Ranch Investor Podcast

Episode 2 | Challenging Assumptions: East-Coast Developer’s Perspective on Real Estate Investing

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In this thought-provoking episode, we sit down with Atif Qadir, a luminary in the fields of real estate and urban planning, to explore the intricate dance between development, technology, and the socio-political landscape shaping our cities. Atif offers invaluable advice for those looking to transition from corporate roles to real estate development, emphasizing market knowledge, specialization, and capital access. We also explore the philosophical impacts of consumerism on city planning, the evolving landscape of office spaces, and how global politics intertwine with local real estate markets. This episode is a must-listen for anyone intrigued by the nexus of development, technology, and urban innovation.

Speaker 1:0:00

I think the question that is fundamentally at the core of American democracy is the tension between individual choice and community, or larger priority in the longer term, the short term versus the longer term.

Speaker 3:0:18

I’m Colter DeVries, owner of Ranch Investor Advisory and Brokerage Services. As a former commercial nag banker, my main reason for doing this podcast is to simply gauge the market’s appetite for crowdsourcing investment in a Ranch real estate fund.

Speaker 2:0:33

The Ranch Investor podcast, curated by subject matter experts to give you immense benefit, because we believe your time is valuable.

Speaker 3:0:43

Atif Kadeer, is that correct?

Speaker 1:0:47

So it’s long a short line. So Atif Kader.

Speaker 3:0:54

Atif Kader okay.

Speaker 1:0:56

I was backwards.

Speaker 3:0:57

I was backwards on how long you hold those vowels Exactly.

Speaker 1:1:02

Got it.

Speaker 3:1:04

So you are an architect, developer, an entrepreneur, you have your own podcast, your guest speaker I think I see you coming up on a Goldman Sachs series pretty soon and so you’re just a general leader in real estate and it’s a pleasure to have you on. Thank you.

Speaker 1:1:25

I appreciate you taking the time and extending the invitation.

Speaker 3:1:28

Now a little bit more about you. I’m giving your introduction here. You founded Commonplace, a FinTech company, a development company focused on the renovation of historic real estate in New Jersey, and you’re also, as I mentioned, the host of a top ranked podcast called American Building, where you use that platform as a channel to discuss topics that you’re passionate about, especially in housing and impact, and I want to get into that a little more. As we see ranches, rural farms, communities on the outside of cities becoming developed, I mean that’s a never ending occurrence right Is an expansion of these cities into the rural parts. So you also serve on the Planning Commission in Hoboken, where you live, where you live. You live there in Hoboken and you’re on the advisory council of Provident Bank. Now tell me about your these schools. You’ve been to Columbia and Hudson. You graduated from Columbia.

Speaker 1:2:45

Yeah, so I went to Columbia University for my MBA and my undergrad in architecture and urban planning from MIT.

Speaker 3:2:54

Perfect, you’re the guy I wanted to talk to you about. When is this? What we see in the West is continual expansion of the cities on prime farmland, and I don’t know about back East what you’d consider prime farmland or the phenomena of these megalopolises that you live in that are never ending. They just keep growing and growing. But out here people drive around the countryside and they see corn in your low lying. Here in the arid West they see corn fields in the irrigated valleys where you have superior water rights. Of course that’s good for humans, right, and you have good groundwater. So municipalities don’t have to bring out city services to the county areas where you can subdivide into 20 acres, even one third acre tracks and drill a well 80 feet or less to have good quality water. People say, well, dang it. That’s the best farm ground that should be used for food production. And why can’t we develop up on the sandy hills, up in the bluffs and the trees and the sage brush? And maybe you can give us your opinion on that? Answer that question for me, because I mean, I’m a firm believer in capitalism that this is a short term phenomena. Maybe in the long term the cost benefit is there, that barley is more valuable than basements. That’s the trade off out here is barley versus basements.

Speaker 1:4:39

Yeah, I think it probably comes down to what a particular area is best suited to do and, I think, the competing priorities, both on a local scale and on a national scale. So I think let’s talk about the first one. I think when we look at areas across the United States, in urbanized states like New Jersey versus rural states, I think the two issues that were probably are the ones that are feeding into that question. Excellent question you brought up is what type? of land and where that land is and what it’s suited to do, and then what the particular local priorities are versus national priorities and how they may necessarily compete or contrast with each other. So I think the first one when you have an urbanized state like New Jersey, one of the highest and best uses are things that serve the urbanized areas in and around New York City. So that means multifamily and industrial logistics in order to serve the demand of the people that live the 8.8 million people that live in New York City and the 25 million that live around it. So, in those cases it’s pretty hard for us to make a case that Barley makes more sense than Basements because the median home price is so high in this particular area. So I can give you one example that the median home price in Hoboken, which is considered a secondary city next to New York City, is about three quarters of a million dollars. That’s the median home. So the rationale there is it probably makes more sense to go that way. I think in a place like Montana, because of the value of agricultural production and the efficiency of it on a large scale, you may be hard pressed to make the case that a. Basement’s more valuable than Barley, so I would probably say a square foot of agricultural land is probably more valuable than residential, namely that because the cost of construction in a state like Montana is a fraction of that of New Jersey, because of different labor laws and the availability of labor is different and the expectations in terms of quality or materials that are used are different as well. So I think it probably has to do with what a particular area is better suited to, and I think when you look at local priorities versus national priorities, there may be things that are competing against each other, like the desire to want to preserve open land for the pleasure or the care of future generations versus the necessity for two very important things. One is having natural resource security for the United States and being a net exporter of food and that exporter of petroleum products, as opposed to net importer of both of those I think is really important. And I think the other one would be the fact that we have a national storage of housing units and it’s the necessity of actually growing housing units across the United States. So I think that there’s a bunch of things that probably play into the question you asked, but I think the second thing that will bring up is that competing priorities of local versus national. So that’s the way I look at it from an economic or policy perspective.

Speaker 3:8:04

The old guns versus butter trade off. Well, this, this is maybe more of a philosophical question, but I brought you on so here you might have a lot about it, is it? Do you look at this just from the economic or maybe policy sense, just completely objectively, or is there? Is there subjectivity in it? And is it okay to be subjective when thinking about guns versus butter? Because where I’m going with this is we have a lot of people who would say why are we developing so many Amazon distribution centers on top of highly valuable farmland? Can’t we bigger question? Can’t we just be less of a consumerist society? Is this really the direction we want to go? Is this a good thing to have industrial centers that eventually become gray and brown zones? And then then you have impoverished neighborhoods that, like the outside of Detroit, detroit has more vacant homes at one time it did. Then the city I live in has homes and is, and that was due to I mean partially due to the subsidies of auto manufacturers, all those jobs created over the many decades of Ford, chrysler, gm, and that was driven by consumers wanting cars. And here’s a philosophical question and I don’t want to throw too many out there, not saying I agree with this one. But do we need cars? Do we just get to public transportation? I mean, is the underlying problem philosophical? Here Is the direction we’re going, the right direction.

Speaker 1:9:59

I think the question that is fundamentally at the core of American democracy is the tension between individual choice and community, or larger priority in the longer term, the short term versus the longer term, and I think that, from a pure loss of their perspective, the ideas that any American should be able to make an individual choice that they deem to be the most beneficial to them. In the particular example that you brought of retail and consumer goods, I think there is a dangerous compromise to be made for price versus the fragility of supply chain, and I think that when you optimize for price, you end up having a consolidation of choice around ways and means of getting you products that’s the fastest and the cheapest and not necessarily the one of the most durable that are able to sustain shocks to a particular production process, the best example being face masks during the pandemic. So I think I tend to be, perhaps more broadly from real estate protectionist from a philosophical perspective that. I think that those shorter term individual decisions for individual Americans is not as important as the national security for our own supply chain and production. So I think that I would imagine the difficulty comes in is that if we have a desire to have a wider variety of retailers and more American production than the case for Amazon becomes more tenuous than it does right now. But, how do you actually change the behavior of individuals in a democratic capitalist society? It’s through taxation. That’s the only way to do it, because you can’t force people to do things otherwise. So, I could imagine that perhaps there are increased taxation on particular types of behaviors or retailers that are necessarily conducive to those federal parties. And that’s going down a very slippery slope of the heavy handed nature of big government. But that’s probably my perspective on your very good question.

Speaker 3:12:30

So wouldn’t taxation be the whip, and doesn’t the carrot work better?

Speaker 1:12:38

I actually personally think that the whip is more effective than the carrot.

Speaker 3:12:45

Just rain them in, just heavy handed on them, just hammer them down, they will comply.

Speaker 1:12:52

I mean the thought process is the example of economic development incentives.

Speaker 2:12:57

That’s the carrot.

Speaker 1:12:59

It assumes that people will behave in ways that are good for society. So let’s take a long-term housing tax credit, for example that by offering an economic development incentive, it will induce developers to be able to produce more units of affordable housing. And there’s many versions of these carrots that exist in the world of economic development, incentives for real estate. Generally speaking, the process to actually execute on those carrots eventually results in that carrot might have started like this, but the actual size of the carrots is small when it’s delivered. because of all the frictional loss in the process, taxation tends to be, I think, a smoother process than economic development incentives, because there’s a particular means by which you can account for that, whether that’s a property value or that’s an income that someone reports on their income taxes. So I think from that perspective I would say that taxation, or the width, is more efficient means of delivering changing behavior than a carrot is.

Speaker 3:14:15

That never seems to work for cigarettes, though, don’t. People just want what they want, and if I want to build a house on five acres rather than farm that five acres, if it’s in the right location, has the right view, has the right amenities, I’m gonna build that house Maybe not me, but someone else more wealthy than me who can afford that tax will.

Speaker 1:14:44

Yeah, I think that that’s exactly the option that’s available, but the persons or and the persons desire to want to do so, has to be so strong that they get over that hurdle of the taxation to want to do it. I mean an equivalent one for Greater New York City that’s been talked about for a while is congestion pricing. To say that New York City has such insane traffic it’s not sustainable for business, it’s not sustainable for tourists, for the local economy. So, essentially, do congestion pricing to say that use my desire to drive into Manhattan during rush hour able to get me over $50, $60, $70 to drive into Manhattan? In that case you’re essentially using that version of the whip in order to clear the market of the people for whom they don’t have enough desire to want to do that.

Speaker 3:15:36

I’ve heard about that. I’ve heard about the fee that they would use to decongest New York City the flat rate fee. Wouldn’t that just get passed on to consumers though? So you’re Airbnb or not Airbnb, your Uber price would go up. Isn’t that just what would happen?

Speaker 1:15:54

Yeah, those types of taxes are often considered taxes on the poor because the idea, if it’s a flat tax, $50 for someone that is considered wealthy is rather marginal versus $50 for someone who is working class and, generally speaking, people that are working class are the ones that are in the outer boroughs with poor public transit and need a car as a means of getting to their employment within the city. So I think that, from that perspective, those costs are passed on to the end user and they’re often done unfairly or inequitably, but I think that there are means by which that can be adjusted, to say that perhaps below a certain income threshold you have a far lower income tax rate. So that’s essentially a graduated income tax rate that compensates for congestion pricing that you might pay on a temporal basis, David.

Speaker 3:17:00

How does all this relate to problems that you’re focused on, solutions that you are trying to provide? What are you working on and how does all this relate? Yeah?

Speaker 1:17:11

I’d say that being cognizant of public policy in general is important for anyone that is within the real estate industry, and then, more specifically, what I’m working on is basically selling my real estate portfolio because we’re at the top of the market in New Jersey. So I’m selling my multifamily portfolio both on the market rate side as well as the workforce housing side, and I’m actually in the process of selling my technology company as well. So it’s a kind of a funny time to be in sell mode as opposed to buy or build mode right now. But I’m curious from your perspective of what you see in terms of land acquisition, land banking versus actual development of agricultural land in. Montana.

Speaker 3:18:00

Which is kind of what we’ve been talking about. There is more value in assemblage that if you buy two ranches next to each other, the sum of the parts is worth more than the individual parts separately. So that gets into rural subdivision and you talked about. There might be a need for housing across the United States at whatever income level or price point. So there’s this belief that, well, rural subdivisions, there’s demand. We’re gonna see more rural subdivisions, 20 acre homes. We’re not seeing that though. We’re seeing branches actually get bigger and big ranches sell for a premium and medium sized ranches, small ranches, aren’t getting chopped up and subdivided. So this is almost counter to our conversation and it’s counter to what happened in 2006. Yeah, rural subdivision took off in the West. It just boomed, and there’s been times and locations where people come in and they will chop up one section of 640, but the absorption rate always seems to be very slow. They don’t get their quick flip, they don’t get their huge profit within five years like they intended. Selling those lots usually proves to be more difficult than they anticipated. So that absorption rate is very slow. That could change. I mean, real estate tastes and preferences are always changing and price points, maybe interest rate driven. There might be someone who supplies that product per se, that rural lot out in the country, but we’re just not seeing that.

Speaker 1:19:55

So my thought is I’ll give you the example within. Metro New York City, and I have a feeling there might be something similar with you in Montana, so in New York City, in New York City, that the ability to assemble land for multifamily development and say, like starter home developments, really important, particularly in the 95 corridor, which is the main highway that goes through New Jersey. So companies like Toll Brothers, for example, over large amounts of time, assemble large sections of land in order to make several hundred homes. Because of the efficiencies of scale In that, my thought is that what is driving the assemblage of agricultural land is the desire for industrial scale farming that is more efficient than family scale farming. On a dollar made per expense perspective, is that the main driver of why assemblages are worth more per square foot than, say, smaller lots?

Speaker 3:20:59

Yes for farming, absolutely when it comes to that input, intensive operating assets, intensive farming, your equipment is more than ranching. So yes, that operating at economies of scale does correlate to a premium in land value. With ranches that are cowboys and cattle driven, it’s likely more there is operating efficiencies at scale, but it’s likely more driven few things view shed, so what some might call a public good open space, that view shed has value and if you were to chop that up into 20 acre lots you lose that value of the view shed. So today’s buyers are putting a bigger portion of that on view shed value. There’s also the issue of just control. Being kind of a land barren is the feelings behind owning more comes with more reward. It must come with more reward because people are willing to pay more for that. Now, how about your portfolio? Is assemblage the same? Can you separate units and sell them at an eight cap versus assembling a whole bunch into a diversified portfolio and selling it at a six cap? How does that work?

Speaker 1:22:36

Yeah, so to be. I do urban infill development, so that tends to be ones where there’s like a older building for the areas that I work in that’s between the 1800s and then I will do a gut renovation of the building and then redo all the mechanical, actual plumbing, update the finishes, keep architectural details and then either sell them as condos or rent them out as rental units. So for that strategy, assemblage generally doesn’t particularly work because this is more of like a surgical strike within an urban area, I would say. From that perspective, the challenge right now is the cost of acquisition is still very, very high, which makes being a buyer not lucrative but being a seller incredibly lucrative.

Speaker 3:23:30

What do you see for sellers? I mean with institutional owned farmland, so now we’re talking about farmland of scale and of good quality they are reluctant, hesitant and unwilling to sell what they have because they can’t replace that. And a lot of ranchers I mean there’s many, I don’t want to say most or a lot, but there are many ranchers who do not want to sell today because they can’t replace that. What are you seeing for that type of you know that human behavior in your areas? Is it much the same?

Speaker 1:24:09

I think the desire to hold on to real estate is something that is very intrinsically human and it’s probably also specifically very American this idea of real estate being the greatest generator of generational wealth. So I think that’s probably something that’s common no matter what corner of the United States that you’re in. But I think the biggest challenge is going to be folks that have homes with mortgages that are coming due, particularly because the normal cycle is five year resets, 10 year resets, 15 years and those timeframes were all ones with historically low interest rates, and now, at seven and a half, it’s going to make it difficult for people that are wishing to hold on to their homes but have to refinance that loan because it’s come due to be able to actually do that. So I think, from a residential perspective, we’re probably looking at next five years of more absorption by institutional investors of single family homes, as has been happening since the beginning of the pandemic, and I think we’re probably also looking at the beginning of a financing crisis on the commercial real estate side, because there’s about $2 trillion of debt commercial real estate debt coming due by the end of next year. So largely that’s office, but a lot of that’s also luxury and I am multifamily too. That made sense when cap rates were extremely low and interest rates were extremely low, but don’t make sense when those that economic environment, along with this.

Speaker 3:25:52

Yeah, that means there’s like a convergence right now of borrowing at 6% 7% and then your cap rates at 6% 7%. I mean, what is that? What is that? It’s a push. What is that? Is that just saying people are deferring to the future, like, hey, we’ll just hang out, see what happens in the future, just buy at our time?

Speaker 1:26:15

Yeah, I think there’s definitely people that run the acquisition side that may not have the ability to underwrite over multi-generations and for whom the cost of capital is an important consideration that would be small to mid-sized private equity. I think that those players are going to be playing golf over the next couple of years, or maybe like coming out or going out west and pretending to be cowboys for a few years, or coming back to New York City to start buying again, but I think that the types of buyers that are going to do very well in this very volatile environment are probably two types in particular, I think multi-generation, local to regional family offices for whom they are likely managing the assets themselves about a third party and don’t necessarily have the concerns of short-term highs of interest rates because they’re underwriting for their grandchildren and their great grandchildren. So the ability to acquire an asset in a prime market like Hoboken at a 5.5 cap, even if they’re borrowing at a 6 cap, doesn’t particularly matter, because they realize that in 3, 4, or 5 years. They can refinance that back, probably at a 3.5 or a 4. So for them I think that those types of buyers small to mid-sized family offices, multi-generation are going to do very well in this purchasing environment. And the other one are corporate buyers that have extremely low cost of capital because they use their own balance sheet to buy. So, companies like Avalon Bay, for example, I think are going into extreme land banking mode over the next couple of years. May not necessarily be building because of the continuing high cost of construction, because of supply chain and tariff issues with China, but I think that they are likely going to be buying in land banking.

Speaker 3:28:13

So I think that’s very correlated to farms and ranches. And if I can summarize what I heard is if you’re a buyer today, you are well-capitalized, you have a very long-term outlook where the holding costs are not going to affect you. They’re not going to affect your daily operations, your net worth, your credit collateral. You’re good with the holding costs for a very long time. So that weeds out entrepreneurial, opportunistic type buyers.

Speaker 1:28:49

it sounds like yeah, well, I mean on its surface, yes, but then the question is, what is the lever that’s available? And I think one is do you have access, if not to extremely low cost of capital? Do you have access to low cost of construction? And the way that comes in is are you a developer that does in-house construction? There you go. That’s one lever to be able to use. Do you have family land holdings that you had just owned for a long time and now you can actually develop them such that your cost of acquisition is extremely low? Okay, that’s one other lever that you’d be able to pull. Or do you have the ability to release these units, perhaps to a university for student housing, because student housing demand is still very strong, because universities are definitely still expanding. So I think, if you’re able to take the risk on an income perspective off the table, that’s a lever you’re able to pull, and I think someone that is entrepreneurial is probably going to imagine what they can do in a high cost of capital environment around any of those options or other ones.

Speaker 3:30:06

Now you yourself. You said you were selling your portfolio, so you’re shorting the market. You’re not the near term. You don’t have a lot of belief in the near term. Right now is the time to short the market, correct.

Speaker 1:30:22

I think the levers that I’m able to pull. Typically it’s been low cost of acquisition. So that comes through deep relationships in the markets that I work in and the recognition amongst the brokers that I work with of the high likelihood to close. So generally speaking that gives me purchasing power and I like to buy all the money afterwards. So in those situations my lever is very dominantly the cost of acquisition and perhaps secondarily because on a licensed architect the cost of the design and construction portion of it can be optimized because I have a sense of foresight as to how something can be used that tends to save time and effort from a design and construction perspective. But I don’t necessarily have confidence in those two levers in this market. I think that the cost of capital so far outweighs any advantages that I have in those two areas that more likely, a better use of my time is to play golf or pretend to be a cowboy for a few years and come back.

Speaker 3:31:28

You’re welcome. You’re very welcome to come out and play cowboy and bring billionaire New Yorkers with you. You brought up another participant on the buy side. We still, even though with record low inventory and we’ve got these high interest rates, we still see strong demand in farm and ranch closings every day going under contingency contract. Every day Things are happening and maybe it’s people who think they have a competitive advantage because that would also be, as you mentioned, someone who’s got some of the other skill sets to optimize ad value. Is that the only play right now? Is that value ad? Is core real estate a bad idea?

Speaker 1:32:22

Going back to, say, east Coast urbanized markets. If you want to be active, I think the way to do it is go to the sectors of the market which are the least risky. I think in that perspective, when I’m looking at asset or geography, it’s going to be ring urban, because I think that urban itself has a lot of issues, particularly with things like crime and taxation and outflow of populations. I would much rather make a bet on Princeton, new Jersey, than on New York City, for example. I think the optimizing around the geography is really important. I think being able to pick the asset class that makes sense in that particular time and that geography In this case it would be from Metro New York City, it’s single family and highly monetized multifamily it’s probably the areas that I would go into and I would likely lean, from a class perspective, into affordable and workforce as opposed to luxury, because I’d rather be in a situation where, if I’m delivering a unit, there are 100 people that can rent that or 100 people that can buy it than one. I think that being able to optimize towards that perspective is really important. Then, if I have the choices between new construction, heavy redevelopment or renovation, I would pick the least risky of that, which would be renovation. If someone were to try to be, I think, astute and make a buck in this market in Metro New York City, I would probably focus on light value. Add single family homes and townhouses in that range of 30 minutes to one hour drive from New York City and see what neighborhoods and what towns might be next to very wealthy areas, are in good school districts but are dominantly working class right now, but you can see the movement towards middle class in those areas. That strategy is probably like shooting fish in a barrel, but if you’re able to come up with a strat like a platform to do that, because you have broken relationships or there’s other ways you’re able to procure all of these assets in a diffuse way but then operationalize them on a platform perspective, that sounds like a winner to me for a high-cost, high-taxation market like New York, new Jersey.

Speaker 3:34:59

I can relate that to Farm and Ranch. We talked about creating a product that has the most broad general appeal. For me that’s like okay, let’s start within an hour of Bozeman, montana, or Bend, oregon, an hour within Cordelaine, idaho, places like that. Start there. Then you’re thinking okay, what price point. We watched the bread and butter go from $2 million pre-COVID. Lots of people could get into that $2 million ranch. That’s now up around $3, $3.5, even with the increased interest rates, bread and butter is still around that $3.5. Then, don’t over-customize, don’t over-build. Do some value add, but don’t do too much. I can relate Farm and Ranch to that play in New York City. You got into my next question. Actually, when you’re looking, you’re going to sit on the sidelines for a while and I want to hear how long you’re forecasting to sit on the sidelines after you short the market. I also want to know, in your next consideration, how do you rank these risks in your own mind of cap rate? Do you want to go? Interest rate, political, geopolitical crime, average incomes, us incomes? What are these risks in your mind and how are you waiting them? Yeah, I think for when?

Speaker 1:36:39

when an investor, like a developer like me, is very hyper specific in terms of geography, it allows me to Kind of be like an ostrich with the head. This and when it comes to geopolitical or macroeconomic risk, because those things don’t particularly impact me in any particular way. So I would say the social, cultural, political issues are Probably a very little consequence. I think a lot of it has to do with the operational risk. So the ability to acquire, the ability to effectively and quickly Renovate and the ability to lease up or sell. That is the the backbone and that, I think, is the for For conversation. When you’re hyper specific in terms of your geography, I think that if you attempt to be a developer that’s agnostic to Geography and it’s open so all across the Sunbelt, for example, a mid-sized developer I think those types of folks are gonna be much more hard-pressed, so they’re gonna have a lot of risks to be able to weigh Across these larger regions as they’re making decisions as to where they’re out where they’re out in capital. So I think I can ignore most of the ones that you’re talking about.

Speaker 3:37:46

For that reason, Okay, much more, much more at-home, hands-on, tangible what’s within my own control.

Speaker 1:37:55

Exactly because I mean think about it. The state of New Jersey. He is one to eight million people. The city of New York City is eight million people. That means there’s 16 million people between the city and New Jersey that need homes. That’s more than enough for one developer to do so. Always kind of give side eye to people. Let’s say that they’re agnostic to geography. They’ll do deals everywhere. They’re good. I mean that basically just need to have.

Speaker 3:38:21

So is that? Is that a in your experience? Is that you’re? One of your recommendations is start by defining your strategy. Write it out vision, values, mission, what is your, what is your core Beliefs and and how are you going to? What is your competitive advantage or comparative advantage? Is that a good place to start?

Speaker 1:38:44

completely. I mean the same way that culture, when you did your 2024 vision board and Maybe on your vision board you want to have a really cute puppy for your kid. That’s a new vision board get a puppy. I think the same way to think about what is it that you are looking to focus on this year and why is it that you’re looking to do it? I think absolutely from a professional perspective. I think the really great point that you bring up is probably very particularly applicable to your listeners that might be interested in leaving their corporate job and becoming a developer, or Maybe they work for a corporation and want to go out on their own. I think from that perspective, there’s probably three things that are really, really important. One of them is to choose a geography that you want to be the king or the queen of and just know everything about it know the price per square foot. No, who owns what? know, what public policy issue is going to affect your land value? What’s going on the tax assessor’s office with property taxes? All of that stuff, I think, is the core, foundational element. I think the second one is to make sure that you’re really really good at one particular part of the development process. Then you know enough about everything else that you’re dangerous. I think that’s really important. And I think the third one would be having access to mine. So if you don’t have access to capital Of scale of size to do this, just keep doing. Keep doing your W2, because it’s gonna be more headache than this work.

Speaker 3:40:16

Well, that, that was a great summary. I do want to get your crystal ball though, your vision of the future. When is it time for you to get back in? How long are you gonna? How long are you gonna be waiting for? So you think the environment’s right that it’s come together.

Speaker 1:40:33

Given your strategy, I think the there’s a couple things that play. One is that, more specifically for me, I have the benefit of Having both experience and active deals and development perspective, as well as a technology company perspective. So I think that the rule of technology, particularly around the buzzword of artificial intelligence on how data is, used and and and Allows developers to make smarter acquisition decisions. I think companies in and around that data perspective. That sounds like an area that I’m very interested in over the next. Year or two, particularly as I’m in the process of selling my technology business, I might eventually land that the buyer of the business might just acquire me and that might be a cool thing to do for a couple years. I think from a, but I think more specifically, you’re asking around development, and I think from that perspective. There’s usually the marker as to presidential elections, and I think that In this case, depending on which party takes the White House, there’s probably going to be a slightly different trajectory of what. What will be happening in terms of housing, which is the core of the real estate industry, but also in terms of the the zombie apocalypse of office buildings, which is important for, like for Old industrialized East Coast cities, because if there isn’t a good solution for that, I think that actually creates an incredible opportunity around developers that are well capitalized to acquire office on the chief and Work through the process of conversion to residential so I think, that being able to get smart around Anything related to that process of conversion of uses, which is a very complex thing from a design perspective, construction perspective, insurance perspective, like fire safety perspective- all of those it’s a complex thing, but getting smarter on that is probably where opportunity lies In, I think, the real estate industry, the next place.

Speaker 3:42:50

Absolutely. And as we think about opportunity, what was it, warren Buffett, who said wait until there’s blood in the streets? And I have many friends, peers, contacts, who are Side-lined waiting for blood in the streets. But I’m not. I don’t believe there would be that in farm and ranch. I think farm and ranch is too stable and the underlying fundamentals are Not indicating blood in the streets. I’m I’m little indifferent. Split on residential, that’s a hard one, because I do want to be buying another house very soon. So residential to me seems I Want, I almost want there to be blood in the street because I am a buyer. You know I’m I’m short on the market right now. I’m short a house, but I think it’s gonna come in the form of that, not commercial, but a office space. In those, those areas where they have Hundreds of thousands of square feet of vacant office space and it has been that way for a couple years now, you can’t come to Manhattan exactly. That’s probably where the opportunity lies ahead of us.

Speaker 1:44:03

I’m really, and I think the the honest surface, the idea that once where a foot of one space can be converted to another is so alluring, but I think that being able to take the time to Identify the opportunities and very surgically go after them. They’re very certain types of offices that can convert effectively. Those are ones with Enough light and air on the perimeter of the building, relatively smaller size Footprints of these are buildings that typically were built before the 1970s. Those are the ones that can convert most easily to Residential. I think the short term strategy is to be able to do something like that, but I think I’m one big term strategy is lobbying public officials to be able to Initiating, deploy more tax credits for the conversion of office to residential or to ease Building code requirements around light and air and egress that allow for the more easier conversion of those. So those feel like the places that I would be focusing my attention if one chooses to be able to go down that path of Office to Resid conversion.

Speaker 3:45:26

Well, thank you for the crystal ball, that’s. I like to get people’s forecast. What they believe is is in the cards and, as you’re gonna take us out of this this episode, tell me about your podcast.

Speaker 1:45:40

Sure, it’s the American building podcast. So if any of your listeners are interested, they can head over to American building podcast. Calm and it’s.

Speaker 2:45:51

We’ve done three seasons.

Speaker 1:45:53

We’re, I think, close to about a hundred episodes. And it’s a collaboration between myself and Michael graves architecture and design, which is a famous design from based in Princeton, new Jersey and New York, dc, and our goal is to Tell the story of Up-and-coming new, really fascinating developers and designers and the projects that they’re working on. On the third season focused on the housing challenges of the greater New York City area and then In future seasons, will be tackling other important issues with the real estate industry. But I enjoy it and I think my listeners do as well, so definitely give it a chance.

Speaker 3:46:34

Well, thank you for coming on the ranch investor podcast and if there’s anything I can do for you personally in the future, please reach out and let me know. Thanks for your time that sounds good.

Speaker 1:46:44

Thank you very much.

Speaker 3:46:45

Hold it listeners of the ranch investor podcast who are receiving this immense value for free. Thanks for tuning in. I do have an ask in place of advertising. I do not monetize this on spotify, apple, anywhere. I don’t click the monetize button, so I do have to get a plug in here and I ask what I’d like from you is to hear some feedback. So, on our social media, please share this episode. All I all I ask in return for not having promotions and advertising is that you share this, send a text, get it out there so more people can enjoy what we’re producing. Thanks for tuning in.

Speaker 2:47:31

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Individual Choice vs Community in Democracy
Taxation vs Carrots
Assemblage in Rural Subdivisions
Real Estate Challenges and Opportunities
Crystal Ball Insights for Real Estate
Individual Choice vs Community in Democracy
Taxation vs Carrots
Assemblage in Rural Subdivisions
Real Estate Challenges and Opportunities
Crystal Ball Insights for Real Estate