StripMallGuy

😳 👀

Had lunch yesterday with a gentleman who’s built a monster real estate empire from nothing. We spoke for over two hours, and he walked me through a journey which started around 45 years ago. About halfway through, he started a sentence that I completed in my head half-way through. I knew what he was going to say. I thought. “Of course, I had a couple of big breaks…” I figured he’d list a couple of deals that made most of the difference. Turned out I was way off. “Of course, I had a couple of big breaks…” And what followed were the names of some of the people he hired along the way. He sees success as based mostly on the team you build around you, and highlighted the great importance of overpaying those people. “I always knew that if a competitor tried to recruit them, they’d be shocked by what it would cost, and they’d go away.” In essence, his fortune was built on one principle above all else: You find great people, and you overpay them.

Great real estate’s trading at 30% discounts to a few years ago. Yet again, the folks who swore they’d jump in when prices cooled are sitting on the sidelines, boots shaking, learning that the whole “be greedy when others are fearful” thing is harder than it sounded.

Hearing something interesting is playing out in the San Francisco office market: In 2022/23, office demand was primarily for spaces of 3k-8k square feet. Over just the last couple months, there's been an uptick in demand for spaces 10k - 15k square feet. Driving this: AI and Tech, of course. It's interesting to note that the layoff waves we saw in big tech are now leading to startup activity. Laid-off employees finally pursuing that startup they always dreamed of having one day. Will be interesting to see how this continues to play out.

This week I’m headed to a conference where dozens of fund managers are getting together. I’ve raised just about $150M in my career. The folks at the conference have raised much much more. I’ll be the smallest fish in the room. My favorite kind of room.

Spoke to a gentleman with a large multi-family portfolio: “Our rents are absolutely going down!” What areas of the country are seeing this?

Somebody sent me this and I’m triggered

An incredible amount of wealth is constantly being transferred from those who fear vacancy to those who don't.

Signal that it may not be a good idea for the non-retail folks to jump into retail: The retail real estate folks are excited you’re wanting to jump in. Welcome 😀

I don’t make real estate decisions based on what I think will happen in the future. I don’t think doing so is investing. I’m not a psychic. My decisions are based on what I see now.