


PGIM has such a diversified a portfolio across equity and debt and different asset classes and risk profiles. How do you strategize for these business lines? Since joining PGIM Real Estate, I have focused on learning all that I can about the company’s global platform and laying the groundwork for the creation of innovation strategies. Our real estate business crosses all product types and covers many geographic markets globally, which is a massive opportunity for the implementation of proptech. However, proptech is such a fragmented segment of real estate. For example, what works in retail might be hard to duplicate in multifamily and what works in the U.S. might not function perfectly in an international market like Singapore. The way we are currently tackling our strategy is that we’ve set up a variety of Innovation Councils across our different business lines, including asset management, property management, acquisitions and portfolio management. We also have councils that are sector specific, region specific and business function focused, which includes areas like real estate debt and ESG (Environmental, Social and Governance). I view these groups as Agents of Innovations that will help me to research, pilot and implement various innovative products and help to build a Culture of Innovation at PGIM Real Estate.


“The hope is that through the initiatives I am working on right now, more people at PGIM Real Estate can harness the power of technology... We want to promote and establish a positive feedback loop between my team and all other business lines to push innovation forward together.”

What would you like to achieve in five years? In five years, the way we tackle innovation at PGIM Real Estate will evolve as we learn more about our business needs and the best solutions available in the marketplace—as well as how we can streamline and standardize the use of technology across our firm. The hope is that through the initiatives I’m working on right now, more people at PGIM Real Estate can harness the power of technology and bring us their own ideas or suggest new products. We want to promote and establish a positive feedback loop between my team and all other business lines to push innovation forward together.


I learned that you are building up the data team. What do you see the future of data for PGIM Real Estate and real estate companies as a whole? Real estate has not historically embraced data nearly as much as other industries have, but that is beginning to change. Within PGIM Real Estate specifically, we officially integrated our debt and equity businesses this past April and as a result, our combined business now benefits from access to a wealth of global real estate data. Our data stems from both real estate equity and lending transactions and some of it spans as far back as the past 50 years. We will produce powerful predicative analytics from this data once we’ve finished aggregating, standardizing, and analyzing it. We’re in the process of hiring a head of data governance, who will solely focus on this initiative because we see this as a key step to standardizing data that are stored in different formats or languages, recorded in different currencies or units, or that have followed different industry practices. After that, we’ll focus on the data science aspect. We’ve committed to spending a great deal of time and resources on our data because we know that the result will be very beneficial for us as a company and for our partners, tenants and investors.


You sit on the advisory board of a few leading proptech companies. And it has been common for real estate companies to invest in proptech companies directly or through a VC. Can you help the audience understand how real estate companies typically work with proptech in addition to being a customer? PGIM Real Estate hasn’t invested in proptech companies, but many owners and operators have chosen to make direct or indirect investments because of the synergies. When working with proptech companies as a customer, an owner/operator typically spends a lot of time and “sweat equity” working closely with that firm, so it can make sense to invest in the company itself and to receive an additional return on their investment beyond the improvement to their own business. Such an investment also aligns the interest of the real estate company with the proptech company, which is healthy for the long-term success of the industry and particularly helpful for the proptech company in terms of raising capital and advancing their product with deep industry connections. That being said, there are still many benefits for both real estate and proptech companies that come with a traditional customer relationship. Proptech companies are willing to help their customers understand how they plan to continue to develop and grow in a sustainable way, and how that will ultimately benefit the customer. I have also served on proptech companies’ advisory boards, which is another way to work with closely with firms on the evolution of their products.


What do you find the most challenging about adopting innovation in a real estate company? At PGIM Real Estate, I’ve found that leadership and employees are interested in understanding what is available in the proptech market. The senior management team has set innovation as a clear priority and has nurtured a culture that embraces innovation. One way to effectively get employees on board with new technologies is to leverage the customer success teams that most proptech companies have built up. They’re very familiar with the pain points that users typically push back on with their products and they have the experience needed to drive adoption within an organization. Additionally, it’s always helpful to have internal technology champions that are excited to work closely with those proptech companies.


How did you start in taking an innovation role? When I moved over to portfolio management at Beacon Capital Partners, one of the first things that I did was pilot and then adopt Hightower (which merged with VTS in 2016) across the entire portfolio. I became closely involved with the proptech community through that initiative and realized that the real estate industry really needed this disruption. I enjoyed leveraging my experience and skillset to make that happen and I organically became deeply involved in innovation—before I knew that I had taken an official innovation role!


Who would you consult with in your network when evaluating a proptech idea? Creating and nurturing relationships is at the heart of my role at PGIM Real Estate. Because the proptech industry is so fragmented, it can be challenging to understand and evaluate all of the products that are out there. Having been involved in the proptech industry for so long, I’ve built a strong network in the U.S. and I am working on developing my global network now. During due diligence, I’ll always ask a proptech firm who their existing clients are and, in most cases, I’ll be able to then speak with someone in my network about the pros and cons of that product. My philosophy is that the more companies that sign up for a certain technology, the bigger and better that technology will become. It takes a village to make progress in the real estate industry, where the existing way of doing business has been around—and in many cases has been successful—for a long time.


What technology are you excited about? To be honest, the technology that I’m most excited about at this moment is anything that can successfully fight or prevent COVID-19 because it’s such a destructive force to humanity and the economy. But beyond the COVID crisis, I’m amazed by database technologies and the data scientists who have made incredible strides in doing very important work. I’m also fascinated by 5G and enjoy learning more about what it’s going to enable us to do in the near future.


What is the impact of Covid on you and your work? On a personal level, I have not yet relocated to New York from Boston as I had planned when taking this role. Technology today makes it possible for us to work productively from remote settings and PGIM Real Estate has been incredibly supportive of employees working from home—we have all of the necessary tools to be successful. But I do of course wish that I could meet my new colleagues face to face, and I miss collaborating in person and sitting around a whiteboard to brainstorm.

At the property level, we’re very focused on exploring cutting-edge HVAC technologies and ion infrared filtering technologies to cleanse air, as well as contactless access systems, tenant communication systems, and wayfinding systems.

“…early in my career, I worked a lot of hours every week and did not do enough networking. I realize now that it’s not always about how much you work but rather how smart you work—for example, by building your network you can boost your career in the long run.”

People say successful women in real estate have to perform better than their male counterparts to gain the same opportunity. How would you suggest young women in this industry find their way to excel? Success in the real estate industry goes beyond just working hard and performing well in your specific job. One of the key things that I recommend is building a strong network of contacts across the industry. Inviting people to coffee or just checking in on a regular basis goes a long way. I have to admit that early in my career, I worked a lot of hours every week and did not do enough networking. I realize now that it’s not always about how much you work but rather how smart you work--for example, by building your network you can boost your career in the long run. And be real with people because you cannot expect people to share with you if you are not going to share with them. Network with people at all levels because they are all important and can help you over time. The other key thing that I’ve done throughout my career is volunteer to take on projects that were simply not being done or that were outside of my job description, which is how I ended up leading the innovation initiative at my last job. Lastly, do not be afraid to ask for what you want and what you deserve. Women tend to check every single box before asking for something, and that does not always need to be the case.


Who are some of the women who inspire you in the proptech industry? So many! Interestingly, there’s a significant number of female leaders that are leading the charge on proptech initiatives on behalf of owners and operators—and it is a very collaborative and forward-thinking group. A few amazing women that I bounce ideas off of include Karen Hollinger at AvalonBay, Ginny Miller at Jamestown, Jenny Wong over at Tishman Speyer, and Merritt Hummer and Clelia Peters from Bain Capital. As I mentioned, I am also committed to building my international connections and I’m overwhelmed by the great work by many women overseas, including Helen Lam at Lendlease and Sally Jones from British Land.

Edited and condensed for clarity.

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