Triple Net Leases with Michael Flight of Liberty Fund

Welcome to Ladies Kicking Assets. Once again, we have a super rock star guest with us today. We are not financial advisors. This is for educational purposes only. And we are super, super thrilled to have Michael Flight with us today. He is a man of many hats. He has been involved in real estate for, what were we just calculating, 35 years, 36 years. That's amazing. And your, I guess, I guess I'll let you kind of introduce yourself and some of the things that you're involved in.

Sure. I'm still involved with real estate because they don't know how to do anything else, so. But I started out in real estate in 1986. I graduated from college, I went to college. I thought I wanted to be a Lutheran pastor. And then Greek.

Know that about you?

Yeah, yeah. And then Greek and Hebrew or a sign from God that I should not be a Lutheran. So I went, went in the business and my brother and I, while I was still in college and I think he had just graduated, we went to a nothing down seminar. And I'm like, oh, we could buy real estate. Nothing down. And so it, we never did end up buying any real estate. Nothing down. But we ended up owning property just as I graduated from college and I became a commercial real estate broker and I went into retail real estate, which is shopping centers and malls and things like that. And you know, there's been, I think this is my fifth, we're going probably going into my sixth downturn or cycle. So I've, you know, been through the ups and downs and it really, I, I, I love the business. I especially love retail real estate because you not only need to know the real estate business and zoning and just about every aspect of business, but you also need to know how retailers operate their businesses and what makes a good retailer and what doesn't make a good retailer. And when you're merchandising a shopping center, it's kind of like merchandising a department store. So I've just loved that aspect of the business. But I've done everything from flipping close to 150 houses to bank workouts on broken condo projects. And we were some of the first people in the United States to do demoling, which is taking a mall and, you know, making it no longer a mall. So it's been a great and fun ride. And I really, really love real estate.

That's amazing. I didn't know that you flipped houses along with that. And so that's incredible. That's something that I always thought about, but I never have gone down that Path.

So that was with. I have an east. Oh, we're great friends and we're partners on a few things still. He's a residential broker, and I always tell people I've been a real estate broker since 1986 and have never sold a house. So I wouldn't know how to sell a house. But my partner, Jimmy, is a residential real estate broker in the Chicago area. And so we've done a number of things, but one of them was we were flipping houses. So I would raise the money and be the tax matters partner, and he would find the deals and, you know, he would know what they would sell for. And we just back into the numbers. And then he and I, like I said, we've, you know, did some workouts for some banks on, you know, foreclosed single family home portfolios and a few different broken condo projects. So it's just, you know, we were a boutique firm and so we kind of just went where we thought we could make money. I stopped doing it because it wasn't worth doing the house flipping for the amount of work my company had to do in terms of record keeping. Some of our. One of our partners was a Canadian institutional fund. And so just the tax parts of that and figuring out the, the non US taxation and things like that was just a, A big hassle. So I'm like, jimmy, I really don't want to do this anymore because it's just not working.

It's a lot.

Yeah.

Yeah. Well, so you have been involved in triple net leases for how long now? And that's really kind of what I want to dive into because I, I don't, I don't know a whole lot about it. And I'm really excited to learn. So.

So.

Yeah, shopping centers are quote, unquote, triple net. They're not like complete triple net. And then a lot of the out parcels and things surrounding those, like the restaurants or the Starbucks or the McDonald's or the Walgreens. Out on the out parcel in the parking lot are typically either ground leases, which are complete triple net and the tenant just takes care of everything. Or is that what triple.

What does triple net mean?

Okay, so we should probably back up there.

Yeah.

Start from the beginning.

Triple net, it means that the tenant pays for taxes, insurance, and maintenance. So a single net means that the tenant pays the taxes. A double net means the tenant pays the taxes and, and the insurance or they pay their pro rata share. So like in a shopping center, if there's 100,000 square feet and the tenant has you know, 10,000 square feet, you know, it'll pay 10% of, you know, whatever the taxes and the insurance are. And then a triple net means that the tenant pays for the maintenance. Now when you have a full triple net lease, like for example, Walgreens or McDonald's, the tenant does everything. If there's something wrong with the sidewalk in front of their store, if there's something wrong with the walls or the roof or anything like that, that the tenant also has to do their snow plowing and everything else in a shopping center. It's not quite a full triple net in that they do pay for common area maintenance, they pay their share of snow plowing and things like that. But the landlord is typically responsible for the structural, which is the walls and, you know, whatever supports the roof. And the landlord is typically responsible for the roof. But you can remember triple net by the acronym tim. So taxes, insurance and maintenance.

And that's in addition to all the utilities and their rent.

Oh yeah. So the great thing, what I, you know, and you know, I like to say it's nothing but net because it's nothing but net income. So, so the tenant pays for the rent. And a lot of the thing, the great thing about, like if you do a deal with McDonald's or you do a deal with Starbucks or all the rest of these guys, they don't want to send you a check anymore. They send an ach payment directly to your bank account. So, and I, I tell you like, McDonald's is like clockwork. It's in the bank account five days before the beginning of the month. So it's like, you know, literally better than mailbox, mailbox money. And the other thing is, is that if something goes wrong with the roof or something like that, and they call you up, you just kind of like say, did you read your lease? Because your lease says you're responsible for that H Vac, you're responsible for doing this and that. So in shopping centers it's a little more management intensive because some of the local tenants and even some of the tenants that are having some financial issues, you might need to go out and get a maintenance contract for their H Vac to make sure that they're maintaining the equipment properly. Right. And the other thing is, is that even with triple net, you need to make sure that they're carrying their insurance because if somebody does slip and fall in their parking lot or in their store, you know they're going to sue not only the tenant, but you. So you need to make sure that you are listed as an additional insured and that they have the proper insurance.

Oh, good to know.

Do you find the triple net leases to be more common in commercial properties that are more retail strip center styled or in commercial buildings that maybe have multi floors and different?

So triple net properties can be just about anything. I've even seen triple net apartment buildings where, and you can see it even in if you've got like even a 4 flat and let's say somebody's running a rehab center in the 4 flat, they might lease the whole building from you as a residential home. And then, you know, so I've seen, you know, triple net even in, in certain residential circumstances. But one of the biggest things in triple net, literally billions of dollars is most of the casinos in Las Vegas are triple net properties. So and the really cool thing is on those in their own by real estate investment trust. But not only are they paying for everything, but they're also paying a percentage rent of, you know, what their income is.

Oh, wow.

Oh, in casinos, yeah.

And, and that's one of the nice things that you'll see in retail, which you won't see anywhere else, is to cover yourself for inflation. It used to be people were doing percentage rent leases and then that kind of went out of favor in, you know, the late 1980s because a lot of lenders didn't want to see percentage rent leases. They wanted to see regular monthly income and they wanted to see a guaranteed minimum rent. But now given the fact with COVID everybody like was forced to close down and they couldn't pay their regular rent. So you know, we went back to saying, well, you could pay a portion of your sales until we get up back to normal and then we'll go back to the normal thing. But with inflation now we're also doing and adding in the percentage rent back in because the percentage rent will cover you in inflation because as they raise their prices then you know, the percentage rent kicks in and gives you extra rent.

Huh, I like that. I'm going to make a note of that. The percentage rent.

Yeah, and that's you'll, you'll really only see that in retail because it's really hard and a lot of retailers won't do it anymore. Some will. So. But it's becoming more prevalent again, especially with inflation. So going back to your question, you can see triple net leases in office buildings. Typically multi tenant office buildings are not straight triple net. They're what we call modified gross. But you know, in certain situations a tenant will like lease the entire office building. So it'll be leased as triple net. You'll also see it in certain, you know, medical or hospital things where, you know, the medical space or the hospital will lease the entire building and there it might even be a multi tenant thing. So we've done things. When we were converting one mall, we had a department store and it was vacant. And so we refurbished it, leased it out to a hospital. The hospital leased the whole thing and then subdivided it and subleased it to all their doctors because they wanted the doctors to feed into all their patients into the hospital. So that was we, we had one lease with the hospital and the hospital was responsible for doing all the subleasing and dealing with doctors directly.

Fascinating.

And these leases are generally, they're not one year leases. These are longer term.

Yeah, five years, right?

Yeah. And the reason for that is, is that there's a large amount of capital expenditure so either on the tenant side or the landlord side. So for example, you know, we like three years ago did an Old Navy and we ended up spending, you know, close to a million and a half retrofitting the space because a really large space and divided it up. So you want a longer term lease to be able to recapture, you know, that expenditure versus, you know, I, if you're doing an apartment turn or something like that, I, when I was doing them, it was like $10,000. I don't know what it is now, but you know, it's not that type of a thing. And you know, the, the other thing is the retailers or the corporations want to know that they have that location because there's a lot of equity that they build up, creating traffic to go there. You know, for example, we used to say that McDonald's is not a, a restaurant company as much as they are a real estate company. Right. So because wherever McDonald's goes, they create a market for real estate. And then all of a sudden you see Burger King popping up and you see Kentucky Fried Chicken and Chick Fil A and everybody else will come to that. Because McDonald's spent a ton of money doing a lot of research on, you know, the rooftops and what the growth is and all the rest of it. So but when they put that type of capital expenditure in there and when they say, I know that we're going to spend in a lot of these places, like stores take like three years to actually get to be profitable. So you know, they have to build up that brand equity at that location. And so they want a longer term lease so that they can do it. A lot of them, this Is the dirty secret want what are called kickout clauses after five years. So you might sign a 10 year lease with them, but a lot of them have the right to kick out after two years, three years, or five years if they don't make the sales numbers. So you know people that are not familiar with retail real estate. I just had this conversation. Somebody called me up, said, oh, there's this mall in Minnesota and it's a bargain. And these guys are telling me that you can redevelop it and all the rest of it. I'm like, look, I've done mall redevelopments and it's never as easy as these guys are telling you, right? Because not only do you have these clauses with, you know, percentage rents and you have to make sure it's the correct pro rata that they're paying back to you for expenses and you're covering all your expenses. But a lot of tenants have what are called exclusive use clauses. So for example, if a beauty salon or a nail salon goes in there, they'll want to be the only tenant that's doing nails. And honestly, if you're a responsible shopping center owner, you wouldn't put a nail salon in right next to another nail salon because you know neither one of them are going to do well. So you want to make sure that your tenants are doing as much business as possible and then they can pay you much more rent and because their rent is a factor of how much business they're doing. So there's exclusive use clauses. There's also the tenants have use clauses in there that say you cannot put certain noxious uses in. Like a big example is, you know, you can't put, you know, pornography shops in there. Used to be you can't put head shops in which are, you know, drug paraphernalia. A lot of retail tenants don't want a gym in the shopping center because the gym people just go there and work out and then leave and they're all sweaty and they don't go shopping so they just take up a lot of parking. So you have to be aware of there's, it's, it's a lot more active than a lot of people think.

Yeah, I hadn't thought about that. And it's, it's funny because we actually have a little shopping center and I don't know who is in charge of what's going in there, but it drives me crazy because it's two buildings and each building has like three stores and there's a paint store in each one, a sandwich Shop in each one and then a burger place. And I'm like, okay, who, who, who did that?

Right, right.

But now you're going to look at all of them differently. When you're driving around, you're going to be analyzing.

Yeah, yeah.

Types of places are in these trips that are.

And to a certain extent, I mean, I will. This was true with Dunkin Donuts and then again with Starbucks. They always wanted to be on the going to work side. So you know, if in Chicago going to work is downtown and you're heading east. So they always wanted to be on, you know, the south side of the street so that people were heading east or they were heading north.

So that's funny because I will literally plan my strategic stops on what's on the convenient side of the road.

Right. And if you can't make a left hand turn into it, it's dead.

Yeah, yeah, yeah.

That's fascinating. So you're, you're buying these properties, you know, going into these triple net leases and then do you like set up. Okay, after 10 years we're going to sell it or do you plan on holding it long term or what does that look like?

It really depends on who our partners are and it really depends on what the, you know, goal of the fund is or whatever.

Okay.

So we've had one that we're involved with now for it'll be in January, 33 years. So and that's owned by a family office that literally the patriarch of the the family developed probably 25 shopping centers east of the Mississippi at one time. You know, we did four of them together and he was, you know, David Bermant was actually a mentor to me too for 10 years. So it was a great relationship. And you know, we've redeveloped that shopping center probably three times just because retail real estate changes and you know, fads change and the tenants change and all the rest of it. So there's a lot of capital expenditure that goes into it. And like I say, you also have to like kind of read the tea leaves. So right around 2017, we saw that a lot of stuff was going online and so we started shifting from a lot of, you know, clothing and some of the other things that might be disintermediated and definitely stuff like we, we were definitely not doing bookstores.

Right.

You know, like.

Yeah, right.

And the other thing is like we were, you know, even in like around 2000 we saw that, you know, CVS and Walgreens were all wanted to do drive ups. So if we saw a shopping center with you know, CVS or a Walgreens in line. We knew that that tenant wasn't going to renew unless we could put them out on an out parcel. So, you know, we weren't paying full price for those things, even though we were outbid. In a lot of situations, people came in and paid full price. And then, you know, next thing, you know, three, five years that tenants popped out of there because they wanted, you know, a freestanding building with a drive through.

Yeah, that's great because sometimes people, you know, I wouldn't have thought to think about, you know, what the trends are and where that's going. And so it's great that y' all are doing that because really, kind of on the back end, you're helping to maximize, you know, the retailer that's going in there. So.

That's right. And right now, with COVID in after Covid, you're seeing tenants that were in line in these small strip centers like Shake Shack and Chipotle and things like that. Their, you know, new prototypes are all drive thru. So if you're buying some of these smaller strip centers with a Chipotle, with a Shake Shack, with, you know, five guys, and some of these other guys, they realized that they could be shut down, especially in these northern states. And they also realized, like, McDonald's. We had a McDonald's in Illinois that actually didn't open their dining room back up till, like, really late, you know, 20, 21. And it wasn't because of COVID It was just because they were making, you know, gobs of money with the drive through. And it was less expensive to like, yeah. You know, operated as a straight drive through.

Sure. I. I wondered. We had several. I mean, even like our chick fil A's and stuff like that, they stayed closed their dining rooms. And we're in Texas and we had a lot of them that stayed closed. And I just thought, you know, that there's so much less for them to mess with by having that dining room closed. And, you know, they're so efficient in their drive throughs.

Yeah.

My God, they need traffic.

The traffic is probably like one of the most efficient in terms of getting people through the drive thru. They've got the people out there and all the rest of it. Another. I don't know if you guys have ever heard of Dutch Brothers. They're a coffee company. And I. I'm not saying this, so I'm not disparaging Dutch Brothers anything, but it's like they must have cocaine or something in their coffee because they have.

Because it's doing good stuff.

Well, there's like lines like three blocks long and it's wrapping around and around.

I have heard great about them.

I've not had it.

It's great coffee. I'm not disparaging them whatsoever. I'm just saying it's like there's no way I'm going to spend, you know, like two hours in line. But they, they really know how to move people through. They've got like two and three people with headsets out there and you know, they're just like shoving people through there.

That would, that would give me anxiety because I, I'm not a big coffee drive thru person. I need, you know, especially like Starbucks. I'm not a Starbucks fan, but I always have to sit there and take eight years to look at the menu because I don't even know what to order. And so that would give me anxiety. And a driver.

Yeah. If there's more than, and I'm not like a super huge drive thru person anyways anymore, but if there's more than three people in a drive thru, there's no way I'm going to that place.

So unless it's Chick Fil A.

Well, is super frantically busy here in Houston, I would say.

Right. And around here there's a hot dog place called Portillo's. And Portillo's, you know, literally has, you know, three blocks long lines too. I'm not gonna sit in my car that long for a hot dog.

Yeah, yeah, no doubt.

That's funny. That's funny. Well, interesting on all of that. Courtney, go ahead, what were you gonna say?

No, I was just gonna say, you know. Okay, so triple net leases, like that's super appealing, the fact that you're, you know, acquiring these buildings, these tenants are pretty much taking care of everything. Are there downsides to it? Is there anything where you're like, oh, you know, I feel like there's always pluses and minuses. Yeah.

So the downside is, is that you're locked into a long term lease. So we like to describe it especially the single tenant leases, bonds wrapped in real estate. So just like I would compare certain value add multifamily and this was like a few years back. I don't think you're going to get this as much pop as you were getting before. But if you look at that value add model like two or three years ago, that was your growth stocks. And if you look at single tenant triple net leases, that was your bonds. So. And you're typically, we're buying at A lower cap rate, although, you know, with multifamily, it's dip really far below. There's not as much upside, but you know exactly what the cash flow is going to be all the way through. So that's one of them. The other thing is, is that you just want to make sure that there's rent escalations in the lease. Otherwise I see a lot of people buying the Dollar Generals and you can get them for like an 8 cap. My main concern about those is, number one, they're in small towns and so you're paying. We like to look at them not only from a cap rate point of view, but also a dollar per square foot because it's like, what is the replacement cost? So if you're paying in the middle of Podunk, Kentucky, $400, you know, a foot for a Dollar General, you're never going to replace that tenant with something, you know. But at the same time, I'll take a, you know, 4 cap or a 5 cap in Austin, Texas. And the one we missed, which was the absolute. I, I still regret this to this day. There was a Jiffy Lube in Lakeway by Austin.

Yeah.

And it was a 5 cap. But the, the value of the land underneath that, it's like, so what if they leave? You know, it's like, there's no way you'll ever replace that in Austin, Texas, because it was literally like $300 a foot. Yeah.

Right.

So that, those are some of the, the things you gotta look at. It's like, are you paying more than, you know, the value? Or. I look at it now, a lot of people say, well, you know, you're kind of locked into this. Where's your inflation hedge? It's like, well, my inflation hedge is, is that anybody building something new, especially in Dallas or something is right now probably, you know, per square foot, cost of $400 a foot.

Right.

So if you were in it like 150 to 200 or 250, you're already ahead of, you know, inflation on that. But another key thing that really a lot of people don't realize, some, sometimes people invest in single tenant, triple net leases completely on the financials of the tenant. So you need to know how to underwrite the financials of the tenant to whether they're going to be an ongoing business in 10 years because you're underwriting a tenant. That is basic. So you need to like, say, this tenant is going to be in business for 10 years. This tenant is going to have a going concern in 10 years. And they're going to pay their rent all the way through. And then the other issue is a lot of people that are strictly financial analysts and say, oh, this is a great tenant, I'm buying it at a great cap rate. Don't take a look at what the actual property is because you need to have visibility, you need to have access. And I, I'm, I should preface all this with I'm a retail guy. So there's a ton of opportunity out there to buy industrial real estate. Yes. Also at triple net, so you can buy like even an Amazon warehouse, but in a really big and great way to make money is people will do what are called sale, lease back. So they'll approach some of these industrial real estate owners that have owned their property for a long time and say, hey, we'll buy your property for you and then do a long term lease. And that way you can get your money out of the property and you can monetize some of your business. But I don't do any of that. So everything that I'm talking about is based on retail real estate. And there are fantastic experts out there that can talk to you all day long. Because industrial real estate and you know, office real estate, you know, are completely different businesses. Just like, you know, retail and multifamily or you know, multifamily and storage, mobile home parks are a little similar, but they've got different quirks. But you know, it's like oil and water with some of these things. So everything I say is my experience with retail real estate.

Right.

And since COVID would you say, and I'm just, just on my, my own, you know, thoughts, you're seeing like the clientele of the retail store different, like I'm seeing here in the Houston market, like nail salons, doctor's offices, things that people need, services that people need to like go to. Not something that you can like order on Instacart and have delivered to your door. Those are like more of the types of stores, if you will, or businesses that are restaurants, you know, that are in the strip centers. I had a conversation with a gentleman here in Houston who that's. He and his business partners. That's really their expertise. And he was telling me that there's just like a significant shift in the types of successful businesses now because people had to reshape how they do business if they stayed in business, you know.

Right. And that was one of the things I was talking about. Going back to 2017, we saw things shifting.

Yeah.

More towards a necessity, retail, which is what we like to call it, I don't like to call it what they called it. I forget what they called it. But it's like nobody's, you know, so in necessity retail people still want to shop for their groceries in store. And Walmart really had figured it out earlier, you know, like when Amazon started coming on and even Amazon realized that they couldn't sell groceries, you know, online so they bought Whole Foods and now they're opening up Amazon Fresh stores. So, and you know, so there's always going to be shopping in person. And I, so there was other people telling me that, you know, online retail is probably going to only reach 25% maximum. And I, I think that's kind of true because you saw the absolute max of what could happen in 2020, in early 2021. And now you see Amazon laying off all kinds of people because they really over did it. We have to serve these people because these other businesses were arbitrarily shut down by government. So you see it shifting back. People are going back into shopping. There's some people that are never going to go back to in person shopping and you're not going to change that. And there's some shopping patterns, you know, that were forever changed, but there's other patterns that were there. You know, I, I don't even know if there's any more Sears stores available. But there was no reason for Sears to exist even in the 1990s. I don't know why JCPenney is still around. I, you know, and I can go on the list of these stores and you know, I used to frustrate my wife because, you know, every once there was a few times early on in our marriage or before we were married, I would bring her on like these trips that we would have to go visit, you know, five and six malls to, you know, see if they were worth buying and all the rest of them.

Maybe we should be talking to her.

Well.

We'Re walking through the mall and she's like, I'm like, we're not here to shop. She's like, what do you mean?

I am.

Retail therapy is healthy.

I, I know, but she, she stopped going on trips with us. But my K as, as part of like, you know, doing vacations. My kids have probably seen shopping centers I think 45 states. So. Well, it's a good way to like write off the vacation too. So we were.

That'S right.

And then my older son, as we were talking about, you know, Bob Helms from the real estate guys, the godfather of real Estate really had a big impact on my oldest son getting into real estate. But I think my oldest son, when he went to Providence College out in Providence, Rhode island, and we were out there, I had dropped him off and. Or I was just, you know, out there visiting. And they've got a really big mall right downtown, and it's three stories. And we were going through it. And I'm just pointing out, it's like we see the buckle. They always want to be next to the. Because that's where the kids hang out. And you can see, you know, this is the main court here, and you always see the jewelry stores there. And they'll pay the most because they have the highest margin, you know, and their impulse. And so I was just kind of breaking the stuff down. And he looks at me. Wow, I had no idea you knew this much.

Well, and it's funny because you walk through them all and you're thinking about those things. I walk through them all and I'm thinking, okay, where do I buy? What store do I want to hit next? But, you know, strategy that goes into everything, it's not accidental.

Yeah. I'm walking through a mall and like, you know, merchandising. So it's like. And it's like, why would they put this store next to that store? That's stupid. Yeah.

Oh, my gosh.

Well, so, okay, so this is such an interesting asset class to me. Probably one of the least knowledgeable areas that I'm in for.

Sure.

And so let's say, Michael, I. I like. Okay, this is great. This, you know, I would imagine, you know, McDonald's and a lot of these places are pretty reliable tenants that are paying their bills. You know, these are companies that have been around for a long time. Not all of them, but, you know, if I wanted to invest in triple net leases, how do I do that?

Well, most people that are in active management with multifamily and single family and all the rest of that, when they build up all their equity and they're finally tired and they want to retire, they sell those buildings in 1031 into a single tenant triple net lease. Because then they just like, it literally is mailbox money. So that's what. What a lot of people do.

A.

Lot of other people do, will come and invest with us because, you know, it's like, I will, you know, work with somebody. And this is the other thing. Like, there's people out there that, like those 1031 people that all the people will tell them and all the experts will say, oh, buy Something with a long term lease and you won't have to worry about it. And the worst possible thing is if the tenant leaves, whereas a lot of times we'll buy something with a shorter term lease. Because I know in the back of our head we've got the people that we know who can backfill that. So let's say if there's a Walgreens, there's a. And we can get the data as to whether the store is doing well or not doing well. So it's like, okay, if they're going to renew, you know, then we get the benefit of the rent increase. If they're not going to renew, then I could put this other tenant in here like, oh, you know, I know Dollar Tree isn't in this market and I can get a higher rent from Dollar Tree than I could from, you know, this tenant. Or, you know, there's certain things that that's a way that we would do value add that a lot of people wouldn't do value add because that's called lease risk. And most people, especially the REITs, are buying longer term leases. And most people that are 10, 30 wanting don't want lease risk. That's the last thing they want possible. So we can buy some stuff that, you know, is like a two or three or a four year old, you know, expiration, and you should be getting a higher cap rate, you know, for that and you should be getting a better deal. And in the Most cases, probably 60 to 80% the tenant is going to renew. And then there's certain situations where like, you know, the Starbucks, I was helping some guys out and they said, hey, we've got the Starbucks and her father owns it and it's in, you know, Colorado. And you know, what do you think we should do? I'm like, well, I need more information on it because Starbucks is calling us up and saying they want to reduce the rent. I'm like, all these national tenants will call up in the first shot. They'll do if their lease is expiring or even if they have an option is say we'd like to reduce the rent. And so I looked at it and I'm like, if you want me to, I'll call Starbucks person, because I know who they are. He's like, what are you gonna say? And I'm like, I'm gonna tell him that, you know, they can go find another place to, you know, you know, go out there. And he's like, what? I'm like, don't worry, relax. I said, there's no place they could go because they. There's. This is the only place they can get the drive through like that. Right. They can't drive through on any of the other corners. And this is the going to work side and this is everything they need. So you just say, hey, you know, but then there's other situations where that, that also comes back around and you know, so you absolutely do need them and you end up taking the. The cut and run. So.

Well, I think, I think that too, you know, people are shopping around for, you know, they're going to be looking at the best pricing, if you will, and the landlord's willingness to maybe upgrade some property and things of that nature.

The key thing is, is that if they could get two or three people or even four people. If you take a look at like how many stores that Dollar General has. Dollar General has like 15,000 stores. Seven Eleven has close to 70,000 stores.

Seven Eleven has just made like a major comeback. I mean, I'm seeing everywhere.

Yeah, they're owned by a Japanese company now, but if you take a look at. If they can save a little bit here and a little bit there, over 5,000 stores, that adds up to some super huge money. So they will also contest their cam charges if they're in a shopping center. Large tenants, as a matter of course, they'll just say, send us all your cam charges and we're going to audit them. And if they can come back and even save like 500. If you take 500 and like spread that across the stores, you know, it's worth it for them.

Significant. Yeah. Well, I.

Our. Our time is. Is drawing to a close and I just, I want to thank you so much because as Courtney said, this is a. A space that I'm not real knowledgeable about. And you've just brought a lot of information in a very short window of time. A lot of. A lot of things to.

Just.

In how that applies.

Yeah. And I want to apologize for being stereotypical and assuming that ladies just want to talk about shopping.

Well, listen, we, we can talk about that too, because I'd love to talk about at another time, maybe the demoling and you know, I believe that's what you called it. How.

Right.

How malls really evolved.

Right.

Because that would be another. Really. That would be a great conversation because, you know, I remember seeing some of those years ago thinking, oh, that's never gonna. That's never gonna go over well. And boy, aren't they popular.

Right. Right.

Yeah.

Well, let me just ask you. So if people wanted to get a hold of you or wanted to invest in you or to dig in further. How can people get a hold of you, Michael?

Sure. So people could go to our website. It's libertyfund IO it's libertyfund IO and it, the Liberty Fund is set up as a triple net property fund. So single tenant, triple net essential business necessity business real estate. So and, and we designed it to be recession proof and Amazon proof and it also turned out to be you know, Covid stupidity proof or I, I shouldn't say proof, let's say resistant.

So resilient. Resilient, yes.

And the other thing is, is that there is a lot of information on there about triple net properties about you know, what's unique about them and I also have, which I'm trying to get a few more podcast up but we have the Nothing but Net show podcast so and it's all about triple net properties. So we try to you know, put out as much education as possible and even if you're not investing with us, we'd like you to be knowledgeable about this so that you know, you've got, you're protecting your, you know, funds. And the reason why it's liberty is because you can't have any type of freedom unless you have financial freedom. So financial freedom is above everything, including political freedom.

Oh, love that. Oh I, I, I just really appreciate, I think it's so important to have you know, different assets in your portfolio and this is another great addition that I clearly need to get added into mine.

So I'm firm believer in, in diversification. I think you know, to a certain extent multifamily people have done a great job of educating investors and educating investors about short term rentals and all the rest of this. But I mean you should have exposure to like self storage. You should, you know, if you can get into some mobile home parks you should, you know, you shouldn't have like 100 in the value add multi family. Yeah, you know, you should just spread it around a little bit because you know, when one you know, might be hit by a certain thing, the other one know is probably going to be clicking along for you.

Right.

Absolutely. I love so well thank you so much.

Thank you.

I really appreciate it. This has been fantastic.

Really informative. Thank you very much.