Real Angle: Building Success in Commercial Real Estate

The Rise of Modular Construction, Roger Krulak @ Fullstack Modular

Roger Krulak, founder and president of Fullstack Modular, discusses modular construction and its benefits. Fullstack Modular is a fully volumetric design manufacturer system for mid to high-rise buildings. They have built the tallest modular building in the world, hotels, affordable housing, and student housing. They have factories in Connecticut and Portland, allowing them to serve both the East Coast and West Coast. Modular construction offers faster construction, less neighborhood disruption, and cost savings through economies of scale. Fullstack Modular aims to be part of the development team and drive the product through the factory to level out the volatility of the development cycle.
Keywords modular construction, Fullstack Modular, volumetric design, mid-rise buildings, high-rise buildings, tallest modular building, hotels, affordable housing, student housing, factories, East Coast, West Coast, faster construction, cost savings, economies of scale, development team, volatility
Chapters
00:00 Introduction to Fullstack Modular
03:48 Benefits of Modular Construction
06:34 Industrialization in Construction
10:49 Becoming Part of the Development Team
13:08 Modular Construction in the Market
18:13 Adoption of Offsite Construction
21:22 Collaboration with Building Trades
24:02 Limitations of Modular Construction
25:12 Applications of Modular Construction

The Surprising Strength of Post-Pandemic Brick-and-Mortar Retail, Michael Berne @ MJB Consulting

In this conversation, Joshua Kahr speaks with Michael Berne of MJB Consulting about the state of the retail market and trends. They discuss the role of MJB Consulting in helping clients understand the realistic retail expectations for their projects. They also explore the influence of retail on site planning and space planning and the importance of understanding psychographics in retail. They touch on the impact of the pandemic on retail and the resilience of brick-and-mortar stores. Finally, they discuss the future trends in retail, including the growth of experiential retail and the success of off-price retailers.
www.consultmjb.com (for consulting)
www.michaeljberne.com (for speaking and writing)
Keywords retail market, trends, MJB Consulting, realistic retail expectations, site planning, space planning, psychographics, pandemic impact, brick-and-mortar stores, experiential retail, off-price retailers
Chapters
00:00 Introduction and Overview
02:02 Role of MJB Consulting in Retail
03:23 Influence of Retail on Site Planning
05:59 Psychographics in Retail
10:02 Resilience of Brick-and-Mortar Stores

Mobile Home Investing, Sam Hales @ SG Communities

In this conversation, Joshua Kahr speaks with Sam Hales of SG Communities about mobile home parks and manufactured communities. They discuss the reasons why Sam got into mobile home parks, the challenges of finding product, the lack of new park development, and the perception problem associated with mobile home parks. They also touch on the financing and investor relations aspects of the business. Sam mentions that they are currently considering the future direction of Saratoga Group, whether to continue with syndication or explore other options. Sam Hales, CEO of Saratoga Group, discusses the mobile home park industry and the growth of his organization. He shares his focus on providing stability for residents and employees and building a career path for his team. Sam talks about the challenges of running a family business and the importance of having consistent rules for all employees. He also shares a surprising anecdote about a manager burning down a clubhouse on the morning of a closing. The conversation ends with a discussion about the current market and the increase in activity in the real estate industry.
 
Keywords mobile home parks, manufactured communities, product availability, new development, perception problem, financing, investor relations, syndication, mobile home parks, growth, stability, career path, family business, rules, surprising anecdote, market activity
 
Chapters 00:00 Introduction and Setting
02:30 Recession Resistance and Perception Problem
05:11 Zoning and Approvals for New Parks
07:06 Housing Crisis and Perception Problem
09:03 Changing Perception through Upgrades
11:41 Refinancing with Fannie Mae or Freddie Mac
14:11 Considerations for the Future of Saratoga Group
22:48 Surprising Anecdote: Manager Burns Down Clubhouse
31:04 Increased Market Activity in Real Estate

State of the Real Estate Accounting Industry, Howard Altshuler @ Weaver

In this conversation, Joshua Kahr and Howard Altshuler discuss the state of the accounting industry and the Fort Worth real estate market. They explore the growth and opportunities in the Fort Worth area, the impact of the pandemic on the office market, and the strategic growth of accounting firms through acquisitions and private equity investments. The conversation covers various topics related to the accounting profession, including talent acquisition, education requirements, the impact of AI, and the culture of accounting firms. Howard Altshuler shares insights on the challenges and opportunities in the accounting industry, as well as the importance of company culture and talent development.
Keywords
accounting industry, Fort Worth real estate market, office market, growth, acquisitions, private equity investments, accounting, talent acquisition, education requirements, AI impact, company culture, talent development
Chapters
00:00 Growth and Opportunities in Other Markets
15:06 Strategic Growth of Accounting Firms
20:11 Navigating Talent Acquisition in the Accounting Profession
25:00 Education Requirements and Challenges 30:42 The Impact of AI on Accounting: Uncertainty and Potential

Multi-tenant Flex Industrial Investing, Grant Reaves @ Stoic Equity Partners

Grant Reaves, Managing Director and Co-Founder of Stoic Equity Partners, discusses the industrial real estate market. Stoic primarily invests in multi-tenant flex industrial properties in the Southeast region of the United States. They focus on secondary markets that offer in-place yield and potential for rent growth. The demand for flex industrial space is high, with a variety of tenants including home services businesses, pharmaceutical companies, general contractors, and more. Stoic follows a value-add strategy, acquiring properties with varying degrees of stabilization and pushing rents to increase returns. They have recently launched a fund to raise equity for their acquisitions. Grant Reaves and Joshua Kahr discuss their experiences in the real estate industry and the growth of their firms. They talk about the importance of remaining humble and working well with partners. Grant shares the story of how he and his partner Jeremy Friedman started working together and their different backgrounds in investment banking and home building. They discuss the evolution of their firm and their plans for future funds. Grant also shares a funny story about discovering people living in one of their self-storage units. They talk about the importance of marketing and building relationships with investors.
 
Keywords
industrial real estate, flex industrial, secondary markets, in-place yield, rent growth, value-add strategy, fund, real estate, growth, partnership, investment banking, home building, fund, syndication, marketing, investors
Takeaways
Stoic Equity Partners invests in multi-tenant flex industrial properties in the Southeast region of the United States.
They focus on secondary markets that offer in-place yield and potential for rent growth.
Flex industrial properties have a variety of tenants, including home services businesses, pharmaceutical companies, and general contractors.
Stoic follows a value-add strategy, acquiring properties with varying degrees of stabilization and pushing rents to increase returns.
They have recently launched a fund to raise equity for their acquisitions. Remaining humble and working well with partners is important in the real estate industry.
Building relationships with investors and marketing through various channels is crucial for raising funds.
The evolution of a firm often involves starting with friends and family, then moving to syndication, working with family offices, and eventually launching a fund.
Putting out content and showcasing expertise through blogs, videos, and podcasts can help attract investors.
Flexibility and problem-solving skills are valuable assets in the real estate business.
The internet has made it easier to raise funds and connect with investors from different locations.
Finding the right investors who align with the firm's vision is key to long-term success.
Documenting everything on social media can have unintended consequences and impact one's reputation.
Selling and convincing are important skills in both brokerage and fund management.
Keeping things simple and not overcomplicating deals is crucial in the real estate industry. 
Chapters
00:00 Introduction and Background
02:10 Investing in Multi-Tenant Flex Industrial Properties
04:59 The Diversity of Tenants in Flex Industrial
10:00 Trends and Outlook for the Industrial Market
12:53 Value-Add Strategy in Industrial Real Estate
14:55 Stoic's Approach to Property Management
20:11 The Evolution from Syndication to Fund Management
23:03 Attracting Investors through Content Marketing and Relationship Building

High Leverage Balance Sheet Lending, Maxwell Wu @ Fulcrum Lending

In this conversation, Joshua Kahr speaks with Maxwell Wu, CEO of Fulcrum Lending, about their lending business in the multifamily space. They discuss Fulcrum's high-leverage lending approach, their transition from being a correspondent for Freddie and Fannie to a balance sheet lender, and the importance of technology in their operations. They also touch on the current market dynamics, the future of gap financing, and Fulcrum's growth plans.
Keywords
multifamily lending, high leverage lending, balance sheet lender, technology, market dynamics, gap financing, growth plans
Takeaways
Fulcrum Lending is a high leverage lender in the multifamily space, offering loans with a 1.0 debt service coverage ratio (DSCR) and up to 75% loan-to-value (LTV) ratios.
They started as a correspondent for Freddie and Fannie but transitioned to a balance sheet lender due to rate increases and the need for gap financing.
Fulcrum uses their proprietary technology platform to quickly evaluate deals and make data-driven lending decisions.
The current market conditions, including the increase in money supply, suggest that the window for gap financing will continue for another 18 months to two years.
Fulcrum's future plans include expanding their footprint on the West Coast and Southeast, offering their own loan products, and focusing on being the best in the multifamily space.
 
Chapters
00:00 Introduction and Background
03:00 The Role of Technology in Lending
07:06 Lending Terms and Leverage Levels
09:05 Efficiency and Speed in the Lending Process
11:13 The Importance of In-Person Meetings
22:45 The Window for Gap Financing
26:25 The Impact of Money Supply on the Market
30:06 Fulcrum's Vision for Growth

Exploring Land Development in Texas, Alexander Vitenas @ Land Based Strategies

In this conversation, Josh Kahr speaks with Alex Vitenas about land development. They discuss the process of land development in Texas, including tax foreclosures and auctions. Alex shares his experience in purchasing distressed assets and flipping properties. He also talks about his funding strategies and the importance of finding the right deals. Alex highlights the success he has had with subdividing land and selling the parcels individually. Alexander Vitenas discusses his strategy of utilizing leverage to acquire properties and pay off debt quickly. He shares his approach of accumulating cash and then using leverage to do acquisitions. He also talks about the benefits of delayed gratification and the challenges of analyzing a large number of deals. Vitenas explains his decision to focus on finding the best deals rather than a specific neighborhood and the importance of being able to quickly identify the highest potential opportunities. He also shares a story about a challenging property purchase and the legal issues he faced.
 
Takeaways
Land development in Texas involves tax foreclosures and auctions. 
Purchasing distressed assets can be a profitable strategy. 
Finding the right deals and focusing on specific areas can lead to success. 
Subdividing land and selling parcels individually can be a lucrative approach. Utilizing leverage can help accelerate debt repayment and property acquisition.  Accumulating cash and then using leverage can be an effective strategy. 
Delayed gratification can have significant benefits in the long term. 
Analyzing a large number of deals can be challenging but can lead to finding the best opportunities. 
Focusing on the best deals rather than a specific neighborhood can result in higher deal flow and better returns. 
Legal issues can arise in property purchases, and it is important to navigate them effectively.
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Chapters 00:00 Land Development in Texas 11:45 Finding the Right Deals and Focusing on Specific Areas 22:26 The Benefits of Delayed Gratification 29:11 Navigating Legal Issues in Property Purchases

Building a Vertically Integrated Real Estate Company in New Orleans, Michael Merideth @ VPG Enterprise

Michael Merideth, CEO of VPG Enterprise, discusses his journey with Joshua Kahr in real estate and the growth of his company. VPG Enterprise is a vertically integrated real estate company based in New Orleans, specializing in affordable housing. Michael started investing in small rental properties in 2011 and has since grown the company to include institutional and affordable housing developments. The company has also expanded geographically, working on federal projects in Miami, Texas, Arkansas, and Oklahoma. Michael's vision for the future is to become a billion-dollar real estate company with a focus on more stable and less risky projects.
Takeaways
VPG Enterprise is a vertically integrated real estate company based in New Orleans, specializing in affordable housing. 
Michael started investing in small rental properties in 2011 and has since grown the company to include institutional and affordable housing developments. 
The company has expanded geographically, working on federal projects in Miami, Texas, Arkansas, and Oklahoma. 
Michael's vision for the future is to become a billion-dollar real estate company with a focus on more stable and less risky projects.
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Chapters 00:00 Introduction and Background 01:15 Building a Vertically Integrated Real Estate Company in New Orleans 13:28 The Vision for the Future: Becoming a Billion-Dollar Real Estate Company

Benchmarking Performance, with Norman Miller, Professor Emeritus at the University of San Diego

In this conversation, Joshua Kahr and Norman Miller, a professor emeritus at the University of San Diego, discuss various aspects of real estate investment. He explains the evolution of family offices and the challenges of benchmarking in real estate. Miller emphasizes the importance of long-term thinking and net present value in investment decisions. He also highlights the significance of storytelling and track records in the industry. Additionally, Miller discusses the role of risk, branding, and niche segments in real estate investment. He concludes by expressing optimism about the future of the real estate market.
Takeaways
Real estate investment requires a long-term perspective and a focus on net present value rather than short-term gains. 
Storytelling and track records play a crucial role in attracting investors and building credibility in the real estate industry. 
Benchmarking in real estate can be challenging due to the lack of public data and the diversity of property types. 
Investors should consider the risk-adjusted returns and the financing strategies when evaluating real estate investments. 
Niche segments, such as data centers and self-storage, offer promising opportunities for real estate investors.
 
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Chapters 00:00 Introduction and Background 01:27 The Evolution of Family Offices 03:43 Challenges of Benchmarking in Real Estate 05:36 Determining the Right Level of Risk in Real Estate Investing 07:23 Internal Rate of Return (IRR) vs. Net Present Value (NPV) 09:17 The Importance of Storytelling in Real Estate Investment 10:28 The Challenge of Measuring Success in Real Estate 13:18 The Role of Risk in Real Estate Investment 14:17 The Importance of Track Records in Real Estate Investment 19:14 The Value of Branding in Real Estate 21:45 The Future of Private Wealth Managers in Real Estate 23:31 The Importance of Niche Real Estate Segments 26:06 The Role of REITs in Real Estate Investment 31:47 The Future of the Real Estate Market 33:21 Conclusion

Transitioning from LP to GP, Diana Lin @ Navi Ventures

In this conversation, Josh speaks with Diana Lin from Navi Ventures. We discuss her role in the company and their focus on value-add multifamily properties. She shares the markets they operate in, including Arizona, DFW, and New Mexico. Diana explains how she transitioned from being an architect to launching her own real estate venture. She emphasizes the importance of partnerships and finding mentors in the industry. Diana also highlights the value of hands-on experience in real estate rather than relying solely on formal education.
Diana Lin discusses her transition from being a limited partner (LP) to a general partner (GP) in real estate deals. She highlights the benefits of being an LP, such as gaining perspective on underwriting and vetting sponsors. Diana also shares her surprises and challenges as a GP, emphasizing the importance of time management and active asset management. She expresses her interest in focusing on ground-up development in the future and leveraging her architectural background to design her own projects. Overall, Diana's journey showcases the evolution and growth of a real estate professional.
 
Takeaways
Navi Ventures focuses on value-add multifamily properties in markets such as Arizona, DFW, and New Mexico. 
Diana Lin transitioned from being an architect to launching her own real estate venture. 
Partnerships and finding mentors are crucial in the real estate industry. 
Hands-on experience in real estate is valuable and can be more beneficial than formal education. 
Transitioning from an LP to a GP provides valuable perspective on underwriting and vetting sponsors. 
Active asset management is crucial for success as a GP. 
Being a GP requires time management and the ability to wear multiple hats. 
Ground-up development offers opportunities for creative design and control over the entire project.
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Chapters 00:00 Introduction and Company Overview 01:07 Markets and Location 04:07 Diana's Background in Architecture 06:27 Transitioning from Architecture to Real Estate 08:26 The Decision to Launch Navi Ventures 10:55 Choosing Value-Add Multifamily 12:36 Importance of Partnerships and Trust 14:04 The Value of Experience over Education 15:08 Learning by Doing 16:24 The Role of Architecture in Real Estate 18:43 Benefits of Being an LP 21:09 Surprises of Being a GP 22:34 Balancing Work and Family 25:36 Future Plans: Ground-Up Development 28:38 Architecture Background and Development