Prologis Inc. CEO Hamid Moghadam called on Bay Area business leaders to help address challenges facing San Francisco as he shared key factors contributing to his success in building a real estate juggernaut.
“I’m a big believer in keep it simple, and people make things too complicated in my opinion,” Moghadam told those attending the Bay Area Council’s annual dinner Tuesday in San Francisco, where he and business leader Mary Cranston were inducted into the organization’s Business Hall of Fame. “We’ve really focused on three things at Prologis over the years.
“We focus on the customer, which sounds really simple and obvious. But in real estate companies, nobody focuses on the customer. They all focus on their next deal,” Moghadam said. “If you really want to build a business, as opposed to a series of assets, you’ve got to focus on the customer and that allows you to extend your business in many dimensions that are unconventional.”
For example, Prologis (NYSE: PLD) is the nation’s second-largest producer of solar energy, leveraging the roofs of its many warehouses and other structures for solar panels, according to a video on Moghadam’s career that was played at the dinner.
Prologis is also taking advantage of the fact that about 3% of world trade moves through the company’s facilities.
“Because of that scale, we have access to a lot of data that can help our customers.
“Taking these four walls and a roof and then powering them with other things is a real opportunity. Of course, we’re gonna grow our real estate business… that’s the foundation of the business,” Moghadam said, pointing to the company’s activities in energy, mobility and private capital investing on behalf of institutional investors.
“The second thing we’ve focused on is embracing change, and a lot of that has to do with the innovative culture we’ve built around the company,” said Moghadam, who studied at Stanford University and built his career in San Francisco. “We’ve benefited from being in Silicon Valley, or near Silicon Valley, and being exposed to so many new ideas.
“The third thing, and I think the most important, is a real focus on building an organizational culture that attracts the right people, retains the right people and maybe even repels the wrong people that don’t fit that culture,” Moghadam said. “Culture is the only form of sustainable competitive advantage.”
Although a company’s culture isn’t captured on a balance sheet, in an analyst’s report or on a spreadsheet, an effective culture allows some companies to outperform, he said.
But it was his call for action to fix what ails San Francisco that came with a sense of urgency. The chief executive has firsthand experience with those challenges, having been robbed at gunpoint outside his San Francisco home last year.
“The voice of business has been absent in San Francisco because we’ve taken the success of this region for granted,” Moghadam said at the sold-out dinner held at the Westin St. Francis Hotel. “We’ve perfected the art of saying no, because there was so much that was trying to come into this region, create jobs, hire people.
“The last thing we thought about is being aggressive about attracting business and keeping business around here. We just fold our arms and let businesses come and leave as they wish. I don’t think we have that luxury anymore.
“I need all of you guys in the business community to stick your necks out and help one another so that our elected leaders and policy makers really hear us,” Moghadam said to audience applause.
“The voting populace is so ready for it.
“We have a huge opportunity coming up in 2024,” he said. “This is not the time to be shy or patient or quiet about this.”
