Michael Smith spends a lot of time thinking about space.
After all, he points out, it is the entity on which his business is based. After payroll expenses, space-or real estate-is the top operating item of a company’s budget.
As CEO of the Cabot Group Inc., Smith says his role is to help minimize the cost of that operating space for his customers while maximizing the return on their investment.
"We get paid to save and make our clients money," Smith says. "I love being able to solve their real-estate-related issues."
Smith, 68, founded the Cabot Group in 1971. The Pittsford company ranked third on the most recent Rochester Business Journal list of property management firms.
The real estate services firm provides tenant representation, project management, strategic planning, lease audit administration and mortgage financing.
The company represents privately held and publicly traded corporations, health care organizations, municipalities, professional practices, real estate investment trusts, financial institutions, non-profit organizations, colleges and universities and private investors.
The Cabot Group employs more than 150 people and manages 3.5 million square feet of space. Its brokers’ division has more than $50 million worth of real estate listed for sale.
While the company has grown over the years, Smith makes sure to maintain its focus.
"Our primary role is to be an adviser," he says.
Raised in Irondequoit by his mother and four older sisters, Smith enjoyed sports in high school and went on to study business at Miami University in Oxford, Ohio.
He graduated in 1967 with a degree in corporate finance and remained at the school to take graduate classes. It was there he became interested in real estate, working on case studies in a class.
"I became enamored by the concept of real estate," he says.
But when his money ran out, Smith had to leave school and enter the workforce. He returned to the Rochester area and worked in finance positions at a couple of manufacturing firms.
While working those jobs, he also served as the supervisor of a 48-unit apartment building owned by the father of a friend. The owner liked that Smith had some business experience, and Smith was able to live there rent-free.
He could not, however, get real estate off his mind and left the manufacturing sector to work for a real estate developer. He stayed a couple of years before deciding to start his own business.
The Cabot Group began with two employees and originally focused on property management services. It has since expanded its employment and services, taking a broader role as an asset manager for clients.
Smith considers the Cabot Group to be an outsourced real estate department for his clients. He believes the company best serves its clients when they seek advice on what action they should take-whether it be buying, selling, financing, leasing, renovating, relocating, expanding, operating, renewing or demolishing a space-and when they should take that action.
The business offers services that let clients focus on their business, he says.
The Cabot Group mainly serves clients in Western New York, but recently it sold an apartment portfolio in Florida on behalf of the Max and Marian Farash Charitable Foundation.
It also has grown through acquisition. In November, the Cabot Group announced it had acquired Adams Mortgage Capital LLC, a mortgage brokerage in the town of Greece.
"We are always looking for ways to improve," Smith says.
Smith is often on the job before sunrise and spends his days working with key personnel at the office, making sure everyone is in synch with client needs.
He spends the rest of his time with clients, often visiting their places of business. It is not unusual to find him at a client’s office or in the boiler room of one of that client’s buildings.
"I learned from (the late) Max Farash that you can’t manage clients’ real estate from an office; you have to go out and see it," Smith says.
The best part of the job is helping his clients save money and expand their businesses.
The outcome of those rewards includes a ripple effect that can benefit the community when a business is successful. Take the University of Rochester, for example. Smith has worked with the school for years. It is now a key economic force in the region and the area’s largest employer.
Ronald Paprocki, UR chief financial officer and senior vice president for administration and finance, has worked with Smith roughly 15 years. The Cabot Group has provided real estate advisory services to the university, and Smith has been a consultant to Paprocki on several real estate matters.
"Mike is the consummate professional who is an expert in the field in general and knows the local market and the key players in this business," Paprocki says. "I can always count on him for sound advice."
Paprocki also spoke of Smith’s integrity.
"He can be tough-minded, but he is a person of kindness and generosity," Paprocki says.
Smith describes his leadership style as demanding, but in a respectful way.
"It has to be done right, but I don’t yell and scream to make sure it gets done right," he says.
He has high standards for himself as well as his employees.
Smith says having a personal life is just as important as work, and he aims to maintain that work-family balance.
"I have no intention of retiring, ever, period," he says. "But I might begin to do more things (off the job) that I didn’t have time to do before."
That could include traveling with his wife, Alice. The two particularly like visiting places such as the Caribbean, France and San Francisco.
They also enjoy spending time-and taking trips-with their children and grandchildren.
Smith says he would not have it any other way. His Linden Oaks office-which features a wall of windows that looks out onto trees-is filled with family photos, and he gets a charge out of telling funny anecdotes about his nine grandkids, who range in age from less than a year up to 7.
The entire family recently took a trip to Florida, renting a massive beach house. He admits there was the occasional calamity, but when asked if they would take another family trip, Smith says one is already in the works.
He and his wife live in Pittsford. They have two daughters, Gretchen, 40, and Hanna, 38, and a son, Adam, 36, who joined the company about four years ago.
When he is not working, Smith regularly hits the gym to work out. While he loves to travel, his favorite pastime is being with his family.
Richard Dorschel, president and CEO of the Dorschel Group, has known Smith more than 30 years. The two are business associates as well as friends who often travel in a group of couples.
Dorschel spoke of Smith’s determination, grit and self-discipline, rising from humble beginnings to the head of a successful firm.
"He’s a man of his word," Dorschel says. "If Mike makes a commitment to you, you can bank on it."
In addition to his business success, Dorschel says, Smith is a true family man and half of a couple that people enjoy spending time with.
"They are one of those couples everyone wants to consider their friends," he says.
He also talked about Smith’s character and commitment to area causes, saying Smith has been a fundraising leader and key donor for the University of Rochester Medical Center’s Golisano Children’s Hospital. The hospital kicked off a fundraising effort last year with Smith as co-chairman.
To lead by example, Smith and his wife pledged $1.3 million.
The gesture personifies Smith’s character, Dorschel says.
"It’s hard to find a flaw in Mike Smith," he says.
Position: CEO, the Cabot Group Inc.
Education: B.S. in corporate finance, Miami University, Oxford, Ohio, 1967
Family: Wife, Alice; daughters Gretchen, 40, and Hanna, 38; son, Adam, 36; nine grandchildren
Activities: Family, travel, exercise
Quote: "We get paid to save and make our clients money."
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