The Signet Podcast – Brian Shirken Transcript

In this episode, Eduardo Signet speaks with Denver commercial real estate broker, landlord, and investor Stuart Zall, founder of The Zall Company.

The conversation explores how relationships, tenant selection, networking, mentorship, long-term ownership, and neighborhood-building shape success in commercial real estate. Stuart shares lessons from his career in retail leasing, property ownership, Denver development, international projects, and the practical realities of working with landlords, tenants, brokers, contractors, and emerging brands.

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Podcast transcript

SIGNET: Stuart, thank you for coming. I have so much to ask you. I want to introduce you as the broker and landlord in the Denver market, although you do brokerage and properties everywhere, including a deal in China. You have quite a lot of experience. Do you want to say a little bit about yourself or introduce yourself?

STUART ZALL:

I am Stuart Zall, founder of The Zall Company, which I founded in 2000.
I did not grow up expecting to go into real estate, and I did not come from a multigenerational real estate family.
I studied accounting at the University of Denver, got my CPA, and started at Arthur Andersen, but I lasted only about a year.
I moved into real estate almost by accident after helping Steve Gettleman with accounting on a strip center, then being asked to help lease it by calling people from the phone book.
I learned by u201cdialing for dollars,u201d got results, and eventually moved through Lakeside Mall, Taubman, and outlet-mall projects around the country.
Taubman taught me the art of leasing, merchandising, and building tenant relationships across multiple markets.
In 2000, when my firm was bought, I chose to start my own business instead of moving, and the business grew from hired-gun leasing work into a brokerage company.
Along the way, I started buying properties when opportunities came up, often through partnerships, because I believe successful brokers should have some investment exposure to commercial real estate.
I eventually bought the Larimer building where we are now, partly because I needed space for my own company and could lease the rest to another tenant.
Having a storefront and a sign on the street has changed the business because people now drive by, see the company, and call.

SIGNET: It is so interesting. I love this area. I have been here a few times and have been to the restaurants. I did not realize everything was right on this block, like Barcelona, Federales, and other places. It is a cool part of town. How did you know this was going to become that?

STUART ZALL:

Sometimes you get lucky.
A friend from New York, Stephanie Rubenstein, was representing a concept connected to the founder of Lululemon, and they wanted a gritty part of town for a millennial worker-focused concept.
At that time, Larimer Street was very rough; Denver Central Market was not open, and there was very little there besides Ratio Brewery.
My friend saw something in the area that reminded her of Brooklyn, and I trusted her perspective even though I did not fully see it myself at first.
I made it a quest to find a building in that area, and we got what I believe is one of the best blocks on Larimer Street in RiNo.
When I bought the building, I was nervous enough that I did not tell my wife exactly where it was at first.
The area still has city challenges, but the building has worked out extremely well.
My advice is not to overanalyze real estate; sometimes you have to find it, take the risk, and let time work for you.
Real estate is scary because you are putting a lot at risk, but time can become your best friend if you take the chance.

SIGNET: You hit on so many points I want to talk about. Mentorship is one. First, can you talk about your mentors and the values you learned in your training with Taubman? You have also been a mentor for me in Denver, and I have met many people you have mentored who became incredibly successful. What qualities do you look for in people that lead them to success?

STUART ZALL:

I think it starts with heart.
If you have passion for what you do, then it does not feel like work.
You need drive, passion, and the ability to dream.
I think younger people are missing face-to-face communication because so much is done through texting, Instagram, and efficient digital communication.
When I started, even sending someone a picture of a space took days, and that slower process created dialogue and relationship-building.
Today, information can be sent instantly, but the relationship process can be lost.
Networking begins with meeting people and building relationships.
I try to create platforms, such as breakfasts, where people can meet others who may help advance their careers.
If you want to make deals, you need to put yourself where decision-makers are, such as shopping-center conventions and industry events.
You should not only spend time with people you already know; you should try to meet as many people as possible and then follow through.
Many deals begin with a cup of coffee, a handshake, or simply bumping into someone.

SIGNET: I love the idea of networking outside your own category. Developers often network with developers, and brokers often network with brokers. I have looked at finance events and capital groups because you get exposure to different people and make different links. One thing I have heard you say is that you never know where a deal is going to come from, and it is about being there. Is that one of the ideas?

STUART ZALL:

I learned something from doing business in China: if you are in a room where everyone speaks English, you are less valuable, but if you are the one person who speaks a language no one else speaks, you become extremely valuable.
I apply that metaphor to real estate networking.
If I am in a room full of brokers, everyone already understands leasing, so I am less differentiated.
If I am in a room where no one understands what I do, then I may be able to provide something valuable.
I like working with contractors, architects, finance people, and others connected to real estate but not doing the exact same thing.
I see networking as collaboration, where different people can benefit from different parts of the same opportunity.
I try to pay it forward by connecting general contractors or other professionals with people who may help them, without keeping a strict scorecard.
Those relationships often come back in useful ways, even if not immediately.
Mentoring people is not just telling them what to do; it is encouraging them to go out, network, socialize, talk to people, and learn from events.
As an example, I paid to meet Danny Meyer at an event, got a signed book, introduced myself, and created a connection that later became useful.
You cannot build those kinds of connections if you only sit in the audience; sometimes you need to go to the front and introduce yourself.

SIGNET: You talked about win-win situations. One thing you have said before, and I have seen you do, is that you want your tenants, your clients, and the people you represent to win. You have said that after the lease is signed and the commission is done, that is when you start to work by helping promote them, because if they expand, they are going to call you. What do you do after the lease is signed, since they still have so much to do?

STUART ZALL:

You can go too far and become your clientu2019s outsourced administrative staff, so you should not go looking for trouble.
It is still important to check in and help when there are problems.
I try to guide clients toward good people, such as reliable liquor-license attorneys, contractors, or other professionals.
I prefer to give clients two or three strong referrals rather than just one, so they can do their own homework and choose.
My role is to point them toward people who are tried and true, not to make every decision for them.
Most of the help is needed between signing the lease and opening the store.
After opening, I cannot solve every operational problem, such as labor or marketing, but I can pick up the phone and be available.
Signing a lease can be a multimillion-dollar commitment, so I want the tenant to succeed.
I once helped a restaurant franchisee renegotiate terms and work through problems even though I technically represented the landlord.
A lot of salespeople disappear after they get paid, but we want continuity, repeat business, and clients who know we tried to help.
At the core, I see our work as solving problems.

SIGNET: I love the way your brain thinks. You are very creative. Taking a wider-angle point of view, why commercial versus residential? I love commercial, but I am curious why you chose that path.

STUART ZALL:

Triple-net leases are a major reason.
I had experience with residential early on, including buying condos during a period when banks wanted properties off their books.
At one point, I had about 50 condos with a partner.
Residential was more management-intensive, especially before todayu2019s technology made banking and administration easier.
I do not have the patience for residential.
Commercial is more interesting to me because I am fascinated by businesses, retail, and how those businesses operate.
I moved most of my residential holdings into commercial projects over time.
In commercial, if a store does not work out for an operator with many stores, it is usually not as emotionally catastrophic as something going wrong with someoneu2019s home.
Residential deals involve peopleu2019s shelter and can be more personal and stressful.

SIGNET: In commercial real estate, what trends are you looking out for? We have tariffs, the internet has been affecting retail for a while, and there are other forces in the market.

STUART ZALL:

People have probably been worrying about the future of retail and commerce since ancient times.
Humans will always need commerce in one form or another.
There will be AI, headwinds, and other changes, and the key is to keep pivoting.
If you sit back and do nothing, you are going to be dead.
COVID was a major test for restaurants, and the smart operators quickly moved into patio seating, takeout, and alcohol-to-go where allowed.
Apparel is changing because so much can be bought online, but people still shop when traveling or looking for experiences.
Food still has to be made somewhere, even if DoorDash or another service delivers it.
I think ghost kitchens have mostly been a bust because people still need to see, experience, and trust a restaurant.
Food, entertainment, and apparel will remain, but models may change, stores may get smaller, and department stores need to reinvent themselves.

SIGNET: I am loving these public markets you see everywhere. I drove up and down the coast, and places like San Luis Obispo and Santa Barbara have public markets. Here there is The Hangar and Edgewater. I love those developments because they have synergy together if they are done well. Colorado Mills may have been an example of that 15 or 20 years ago.

STUART ZALL:

Denver is often a poster child for jumping on trends harder than other cities.
We probably overdid the public market and food hall concept.
Some public markets and food halls are winners, but others do not work.
It is not enough to build a food hall and assume people will show up.
You still have to put real thought into the concept, location, tenant mix, and execution.
Denver Central Market and Edgewater are strong examples.
Some others have gone out of business, which shows the model is not automatically successful.
If the concept is done right, it can work very well.

SIGNET: Your company has come such a long way. I think it is incredible that you started as an accountant, which uses a certain type of brain, and then went into such a relationship-heavy business. What qualities did you bring from accounting into your current work?

STUART ZALL:

I can understand financial statements, accounts receivable, and the basic mechanics of a business.
That is valuable because many brokers do not really understand the business side.
I understand operating properties and mortgages.
At the same time, I outsource almost everything that is not one of my strengths.
I use an outsourced bookkeeper and outsourced graphic arts help.
I know I need to work within my strengths.
Running numbers and detailed accounting work are not where I perform best now, even though the background helps.

SIGNET: I have a personal question that I think applies well to the podcast. Hiring people and managing people is really a talent. There is a reason CEOs sometimes manage managers, and managers manage individuals. How do you develop the skills needed to manage people? If you do not do that right, your business suffers and you reach dead ends.

STUART ZALL:

Managing people is a real challenge.
I believe there may be some force or timing that helps you find what you need when you need it.
About a year ago, I hit a wall because sales were down and I was struggling to motivate the team.
Our leasing meetings were not productive, and people, including me, were distracted.
I realized I needed a coach.
I met Steve Benoit from Crafted Consultants through my son and later sat down with him for coffee.
Steve explained a structured process for working with people, and I decided to try it even though it was not cheap.
He has become a meaningful part of the team.
We now have mandatory Monday meetings, with no cell phones, where each agent reviews what they said they would do and whether they got it done.
We also have one-on-one status updates and KPIs.
One KPI is getting one positive Google review per month from each person, which helps the company cast a wider net.
We now track deals by quarter instead of just doing deals without tracking them.
The coaching and structure have been important to our growth.

SIGNET: I asked that because I am managing a construction project in Pebble Beach right now, and you manage subs and contractors. Many people I have interviewed say their success is due to the people they hire. A lot of it is finding the right people with drive, quality, and pride in workmanship. It is hard to find those people because everyone wants to present themselves that way, but not everyone is that person.

STUART ZALL:

A lot of hiring is trial and error.
We now have an onboarding sheet and an interview sheet that lists what we are looking for.
You can also overanalyze hiring.
Right now, we are at capacity and do not have room for more people unless we build up or expand.
I am willing to take a chance on a lot of people.
Many people in the industry probably got their start with me.
In the past, I may not have had the tools to mentor and coach people properly, so I probably lost some talented people.
If you love what you do, it is not work.
I work in some form seven days a week because I am always available and always thinking about how brokers can be more productive.
I do not only think about their productivity in terms of my own income; I want them to succeed.
People are giving me their time and part of their lives, especially when they are young.
Even if someone only stays with me for a year, two years, or three years, I want them to leave with skills that help them succeed elsewhere.
At Arthur Andersen, many good accountants eventually went to work for clients, and the firm saw that as creating a friend at that company.
I see former employees similarly: if they leave and succeed, the relationship may help both of us later.
I do not expect anyone to give me their entire life, but I want their time with us to be productive.

SIGNET: You said you are at capacity. Where do you want to go from here? What is really good now, and what do you want your legacy to be? That is a two-for-one question, but they are different intentions.

STUART ZALL:

I am having a lot of fun and enjoying what is happening.
We are working on projects with the Orlando Magic, which has been very cool.
I have partners outside my company, including Dan Nelson and Neil Berkowitz, who help expand our bandwidth.
I like the arena and sports district space and see it as an area for future growth.
Many arenas are moving back into central business districts, which creates opportunities around live music, sports, restaurants, retail, and event traffic.
Time is precious for people, so projects that combine sports, entertainment, food, and retail can create strong commercial environments.
We do a lot of leasing downtown, in RiNo, and in Cherry Creek, and I want us to continue being a leader in those markets.
Downtown Denver still has a lot of opportunity, despite lingering perceptions from COVID, crime, and 16th Street Mall disruption.
When you lease space and bring in a store or restaurant, you can change a neighborhood for better or worse.
A lease such as Mendocino Farms in Cherry Creek changes the everyday experience of a neighborhood by adding a useful commerce point.
My legacy is not about ego; it is about improving the city or the commercial playground I work in.
Early in my career, I was focused on getting paid, but over time I came to care more about the type of tenant and whether they improve the neighborhood.
A street full of banks may pay rent, but it does not create the same neighborhood energy as coffee shops, restaurants, and places to shop.
The goal is to help create neighborhoods where people feel commerce, culture, and activity.

SIGNET: The tenants really give a neighborhood its feel u2014 the restaurants, bars, and different spots.

STUART ZALL:

The right tenant mix creates a good environment.
When neighborhoods improve through thoughtful retail and restaurant leasing, everyone benefits.

SIGNET: I was listening to another interview you did, and you said 2010 was a hard year after the Great Recession. How did you survive that, and what advice would you give to other people in future recessions?

STUART ZALL:

Praying is real.
If you have your health, you should not let your stock account or money account consume you.
Do not listen to all the background noise.
I do not watch much news because it can become distracting and negative.
In our business, the recession showed up late because commissions often take six months to a year to come in.
2009 was still fine, but in 2010 nothing was coming in.
I tried to get exposure by writing articles and appearing in trade magazines.
A partner and I wrote an article about repositioning malls, and someone from China called asking whether we could do that work there.
Our default answer was yes, even when we had to figure out how to execute afterward.
We needed demographic and psychographic data in China, which was difficult to get, but a colleague connected us with someone who did data work in Asia and had gone to the University of Denver.
We partnered with him, created a merchandising plan, and the client then asked whether we could lease the project.
The project was in Xiu2019an, which was connected to the Terracotta Warriors and the Silk Road.
I used my U.S. relationships with brands to find the right international contacts and started leasing the project.
I worked between China and Denver, using a Wi-Fi phone line with a Denver number so clients did not know I was overseas.
The project was ultimately scrapped because housing became more lucrative for the developer, but we had been paid in advance.
By the time that project ended, the U.S. economy had improved.
That experience helped us survive and led to work in places such as Puerto Rico and Hawaii.

SIGNET: I do residential in Europe, but it is interesting because that is another market. Even here, RiNo and Cherry Creek feel like different markets because the tenants are different. You deal with a lot of high-end, popular, and trendy tenants.

STUART ZALL:

I would not call most of our work true luxury, like Gucci or Hermu00e8s, because Denver is not a very luxury-heavy market.
We work more with upper-moderate and emerging brands.
That includes brands like Lululemon, North Face, Birkenstock, and other better brands.
I also love working with immigrants because many of them are fearless.
Some people create businesses because they may not have the same access to conventional jobs, and they are willing to take chances.
Those chances sometimes turn into great businesses.
I have worked with clients from one store to very large store counts, and it is rewarding to watch a brand grow.
It is interesting and fun to see a person or brand evolve from one location into something much larger.

SIGNET: That is part of their story. I think you did that with H&M, where you had the first one in Colorado.

STUART ZALL:

We did the first H&M in Colorado.
H&M has withstood the stress of downtown.
We also brought Uniqlo to downtown Denver, although it unfortunately closed during COVID.
Forever 21 was another example.
No brand lasts forever, but if you can get 15 years or more out of a brand, that can still be meaningful.

SIGNET: Thinking about the 16th Street Mall, coming from Los Angeles, what is the secret? In LA, it is very hard to turn around cities, maybe because of bureaucracy or something else. Here, you have the Downtown Denver Partnership and developers working with political bodies. What is the secret to turning around a place like that?

STUART ZALL:

Comparing Los Angeles and Denver is difficult because Los Angeles County is massive and harder to move.
Denver is smaller and more nimble.
Denver has a lot of downtown history.
Union Station was critical to Denveru2019s growth and connects directly to the 16th Street Mall.
The redevelopment of Union Station was a beautiful project.
Historically, the railroad helped Denver grow because the rail route came through Denver instead of elsewhere.
Larimer Street and downtown Denver developed around rail traffic, travelers, and the commerce they needed.
Denver has historic assets, including Larimer Square and older buildings, that give it a character beyond steel, brick, and glass.
The city has serious struggles, including high minimum wages and permitting timelines, but there are good people who believe in downtown.
With the 16th Street Mall work completed or nearing completion, I expect to see more positive activity in the next couple of years.

SIGNET: It is a great area. I lived near Union Station and would jog through 16th Street. That area has completely changed, with Whole Foods, the train, and a safer environment.

STUART ZALL:

During COVID, Denver dropped its guard and got hit on multiple levels.
The trend is now improving.
Some older office buildings may be converted to residential if conversion is feasible.
There is still a need for housing, even if apartment rents are currently soft.
I expect the need for apartments to continue as the city grows.

SIGNET: Prices have come up a lot since then too.

STUART ZALL:

Prices have come up, and interest rates are another obstacle.
Every generation has something that gets in the way.
I often hear people say something is too expensive and that they will wait for prices to come down.
In the long run, saving a relatively small amount on price may matter less when amortized over decades.

SIGNET: I once heard that it is not timing the market, it is time in the market. It is the same principle.

STUART ZALL:

Jordan Perlmutter once told me that some real estate projects succeed because of timing.
Even if you do not time it perfectly, real estate is a long game.
It is like golf: people focus on individual shots, but real estate has waves.
There are periods when you can make a lot of money quickly, but overall you need a long-term view.
If you take the long view, you have a better chance of being successful.

SIGNET: It seems like that is also what you do with your investments. Originally, the name of this podcast was u201cThe Long-Term Real Estate Investor,u201d because thinking long term removes some of the pressure around things like IRR calculations. If you have a 100-year business plan, it changes the mentality. I feel that in your investing and leasing, it is always long term, and there are also a lot of transaction costs in trying to flip.

STUART ZALL:

In commercial real estate, long-term thinking is important.
Because I did not come from a real estate family, I had to start by planting seeds myself.
It would have been nice to walk into an existing forest, but I had to begin building it over time.

SIGNET: It is tricky too, because when you are starting out, how are you going to buy something without financing? A lot of times the long-term plan is to get rid of financing so you have more stability and the bumps in the road are not as dramatic. Let me ask you the wrap-up questions. What was the number-one deal that changed your career, taught you the most, or had the most impact on you?

STUART ZALL:

The most important turning point was not really a deal; it was going to work for the Taubman Company.
That job was transformational because it taught me how to lease not just to fill space, but to create neighborhoods.
When I was about 27, I met a friend at a restaurant called Fresh Choice, saw a huge line, and asked about the owner.
I had just taken a job involving two malls, and within about 30 days I made two deals with that restaurant operator.
That happened because I asked a question when the opportunity was right in front of me.
Sometimes you are on the one-yard line and only need to ask the question.
Over my career, I did several deals with that operator, so that became an important relationship and an important early lesson.

SIGNET: What are your three key daily habits that have made you successful? I am always curious what time people wake up, whether they meditate, read a certain newspaper, or spend family time.

STUART ZALL:

I do not read a newspaper.
I get up early, usually around five.
My most productive time is between about five and eight in the morning.
I try to filter out negative noise because there is always a lot of it.
I would tell people not to listen to all the noise that is designed to stop them.
I try to stay positive.
I meditate for about ten minutes almost every day.
I use paper and pencil to write things down, even with all the CRMs and technology available.
I try to be thankful.
I remind myself that there are many opportunities available and that people do not need to stay stuck.
I try to wake up with a smile and a mindset of taking on the world, even if some days are harder by the end.

SIGNET: Final question: what would you say to a young individual who wanted to start in the real estate business? They might not know whether they want to be a broker, investor, or what segment to focus on. How would they find their path?

STUART ZALL:

I would tell them not to be afraid.
If they need to live at their parentsu2019 house or drive Uber while getting started, they should do what they need to do.
They should absorb as much information as possible.
There is so much information available now that they do not even have to subscribe to everything to learn.
They should become an expert at something and become the go-to person in that area.
They should not try to do everything.
They should find one area and try to be the best at it.
They need passion for the business.
If they think of it only as a job, they are in the wrong business.
It is always a good time to get into real estate, and bad times can actually be the best times to start.

SIGNET: Stuart, thank you so much. We could do round two another time. Thank you for joining the podcast, and hopefully we will grab dinner soon.

STUART ZALL:

I hope so.

INTERVIEWER u2014 SPEAKER UNCERTAIN: Bonus question: what are your thoughts about the new Burnham Yard deal and what it is going to do for downtown?

STUART ZALL:

I do not know exactly how it will affect downtown, but I think it will be very positive for Burnham Yard.
Burnham Yard feels like one of the last major pieces of Denver that has not really been developed.
A key question is what happens to the area where the stadium is now if activity shifts.
I think the project will not hurt downtown because people will still come downtown, and the distance may not be dramatically different.
Large investments, such as a multibillion-dollar stadium, create a multiplier effect that benefits many people.
I do worry about displacement, especially for people who currently live nearby and may have cheaper rent.
Growth can be positive, but people still need places to live.
Denver has done some work around affordable housing, but development can still affect neighborhoods.
I think developers and stakeholders need to think carefully about who is affected.
Overall, I think the project is good, but I hope there is thoughtful attention to housing and displacement.

00:00 i meet a lot of younger people coming
00:02

00:02 into the real estate business and
00:04

00:04 you know they all ask the same question
00:06

00:06 you know what should i do if i want to
00:08

00:08 succeed and you know the most important
00:10

00:10 thing i think is to follow your passion
00:13

00:13 [Music]
00:24

00:24 me
00:27

00:27 [Music]
00:47

00:47 today we have an interesting
00:49

00:49 conversation with my friend brian
00:50

00:50 shurkin he is a co-founder of mountain
00:53

00:53 pacific opportunity partners as well as
00:55

00:55 columbus pacific brian has experience
00:58

00:58 across a broader range of asset classes
01:01

01:01 that’s one of the reasons he’s super
01:02

01:02 interesting brian has done retail he
01:04

01:04 does student housing multi-family a
01:07

01:07 hotel in park city utah as well as
01:09

01:09 affordable housing and senior housing
01:12

01:12 brian has also provided mezzanine and
01:14

01:14 equity in excess of 500 million dollars
01:17

01:17 for projects that have an underlying
01:20

01:20 value of 2 billion dollars watch or
01:22

01:22 listen to the show and find out what
01:24

01:24 made him so successful and his
01:26

01:26 investment philosophies
01:30

01:30 well thanks for having me in park city
01:32

01:32 it is absolutely beautiful here i wish
01:35

01:35 the cameras could see which i guess i’ll
01:37

01:37 take a video after of how green and and
01:40

01:40 absolutely marvelous this area is
01:43

01:43 that’s a word people still use
01:45

01:45 um yes it’s beautiful how we uh we
01:47

01:47 absolutely love it which is why we spend
01:49

01:49 as much time as we do here yeah you said
01:52

01:52 your wife works with you and you do the
01:53

01:53 uh she did the design here
01:56

01:56 uh yeah so she really built this house
01:58

01:58 um she built six homes in park city and
02:01

02:01 uh we really didn’t come out out to
02:04

02:04 develop real estate we came how to build
02:06

02:06 a second home
02:07

02:07 and uh we had such a great time building
02:09

02:09 the first one the first second home that
02:12

02:12 we decided to build a
02:13

02:13 second spec home and ultimately kirsten
02:16

02:16 became a homebuilder she built six homes
02:19

02:19 and sold six homes and
02:20

02:20 this is the third one wow
02:23

02:23 okay yeah well it is absolutely amazing
02:26

02:26 um
02:27

02:27 so i i was curious about your
02:30

02:30 your entrepreneurial ventures when you
02:32

02:32 were younger was real estate really your
02:34

02:34 first way of
02:36

02:36 exploring you know investing and
02:39

02:39 or did you do anything before real
02:41

02:41 estate well i really didn’t know
02:43

02:43 anything about real estate when i first
02:45

02:45 came out here
02:46

02:46 i immigrated to the united states in
02:48

02:48 1983
02:50

02:50 from south africa to work for an
02:51

02:51 accounting firm
02:53

02:53 i knew a little bit about accounting
02:55

02:55 that’s what i studied in college at the
02:57

02:57 university of cape town
02:59

02:59 but what public accounting did for me is
03:01

03:01 it exposed me to lots of different
03:03

03:03 industries i had clients in
03:05

03:05 manufacturing and distribution and
03:07

03:07 retail and restaurant and
03:09

03:09 real estate and
03:11

03:11 of all of the clients i had the real
03:13

03:13 estate ones were the most interesting i
03:15

03:15 liked the uh the idea of building things
03:18

03:18 of creating value and uh when i decided
03:21

03:21 it was time to move on from public
03:23

03:23 accounting i focused on real estate and
03:26

03:26 uh
03:27

03:27 ended up getting an opportunity to go
03:29

03:29 work for a uh
03:31

03:31 really a legend in the real estate
03:33

03:33 business uh at the time a gentleman by
03:35

03:35 the name of sam freshman uh who i worked
03:38

03:38 with for eight years who really taught
03:39

03:39 me the real estate business and i loved
03:41

03:41 it but even when i was working for sam
03:43

03:43 he gave me the space to buy small
03:47

03:47 apartment buildings and renovate them
03:49

03:49 and sell them and so uh my
03:51

03:51 entrepreneurial spirit was strong even
03:54

03:54 in the very beginning of uh being an
03:56

03:56 employee for a real estate company okay
03:59

03:59 yeah i it’s incredible your story part
04:02

04:02 of it was when you first had your first
04:04

04:04 deal that you were going off on your own
04:06

04:06 to do
04:07

04:07 and you were looking for and it was
04:09

04:09 personally inspiring to me
04:12

04:12 you went to a hundred people and the
04:14

04:14 last person said yes when you went to
04:16

04:16 new york and you met with that group and
04:18

04:18 the 300 000 square foot uh columbus
04:22

04:22 property that is correct so um yeah it
04:25

04:25 was 1994 and
04:28

04:28 for those of the people that are
04:29

04:29 watching this that weren’t around in
04:31

04:31 1994 it had quite a lot of similarities
04:33

04:33 to 2008
04:35

04:35 the world had come to an end uh it felt
04:37

04:37 at the time like it was never going to
04:39

04:39 recover
04:40

04:40 there was no capital in the market and
04:42

04:42 uh
04:43

04:43 um and a lot of people thought we were
04:46

04:46 pursuing the impossible
04:48

04:48 um and actually the investor i thought i
04:50

04:50 had uh by the time i got back to la from
04:53

04:53 new york it actually changed their mind
04:55

04:55 and decided not to do the transaction
04:57

04:57 but fortunately we were talking to
04:59

04:59 another new york group and
05:01

05:01 they kept moving forward and ended up
05:03

05:03 becoming our partner but
05:05

05:05 it really goes to perseverance and
05:08

05:08 having no choice but to succeed i had no
05:10

05:10 job i had no income
05:13

05:13 we were absolutely determined to
05:15

05:15 succeed in buying our first property and
05:18

05:18 you learn to accept rejection and learn
05:20

05:20 from the rejections and adapt your
05:22

05:22 presentation to what it is that people
05:24

05:24 are objecting to and
05:26

05:26 you know with the belief that what you
05:28

05:28 have is
05:29

05:29 uh is viable and is going to deliver
05:32

05:32 attractive risk-adjusted returns and we
05:34

05:34 just kept going we had no choice right
05:37

05:37 no it’s it’s it is inspiring that and
05:40

05:40 also
05:41

05:41 you mentioned something about the
05:43

05:43 entrepreneurial lifestyle about it being
05:45

05:45 high risk high reward and not
05:47

05:47 necessarily safe and stable when you’re
05:49

05:49 starting out
05:50

05:50 and you know it that it’s not made for
05:53

05:53 everybody and
05:55

05:55 maybe that’s why you have investors that
05:57

05:57 invest with you because they trust you
05:58

05:58 then they
06:00

06:00 they know that you come with expertise
06:03

06:03 the track record and the the dependency
06:05

06:05 on on your professional
06:08

06:08 you know well at this point we do
06:11

06:11 obviously but um 30 years ago when we
06:14

06:14 started right we didn’t uh we just had
06:17

06:17 belief and passion and uh and convection
06:21

06:21 and
06:22

06:22 we were able to
06:24

06:24 convey that
06:26

06:26 but for the first five years we were
06:29

06:29 investing in real estate and really
06:30

06:30 focused on redeveloping shopping centers
06:32

06:32 at the time we weren’t really sure that
06:34

06:34 we even had a business i mean we had a
06:36

06:36 series of deals
06:38

06:38 we were hopeful that they would be
06:39

06:39 successful uh which they were because as
06:42

06:42 it turned out
06:43

06:43 it was a very good time to be buying
06:45

06:45 real estate in retrospect and
06:48

06:48 as i look back at it i think the only
06:49

06:49 mistake we made was not buying more but
06:52

06:52 when you’re in the middle of it it feels
06:53

06:53 very different you know the every the
06:55

06:55 environment is negative
06:57

06:57 you know people are being wiped out uh
06:60

06:60 tenants aren’t leasing space
07:02

07:02 but
07:02

07:02 as you look back on it it was almost
07:04

07:04 obvious that
07:06

07:06 it would recover and it did and
07:08

07:08 it turned out that our conviction was uh
07:11

07:11 was accurate and
07:13

07:13 it gave us the ability to build a track
07:15

07:15 record and build some success and
07:18

07:18 also put us in a position where we could
07:20

07:20 co-invest with our investors in our
07:22

07:22 deals which is very important when
07:24

07:24 people are making an investment decision
07:26

07:26 they need to have alignment
07:28

07:28 with their
07:30

07:30 with their partner and co-investment is
07:32

07:32 the biggest part of that alignment
07:35

07:35 that makes sense
07:36

07:36 so skin in the game
07:38

07:38 exactly it’s really important and today
07:40

07:40 we’re the biggest investor in all of our
07:42

07:42 deals but we’ve never forgotten our
07:44

07:44 investors so we
07:46

07:46 we continue to bring in the same
07:47

07:47 investors that we were bringing in 25
07:50

07:50 years ago
07:51

07:51 but they come in at a whole different
07:52

07:52 level today right so i think part of the
07:55

07:55 lesson from that is that people who are
07:58

07:58 able to invest small amounts of money
08:01

08:01 over time are able to invest larger
08:04

08:04 amounts of money and then eventually
08:06

08:06 significant amounts of money and
08:08

08:08 for us we’ve really been able to build a
08:10

08:10 business around our investor base who
08:12

08:12 has grown
08:13

08:13 with us of as we have grown but you know
08:16

08:16 through building the trust obviously
08:18

08:18 delivering good performance standing
08:20

08:20 behind our deals etc
08:23

08:23 yeah one thing that’s interesting about
08:25

08:25 your deals and you were talking about
08:26

08:26 retail and before this we were talking
08:29

08:29 about a hotel that you’ve developed is
08:31

08:31 that you have such a
08:34

08:34 diverse spectrum of real estate assets
08:37

08:37 you have assisted living student housing
08:39

08:39 which i wanted to ask how you got into
08:41

08:41 that
08:42

08:42 you have you know hotel condo homes
08:45

08:45 and uh and retail a b and c
08:49

08:49 so
08:49

08:49 how do you
08:51

08:51 network with brokers or you know get the
08:53

08:53 word out there that brokers sometimes
08:55

08:55 need to be told exactly what you want
08:57

08:57 how do you do that where you find these
08:59

08:59 opportunities
09:01

09:01 so um the real estate business is
09:03

09:03 cyclical um and uh the good thing about
09:07

09:07 being in
09:08

09:08 an entrepreneurial real estate
09:10

09:10 investment company is that we’re not
09:12

09:12 really locked into any one
09:14

09:14 uh category of real estate and we’re
09:16

09:16 able to move around as the opportunities
09:19

09:19 present themselves in different areas
09:23

09:23 so for example
09:24

09:24 you know in the late
09:26

09:26 2000s we stopped buying everything felt
09:28

09:28 expensive uh you know 2011-12
09:33

09:33 when we started to
09:35

09:35 become exposed to future negative
09:38

09:38 consequences of retail as a result of
09:40

09:40 the internet we thought it would be a
09:42

09:42 good idea to
09:43

09:43 [Music]
09:45

09:45 re-reposition our business away from
09:47

09:47 retail and into a uh investment category
09:50

09:50 that was really underappreciated at the
09:52

09:52 time which was student housing okay and
09:55

09:55 uh i i won’t say that we
09:58

09:58 went out and researched every category
09:60

09:60 of real estate and decided student was
10:01

10:01 the best but we were delivered a student
10:03

10:03 opportunity by a
10:06

10:06 a partner of ours and
10:08

10:08 as we dug into it we concluded that the
10:11

10:11 entire category was mispriced
10:13

10:13 and we really bought as much student
10:16

10:16 housing as we could starting in 2011
10:19

10:19 and then in about 2015 or 16 when
10:22

10:22 everybody else caught on to it
10:24

10:24 and it became too expensive to buy we
10:26

10:26 started building brought in a
10:27

10:27 development team and uh
10:29

10:29 you know then it became too expensive to
10:31

10:31 build and we just continued to operate
10:34

10:34 so
10:34

10:34 it’s i think it’s important to continue
10:36

10:36 to evaluate you know where you are in a
10:39

10:39 cycle both generally
10:41

10:41 and globally and also with respect to
10:43

10:43 the category you’re in and
10:45

10:45 and ensure that you’re receiving returns
10:48

10:48 that are adequate given the level of
10:50

10:50 risk you’re taking in the level of
10:51

10:51 effort and we’re able to look at other
10:54

10:54 investment areas from the same
10:57

10:57 perspective
10:58

10:58 but even you know the condos or hotels
11:01

11:01 that we’ve built in our building in park
11:03

11:03 city it wasn’t like we came how
11:05

11:05 strategically to do that it was an
11:07

11:07 opportunity that arose as a result of
11:10

11:10 kind of unrelated circumstances in park
11:12

11:12 city it was us building a second home
11:13

11:13 and being exposed to
11:15

11:15 opportunities and single-family home
11:17

11:17 development and then
11:18

11:18 opportunities to acquire
11:21

11:21 land in a distressed market in that land
11:23

11:23 exposing us to other land which exposed
11:26

11:26 us to
11:27

11:27 you know different areas of opportunity
11:29

11:29 so a lot of it isn’t strategic it’s
11:31

11:31 opportunistic but it’s being able to
11:33

11:33 recognize the opportunity when it arises
11:36

11:36 and then to have the confidence
11:38

11:38 and to build the team around it so you
11:40

11:40 know i’m not an expert at building a
11:42

11:42 hotel or operating a hotel but
11:44

11:44 uh when we decided to do it we assembled
11:47

11:47 a team of people who were experts that
11:49

11:49 enabled us to
11:51

11:51 uh rely on our own strengths and draw on
11:53

11:53 theirs yeah that’s i mean
11:56

11:56 to go from you know different types of
11:58

11:58 asset classes it’s like you know
12:00

12:00 starting to dig a new hole from scratch
12:02

12:02 because you have so much education you
12:04

12:04 have to do but also
12:06

12:06 to do it in different cities that seems
12:08

12:08 to be even more of a you’ve really gone
12:10

12:10 through it you must love the uh
12:13

12:13 the process well you do
12:15

12:15 and you have to i mean so i meet a lot
12:17

12:17 of younger people coming into the real
12:19

12:19 estate business and
12:20

12:20 you know they all ask the same question
12:23

12:23 you know what should i do if i want to
12:24

12:24 succeed and you know the most important
12:27

12:27 thing i think is to follow your passion
12:29

12:29 because if you’re not passionate about
12:30

12:30 it and you’re not excited about it and
12:33

12:33 it’s very difficult to succeed in it and
12:35

12:35 uh you know to be honest my passion for
12:38

12:38 retail diminished and uh it just became
12:41

12:41 difficult to
12:42

12:42 you know constantly be getting your ass
12:44

12:44 kicked by retailers who had all the
12:46

12:46 powers so
12:47

12:47 at a point in time when it becomes less
12:50

12:50 fun and less interesting and
12:52

12:52 it makes sense to start looking at other
12:54

12:54 opportunities
12:56

12:56 we’ve always had a
12:57

12:57 national platform in terms of how we’ve
12:59

12:59 operated our business and so we’re not
13:02

13:02 afraid
13:03

13:03 to go into different markets where we
13:04

13:04 haven’t
13:06

13:06 had experience and really learn and
13:07

13:07 understand those markets
13:09

13:09 um and i think the same applies to
13:12

13:12 different property types
13:14

13:14 you know we’re not afraid to really dig
13:16

13:16 in deep and you know understand the
13:19

13:19 uh yeah the the the playing field and
13:22

13:22 the and the players and start to build
13:24

13:24 the relationships but it you know it
13:25

13:25 takes a lot of effort it doesn’t just
13:27

13:27 happen
13:28

13:28 you know when we decided to fully commit
13:30

13:30 to student it took a lot of effort to
13:32

13:32 get the confidence of the
13:34

13:34 you know the brokerage community to get
13:35

13:35 access to the best opportunities but you
13:38

13:38 know i’ve always felt that
13:40

13:40 if you
13:41

13:41 tell people what you’re going to do and
13:43

13:43 then just do it and you become reliable
13:46

13:46 and
13:47

13:47 honest and display integrity i mean
13:50

13:50 those are the people that
13:52

13:52 uh
13:53

13:53 that
13:54

13:54 professionals in the space want to work
13:55

13:55 with and
13:57

13:57 so you know when we came to student it
13:58

13:58 wasn’t like we were starting from
13:60

13:60 scratch i mean we bought hundreds of
14:02

14:02 millions of dollars of shopping centers
14:03

14:03 and you know the same principles apply
14:06

14:06 so um
14:08

14:08 so what we do is we take the learning
14:10

14:10 from everything we’ve ever done and
14:12

14:12 apply it to what we’re doing
14:14

14:14 and there are a lot of parallels yeah
14:17

14:17 that’s interesting i i love seeing that
14:19

14:19 i uh
14:21

14:21 i this is i was told as saying a long
14:23

14:23 time ago the tail shouldn’t wag the dog
14:26

14:26 um
14:28

14:28 you i could see how somebody would say
14:30

14:30 that qoz zones are that
14:32

14:32 but they’re not also because
14:34

14:34 i know that opportunity zones you save a
14:37

14:37 ton in taxes the gains i think it’s
14:39

14:39 tax-free if you hold an asset for 10
14:41

14:41 years
14:43

14:43 not a cpa i don’t know these things uh
14:46

14:46 but
14:47

14:47 supposedly theoretically i believe
14:48

14:48 that’s the the essence of why people
14:51

14:51 want to
14:53

14:53 invest in these uh opportunity zones
14:56

14:56 why what what attracts you to that so
14:59

14:59 one of the other businesses we have um
15:02

15:02 is one that provides uh equity for the
15:06

15:06 development of multi-family properties
15:09

15:09 it’s a business called mountain capital
15:11

15:11 partners and through that business
15:14

15:14 we invested in the
15:16

15:16 construction of about three and a half
15:18

15:18 thousand
15:19

15:19 apartment units in the western states
15:22

15:22 we started to sell off those properties
15:24

15:24 about three years ago
15:27

15:27 and the opportunity zone timing
15:30

15:30 uh
15:32

15:32 was consistent with what was happening
15:34

15:34 in our business at that time number one
15:37

15:37 we were selling off a lot of properties
15:39

15:39 and we had gains that we were looking to
15:41

15:41 reinvest at number two we’d had a lot of
15:44

15:44 experience providing capital for
15:47

15:47 multi-family development and uh
15:50

15:50 opportunity zones were the intersection
15:52

15:52 of both a need and a skill set
15:56

15:56 so but we look at the opportunities on
15:58

15:58 business a little differently the deal
15:60

15:60 needs to stand on its own independently
16:02

16:02 of the tax benefits you uh i think
16:05

16:05 you’ll generally accept somewhat of a
16:07

16:07 lower return because of the economic
16:09

16:09 value of the tax benefits but it still
16:11

16:11 needs to be
16:12

16:12 a viable real estate deal
16:14

16:14 we have very high level of comfort in
16:16

16:16 multi-family housing and the fact that
16:19

16:19 over time
16:21

16:21 we’ve seen a pretty significant shortage
16:24

16:24 of supply with growing demand so the
16:26

16:26 fundamentals are very strong
16:28

16:28 just by definition there’s a tremendous
16:30

16:30 amount of value created
16:32

16:32 through the development process but the
16:34

16:34 scale of the business is not really what
16:36

16:36 we had hoped uh with the escalation of
16:39

16:39 uh construction costs and then the
16:41

16:41 impact of covert and its impact on
16:43

16:43 rental growth that it hasn’t been that
16:46

16:46 easy to find
16:47

16:47 ground-up deals that make a lot of sense
16:50

16:50 i think we’re doing about a dozen
16:52

16:52 opportunity zone development deals right
16:54

16:54 now okay and um i’m very comfortable
16:57

16:57 with the deals that we’ve done but it’s
16:59

16:59 become more and more difficult to find
17:00

17:00 projects
17:02

17:02 that meet our our return criteria given
17:05

17:05 the risk but uh i like the business i
17:07

17:07 like the fact that we’re developing
17:09

17:09 housing in areas that have a shortage of
17:11

17:11 housing yeah uh and uh in areas that are
17:14

17:14 really
17:15

17:15 up and coming and uh where over time you
17:19

17:19 know that the uh the environment will
17:22

17:22 catch up with the project that we’re
17:23

17:23 developing we have to
17:25

17:25 for the most part hold these properties
17:26

17:26 for 10 years and we’re comfortable
17:29

17:29 being a long-term investor
17:31

17:31 in these projects and we know that the
17:33

17:33 environments that we’re building in are
17:35

17:35 going to see significant change over
17:36

17:36 that period of time as well
17:38

17:38 okay
17:39

17:39 how do you compete with other people or
17:41

17:41 how do you advise somebody who
17:43

17:43 is smaller to compete with other buyers
17:46

17:46 you know there’s so many so much capital
17:48

17:48 now going towards real estate that
17:51

17:51 it seems like it’s hard to find deals
17:53

17:53 that do have the returns that you know
17:55

17:55 you’d be looking for
17:57

17:57 so my advice is always to find the niche
17:60

17:60 in which you have an expertise that
18:03

18:03 differentiates you from everybody else
18:06

18:06 because the only way to really
18:08

18:08 deliver
18:10

18:10 returns that are in excess of what you
18:13

18:13 should be getting given the risk you’re
18:14

18:14 taking is to know something that not
18:17

18:17 everybody else knows or have a skill set
18:20

18:20 or expertise or a
18:22

18:22 perspective or vision or
18:24

18:24 that you can convey that is different
18:27

18:27 from others
18:29

18:29 so not to be afraid to go
18:31

18:31 contrary to the market or go into a
18:33

18:33 property type that is less popular
18:36

18:36 or a geographic area that is less
18:38

18:38 populous so there has to be a
18:40

18:40 differentiation just duplicating
18:42

18:42 somebody else’s strategy
18:44

18:44 i don’t think
18:45

18:45 you know adds
18:47

18:47 much value right on the other hand when
18:49

18:49 you’re in a good market like the one
18:50

18:50 we’ve been in over the last 10 years
18:52

18:52 it’s difficult to fail right so it makes
18:55

18:55 everybody look good but the reality of
18:58

18:58 it is that nothing grows to the sky and
18:60

19:00 at some point we’re going to see some
19:02

19:02 kind of adjustment and
19:05

19:05 you know when the tide goes out then you
19:07

19:07 start to see the people who are
19:10

19:10 exposed so um
19:12

19:12 you know you’ve got to be careful and
19:13

19:13 you’ve got to be careful not to get
19:14

19:14 caught up
19:15

19:15 in uh
19:17

19:17 in market success which is
19:19

19:19 differentiated from you know individual
19:21

19:21 success and to try to understand how
19:23

19:23 much of your success has come from
19:25

19:25 market growth or rental growth and you
19:27

19:27 know how much of it has come from your
19:29

19:29 own
19:30

19:30 you know original ideas and vision and
19:32

19:32 concept etc and intuition that’s that
19:35

19:35 was something i was wondering about how
19:37

19:37 do you learn to trust your intuition and
19:39

19:39 not everybody’s intuition is
19:42

19:42 you know on point with
19:44

19:44 with you know you’re putting money at
19:45

19:45 risk how do you find well it’s not
19:47

19:47 always about intuition i mean oftentimes
19:49

19:49 it’s just about experience right
19:52

19:52 and the example i will give is
19:54

19:54 we came back into the market very
19:56

19:56 heavily in 2010
19:58

19:58 and a lot of people thought it was too
20:01

20:01 early and a lot of people thought
20:03

20:03 markets may never recover
20:06

20:06 which seems like a silly thought at this
20:07

20:07 time but we felt like we’d seen it
20:09

20:09 before you know so we thought we’d seen
20:11

20:11 the same thing in 1994
20:13

20:13 recognizing that the only mistake we’d
20:15

20:15 made then was not um
20:18

20:18 not buying more
20:19

20:19 the other thing we saw in um we knew in
20:23

20:23 2010-11 is that our housing assets had
20:27

20:27 recovered much more quickly than our
20:29

20:29 commercial assets
20:31

20:31 so housing felt like a much better
20:33

20:33 sector right to come into based on the
20:35

20:35 recovery that we’d seen in our portfolio
20:38

20:38 so i would say we depended much less on
20:41

20:41 intuition than we did on experience
20:44

20:44 but even then we had to
20:46

20:46 take
20:47

20:47 some leap of faith because we were going
20:49

20:49 against the market the market wasn’t
20:51

20:51 buying yet the market was still
20:53

20:53 desperate to find a bottom
20:55

20:55 um so i think it was really a function
20:58

20:58 of our experience a function of our
20:59

20:59 track record our ability to
21:01

21:01 you know raise equity and debt and uh
21:04

21:04 and also to co-invest because that’s
21:06

21:06 what gave our partners confidence
21:09

21:09 in the fact that
21:11

21:11 we believe very strongly in what we were
21:13

21:13 executing on now um
21:15

21:15 we’ve invested with a lot of partners
21:17

21:17 over the last four or five years that
21:18

21:18 have gone into markets that we were not
21:21

21:21 in for example we’ve bought
21:23

21:23 i don’t know maybe a dozen
21:25

21:25 multi-family assets in the phoenix
21:27

21:27 market okay with a partner who had a
21:29

21:29 very strong view on the market and
21:32

21:32 brought us around to their view
21:34

21:34 and then we began to invest very heavily
21:38

21:38 with them so they had a unique
21:40

21:40 perspective on the market they developed
21:42

21:42 the ability to execute very effectively
21:45

21:45 and efficiently and uh
21:48

21:48 and three years later everybody else was
21:50

21:50 doing what they were doing but the real
21:52

21:52 money is made in that time period where
21:54

21:54 you’re
21:55

21:55 ahead of the rest of the world
21:57

21:57 let me see what else i wanted war
21:59

21:59 stories i mean i’m kind of scared to ask
22:02

22:02 i was going to say you’re a sucker for
22:03

22:03 stress because you just love the the
22:05

22:05 adventure but it’s got to take its toll
22:08

22:08 on your your you got to put your heart
22:10

22:10 and soul into
22:11

22:11 learning all these new skills different
22:14

22:14 asset classes
22:15

22:15 ex you know
22:17

22:17 you’ve come a long way it’s
22:19

22:19 yeah so i’d say the difference today is
22:21

22:21 that
22:22

22:22 we’re really not in the business of
22:24

22:24 doing deals we’re in the business of
22:26

22:26 building businesses and i’d say that’s
22:28

22:28 the differentiation today so when we
22:31

22:31 looked at student housing
22:33

22:33 10 11 years ago it wasn’t with the idea
22:35

22:35 that we’d go out and buy a deal or two
22:37

22:37 deals it was with the idea that we would
22:40

22:40 build a business
22:41

22:41 and when you build a business
22:43

22:43 you create infrastructure and resources
22:47

22:47 and expertise outside of yourself and
22:50

22:50 you’re able to remove yourself from the
22:52

22:52 day-to-day stresses associated uh with
22:55

22:55 that business and uh and hopefully get
22:58

22:58 to a point where no one asset
23:01

23:01 really makes a difference right so for
23:03

23:03 example today
23:05

23:05 we own
23:06

23:06 10 close to 10 000 student housing beds
23:09

23:09 and you know maybe a dozen different
23:10

23:10 markets and
23:12

23:12 we
23:12

23:12 we own a management company that manages
23:15

23:15 our properties they have close to 250
23:18

23:18 employees but wow none of them report to
23:20

23:20 me they all report to my partner who
23:22

23:22 runs
23:23

23:23 the operations of our student housing
23:25

23:25 business and uh so he deals with the
23:28

23:28 day-to-day stress of uh you know dealing
23:31

23:31 with the tenants and you know dealing
23:33

23:33 with the move-ins and move-outs and
23:35

23:35 turns and parents and complaints and
23:37

23:37 so the advantage of building a business
23:39

23:39 is that you’re able to create enough
23:41

23:41 scale
23:42

23:42 that you can put human infrastructure in
23:44

23:44 place that can that brings an expertise
23:48

23:48 that you don’t have and is able to
23:50

23:50 absorb the stress of the day-to-day
23:52

23:52 issues that you don’t have to absorb and
23:55

23:55 and the same applies to even buying
23:57

23:57 properties you know there’s no one
23:59

23:59 property that we’re buying today that
24:01

24:01 we have to buy or that really makes a
24:03

24:03 difference i have an acquisitions team
24:05

24:05 that is out chasing multiple assets we
24:07

24:07 win we lose
24:09

24:09 uh in the beginning you know if i was
24:11

24:11 pursuing one deal and i lost that deal
24:13

24:13 that was devastating right yeah you know
24:15

24:15 the last
24:16

24:16 15 years or so it’s been really about
24:18

24:18 these businesses and these platforms
24:20

24:20 so we have the student housing platform
24:23

24:23 i have the uh value-add investing
24:25

24:25 platform we have the ground up
24:27

24:27 development and opportunity zone
24:29

24:29 platform we have the park city platform
24:31

24:31 we have the retail platform and these
24:33

24:33 businesses really
24:34

24:34 operate independently of each other and
24:37

24:37 they’re and they’re all run by partners
24:39

24:39 uh so we’re a big believer or i’m a big
24:42

24:42 believer in alignment
24:43

24:43 um so i’d much rather bring in a partner
24:46

24:46 or sponsor a partner
24:48

24:48 to run a business for me and give them a
24:51

24:51 significant portion of the ownership to
24:52

24:52 create alignment then have to be
24:55

24:55 involved in the day-to-day operation of
24:57

24:57 the business which is
24:58

24:58 really what enables us to keep our
25:00

25:00 sanity i mean if we were dealing with
25:02

25:02 all the day-to-day issues of all these
25:04

25:04 businesses
25:05

25:05 uh you’re right i think it would be
25:07

25:07 overwhelming yeah the quality control
25:09

25:09 that’s a lot to
25:11

25:11 have to put your head on a pillow at
25:12

25:12 night and not think about it’s all about
25:14

25:14 the people
25:15

25:15 as it is with everything so you know
25:17

25:17 you’ve got to be able to trust your
25:18

25:18 people and your partners and
25:20

25:20 allow them to execute and engage where
25:23

25:23 you can add value
25:25

25:25 which is the way we’ve we’ve set up our
25:26

25:26 businesses today how do you add value
25:29

25:29 is it improvements or
25:31

25:31 being
25:33

25:33 changing leases
25:34

25:34 um so i’d say that my involvement is at
25:38

25:38 a much higher level it’s
25:40

25:40 really trying to understand where the
25:42

25:42 strategic opportunities are okay and try
25:45

25:45 to help my partners
25:47

25:47 uh in the vision uh both in terms of uh
25:52

25:52 figuring out where to direct their
25:54

25:54 activities and uh and also on the
25:57

25:57 capital side uh you know i’m the primary
25:60

25:60 provider of capital to the business and
26:02

26:02 uh have most of the capital
26:04

26:04 relationships and lender relationships
26:06

26:06 so that’s my
26:07

26:07 my uh my primary involvement
26:10

26:10 speaking of lenders i i was wondering
26:12

26:12 how do you utilize leverage
26:15

26:15 uh you know everybody has different
26:16

26:16 philosophies what do you
26:19

26:19 is it different for each asset class or
26:21

26:21 it’s different for asset class and for
26:24

26:24 the business plan for the asset so
26:26

26:26 typically if we’re buying a transitional
26:28

26:28 asset we’re going to use
26:30

26:30 um
26:32

26:32 floating rate debt
26:33

26:33 in this environment where debt is really
26:35

26:35 inexpensive
26:37

26:37 we’re using a lot of it so we’ve started
26:40

26:40 to push up our leverage levels
26:42

26:42 because the debt is so inexpensive and
26:44

26:44 we expect it to be that way for the next
26:46

26:46 couple of years
26:48

26:48 if we’re buying a
26:50

26:50 asset that we’re expecting to hold for
26:52

26:52 the long term typically we’d use
26:54

26:54 fixed rate long-term debt uh one of the
26:57

26:57 big lessons we learned coming out of the
27:00

27:00 2008 downturn is that we have really
27:03

27:03 diversified
27:05

27:05 our lenders that we work with and try to
27:08

27:08 identify the lenders who are best suited
27:10

27:10 for the types of
27:12

27:12 transactions that we’re doing so we work
27:14

27:14 with a lot of different lenders right
27:15

27:15 now that have core relationships that
27:18

27:18 focus on certain
27:20

27:20 types
27:21

27:21 but i’d say generally that is
27:23

27:23 very available right now it is
27:25

27:25 relatively inexpensive and um it’s
27:29

27:29 really what’s driving valuation today is
27:31

27:31 the fact that people can access yeah a
27:33

27:33 lot of very inexpensive debt and you
27:35

27:35 have to be careful of that as well
27:36

27:36 because that is a
27:38

27:38 it’s a two-edged sword it can work with
27:41

27:41 you and it can work against you
27:43

27:43 yeah that’s uh i
27:45

27:45 that’s you know people talk about the
27:47

27:47 bubble right now and everything
27:48

27:48 happening and interest rates if they go
27:50

27:50 up how it’ll affect prices
27:53

27:53 i mean but with construction costs like
27:55

27:55 you were talking about i was listening
27:56

27:56 to some something on the way up here
27:58

27:58 when i was driving
28:00

28:00 and it talked about how a lot of the
28:02

28:02 waiters and and busboys in restaurants
28:04

28:04 are now you know they used to get paid
28:06

28:06 15 an hour now they’re going to get
28:08

28:08 labor jobs for 20 an hour and there’s
28:10

28:10 still an incredible shortage of labor so
28:13

28:13 it that inflates a lot of the prices
28:16

28:16 so where do you think we’re going from
28:17

28:17 here i mean generally it don’t has
28:19

28:19 current event type questions but you
28:21

28:21 know i’d be curious to hear what you
28:23

28:23 think well number one i think it’s great
28:25

28:25 that people can earn a living wage
28:28

28:28 i also think it’s great that it’s being
28:30

28:30 driven by market forces
28:32

28:32 um and that employers have to pay more
28:36

28:36 money in order to get employees to do
28:38

28:38 the job
28:39

28:39 um so i think that’s very productive
28:43

28:43 for our economy and for our society
28:45

28:45 because this idea that we would we’re
28:47

28:47 developing this permanent underclass
28:49

28:49 that even though they were working
28:51

28:51 full-time weren’t generating enough
28:53

28:53 income to support the the basic needs of
28:56

28:56 their family i think is really important
28:58

28:58 um i think that we go through
29:01

29:01 uh cycles like this where it becomes
29:04

29:04 expensive to uh
29:07

29:07 to deliver
29:08

29:08 product maybe uh so expensive that it
29:11

29:11 doesn’t it is not economically viable to
29:14

29:14 build and deliver it
29:16

29:16 on the other hand
29:18

29:18 my view is evolving into one where i
29:22

29:22 think that a lot of the factors that are
29:26

29:26 that are inflationary in our environment
29:28

29:28 are going to
29:29

29:29 diminish over time so um i think that
29:33

29:33 there are a lot of transitory
29:35

29:35 cost increases that have occurred in the
29:36

29:36 market and uh i think a lot of those are
29:39

29:39 going to change over time so a very good
29:41

29:41 example of that would be
29:43

29:43 lumber which is i think is close had
29:46

29:46 close to quadrupled in price and we had
29:49

29:49 development projects that we were
29:51

29:51 working on that just didn’t make sense
29:53

29:53 given the cost of lumber yeah and our
29:55

29:55 advice to our partners was to wait uh we
29:58

29:58 thought it was going to take another
29:59

29:59 year before lumber prices got to a place
30:01

30:01 where it made the projects viable but
30:04

30:04 over the last few weeks
30:07

30:07 prices have come down pretty
30:09

30:09 significantly so i think they’re market
30:11

30:11 forces in effect that will ultimately
30:13

30:13 bring
30:14

30:14 you know these factors into equilibrium
30:16

30:16 and i think that the
30:18

30:18 societal benefits of uh labor cost
30:21

30:21 increases are going to be very positive
30:24

30:24 on the other hand i believe a lot of
30:25

30:25 people will enter back into the labor
30:28

30:28 force again
30:29

30:29 when the unemployment
30:31

30:31 benefits
30:32

30:32 expire which i think is going to happen
30:34

30:34 around labor day so uh i think that that
30:37

30:37 uh
30:38

30:38 inflationary pressure on labor costs is
30:40

30:40 going to diminish as well yeah
30:42

30:42 you’re talking about pandering you’re
30:44

30:44 your new hotel is that the newest
30:46

30:46 project you have or there’s another
30:48

30:48 project here that there’s there’s always
30:50

30:50 another project yeah
30:52

30:52 what’s your favorite project that you
30:54

30:54 found most exciting challenging
30:56

30:56 rewarding not on a financial level but
30:58

30:58 on a on more of a personal level
31:01

31:01 so uh in in park city we’ve developed a
31:04

31:04 very significant
31:06

31:06 development company that is focused both
31:09

31:09 on developing um
31:11

31:11 condominium hotel and housing assets and
31:14

31:14 park city but is also now focused on
31:16

31:16 developing hospitality and assets and
31:19

31:19 other resort markets
31:20

31:20 so i’d say in general
31:23

31:23 it’s a very exciting business and
31:26

31:26 a lot of that is because of the
31:28

31:28 creativity required in the process so i
31:31

31:31 really came to real estate development
31:33

31:33 at a relatively late stage in my career
31:36

31:36 i was primarily focused on the real
31:37

31:37 estate investment business
31:39

31:39 until the last
31:41

31:41 seven or eight years and
31:44

31:44 so i really
31:45

31:45 enjoy the process of
31:48

31:48 of visioning and creating and
31:50

31:50 conceptualizing um in this market in
31:53

31:53 particular where we have a very strong
31:55

31:55 personal connection to the community
31:58

31:58 we’ve been coming here for close to 30
31:59

31:59 years we’ve had a home here for 13 years
32:01

32:01 now we understand
32:04

32:04 what’s missing here and
32:06

32:06 we also understood
32:09

32:09 what we needed to what needed to be
32:11

32:11 created in order to
32:14

32:14 take this entire entire market the ski
32:17

32:17 market to a whole different level what
32:19

32:19 was missing and to be engaged in helping
32:21

32:21 to create
32:23

32:23 an environment and an experience that
32:25

32:25 will change the way people enjoy
32:27

32:27 this mountain is very
32:29

32:29 rewarding we’ve also gotten very
32:31

32:31 involved in the community
32:33

32:33 philanthropically and uh
32:35

32:35 and socially and uh so this is a very
32:37

32:37 big part of our lives today
32:40

32:40 the pendery project is by far the
32:42

32:42 biggest project we’ve ever done it’s
32:44

32:44 probably the riskiest project we’ve ever
32:46

32:46 done but it’s also drawn on
32:48

32:48 every skill set
32:49

32:49 that we have
32:51

32:51 so we’ve loved the challenge we’ve loved
32:53

32:53 the creativity
32:55

32:55 we’ve gotten quite fortunate with the
32:57

32:57 market the project is 100 pre-sold
32:60

32:60 and it’s opening in december so um
33:04

33:04 a lot of the worst
33:06

33:06 or most worrisome components of the risk
33:08

33:08 are now behind us so we’re really
33:10

33:10 beginning to enjoy bringing bringing the
33:13

33:13 project to life and it will be a
33:15

33:15 living organism uh it’s very activated
33:18

33:18 it has
33:19

33:19 uh six restaurants and 153 condominiums
33:22

33:22 and uh big retail plaza and uh so it’s a
33:27

33:27 very exciting
33:29

33:29 project that space in the middle of
33:30

33:30 those three buildings looks like it
33:32

33:32 would be a great you know it would be a
33:34

33:34 nice
33:36

33:36 walking hangout hotel yeah it was really
33:38

33:38 created that way uh the buildings were
33:41

33:41 really designed around the outdoor space
33:43

33:43 okay uh to create
33:45

33:45 a
33:46

33:46 great opportunity for both the community
33:49

33:49 to engage in the non-ski season
33:53

33:53 by encouraging
33:54

33:54 families to enjoy
33:57

33:57 a very safe clean controlled highly
33:60

33:60 programmed environment with
34:02

34:02 lots of parking that was easily
34:04

34:04 accessible
34:06

34:06 but also to create a great upray ski
34:08

34:08 environment for skiers a 24 7
34:11

34:11 experience for
34:13

34:13 people coming into the new ski village
34:15

34:15 that we’re creating
34:18

34:18 so
34:19

34:19 the goals of the project are were pretty
34:21

34:21 ambitious it wasn’t just to create a
34:23

34:23 hotel yes uh
34:25

34:25 it’s going to create a place that um
34:28

34:28 will hopefully play a role in the lives
34:31

34:31 of a lot of people
34:33

34:33 we’re also building a uh and this is a
34:36

34:36 more current project an employee housing
34:38

34:38 project with uh
34:39

34:39 1100 beds at the base of the canyons
34:41

34:41 village because
34:43

34:43 as these communities grow and the
34:45

34:45 housing becomes more expensive and
34:46

34:46 unaffordable it’s very important to have
34:50

34:50 affordable housing for the employees to
34:52

34:52 live in where they’re not driving
34:54

34:54 long distances every day to get to work
34:56

34:56 so
34:57

34:57 so we’re involved in many aspects of
34:60

34:60 housing we’re also we’re working on
35:01

35:01 another
35:02

35:02 relatively large mixed use project in
35:04

35:04 the area we’re working on another
35:05

35:05 boutique hotel
35:07

35:07 another townhome project and uh so our
35:10

35:10 development company is very busy wow
35:12

35:12 okay yeah that’s great we spend the
35:14

35:14 majority of our time did you think that
35:17

35:17 this would happen when you were getting
35:18

35:18 in real estate no
35:20

35:20 no
35:21

35:21 not at all um
35:23

35:23 i think that um
35:25

35:25 the kind of life we’ve been able to
35:27

35:27 create for
35:29

35:29 our family and
35:31

35:31 is
35:32

35:32 way beyond anything i would have
35:34

35:34 imagined i always wondered who those
35:36

35:36 people were that had homes on the ski
35:38

35:38 mountain where they could ski out of
35:39

35:39 their back door onto the slope yeah
35:42

35:42 i skied past those homes for many years
35:44

35:44 thinking that
35:45

35:45 just as i rode my bike around
35:48

35:48 a certain country club in los angeles
35:50

35:50 wondering who those members were and how
35:52

35:52 they ever got to a place where they
35:53

35:53 could
35:54

35:54 become a member but that’s one of the
35:56

35:56 great things about real estate it is
35:58

35:58 provide opportunities to
35:60

36:00 accomplish goals that you could never
36:02

36:02 imagine
36:03

36:03 do you have like three key daily habits
36:06

36:06 that you that sort of help set your day
36:08

36:08 and helped you in the right mindset to
36:12

36:12 um i’m not sure my life is not
36:14

36:14 structured in that way
36:15

36:15 um i mean the first thing is i’ve got to
36:18

36:18 figure out what city i’m waking up in
36:20

36:20 we still live in
36:22

36:22 we live in different places and in
36:23

36:23 different places i have different i have
36:25

36:25 different habits
36:27

36:27 work is a big part of my life but so is
36:29

36:29 my family
36:31

36:31 and
36:33

36:33 so we we now have the freedom to do a
36:35

36:35 lot of things
36:37

36:37 that we weren’t able to do as we were
36:39

36:39 building the business so i think it’s
36:41

36:41 we put a lot of effort into enjoying the
36:44

36:44 results
36:45

36:45 of what we’ve accomplished but also
36:47

36:47 giving back uh we’re very involved
36:50

36:50 in community and philanthropically and
36:52

36:52 that’s
36:53

36:53 it’s a very big part of our life not
36:55

36:55 just writing checks but getting very
36:57

36:57 involved in helping our
36:60

36:60 community organizations accomplish their
37:02

37:02 goals because we’ve developed a lot of
37:05

37:05 skills
37:06

37:06 over the years which we think we can
37:08

37:08 bring to the
37:09

37:09 uh not-for-profit world and in fact
37:11

37:11 which we’re actively doing how are you
37:13

37:13 doing that just
37:15

37:15 curious because you were involved with
37:16

37:16 the federation and the leadership i
37:18

37:18 think that was a great program yeah so
37:20

37:20 in so i’d been very active in the jewish
37:23

37:23 community in los angeles for many years
37:25

37:25 probably 25 plus years including being
37:28

37:28 on the board of the jewish federation
37:29

37:29 the jewish community foundation
37:31

37:31 the border of my temple and um so my uh
37:35

37:35 involvement in the non-profit for profit
37:37

37:37 world has always been as an entrepreneur
37:39

37:39 as what i call a philanthropic
37:41

37:41 entrepreneur so really not accepting the
37:44

37:44 status quo
37:45

37:45 but trying to figure out how to build
37:48

37:48 programs or initiatives that best met
37:51

37:51 the needs of the time
37:52

37:52 that we were living in so
37:55

37:55 and i’m fortunate because i had really
37:57

37:57 great partners in the non-profit world
37:59

37:59 and we were able to create some really
38:01

38:01 phenomenal programs that have been able
38:03

38:03 to sustain themselves
38:05

38:05 even beyond my involvement
38:08

38:08 in park city we have focused most of our
38:11

38:11 efforts on the
38:13

38:13 on the immigrant
38:15

38:15 population how which is a
38:17

38:17 a community that i am very sensitive to
38:21

38:21 particularly
38:22

38:22 the plight of those immigrants who were
38:25

38:25 not able to access public services right
38:28

38:28 and
38:30

38:30 particularly in the area of early
38:31

38:31 childhood education which i’ve learned
38:34

38:34 in this community is the single biggest
38:37

38:37 need that
38:38

38:38 that much of the immigrant population
38:40

38:40 has so we’re in a service economy now
38:43

38:43 where
38:44

38:44 many
38:46

38:46 parents or
38:48

38:48 have multiple jobs or both parents
38:49

38:49 certainly have a job and they need to be
38:51

38:51 able to get their children into the
38:54

38:54 educational system but most of them
38:56

38:56 can’t afford to
38:57

38:57 because there’s no
38:58

38:58 [Music]
38:59

38:59 public uh public educational system for
39:02

39:02 kids age zero to five so
39:04

39:04 for them a lot of it becomes informal so
39:06

39:06 what we focused on here is
39:09

39:09 uh providing the capacity
39:11

39:11 to fill the need of the community so our
39:15

39:15 goal is to ensure that any
39:17

39:17 any pre-k kid has access to
39:19

39:19 early childhood education because we’ve
39:21

39:21 seen the consequence of that as kids
39:24

39:24 move through the educational system and
39:26

39:26 really never catch up many of whom never
39:28

39:28 catch up from their lack of
39:30

39:30 access to uh
39:32

39:32 esl skills or social skills
39:34

39:34 that that are developed in those pre-k
39:36

39:36 years that’s touching i mean that’s uh
39:39

39:39 takes a lot of heart
39:41

39:41 uh
39:42

39:42 yeah that’s great i’ve seen personally
39:45

39:45 that
39:46

39:46 you i mean you created a program that i
39:47

39:47 was a part of that uh
39:49

39:49 that really does open your eyes and
39:52

39:52 expose you to things that you know i
39:54

39:54 still feel very fortunate and i still
39:55

39:55 bet you know
39:57

39:57 get the benefits from the program that i
39:59

39:59 went through so thank you so much is
40:01

40:01 always on leverage it’s really in the
40:04

40:04 same way that we use leverage in real
40:05

40:05 estate to acquire projects on a much of
40:09

40:09 a much larger scale than we otherwise
40:11

40:11 could i look to utilize that in the
40:13

40:13 not-for-profit world and that’s really
40:15

40:15 leveraging the resources of
40:18

40:18 not-for-profit organizations uh either
40:20

40:20 their capital resources or their
40:22

40:22 expertise or personnel to create
40:24

40:24 programs that can have an impact
40:26

40:26 significantly beyond what i could do
40:29

40:29 myself
40:30

40:30 so i was very focused
40:33

40:33 10 or 12 years ago on the
40:35

40:35 on the development of leadership in the
40:37

40:37 not-for-profit world and the ability to
40:40

40:40 leverage resources to create leadership
40:42

40:42 programs that would enable
40:45

40:45 people to become
40:47

40:47 better qualified leaders in the
40:48

40:48 not-for-profit world while
40:51

40:51 receiving concurrently a very personal
40:55

40:55 value proposition
40:57

40:57 because i’ve always been of the opinion
40:59

40:59 that people have lots of choices as to
41:01

41:01 what they do with their time or their
41:02

41:02 money and if you can create
41:05

41:05 the best option for them that is the one
41:06

41:06 they’re going to pick so they’re going
41:07

41:07 to look at the value proposition
41:09

41:09 and uh but the community benefit is
41:12

41:12 great yeah the networks that have
41:14

41:14 created the organizations that end up
41:16

41:16 with
41:17

41:17 young board members and chairs and etc
41:20

41:20 so the benefits can be significant over
41:23

41:23 time but it has to be
41:25

41:25 impactful it has to be sustainable and
41:27

41:27 it has to deliver value
41:29

41:29 interesting
41:31

41:31 well that’s uh that’s all my questions i
41:33

41:33 really appreciate you meeting with me
41:35

41:35 and having this discussion and just in
41:37

41:37 general you’ve always been an
41:39

41:39 inspiration to me so thank you well
41:41

41:41 thanks very much i really appreciate you
41:43

41:43 coming all the way over how to do this
41:45

41:45 oh my pleasure it doesn’t feel like it’s
41:46

41:46 been too painful for you either oh my
41:48

41:48 god yeah well i’m gonna be back here a
41:50

41:50 lot great so well we love this place and
41:53

41:53 tell people to come visit yeah
41:56

41:56 cool thank you
41:59

41:59 [Music]

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