Rick Caruso: Why Billionaire Rick Caruso Gives His Personal Cell to Strangers and Neighbors | E177

Summary

Podcast Summary: In Search of Excellence

Episode: Rick Caruso: Why Billionaire Rick Caruso Gives His Personal Cell to Strangers and Neighbors | E177

Host: Randall Kaplan
Guest: Rick Caruso
Date: December 10, 2025

---

Episode Overview

In this wide-ranging conversation, real estate visionary Rick Caruso joins Randall Kaplan to discuss resilience, building genuine communities, business success, and Caruso’s personal journey from humble beginnings to shaping Los Angeles’s landscape. Caruso reflects on family influences, learning from failures, the power of second chances, and the critical importance of community engagement—underscored by his practice of sharing his personal cell phone number with neighbors and critics alike. Practical and philosophical throughout, Rick shares actionable lessons on entrepreneurship, public service, and redefining excellence.

---

Key Discussion Points & Insights

1. Family Background and Early Influences

• Humble Beginnings:
  Caruso’s grandfather was a gardener who immigrated from Italy and worked in Boyle Heights, Los Angeles.

  • Rubber Band Reminder: Caruso uses a rubber band to keep his money, not a money clip.
    • “It reminds me of where I began, where the family began, that we had very humble roots.” (01:42–02:11)

• Early Aspirations:
  At five years old, Caruso told his father he wanted to “own those buildings” overlooking Los Angeles, inspired by weekends riding in his grandfather’s gardening truck.

  • "I want to be a builder, I want to be a developer. I want to own those buildings." (02:45–03:11)

2. Lessons in Resilience: His Father’s Legal Troubles and Comeback

• Father’s Indictment and Resilience:
  Caruso’s father, a successful car dealer, was indicted and spent time in jail.
  Caruso credits his father’s comeback—founding Dollar a Day Rent a Car and selling it for over $70 million—as a masterclass in resilience.
  • “The success comes because you’re willing to stand back up and keep going in spite of failing. You're going to fail multiple times. But every time that you do that, you get stronger, you get smarter, you get better.” (07:33–08:30)
  • "I'm also a believer that more is caught than taught... you really learn more by watching." (08:30–08:50)

3. Second Chances, Law, and Compassion

• On Giving People Second Chances:
  As a proponent of both enforcing laws and compassion, Caruso sees second chances as essential, especially for the homeless.
  • “We need to be a society of laws, and at the same time, we need to be compassionate and we do need to give second chances...I think people can redeem themselves, work hard, come back and do a better job.” (09:08–10:11)

4. Tackling Homelessness: A Critique of Government Inefficiency

• Direct Philanthropy vs. Systemic Change:
  Caruso donates and works hands-on with organizations combating homelessness, criticizing inefficiency in public spending.
  • “The issue isn't how much money can you spend. The issue is, are you spending it the right way?” (11:50–12:09)
  • The city spends up to $900,000 per person to house the homeless—a "ridiculous amount" that "isn't working."
  • Caruso advocates for scaling up effective local organizations with strong metrics and accountability. (13:09–14:51)

5. The Value of Hard Work and “Menial” Jobs

• Advice to Young Adults:
  Caruso believes in paying dues and working hard, whatever the job.
  • “You can't escape hard work. If you want to be successful, you have to go through that cycle. And I went through it. Everybody that's been successful goes through it.” (15:47–16:28)
  • "You're going to look back...and realize everything is about taking a step and building a platform to take the next step." (16:28–17:08)

6. Education—College and Graduate School

• On the Necessity of College:
  Caruso values higher education but doesn’t see it as essential for everyone.

  • “I don't think it's necessary. I think it's a really great option. It's not the right option for everybody. ...Do I think colleges are wonderful? I do. I think they're great, but they're not for everybody.” (18:37–19:00)

• Parental Advice on Graduate School:
  He discourages parents from forcing career or educational paths, advocating for informed encouragement instead.

  • “Younger people should make a decision on their own at the end of the day. And you can always pivot.” (20:44–21:27)

7. Starting in Real Estate: From Duplexes to The Grove

• First Property and Learning by Doing:
  Caruso’s first duplex on Midvale and Massachusetts helped him learn every aspect of property management—painting, gardening, leasing.

  • “It really helped me fashion the company I have today on how you can create value...” (23:52–24:39)

• Creative Financing with Parking Lots:
  Structured deals that required little capital by leasing to his father’s car rental company, leveraging those leases for bank financing.

  • “Basically, I got 100% financing. I didn't have the money. ... It became a great business.” (25:07–26:17)

8. Innovating Retail: Building Community Destinations

• From Burton Place to The Grove:
  Caruso built his first retail center without industry rules holding him back, focusing on outdoor space and amenities.

  • “Sometimes not knowing what you're doing is a real gift because you're not locked into the rules of the road.” (27:12–28:21)

• The Grove's Vision:
  Each project was an evolution—maximizing outdoor and community space, focusing on experience over square footage.

  • “We're in the business of enriching lives. And when you're in the business of enriching lives, you're not building a big box with no windows.” (29:03–29:53)

9. Entrepreneurship: Embracing Uncertainty

• Confidence and Adaptability:
  Caruso advises believing in your ability to figure things out, and quickly pivoting from mistakes.
  • “There is a solution to every problem. ... If you keep working towards finding a solution, you'll figure it out.” (29:33–32:01)

10. The Business Model: Obsession with Customer and Guest Experience

• Secrets to Exceptional Performance:
  The Caruso model focuses relentlessly on guest and tenant satisfaction—all details matter, from safety to music to landscaping.
  • “We are completely focused on the consumer. ... You have to have both [guest experience and customer (retailer) experience]. … When you leave [the Grove], you say ‘that was a great experience’.” (39:17–40:36)

11. Responding to Critics

• Tuning Out Naysayers:
  Caruso ignores architectural critics, focusing instead on what works socially and commercially.
  • “A critic is a critic. I don't spend any time on that.” (40:55–41:37)

12. Community Engagement: The Cell Phone Principle

• Personal Accessibility:
  Caruso gives his personal cell number to community members—including critics—and attends every neighborhood meeting himself.
  • “I've done that since the day I built my first project. ... I need to listen to you. I need to hear what your concerns are.” (43:03–44:39)
  • “We pride ourselves in being a good neighbor from the beginning to the end. We remain a good neighbor in the community.” (44:39)

---

Notable Quotes & Memorable Moments

• “The issue isn't how much money can you spend. The issue is, are you spending it the right way?”
  — Rick Caruso [11:50]
• “Sometimes not knowing what you're doing is a real gift because you're not locked into the rules of the road.”
  — Rick Caruso [27:12]
• “You can't escape hard work. If you want to be successful, you have to go through that cycle.”
  — Rick Caruso [15:47]
• “There is a solution to every problem. It may not be the solution you want, but there's a solution out there.”
  — Rick Caruso [29:33]
• “We pride ourselves in being a good neighbor from the beginning to the end.”
  — Rick Caruso [44:39]
• “Define your business in a way that gives you permission to do things that your competitors don’t do.”
  — Rick Caruso [34:09]

---

Timestamps for Key Segments

• The Rubber Band Lesson – 01:42
• Resilience: Father’s Downfall & Comeback – 03:38 to 08:35
• Giving Second Chances/Second Chance Policies – 09:08
• Homelessness and Systemic Solutions – 11:14 to 14:51
• The Value of Hard Work (Advice to Young Adults) – 15:41
• College: Necessary or Not? – 18:08 to 19:00
• Starting Out in Real Estate – 23:08 to 26:20
• Retail Innovation: Breaking the Rules – 27:12 to 29:03
• Entrepreneurship and Learning by Doing – 29:03 to 32:08
• The Grove: Vision and Execution – 32:40 to 36:02
• The Power of Cold Calling & Networking – 36:20 to 38:32
• Three Secrets to Caruso's Business Success – 39:08 to 40:36
• Handling Critics – 40:36 to 41:37
• The Rosewood Miramar & Cell Phone Principle – 42:33 to 44:39

---

Conclusion

This episode is a masterclass in resilience, humility, community-centered business, and innovative thinking. Rick Caruso’s journey shows that personal accessibility, consistent learning, embracing hard work—even the “menial” parts—and focusing on genuine human experience create lasting value and a powerful legacy. For listeners aspiring to excellence, his example offers both practical guidance and deep inspiration.

Transcript

[Host]

Why doesn't a billionaire take a billion dollars, go buy a ton of land out and build a community to help homeless people?

[Rick Caruso]

The issue isn't how much money can you spend. The issue is are you spending it the right way?

[Host]

Should we be listening to our parents? Are they giving us advice?

[Rick Caruso]

Well, I think you should always listen. You should always listen. That doesn't mean you should do what they want you to do. Sometimes not knowing what you're doing is a real gift because you're not locked into the rules of the road. If it grows or it flows, it goes.

[Host]

How important is resilience to our success?

[Rick Caruso]

Oh, I think it's incredibly important because as you know, you have to fail. You have to take a chance and fail, and you're going to fail. The success comes because you're willing to stand back up and keep going.

[Host]

Welcome to In Search of Excellence. My guest today is Rick Caruso, the most influential real estate developer in Los Angeles who has reinvented the retail shopping experience by turning shopping malls into lifestyle destinations. His company, Caruso, owns 10 major retail and lifestyle destinations, including Palisade Village, including the Grove, which has over 20 million visitors a year, which is more than Disneyland. Rick ran for mayor in Los Angeles in 2022, lost by a very narrow margin. And we're going to talk about today what is political asp are.

[Rick Caruso]

Rick, thanks for having me.

[Host]

Welcome to In Search of Excellence. So I always start with family, and I want to start with your paternal grandparents. And I'd like you to tell us about the rubber band that goes around your money.

[Rick Caruso]

Oh, my God. You did some good research. My grandfather was a gardener. He was an immigrant. Started out in Uniontown, Pennsylvania, in the coal mines and then moved to Boyle Heights with his family. And I remember as a young man, he had his. His money. And it had a money clip. Not a money clip. It had a rubber band on it. And so I don't have a money clip. I use a rubber band because it reminds me of where I began, where the family began, that we had very humble roots, and I think that's an important thing to remember.

[Host]

And your grandmother Josephine was a baker, worked in a bakery.

[Rick Caruso]

Well, no, she was a homemaker.

[Host]

She was a homemaker.

[Rick Caruso]

She was a great baker. She was a great cook. She was sort of this quintessential Italian mom, grandmother, but she was a homemaker. My grandfather was the gardener.

[Host]

Let's move to your parents. And I want to start with your dad. And we're going to take it in a couple different sections, okay? So a lot of us when we're younger, we sort of know what we want to do. But at five years old, you're living in Trousdale Estates and you're looking over the city and you tell your dad, I'm going to own this one day.

[Rick Caruso]

I want to be a builder, I want to be a developer. I want to own those buildings. Yeah. I don't know. It was just the way I was wired. Isn't that crazy? It really was a blessing because it is what I've always wanted to do and I was able to eventually start a company and do that.

[Host]

But. What, what, what? I mean, you're five years old. I'm a five year old right now. And she wants to paint nails. You know, she, she's her nine year old sister. Definitely into the nails, but, you know, five is pretty young.

[Rick Caruso]

Pretty young. Yeah. I don't know. I can't. I can't explain it other than that's just the way I felt when I drove around. You know, I spent a lot of time with my grandfather in his gardening truck doing rounds on the weekends, and I saw a lot of Los Angeles and I became enamored with Los Angeles and with architecture, with buildings, with plants, you know, and all those kind of things. So it just was the way I grew up and it's the way my DNA was.

[Host]

All right, now we're going to talk about your dad, Rick. We're going to take it in two parts.

[Rick Caruso]

Okay.

[Host]

We're going to take it in the first part, his legal trouble, and then we're going to talk about his comeback, which is amazing. So when you were in the first grade, you had kids making fun of you for your dad who was indicted. He owned car dealerships.

[Rick Caruso]

Right.

[Host]

There were seven people indicted from his company.

[Rick Caruso]

Right.

[Host]

He was a leading car dealer in Los Angeles. He was well known.

[Rick Caruso]

He's a leading car dealer in the world at the time.

[Host]

Very young man, number one Dodge dealer in the country.

[Rick Caruso]

Yep.

[Host]

He was a local ad personality. People knew him.

[Rick Caruso]

Yep.

[Host]

And then someone made fun of you and a nun had to interfere. How did that affect your confidence at that age? And how do you translate today into you're dealing with public criticism when you are a very public figure these days and people have a lot to say about public figures.

[Rick Caruso]

Well, let me tell you, that nun who I remember like yesterday, what's her name?

[Host]

Give her a shout out.

[Rick Caruso]

Yeah. Well, there was Sister Stella, who was the principal, and Sister Elizabeth. And she was Sister Elizabeth. And she was this very large, beautiful lady. And of course, back in the day, they had the full habits and whatnot. And when that incident happened and I started crying, she literally just sort of folded me into her habit, you know, and comforted me. Listen, it was something I didn't really understand. My dad and I never talked about it until very much later in his life. He was very much ashamed of that. What happened. He ultimately was vindicated, but many years later was vindicated and the charges were dropped. But he had spent time in jail when I was either before I was born or just born. So it has always stayed with me in a great sign of resilience, a great sign of humility, a great sign of what you can do if you work hard and come back. And he worked very hard to come back. So I really learned a lot watching him. But it was tough. Yeah, of course it's tough. And I still carry it with me. But I carry it with me in a good way because I'm very accepting of everybody, no matter sort of how they've gotten there or where they come from. Because growing up with immigrant grandparents who were very poor, growing up in a household where your father did go to jail and lost everything and had to rebuild it back, and watching him do that, it certainly changed the way he lived his life and it certainly influenced the way I live my life because my dad really wanted me to go to law school in order to protect myself, and he really wanted me to stay out of public service.

[Host]

Right.

[Rick Caruso]

So that was never on his list of things for me to do.

[Mentor/Advisor]

I hope you're enjoying this video so far, but before we jump back in, I want to know if you've ever thought about what you need to do to reach the next level success in your life. Over the last 25 years, I've been an advisor to more than 50 companies. I've invested nearly 100, including Google, lift and Seagate. And I also co founded a company that today is worth more than $15 billion. I've been incredibly blessed in my journey and at this stage in my life, I want to give back. I want to share the lessons I've learned so you can reach incredible success way faster than I did in my own journey. I've learned that having the right mentor is a massive advantage to achieving our goals. I'm hugely passionate about mentoring others, and I'm looking for a few hungry entrepreneurs who are excited to take action on their journey to incredible future success. So if that's you, I've got an opportunity. In the description of this video, there's a Link where you can apply to work with me. All you need to do is answer a few simple questions, and if you're a good fit, my team will reach out so we can build a game plan together. All right, now let's get back to the video.

[Host]

So we'll hit the law school in a little while. We're going to talk about usc, we're going to talk about Pepperdine Law, But I want to go back to second chances. So he ended up starting dollar a day rent a car.

[Rick Caruso]

That's right.

[Host]

With 18 Volkswagen Beetles.

[Rick Caruso]

Yeah, yeah.

[Host]

A dollar a day plus gas.

[Rick Caruso]

Yeah.

[Host]

And built a very successful company over 35 years. They sold to Chrysler years later for $70 million, which in today's dollars, $183 million.

[Rick Caruso]

Yeah, it was actually sold for a little bit more than that, but that was close to it. It was close to it, but he built a hell of a company, built a global company.

[Host]

What's the lesson there? How important is resilience to our success?

[Rick Caruso]

Oh, I think it's incredibly important, because as you know, you have to fail. You have to take a chance and fail, and you're going to fail. The success comes because you're willing to stand back up and keep going in spite of failing. You're going to fail multiple times. But every time that you do that, you get stronger, you get smarter, you get better, you have some wisdom, you get some calluses. It doesn't bother you as much. You take a little bit more risk. You know, I've always told people, you have to live over your skis. You have to feel a little bit uncomfortable, a little bit out of control. It has to be managed. But unless you do that, you're not going to accomplish a lot. And dad could have certainly just quit at that point and done something else or whatnot, but he didn't. He worked very hard to come back. So I'm also a believer that more is caught than taught, especially in a relationship between a mom and dad and kids. Your parents can tell you a lot of things, but you really learn more by watching. And. And I watched my dad just work immensely hard, and I watched my mom being very supportive of him. And that gave me a lot of confidence in life.

[Host]

We're going to talk about some political issues later, but I want to start with one here. It's a story about giving people second chances. Okay, so you have a stance to be hard on crime. All misdemeanors in Los Angeles you want prosecuted. That would include trespass. Things that today, the day is not prosecuting, doesn't believe it's worth the effort. What's your view on people who are. If you were the mayor, are you going to give people second chances?

[Rick Caruso]

Sure. Well, let me. My position is that we should be enforcing the law. Whatever the law is, we should be enforcing the law. If we don't, if the city, if the residents, if people don't believe the law is right, we should go change the law, but we shouldn't ignore the law. The law is there for a reason. And I think we need to be a society of laws, and at the same time, we need to be compassionate and we do need to give second chances. So I'm a big believer in second chances. Absolutely. That, and I think people can redeem themselves, work hard, come back and do a better job. That's why I'm a big proponent in the homeless sector of giving people a path to rebuild their lives. We shouldn't be leaving people on the streets. But I do want to say that what's happened in Los Angeles, we've chosen not to enforce a lot of laws. And I think it's hurt our city tremendously. And, you know, there's just not a good ending in that, in that regard. But I also do believe that you've got to be compassionate on how you enforce the laws.

[Mentor/Advisor]

I hope you're enjoying this video so far, but before we jump back in, I want to know if you've ever thought about what you need to do to reach the next level of success in your life. Over the last 25 years, I've been an advisor to more than 50 companies. I've invested nearly 100, including Google, lift and Seagate. And I also co founded a company that today is worth More than 50, $15 billion. I've been incredibly blessed in my journey and at this stage in my life. I want to give back. I want to share the lessons I've learned so you can reach incredible success way faster than I did. In my own journey. I've learned that having the right mentor is a massive advantage to achieving our goals. I'm hugely passionate about mentoring others. I'm looking for a few hungry entrepreneurs who are excited to take action on their journey to incredible future success. So if that's you, I've got an opportunity. In the description of this video, there's a link where you can apply to work with me. All you need to do is answer a few simple questions, and if you're a good fit, my team will reach out so we can build a game plan together.

[Host]

All right?

[Mentor/Advisor]

Now, let's get back to the video.

[Host]

You mentioned. Homelessness, huge issue in Los Angeles, homeless capital of the United States. Depending on what numbers you look at.

[Rick Caruso]

It'S the capital no matter what.

[Host]

Here's a question for you. And I've always thought about this, right? There's billionaires out there. According to forbes, you're the 255th wealthiest person in the United States, $5.9 billion. So why doesn't a billionaire take a billion dollars, go buy a ton of land out in Palmdale or wherever it's. You know, you can buy a lot of property there and build a community to help homeless people. You could get 30, 40,000 people off the streets, probably build housing, hospital, mental health issues. Have you ever thought about doing that?

[Rick Caruso]

Well, I donate a lot of money to the homeless situation. I donate a lot of money and very active in organizations that support families that are at or below the poverty line to prevent people going homeless. And very involved in education, very involved in Par Los Ninos, which is down on skid row, educating kids and helping families. So Tina and I are very generous. More importantly, we're very active. You know, we're down there working, and so we do a lot. Can we do more? We're always working hard to do more, but I don't, as an individual, doesn't have the power the government has. And in order to solve the homeless problem, you not only need to build housing, you need to wrap services around the housing. And where we have failed in the city is we've wasted billions of dollars. The numbers that are coming out now are roughly $900,000 the city has spent for every person they've gotten off the street, which is a ridiculous amount of money. And it isn't working because the homeless population continues to grow. So you have to be smarter about it. So the issue isn't how much money can you spend. The issue is, are you spending it the right way and is it being productive and effective? And it is giving people a path forward, and there's ways to do it. And if I was mayor, I would be doing it very differently than they're doing it today.

[Host]

What are the first three things you would do that are different than what Karen Bass, who I think is an absolute disaster?

[Rick Caruso]

Okay, well, I'll let you say that. Listen, one is you want to have a plan that is that you can execute on, and you've got metrics around it. But just let's take a look at organizations that do a really good job. Let's look at the downtown Women's Center. Let's look at Common Concern, Union Rescue Mission. They take people in as they are, they give them housing, they give them services that they need. And they have a 90% effective rate, meaning 90% of the people walking in the door do not go back to homelessness. They've got mental health care, they got drug addiction care. We should be funding and empowering those organizations that are already up and scale them so that they can take more people in. Downtown Women's center just built new housing down on skid row. It took them six years to do it because of the permitting problems, the funding problems. We can solve all of that. So that's what I would be doing. I would be taking the funds that we have, putting it behind organizations that have actual metrics, that have worked, that have a story of success and scaling them up. And we'd be doing it for a fraction of the cost because on average, they're building units at about 400,000. You take Hope the Mission. They're spending $100 a day housing people and giving them services. So we've got all these incredible organizations out there doing it. And what are we doing as a city? We're spending billions of dollars and getting nowhere, and there's no accountability. And now they're looking for the money that they lost because there's billions of dollars unaccounted for. So I would handle it and manage it very differently.

[Host]

All right, let's go back to Rick Caruso growing up.

[Rick Caruso]

Okay.

[Host]

We're all made of what jobs we had when we were younger. And you wash cars at the dollar rent a lot for your father as a teenager. We're around the same age. You're a few years younger than I am. And what I've noticed in today's generation is that those students, young adults coming out of school, are more entitled today than they were when we were coming out of school. They don't want to do the hard work, what I call the shit work. So what's your advice? We have a lot of people in the 18 to 25 year old category, men and women listening to the show, who are thinking, you know, I really don't want those menial jobs. Are those jobs necessary to our success and how are they critical to the immense success that you've had?

[Rick Caruso]

If I could just answer the question by addressing what does it take in my opinion, to be successful?

[Host]

Yes.

[Rick Caruso]

In my opinion, what it takes is discovering and spending a lot of time on figuring out what you're good at and then continuing to work Hard at what you're good at. A lot of people talk about go do what you're passionate about, and I think that's interesting and great. But what you're passionate about may not be what you're good at. I may be passionate about singing in the shower in the morning, but if I wanted that as my career, I'd be broke. Right. So now if the two things intersect and you're good at something and then you're passionate about it also, that's when magic happens. Because hard work never feels like hard work. But the reality is, to your point, you can't escape hard work. If you want to be successful, you have to go through that cycle. And I went through it. Everybody that's been successful goes through it. And having a small job, maybe it's a job that you don't like for a while, I think is actually really healthy. I think it's character building. I think you learn discipline, you develop good habits because of that, and then you build off of that, and you're going to look back in your life later years on it, I think, with great fondness, and you're going to realize everything is about taking a step and building a platform to take the next step. And unless you pay your dues and you work really hard and you work really smart, you're probably not going to get to where you want to be. But you can. I think everybody's got the ability to do whatever they want to do.

[Host]

I mean, when I was a teenager, I would knock on doors. Can I pull weeds?

[Rick Caruso]

That's good.

[Host]

Pole climbing was great. I'd come back, my nails were filthy dirty. I was dirty. College of Michigan. Stuffed envelopes for 3 cents each. Worked at amp bagging groceries. These shaped who I am today. Young people will come to me and they, they'll. I said, you know, 90% of my day is shit work. 10% is where you create the value, but you still have to do it to be successful.

[Rick Caruso]

Yeah. Yeah.

[Host]

Are you still doing the nitty gritty running your company?

[Rick Caruso]

Yeah, absolutely.

[Host]

So I've got a great.

[Rick Caruso]

Listen, I got a great team. You know, I. I can't touch everything like I used to touch. The scale of the company is too big. But I have an incredible team, and I'm able to lean in on things that I want to lean into or I think they need to be sort of moved along. But setting strategy, setting goals, encouraging people, thanking people for what they're doing and working hard. We have a really incredible team at carusa. I'm very Proud of them.

[Host]

Let's talk about college.

[Rick Caruso]

Okay.

[Host]

Your dad went to usc, you went to usc. You were on the, you ran the USC board for four years. You took over after a scandal major.

[Rick Caruso]

Yeah.

[Host]

There's a lot of conversation today that college isn't what it used to be and that college isn't necessary today. You may have a very biased view because of your very strong USC ties. You've given over $40 million to the school. Is college necessary today? And what do you think are the three main lessons students learn in college if they do go to college?

[Rick Caruso]

I don't think it's necessary. I think it's a really great option. It's not the right option for everybody. I think trade schools are great. I think any place you go where you can build a skill that you can then be employed, raise a family, hopefully buy a home, you know, build a good life, whatever that definition is for you. It's a very personal definition, I think is great. Do I think colleges are wonderful?

[Host]

I do.

[Rick Caruso]

I think they're great, but they're not for everybody. And listen, USC is, is a wonderful university. My experience there was terrific. I loved it. It did a lot for me. I wasn't particularly a great student. I didn't have the discipline I should have had. And I think one of the important things, the most important thing is learning about yourself. You know, what you're good at, what you're not good at, what you enjoy, how you can excel building that discipline, you know, building those hard edges around you that you can rely on and that you could build your business, build your career, whatever that may be. And it's also fun, you know, from a social standpoint. You get great social skills. You meet people from around the world, around town, around the country that you would not otherwise meet. And you expose yourself to things that maybe also are a little bit complicated, difficult, uncomfortable, and you learn how to get through them, because that's life. So I think the whole system is great, but it's not the only way to be successful or fulfill your dreams, whatever those dreams may be. I think people get too caught up in this, is the only way you're going to be able to get to what you want to do. There's never only one way. There's multiple ways to get to where you want to be.

[Host]

You went to the Marshall School, and then you wanted to go to business school, graduate business school, and your dad said, you're not doing that. You're going to law school. He threw down the hammer, and ultimately you said, it was the best decision, one of the best in your lifetime.

[Rick Caruso]

Right?

[Host]

I went to law school. I went to Michigan. I wanted to go to business school. I don't test well. I got into Northwestern Law School, and I was grateful to go, but I hated every minute of it. Okay, do you think graduate school is important today? And would you recommend that parents force their kids to go to school that they don't want to go to?

[Rick Caruso]

I wouldn't recommend parents force. I would recommend that parents encourage and give a good reason why younger people should make a decision on their own at the end of the day. And you can always pivot, you know, you can always go back to school. You know, there's not a rule that the many you get out of college, you got to go right into graduate school or whatever the case is, people go back to school. One of my sons did that. He went back and got a master's and went back and got basically the equivalent of a PhD a few years after that. Those were all his choices. One son did go to law school. That was his choice. I was glad they did, you know, but it also depends on the individual. So I think, you know, I know. Tina and I, our rule of parenting is, you know, there's a lot of unconditional love. We obviously want to give a lot of good guidance. But as kids grow up, you know, they make their own decisions. And we're fortunate. We've got four kids that have made really great decisions. They're not perfect. Nobody is. But they're really good human beings. I'm very proud of them.

[Host]

You graduated law school, then you went to work at a firm called Finley Cumble, one of the biggest firms doing real estate law. Then it cratered. It went bankrupt.

[Rick Caruso]

That's right.

[Host]

And you said at some point that if you listen to everybody else, you wouldn't be doing what you are doing today. I worked at Sun America. Eli Broad was my boss. I was the assistant to the chairman. I think you guys knew each other and crossed paths at some point.

[Rick Caruso]

Y.

[Host]

And when I left to start a technology company, everyone thought I was absolutely nuts.

[Rick Caruso]

Okay.

[Host]

You know, my mom said, no. My dad said, what are you doing? You have a managing director title. Look at what you're doing. Should we be listening to our parents when they're giving us advice?

[Rick Caruso]

Well, I think you should always listen. Should always listen. That doesn't mean you should do what they want you to do, you know, unless it's something dangerous. But in terms of career, you know, my dad was my best friend when My dad was alive and we talked every day. The greatest gift he gave me, one of the greatest gifts he gave me was not making me feel guilty about not going into his business. I know he wanted me to. It wasn't something that I felt passionate about, nor did I feel like I would be good at it in the car rental business. And I really wanted to be in the real estate business. Really informed me one, it was a great gift and two, it informed me in raising my own kids, you know, they've got to make their own decisions and what's best for them. I, I don't. I think it's tough to be truly happy if all you're doing is trying to accommodate your parents wishes. At some point that's going to catch up to you.

[Host]

We always remember our first deal. When I came to LA in 1993 after graduating law school with $3,000 in the bank, I lived on Midvale. And your duplex, the first one you bought was on Midvale in Massachusetts?

[Rick Caruso]

Yeah. We're a small world. That's right.

[Host]

Tell us what that was like when you saw that building and then tell everyone out there that of the care and love you have to give that thing while you have a full time job as a lawyer, you're doing the gardening, the painting, everything else.

[Rick Caruso]

Yeah, it was great experience, you know. I wanted to invest in real estate. I was practicing law and there was this duplex on the corner of Midvale and Massachusetts. It's still there today.

[Host]

Do you still own it?

[Rick Caruso]

No, I still don't own it. I wish I did.

[Host]

You should buy it.

[Rick Caruso]

I know, I got convinced.

[Host]

Make it as a museum. The Caruso Museum.

[Rick Caruso]

No, I wish I would. I wish I still had it. But it was a great property. I learned so much because I was the painter, I was the gardener, I was the leasing agent, I was everything and did it on the weekends and all those kind of things. It really helped me fashion the company I have today on how you can create value, how if you make something nice and attractive, you can enhance value. All of those kind of things and how to do the leasing and convince somebody to lease the place. So it was a great experience, a really great experience. And I kept it for many, many years. And then as my company grew, some members of the company really convinced me to sell it because they felt it was taking more time than it should take. What not. I shouldn't have listened to that and kept it.

[Host]

There's a price for everything.

[Rick Caruso]

It's the only. I've never sold a property We've built to date.

[Host]

Right.

[Rick Caruso]

We never will. I didn't build that property, but I still shouldn't have sold it. Good real estate, you just keep it.

[Host]

Let's talk about the parking lots and how those deals work. So you bought parking lots and then you're. You were. You got your dad a dollar rent a car with a credit tenant to lease them and then you could get bank financing.

[Rick Caruso]

Right.

[Host]

As well. So walk us through in simple terms for those people who don't have a math background, a finance background.

[Rick Caruso]

Sure.

[Host]

How all that worked.

[Rick Caruso]

I was eager to get out of the law business. And I was an okay lawyer, but not particularly great. And I didn't want to be a lawyer my whole life. And so I went to my dad with an idea because they needed land to park cars. And I said, would you allow me to buy the land, lease it back to you and then I can go to the bank with that lease and finance off of that lease. And Basically I got 100% financing. I didn't have the money.

[Host]

No money down.

[Rick Caruso]

No money down because of the credit of $. But also it was just land, asphalt, paint, the stripes and lighting. So there wasn't a lot of improvements. So the banks were comfortable with that. I did about 13 of those deals with dollar and then I did it with Enterprise Rent a Car. We did a few with Budget Rent a Car and I kept expanding that. It became a great business. And then what happened was, is all of these properties were adjacent to airports. Airports started expanding. They needed the land. An IRS code that basically says if a government entity buys your property, you have the ability to reinvest within three years and not pay any taxes. So as the airport authorities were buying these properties then I used those to build the Grove or to build the Commons. I reinvested and I turned it into a development company.

[Host]

When I was in college, I worked for the Taubman company one summer.

[Rick Caruso]

Okay.

[Host]

And I was technically in the property management group. Nothing was on computers those days. So we were. I would look at all the rents and look at the last month's rent. It was very fascinating to me. They owned and built the Beverly center, which, you know, which is a major thing for Los Angeles. When that, when that came today it's kind of a third tier mall, for lack of a better word. I know you would never use those words, but I'm going to use those words. And you bought your first retail center called the burton Place in 1992, which is right around the corner from that. So that was as we Build our career. We're always looking to do kind of the next biggest thing. So what was the process by which you were going around LA to look at? It was a derelict disco. When you bought it, you raised it. But what were you looking at, you know, when you were looking at that building?

[Rick Caruso]

Yeah, we tore down the original building. There was an old nightclub on it. It was in an area that was a very strong retail area. Right. You'd had the Beverly center, you had a lot of retail around it. So I didn't know what I was doing. I mean, I was, I was learning as I, as I went. I had no background in development, I had no background in retail, I had no background in building. But I just felt strongly that I could figure this thing out. And you know, we had to vacate some land and we had to get the entitlements. It was trial by error. I mean, it was a great learning experience. But was able to get it approved, able to get it built, able to get it leased. And the building is there today. We're going to probably take that building down now and redevelop the property. But it was, it was a great experience and it was very successful. But I literally didn't know what I was doing. But I think it's important for people to understand sometimes not knowing what you're doing is a real gift because you're not locked into the rules of the road. Like you have to build a mall that's got a roof on it and there's no sunlight. Right. I didn't know the rules about building malls. So for me, I wanted to build what I enjoyed being outside, having landscaping, having a fountain, having areas to sit and have dinner outside and lunch and, and. And to people watch. And so if you look at my projects, there's this evolution as they were built. More outdoor space, more common space, more landscaping, more fountains. At the time, people thought I was crazy because the mall industry maximized building. And there was no, you know, there was an old saying, if it, if it grows or it flows, it goes. You know, malls didn't like that stuff. It was an expense. But my view was, you want people to come and enjoy themselves and stay longer and have dwell time. We're in the business of enriching lives. And when you're in the business of enriching lives, you're not building a big box with no windows. You're building something that actually makes people happy.

[Host]

The goal of my show is to inspire, motivate people to be the best they can be. Most People who listen to the show are business people or they're working in jobs where they want to succeed, they want to make more money. And I haven't done a former poll on this rig, but I'm guessing more than 50% of the people want to have their own business one day.

[Rick Caruso]

Okay.

[Host]

And so I've heard people like you who say, I'm going to go into something even though I have no idea what I'm doing.

[Rick Caruso]

Yeah.

[Host]

Is that what you're going to recommend to people who want to start their own business? Just go do it if you have no idea what you're doing?

[Rick Caruso]

Well, no, but the rule is you need to be smart. You need to do your homework, you need to do your due diligence, of course, but you also need to believe in yourself. And that's where I think it gets down to, what are you good at doing? What are those core competencies that you have and then build off of those core competencies? I just felt strongly that I had a vision of what I could achieve. And so I kept being very disciplined and worked at that vision. If I would have said, I'm going to start by building the Grove, that would have been a pretty tall order. I probably would have failed doing that. And so where I started was in real estate, was this duplex, was making sure that the lights worked, the lawn was nice, the flowers looked pretty, that it was the nicest little duplex along the street, that I could add value to it, that I could lease it for more. There was a guy. I'll give you a quick story. There was my duplex, and there was a duplex across the street. We were both having open houses, and there was a guy named Kenny Leventhal. And Kenny Leventhal was the son of the famous accountant, and he was. And I didn't know him at the time, and he was looking at the duplex across the street, came out, then he looked at mine, and he said to me, he said, why would I pay you more than living right across the street? I said, because every morning when you wake up and open your door and you look at this and you see the flowers and the lawn and the paint and everything's pristine, you're going to be upset that you don't live here. And he ended up living in that unit for about eight years. What validated my belief was if you make things a little bit nicer, you can incrementally move the needle on value, you can move the needle on rent, you can charge higher rents because there's Going to be better performance. I started there and I built off of that knowledge to get to building burton Place in 1992 and then moving on to Encino Marketplace. But I learned as I went, made mistakes as I went, and I would pivot quickly. I think one of the most important rules in business is make a mistake, pivot quickly, change it up. You know, don't dwell on the mistake, just change it up, try something else and see what works. But it has to start with this inner confidence that I can figure this out. I'm a big believer and my poor kids, their whole lives have heard this. There is a solution to every problem. It may not be the solution you want, but there's a solution out there. And if you keep working towards finding a solution, you'll figure it out.

[Host]

All right, so Burton Place, 1992.

[Rick Caruso]

Yeah.

[Host]

Then you got 10 years Marketplace and all these properties.

[Rick Caruso]

Right, right.

[Host]

Calabasio at a center. And then here comes The Grove in 2002, 10 years later, 640,000 square foot, 25 acre site, 50 high end stores. You revolutionized outdoor shopping by making it a community attraction. 20 million people go to the Grove every year, more than Disneyland, which is 17.5 million. What was the vision there? Where did, what was the first day you drove by and said, this is the old farmer's market. It's been here 100 years. Same family. I think I'm going to call up the owner and say, hey, I want to redevelop this whole thing.

[Rick Caruso]

That's what I did. I cold called.

[Host]

What was the moment?

[Rick Caruso]

The moment wasn't a moment. The moment was what I was just saying it was building things. And there was a. Continued to be an evolution, not a revolution, an evolution. I saw what worked really well in Encino and then we go did the promenade at Westlake and we did more of what worked really well. Then we did Calabasas and we did a little bit more, worked really well. Then when I got to the Grove, that area everybody told me was long dead. Don't touch it. You know, there was methane gas problems, the farmers market was in financial trouble, all this kind of stuff. I looked at it and I said, I've got this incredible piece of real estate here. I got Beverly Hills on one side, Hancock park on the other side. That's where local knowledge in real estate really matters. I think local knowledge is one of the most important things if you want to be in the development business in real estate. And I said, I'm going to just build upon what's worked and we're going to create our own environment now, which was very controversial. We're not going to open up to the street. We're going to create our own environment. Because I want to transport people to a better time and place. I want to enrich people's lives. And we want to celebrate a little bit of history. In Los Angeles, Louisiana Had a trolley. So why don't we do a trolley? And I'm flying back on, on from New York on United Airlines. And I'm going through their In Flight magazine. And there was this picture of a trolley, a double decker trolley in Hong Kong. And when I landed, I called my lead architect, who we still work together. He's the head of design for the company.

[Host]

What's his name?

[Rick Caruso]

Shout out to Dave Williams. Brilliant. I could never have done what I've done without Dave Williams. He is the genius of the design of all of this. Because I can explain to him what I want. I can't draw it. He gets into my head and together these things happen. But he is. He is a brilliant architect. And I said, I got this idea. Let's build a trolley. Let's have the trolley go through and connect it to the farmer's market. And it will be this physical and psychological connection between the Grove and the market. And of course, the Gilmore family that own the market, love the idea. But if. If I'm in the business of building a mall, you're never going to build a trolley. It's an expense. You make no money. It costs you a lot of money. And what do you get for it? If I'm in the business of enriching lives, a trolley makes sense. And I would say this to people in business. Define your business in a way that gives you permission to do things that your competitors don't do. Because every mall company was building malls. They all look alike, they all operate the same way. The business model is all the same. And when I'm in the business of building something that enriches lives. All of a sudden a fountain, the dances makes sense. Music makes sense. A park makes sense. Nice trees make sense. A trolley makes sense. And what it does is it changes your business model. And it bends the curve and puts a moat around your business. Where others have a tough time to compete. That's where you want to be in business. You want to be in business that has high barriers of entry that make it difficult to duplicate. I don't want to build a mall in the middle of the desert. Where if you took an aerial shot, it looks like the Face of the moon. Because it's easy to get the entitlements to do that. If you look at every one of our properties, they're in jurisdictions that are incredibly difficult to get entitlements. Go build a five star resort on the beach in California. It's like an impossibility. And then, by the way, have a train running through the middle of it.

[Host]

Right, right.

[Rick Caruso]

Those are the things that excite us is how we do things so differently because we look at it through the lens of the guest experience, the customer experience. You know, it's given us an ability to be competitive where other people just can't compete with us.

[Host]

You mentioned something really critical and it's been one of the hallmarks of my own successful career, cold calling. So you're driving around, you figure out who owns this property. It's a huge piece of property. How many times do you think they had been cold called before you got on the phone with them or you want to go see them?

[Rick Caruso]

I don't know. But I'm a big believer in cold calling.

[Host]

Tell everybody out there people are afraid to do it. Right. And why? How important is cold calling to our success?

[Rick Caruso]

I think it's one of the most important things, and I do it today. I call people I don't know. I reach out to them with no agenda and just say, I'd like to get to know you and learn how you did something you got to do that you can't be in a silo. You've got to get out of your office, get on the street, meet people, do different things. I got to tell you something, it saved us during COVID Nobody had a playbook in Covid. I started calling other CEOs around the country saying, what are you doing and how are you doing it? How are you protecting your employees? You know, how are you protecting your guests? How are you protecting your business? All these kind of things. I think being curious and asking a lot of questions, being humble, saying, I don't know how to do that, tell me how you did it, is incredibly valuable.

[Host]

So you have a calling card today, right? You're Rick Ruso. Everyone knows who you are. If they don't, they're going to Google you in a millisecond. He's a Force 400 guy worth $6 billion. I have a calling card. I'm a co founder of very successful $12 billion publicly traded technology company. I can make those calls as well. But what if people, 99% of people don't have that ability to do it?

[Rick Caruso]

Today you network. Networking is really important. Join. If you're in the real estate business, join a real estate club. Join ypo. Join. Join organizations that provide networking. That's how I got started. There was a guy named Carl Terzian years and years ago that sort of took me under his wing. His business was networking, and he would put me in a different groups and organizations. And I went on a hospital board and I got to know a lot of people. I was, you know, 25 years old. I had no idea what I was doing, but I started meeting a lot of people and learning from a lot of people and. And creating great friendships with a lot of people. And it was a huge help in my career.

[Host]

That's interesting. I mean, I met Carl Terzian as well when I was 26 years old and I came out here. Okay, I. I forget the club that was on top of the Regency Club. The Regency Club.

[Rick Caruso]

That's where yelled Court.

[Host]

Eli Broad took over that office to make it his family office.

[Rick Caruso]

Okay.

[Host]

At the. At the end of the day. Okay, so let's talk about the performance of the Grove.

[Rick Caruso]

I always wondered what happened to the old Regency Club. That was a great place.

[Host]

It's sales per square foot are three times the national average. Three of your 15 properties are within the top 15 of all properties. I think the only retail space that beats yours is the Bell harbor shops in Florida.

[Rick Caruso]

I think we're pretty close.

[Host]

Okay, maybe we're beating them now. Close by. So what are the three main secrets to your success? Why is your performance three times better than everybody else?

[Rick Caruso]

I have a lot of really smart, good people that operate the company.

[Host]

Okay, so team is number one.

[Rick Caruso]

The team is number one. The team. The passion of the team, the expertise of the team, and the commitment of the team. We build great properties, but most and most importantly, we are completely focused on the consumer. And we have two things that we take a look at every single day. We look at the guest experience, you walking onto the property, and we look at the customer experience. The customer experience is Nordstrom, Tiffany, Ali, yoga, whatever. That's our customer. They're paying our bills. We have to service them well. We have to make sure that we are doing everything we can, that when their customer shows up, they have a great experience and they come back over and over and over again. And then there's the guest experience. You walk on the property, it's clean, you feel safe, it's happy. The music is right. It's frictionless to get in and out of the garage. All of those Things we think about every day when we open up these properties. You have to have both of those things. People have infinite choices. They don't have to go to the Grove. They can go a million other places to go shop or to go hang out. I've got to give you a reason every day to show up there and to come back and when you leave to say that was a great experience. It's critical to do that. We do that in our hotel, we do that in our apartments, and we do it in our retail centers.

[Host]

Architectural critics panned the Grove. They said you were creating a Disneyland. It was ugly. They got people to complain about it. How important is it to tune out the naysayers? Because if we all listen to people who criticized us, we would never be where we are today.

[Rick Caruso]

Right.

[Host]

And then how good did it feel when at the end of the day, it worked and everybody loves it?

[Rick Caruso]

Yeah, listen, architectural critics are architectural critics. Okay, great. I'm sure there was critics of St. Peter's Cathedral and of the Coliseum. I don't spend any time listening to that. I really don't. What I spent a lot of time doing is going around the country and going around the world with the team and studying what works and what doesn't work. What streets are great and why is that street great? The height of the curb, the spacing of the trees, the rhythm of the lights, the energy on it, the scale. We go around and we look at what doesn't work. But people built it. For whatever reason, it. It's been failing. You want to learn from other people's failures, too, and other people's success. So, you know, a critic is a critic. I don't spend any time on that.

[Host]

So let's talk about the Rosewood Miramar Beach. One of my favorite properties.

[Rick Caruso]

Thank you. Me too.

[Host]

It is a. It is a spectacular 25 acre site on the beach in Montecito. 162 rooms.

[Rick Caruso]

That's right.

[Host]

Ty Warner bought it from Ian Schrager.

[Rick Caruso]

That's right.

[Host]

For $50 million. Then you paid $57 million a few years later. $50 million. Right. It's 47 and then $50 million rumored to cost $200 million, roughly, to build a property. No one really wanted that property. And one of the things that you did. I mean, the local residents didn't. I mean, there was a railroad going right through the property. You know, before you get down to that amazing restaurant, you get down to the beach. And for those people who haven't been there, it really is incredible. It's very Expensive, but it's. It's an incredible piece of property. Great hotel. One of the things that you did to overcome opposition, there was a ton of opposition. Right. This was an 11 year project.

[Rick Caruso]

And so, well, we got our entitlements within a couple of years, and there was a lot of opposition, a lot of concern, a lot of legitimate concern from the locals. But then we had the Great Recession and we put everything on hold.

[Host]

Okay. But one of the amazing things that you did that almost nobody does, and I always say this to people, by the way. I mean, I get criticized all the way. No one does that. And then I come back with, well, that's exactly why you should.

[Rick Caruso]

Well, it's true. So what did I do?

[Host]

And what do you do is you gave your cell number out to local residents and said, call me if you have any concerns.

[Rick Caruso]

Sure. But it's all about the community. You know, I've done that since the day I built my first project.

[Host]

You give your cell number out to people? Yeah, today.

[Rick Caruso]

Yeah. And yet so many people have my cell number.

[Host]

It's going to blow up after today. You're never going to be able to use your phone again.

[Rick Caruso]

I'm walking into a community. Our company is walking into a community. And we used to just be me and one other person when I built Burton Place. I'm asking permission to build something in your community, in your neighborhood. I need to listen to you. I need to hear what your concerns are. And what I need to do is I need to make the project represent what that community really wants and make sure what they really don't want, we don't do. Because I want them to advocate for me. I want them to be their project. I would have never been able to get the Grove approved, Palisades Village approved, Miramar approved. These are areas that are so tough on new developments if the community wasn't alongside with me to build these things. So we take a lot of time, and I go to every community meeting myself, and we have all these hearings with people, and we start out by saying, tell us what you want, tell us what you don't want. What are you worried about? And, you know, we were able to get that project approved. We were just able to get an expansion of it approved, you know, which is very unusual. And even with the coastal commission, a 500 vote, we're a good neighbor. We pride ourselves in being a good neighbor from the beginning to the end. We remain a good neighbor in the community.

Sam.