Kyle Zeppelin | Crain's Denver

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Kyle Zeppelin

Background:  

Zeppelin Development is a real estate company focused on the urban core of Denver. The company launched in the early 1970s, when founder Mickey Zeppelin saw the potential of former industrial areas in the neighborhood now known as Lower Downtown.

Forty years later, Mickey and his son Kyle have developed a slew of projects across downtown Denver, including Taxi, a 26,665-square-foot redevelopment project, and The Source, a 25,000-square-foot food hall. Zeppelin Development is getting ready to open its newest RiNo project later this year. The 100,000-square-foot Zeppelin Station at 3501 Wazee St. is set to feature an international food hall on the first floor and a mix of workspaces on the floors above.

The Mistake:

I didn’t value relationships.

Earlier on in my career, some of my worst times came during arguments with tenants or buyers or other potential partners. It wasn’t a regular occurrence, but there were definitely moments.

Maybe someone wants more out of their build-out than what they are entitled to or maybe someone has expectations that go beyond what is in our contract. These situations happen on every project, and as a developer you want to avoid out-of-pocket expenses. My tendency earlier on was to enforce my rights under the contract and be somewhat defensive.

If you lose the argument, you really lose. If you win, you maybe lose even worse.

When these situations come along, you either go to the table with the perspective that you want to work with the person and you want them to be whole, or you dig in and arguments break out.

There was no one big moment. At a certain point, I just came to the understanding that I needed to change. It was bad for the immediate bottom line, the long-term bottom line and the culture we’re trying to create here.

If you lose the argument, you really lose. If you win, you maybe lose even worse.

The Lesson:

Relationships are critical.

In our business, we build projects around people. It took me some time to realize that.

We have a long-term hold on our projects. We’ve had tenants grow into bigger spaces; we’ve had other tenants contract, and we’ve had to backstop them and make them more marketable.

The key to the whole strategy is being able to attract and retain a lot of the businesses that are part of our projects. So our most important asset is our ability to manage those relationships.

We’re involved in a lot of restaurant, food and beverage-type deals. And especially in those cases, the answer is always yes. You have to take care of people, go above and beyond, maybe even leave something on the table if that’s what it takes.

We stay involved in the day-to-day life of all our projects. Any opportunity we get to cultivate the culture that separates us from other projects in the city, we’re looking to take advantage—pool parties, movie screenings, other amenities.

As far as getting into it with tenants or brokers, I made enough of those mistakes. But now I’m committed to a “customer is always right” mentality, which isn’t always typical in commercial real estate.

Kyle Zeppelin is on Twitter at @kylezeppelin.

Photo by Adam Larkey, courtesy of Zeppelin Development.

Do you have a good story you’d like to share, or know someone we should feature? Email cberman@crain.com.

And be sure to sign up for your local newsletter from Crain's Denver.