Listen to Dorogoi Dlinnoyu “By the Long Road” while reading this story! Click the arrow below.
Written by Gere Gaige
In Midland I spent three years of elementary school, and three years of high school before leaving for Texas Tech and a pre-med Chemistry degree. My parents lived there a bit longer before Mobil Oil transferred my geologist father to Houston. So I had ten total years connected to the Midland water, before entering the U.S. Air Force in 1968 to become an instructor and spin demonstration pilot until our national “conflict” ended in 1973. Those ten Midland years were to be followed a bit later in life by 15 years working and living in Russia helping to form the new real estate market in the changing post-Soviet economy.
Separating from the USAF as a captain, after five years and 2,000 jet instructor hours, I joined many other unemployed pilots that year. Although all of us wanted to continue flying, I decided on starting a career in real estate in the then booming Houston, Texas. After 13 years with the same mortgage and development company, I started my own appraisal and consulting firm in 1986. Then the Soviet Union collapsed (1991) – and by a quirk of fate I was invited to teach the first real estate appraisal courses in Russia…. Moscow, January 1994.
As soon as the 1994 New Year holiday was over, and my two sons were safely back at their universities (Texas Tech and Texas A&M), I boarded my first international flight to Moscow through New York. That flight would be followed by many others over the next 15 years as I built a real estate consulting and appraisal business in Russia and four of the other seven countries of the now disbanded Soviet Union.
Teaching that two-week course led to (1) meeting a fascinating woman (Larisa) who became my wife; and (2) a two-year contract to advise the newly forming Russian government on creating a commercial real estate market in Russia. The first years (1995-96) I traveled to all of the major regional capital cities of Russia – from Kaliningrad to Siberia – meeting governors, mayors and local public officials in charge of state assets and the new real estate activity; such as it was to be. Russians who knew me said I had visited and seen much more of their country than any of them ever would. Speaking Texan, and just listening to Russian made travel a challenge but there were always English-speaking Russian colleagues ready to help.
After those two years, I knew more about the newly forming Russian real estate market than anyone, and used that experience to found a real estate advisory practice for Arthur Andersen (later Ernst & Young, now EY) in Russia. International flights were no longer to Texas to see family on holidays, but now to countries of Europe to connect with the global networks of my new firm and our clients. In the beginning (1996-2000), 80% of our real estate clients were foreign to Russia, but by 2001 (Putin’s first year), 80% were Russian based developers, lenders, insurers and property owners in the rapidly expanding Russian real estate market. It was time to get serious about reading, writing and speaking the Russian language.
Starting from speaking Texan, and my university minor in English, did not help. But all the educated and smart Russians around me did. Over ten years, I had the experience of hiring one-by-one a team of young Russians, Kazakhs, Ukranians and Georgians to build a real estate consulting practice in four different countries; each using a different currency while all real estate markets were priced in U.S. dollars.
Building this team to 70 young professionals, we appraised and guided investment in some of the largest projects in Russia at the time, from hotels, to shopping centers and multi-use land developments. During those years, all hires were extremely loyal. None of them left – and I had only one turnover – a Dutchman – who took his Russian wife back to the Netherlands. Out of the rest some of them worked with me for the entire 15 years, and are still advancing their careers there. Four of them became EY partners, now managing the real estate practice I began 23 years ago.
Our challenge then was to estimate real estate values where there was no transaction information. All players were curious about “market value”, but there was no market. Continuous education of clients was needed to show them there were other value definitions equally useful, and much more valid at the time than market value. For seven years I wrote a monthly article for the national real estate magazine (published in Russian and English) on these topics. The largest appraisal report I ever signed was for the entire railway system of Russia. The most expensive single item was for a downtown hotel; estimated value more than one-million dollars per room.
I testified as an expert witness to value issues in a Russian court (criminal case of Mikhail Khodorkovsky and Platon Levedev, YUKOS); and in sessions of the Arbitration Court of Stockholm (Swedish-Russian business dispute over a mining venture). At the time, I was the only foreigner ever allowed to testify in a Russian court, but that is a whole other story.
After the first five years living and working in Russia, on returning to the U.S. for a visit to family and friends, a common question was “Why do you stay there? Isn’t it more comfortable to live here in the U.S.? Couldn’t you make more money here?” After the tenth year, those same questions started to come from the Russians: “Why do you stay here? Isn’t it more comfortable to live in the U.S.? Couldn’t you make more money there?” That made me think…. why DO I stay here.
Some pondering came to three main reasons: (1) Professional reward and satisfaction. It was hugely rewarding to be able to use the 20 years of expertise I had built-up in the the U.S. real estate market – and to creatively apply all the principles of valuation to a place where it had never been done before. (2) Ego. As an American with a unique body of knowledge and experience I was treated with special importance. People actually listened to what I had to say – and considered it serious. A big contrast to back home in the trite and predictable markets of the U.S.. (3) The energy and eagerness of the young people I was able to employ and lead. Young Russians were (are) brilliant and incredibly hard-working. They showed up every day, paid attention, progressed rapidly in their capabilities and were just inspiring people to work with. It was a pleasure to get up every morning and go to the office to be with them. A big contrast to the youthful U.S. workforce I was used to.
As a partner in an international consulting firm (Ernst & Young), I owned a portion of the business and the only way to leave (retire) was to sell my equity stake to the other partners. This was accomplished 14 years, almost to the day, after my first founding that real estate practice in Russia. The truth is I could not have had in the U.S. such a significant and rewarding experience for the last years of my real estate career. For money, the significance and number of projects we were able to work on, in the fastest growing and most valuable real estate market in the world at the time, provided much more than what was at stake anywhere else. Finishing my career impacting the newly developing real estate market of Russia for 15 years was the most personally and professionally satisfying and rewarding experience I could hope for. (I hope Larisa reads this.)
Back to Midland in 2013 for the 50th reunion of our MHS class graduation was amazing. Another one of those “international” flights, then:
– the double-takes in the hotel check-in line that McElligott mentions,
– the reunion registration room full of crutches, canes and a wheel chair or two that made Larisa think we had made a wrong turn into an infirmary- but was actually our classmates, – and the football game, where we got to experience all over again a “blue norther” but with a lot less dust from 50 years ago.
So… it took me 50 years, but I made the round-trip from Midland to Moscow and back. I’m not sure the water is the same… and we won’t see the effect it is having on those currently there. But through this website we are seeing the effect it had on us. And the individual stories that came out of all of us being together in that environment…. and drinking that water.