44: Reputation is Everything with Matt Shulman

Welcome. This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis & Young's Tri State investment Sales Group. In this program, you'll learn about the world of commercial real estate and find out why it is one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

Welcome to show number 44 of real.

Estate Investing Live from New York. This is your host, James Nelson. We have a great show for you tonight. We have with us my good friend Matt Schulman, who is CEO and managing partner of the Ardent Companies. And then for the second half, we're going to have the rest of the panel discussion from the Young Men's and Women's Real Estate Association. It's going to be some great advice for listeners out there. We're whether you're starting out your career or looking to step up your game, I think Matt has a great story and some really good advice to give. We're titling the show Reputation is Everything and he talks about how important your reputation is and that is a big reason why he's been so successful. He's going to talk about getting that call from a lender on a Monday asking him to close by Friday and that with him they get certainty of close. So really important information for you on the show. I want to continue to thank you all for your support. We're now approaching 80,000 downloads, so please continue to keep your comments and your ratings coming on itunes, Spotify, wherever you get your podcast. And lastly, keep a lookout. After Labor Day, I'm going to do a zoom call in for you all so you can ask your questions and have them answered on this show. So keep those in mind whether you have questions from some of the past interviews you've heard or advice for a deal that you're working on or just to talk about current events and what's taking place. It'd be great to hear from you and engage. So keep a lookout for that as well as a new LinkedIn group that we're going to be starting post Labor Day. Also for the show. Want to build a real community for you all out there. So we're going to have a brief word from our sponsors and we'll be right back with that interview with Matt. Thank you.

Hi, I'm Mark Rose, Global CEO of Avis and Young, the world's fastest growing real estate services firm. And we are proud supporters of Voice America. With over 5,000 professionals in 120 offices in 20 countries, Avis and Young delivers local expertise in partnership with global reach. Because we are principally owned, Avison Young prioritizes client success over shareholder profits through our open architecture. Our firm's experts provide value added client centric investment, sales, leasing, advisory management and financing services to clients across the office, retail, industrial, multifamily and hospitality sectors. Our culture is the bedrock for collaboration that enables each assignment to benefit from the collective intelligence garnered from a company wide database. Partnership Performance Learn how we deliver different@avisonyoung.com to learn more.

And now it's time for our Investor Spotlight and with us today, thrilled to have my good friend Matt Shulman, who I've known I think probably almost 20 years and it was very early on and turns out I was actually a colleague of his wife back in my Massey Nacal days and then we came to know each other through his teaching at NYU and then later as an investor. Matt is CEO and Managing Partner of the Ardent companies and prior to forming Ardent, Matt co founded Fairway Capital Partners in 2007. Before that he was an MD with Rialto Capital in 2010. Matt has done incredible things on the charitable front. He's on the boards of the Atlanta Real Estate Collaborative and Open Doors as Well as the Usher 1F collaborative and the Jewish Federation of Greater Atlanta. A real treat. He has his Master's of Science and Finance from NYU and now he's also a professor there. So not only do you get incredible advice today from one of the top investors out there, but also one of the best teachers. So Matt, thank you so much for joining us.

Thanks for having me. Appreciate it James.

So Matt, tell us a little bit about your story because I guess when we met you were just starting off, you had started at Ross Rock, but maybe tell us a little bit about where you grew up, maybe early job opportunities, schooling, whatever you want to share that got us to that point when we met.

No Great. So I grew up in the suburbs of Detroit, a very midwestern cell upbringing, large public school, the normal track of after school activities of sports. Met my wife Karen in college at the University of Arizona and we followed each other. That's what we like to say to New York together. And there is where I really began my real estate career. Although I have been an entrepreneur probably since I was 10 years old and the theme of my bar Mitzvah was bright lights, big city with big New York skyscrapers is table pieces. So I've had a real estate bug for long before I was thinking about my professional career.

I love that we have to get some photos from that, maybe we can use that for the promo picture rather than show your very professional headshot. Now, maybe we could share some of those bar mitzvah photos. Yeah.

13. My hair was much better than 30 years ago. So that's how it began. And I pivoted to real estate career in the early 2000s. I was going was actually in between jobs and just renting apartments for Manhattan Residential and really just trying to figure out what I wanted to do. And before, when deciding that law school was probably not the right career path, I was much more of a numbers and deal person than I bookworm, especially at that point in my life. And I transitioned to go into the NYU graduate program and out of there. I was lucky enough to find Ross Rock through a mutual relationship. Spent five years working with Jim Ross and Al Levitt, two gentlemen who built that business out of the rtc. And they had another gentleman, Rod Elberts, who ran their development and acquisition arm. And Rod really taught me much of what I know today about buying buildings and negotiating. And Alan and Jim, I learned really a great amount from buying loans. And this is back in the mid-2000s when buying loans was distress was limited to death, divorce, bankruptcies and tax issues. Right. Because those were go go days in the city. And then in late 2006, when we started to see the beginnings of some distress occurring, we were fortunate, or I was fortunate, along with one other, my former partner Steve, that two individuals that were not in the real estate business but had made some substantial fortunes on their own wanted to have a family office. And they offered to back us in buying, really investing in assets, either buying hard real estate or making loans and buying loans. Honestly, I could get into more of the details, but I remember them saying something along the lines of, we'll give you 30 to 50 million to start you, and then we'll help you raise money through our friends. And once they said they'd give us 30 to 50 million, I'm not sure I heard much else in my late 20s, it was like, you'll give us money to go do deals. Sounds like an awesome opportunity.

Well, hold on. By the way, where you started your career, you know, some phenomenal people, incredible experience, but I mean, I don't know if you were kind of the acquisitions guy or the analyst, but, you know, here you are at this shop and then they say, because you had never done a deal on your own per se, at this point, right? They're saying, well, hey, we'll give you 30 to 50 million dollars to go buy product I mean that's got to.

They had great faith in their ability to help manage us would be what I'd say. I think we had really good deal skills and by then five years of asset management and development. So some training and I think the belief was that the two gentlemen with the capital felt that they could put some guardrails around us. And you're also talking about two guys in their late 20s. I mean we had big egos and lots of confidence. It took a few more years before I realized so many, many, many things we did not know.

Right. Well, what did you want to buy at the time? What were you seeing out there? Did you have like a business plan?

Did you just say 0607 was the beginning of distress? So our plan was really buying non performing and sub performing loans in the boroughs. So many banks that don't exist anymore, Greenpoint and North Fork and who had the two to four million dollars loans or many were 500,000 secured by three to six apartments above retail all over the boroughs. That was our mainstay investing when we started. And then we vigorously covered by middle of 07 when distress was really here. We're calling every bank in markets that we felt comfortable investing then it was really New York, Chicago, Florida, California, major markets. And the idea was to buy non foreign loans or get involved in distressed situations with very flexible structured capital. Not all that different actually than today.

Yeah, I was going to ask because now post Covid and I've heard about the amount of distress that the special services are handling and we kind of feel that we're going to be hit with this tsunami of opportunity. The question is how do you go about finding these things? So back then were you literally just calling up the bank saying we've got this new investor, we're ready to go, trust us, we can buy this. And you're calling what, the loan officer at the bank? And how did those conversations go?

You're going to date me a little bit. But yes, I think it was a lot of hustle and some charm and a little relationship. But it's we have money, we're looking for what you may have that was distressed. We did a little of this at the tail end of Ross Rock. So we were lucky enough to have a teacher and Alan Levitt or Jim Ross who knew that business well and the servicing. But it was a lot of just phone calls and hammering And I think from 07 to 08 life really changed. And then I had a material change in my life and late 07 which was Karen, my wife, who you mentioned earlier, fell pregnant. So we always knew New York was not a permanent stay at the time. We were there for seven or eight years into our 10 year stay and she really want we had agreed to move to Atlanta. So in 2008 we really transitioned from buying non foreign loans in the boroughs to attacking development and acquisition loans in the Southeast, which I didn't even know. I laugh about it today. I didn't even know what a lot was back in 2008. And we ended up buying about $100 million of the broken home builder loans. And that really transitioned us and catapulted us forward to kind of phase two of what was Fairway Capital, which was a balance between this highly urban New York City borough non forming loans and then these deeply distressed home builders. And that's also when I met my current partner, Todd Terwilliger, who at the time was a. Was a bolt on partner of Fairway.

So okay, so this was before Rialto because.

Yes. So then you go work for one.

Yeah.

So then 2009, we were actually partners with one of the senior people who became senior at Rialto. Back then Rialto was just the beginning of an idea. Rialto was the second incarnation of the distressed division for the public company Lennar Homes. The first time they did it, they started Lennar Partners that went public as LNR and then they sold that business to Cerberus. That's two, three years post sale. I'm not exactly positive on the time they. I think it was two years. They got their band back together, Jeff Krasnoff and his team, which was really the operating team for L and R. And then Stuart Miller, who's the CEO of or was the CEO of Lennar, he's now the executive chairman, I believe, or executive president. And they created what was Rialto. So a relationship of mine said hey Matt, what you're doing is amazing. These guys are Fairway Capital Times 1000. At the time I thought about our relationship as more of a partnership. But they bought a $3 billion portfolio for about a billion dollars of cash between their balance sheet and money from the FDIC at the time under a one of the TARP loss share agreements. And they said, hey Matt, we really want you to run a Southeast division. I still say that was probably the hardest career decision I've ever had to make. Maybe hardest decision I've ever made in my life because Fairway was my baby, your first business. But I look back now and say it was time and place and really a fantastic opportunity. So I transitioned over in really January of 2010, I moved along with Todd, who I mentioned earlier, Todd Terwilliger, he was our joint venture partner from Fairway. Todd and I went and became corporate guys for pretty much exactly two and a half years at Rialto, hired 60 people, invested over a billion dollars, asset managed 2 billion. And what I like to say is I thought I knew what I was doing when we invested the first 250 at Fairway. And I thank Stuart and Jeff and Eric whenever I see them and say thank you for giving me what I believe was kind of our PhD in Real Estate investing. And it was a fantastic experience. And the only negative was it was still a job. Lennar Corporation would never be mine. Right. It was a public company and had tremendous leadership. And somewhere around late 2011, early 12, you kind of just have that feeling you might want to be back on your own. And they were in between funds and pressure was being made. And that's really when the genesis of the conversations occurred. To start today at the Arden Companies, which is our current company, and a few phone calls, one to my previous partner at Fairway, a few more calls to whether it be employees that were there. And we had started some other divisions that kept people together hanging around. And in June of 2012 really got the. I guess it was June we resigned from Rialto. So I think it was August of 2012 was the launch of what is today the Ardent companies.

Did you have your same seed investors with you again? Did you go back again and at this point to that 30, 50 million, I mean assuming you did right by them, did that amount increase?

Yeah. So what ended up happening was one of those partners like the seed and partners came with me and wanted to continue. The other partner actually went with my old operating partner Steve. And for years the two of them continued to do deals. It was different mindsets on businesses that we wanted to grow. They were just. I was at that point in my career of the mindset of a balance between assets under management and long term relationships were really important. And Steve was one of the best on ball deal guys ever, but he was much more focused on kind of striking and wins at the deal level. And it's hard to do both. So what ended up happening was my current partner Ronnie and I started along with Todd and our other four partners, many of which who were employees of previous companies or ventures, who became partners in the new entity that is today.

Great at this time. Was it kind of deal specific where you Said, hey, because you've been raising money from high net worth individuals as well, if I'm not mistaken, from your early days at Fairway and even today you still take on high net worth investors. So did it just start with a couple deals where, hey, we've got a great opportunity, let's go raise some money for it. What were those first few years like?

Well, you know, going back to 2012 in the summer, there was still some distress out there and it was fine deals and fine money and there was no perfect equation. We had some network from previous investors that went back from the 2007 eight days. A lot of New York was able to expand into some different markets. And really what helped us grow in the early days were relationships with some of the large private investment houses, registered investment advisors, and a couple of them liked what I was doing and support us in the early years. Fast forward to today. I think we're over 700 investors now, ranging from people that have done well in their careers and looking for a place to put some additional capital to a handful of multi billionaires that are major investors. We still have very little institutional capital, but going back to 2012, we were of no capability or ability to really go out and talk to institutions unless that was going to be. The strategy is raise money first, which I know some of my peers have done, go raise money. But we were deal junkies, I guess I have since I was probably 12 years old. So I always felt like if I could find good deals, there'd be money to meet it.

Absolutely. And I know with some of the deal specific transactions you've done, because I know speed and being able to be responsive. I think he once told me that the banks love working with you because they can call you on a Monday and you can close on a Friday, which you know, especially when you're talking about distressed assets where there's limited information to be able to move that quickly. So in instances like this, if I'm not mistaken, you would take down the deal with your existing partnership and then after you've closed it, then you were able to syndicate it after the fact because I would imagine it's great to have a stable of 700 investors, but if you need to close on a deal within a week, it might be challenging to get them comfortable to jump in that quickly.

Yeah, I've given advice to a fair amount of people have asked, hey, when you got started, what were important assets that you had to structure through? And having that relationship with our capital partner to be able to close quickly and then be able to syndicate and sometimes for that capital, partner that line of credit or flexible equity, depending on how people structure it. Matt, do you give up too much? Is it worth giving up 20%, 40%? And to me growth solves a lot of problems and having that ability. And it's also about reputation and relationships and I think for ardent that's all that matters. I mean that's really the only in real estate there are few currencies that matter much more than relationships. I know there are some of the brilliant investors out there that can see five years ahead and can can predict the next single family rental craze or the next institutional, we'll call it industrial for Amazon and buy land and they can be in front of those niches. But for 90% of the real estate market, which moves a little slow and fairly liquid, it's all about relationships. So having that capital to move quickly along with the acumen of how to buy debt and what were the key questions to ask, I think went a long way toward building what is our company today.

Great. And at this point, if I'm not mistaken, I mean you've invested across almost every asset class, right. So I mean you are investing nationally. You've done whether it's busted condo deals, whether it's shopping malls that are vacant, whether it's single family home strategies. So I guess because I've always wondered, I mean I've spent most of my career, almost my entire career in New York focusing on sales in that market. And you know, it's a lot just to keep up with what's going on in New York. I mean, how do you, you know, how do you figure out these other markets? How do you figure out these different business plans when you want to go buy 7, 800 single family homes? You know, how do you learn about that market?

Yeah. So currently we're investing with two strategies. We have our lending platform which is broader than what I would say we would buy and operate assets. We'll lend on a slightly broader array of assets because there's a little less requirement to whether to operate or b it also loan to value we can cover if we're less comfortable maybe in an asset class or in a location. Sometimes you can get a little more comfortable with being at $0.50 on the dollar instead of $0.60. So our debt business is 6 to 36 month bridge financing is kind of 7 to 12%. That business is all run out of Atlanta. But we heavily rely on our network of brokers, partners that we've done deals with previously to help underwrite. And if you don't know the real why in a deal and often you gotta solve for that, like what is the catch? You can do a great underwriting but there's normally that one missing piece of what does the borrower know that you don't know? What does the seller know that you don't know? If you can't figure that out, it's no different than being at the poker table. And if you can't figure out who the minnow is at that table, that's good either. That probably means it's you. I feel like we look at the debt business that same way as like let's just know what we don't know and own it and then move forward and. And that allows us to have a much broader spectrum of real estate. On the equity side where we're owning, operating, we do not do our own property management but we asset manage everything directly and service everything internally. Both on the equity and debt side it's really twofold. We've continued to add talent around strategies. We like to build the best in class. So for example retail, we know there's going to be a fair amount of distress in retail. We know that all the retail we invest in may not exit as retail. So we may buy a mall, keep the Starbucks and the bank out parcels, but tear down the Sears, JCPenney part of the mall and put in a multifamily cold stores etc. To get comfortable with that we hired Jonathan Dubovsky who was the chief investment officer for the shopping center group. And I said okay, if we're going to be in an asset class, we have to operate it. We have to be the best, very similar like the Jack Welch G, you got to be first or second. If we don't think that we can operate at a first or second level within, we should not do the second way that really we've been able to grow, when I go back to relationships, has been this combination of flexible capital along with relationships and trust. So we've done a fair amount of deals as a co general partner. This normally means somebody who has a really good deal or they think they have a good deal, they don't have the capital needed even to be a general partner. Even if they could raise the 90, 95% they don't have the money to get the bank financing. Maybe the 5, 10% is still too much for them and really not the back office. So we've been able to do these deals where we share in our promote with an Operator, but we get a better deal because of it. And to our investors, there's no double promote rather than us being an LP to other people's gps. We, we've been a co general partner and that was a tremendous victory in a way. And for example, the single family homes, it started off as a conversation. Hey, Matt, I think I have a deal. I got 90 days due diligence and we're able to structure. I said, listen, hard to give an answer in three days, but I can put the money up in three days if I have 30 days to do my diligence. But if I don't like the deal, I'll keep my money up for 30 days more for you to find another partner. And I really think that goes to the essence of Ardent, which is balancing flexible capital with real deep trusted relationships with operating partners or brokers or capital providers. And that's been the special sauce, especially on our deals that have gone really well.

Fantastic. So I think you already kind of answered it, but just for our listeners because if they're thinking about where do they get involved either on the equity side or the debt side, you know, is it just, does it have to do with your risk tolerance or your, I mean, how do you decide if you want to, if it is in your target market, you know, with your expertise, are you always a buyer for it first? And then if you don't like maybe the pricing, you fall back as a lender or how do you decide which way you want to approach something?

Yeah, I mean, well, there's, I think there's two questions there. One, which is, which is the preference for us to invest? And then the second is how do you engage if you want to become an investor? And for most people, being on the debt side is not a natural transition. I think I was very lucky that I was at a time and place in my career where I learned a business and then a year after, or really at the beginning of thinking to go on my own and start. There was a major meltdown in 2008 and you were catapulted to the debt side. But in a distressed debt world, you really need to know the debt and the equity side. If you buy a loan at a discount, buy a loan at 70 cents, you call the borrower. I bought your loan. You don't know if you're going to end up getting the keys or if you're going to work it out with the borrower. So you have to be prepared on both sides, which is how we ended up on both sides. So for most people who are entering real estate, they're really going on on the equity side. They have an idea, they want to buy a building, raise money and move forward. Very few people that I see kind of enter on the debt side in a non institutional way there. They come from banks and go forward. The second part of the question, which do we prefer to all the people in my debt funds, which we thank you for your capital, your support. For me, it's more fun to be on the equity side. We're driving the bus, we're making the decisions, we're learning. But it's a lot more risk and it's a lot more gray hair as well because you're living and dying on every lease or every decision versus having a level of comfort there. And also if things go well, you can make a lot more money than the 200 or 300 basis point spread between your cost of capital and where you're collecting. But I'm very happy, we're very happy to have supporters on both business and my politically correct answer for Arnott would be we have capital to meet the needs of the best opportunity that that comes in front of us. And I'm very fortunate and I would speak on behalf of Artem. We are very fortunate to be able to look at any type of deal that we like that we think has a good risk adjusted return. And whether it's one year because we're placing money for a year or an asset that we'd want to own for 15 years, we can find the capital and meet the opportunity. And that's a very fortunate and spoiled place to be. At this point in my career.

That makes a lot of sense and especially from a diversification standpoint to kind of have both kind of the more passive as well as the active opportunity. So that makes a ton of sense. So maybe tell us a little bit about raising a fund as opposed to deal specific. So on the equity side, are you still doing everything deal specific? Are you raising a fund, Is the debt a fund? And maybe talk a little bit about the pros and cons of deal specific versus having a fund.

Sure. So I'm a debt business. We are on our fifth fund and we've done smaller funds based on the dynamic of our investors which have been high net worth investors who like to understand the liquidity more. So shorter investment windows and shorter duration. We moved from a one off model in the debt business to a fund in 2015 or 16. And the reason for that was duration on deals can be a problem. You make A loan to someone in our business and they pay you off in nine months, you made an 11 IRR. That's good, safe. But investors don't want their money back. If they give you $1 million, you give them back 1 million 70. So having a fund really allowed for a better management of liquidity and management of yield. We really loved that benefit for Ardent. But by the time we got comfortable in 201718 and said hey, we should really be a fund business and our investors trust us. I mean part of raising a fund, why many people don't do it is it's hard to raise committed dollars. So you got to start there. Can you? Because for the most part people do deal by deal because it's the only way they can raise money. But by 2017, 18, I think we felt comfortable that we could raise a fund. But our concern was we didn't really have that much deal flow or definitely not to the level that we felt comfortable raising a few hundred million dollars and saying with any level of certainty that we could invest it over a period of time. So we did two kind of smaller strategic funds. We raised 40, 50 million to do a very specific middle markets, new construction, HUD for multifamily with a partner we really liked. And then recently we've done another about the same size 40 be 52 million for highly urbanized self storage. And primarily, although we are based in Atlanta, these assets primarily are in Tri State Area 1 outside Philadelphia. And I think we'll continue markets there where we see that. So those were 40 $50 million funds. But I'm happy to tell listeners that we just raised or closed our first strategic equity fund. The target is 250 million and I think we have about 170 or 180 in commitments. And our first closing was 112 and last it was two weeks ago. And so I think we'll hit our 250 without too much trouble and excited. I think that's really because investing is that breaking news.

Are we breaking news on real estate investing live from New York?

I hope not. I hope not. I'm a little disappointed that me and you haven't had that conversation over the.

Past month or so. I'm reaching 100,000 listeners. I mean we got a great audience here.

You know, this is all 100,000 listeners. I hope that you know when they have some distress and I think where we're going to be and it's funny now we have two funds, but I think that they're all going to serve a lot of the Same master, which is helping people recapitalize their projects. Although we do also in the equity business, look forward to buying whole assets for our own balance sheet within that fund. I think in the short term it's going to be, hey, I have a hotel, a retail center, multi. It's something that's got in trouble and I want to help buy my loan back. But so no, we're excited about moving there and then just the pros and cons of the fund business. The pro is you have committed capital. Sounds better to sellers who are concerned about capital. I mean, even though we closed over a billion and a half dollars in deals when we didn't have a committed fund, sophisticated institutional sellers would put you through the wringer, making sure you have the liquidity and the capital. So it's nice to say that it's a committed fund and the money is there. I think for me, on behalf of my investors, I much prefer the fund because although in a fund of 25 investments, I expect all of them to hit their underwriting, there's always going to be one or two outliers. And it was always a squeamish feeling to have an investor in that one deal that didn't perform as well. Especially if they weren't in 30, 40 deals with us, they were new and somehow they just ended up in the one or two deals out of six that didn't perform as well. So from a personal level, between me and our investors, which me and my partners who raised most of the money for us and our investors, um, it's nice not to have that concern. You know, the big negative with the fund is your promotes are crossed. So, you know, if you're trying to build liquidity, if you're early in your career and you're trying to build some wealth for yourself, you know, if you have to wait till the back end, because most funds, the general partner is not making their promote till you're, you know, all the money's returned plus a preferred return. So, you know, you could be looking at three, four years down the road, harder way to make those pops rather than if you do five separate deals. One, you have a liquidity event in year two, you get to put a check in your pocket that helps with your general partner capital and year three rather than year six. So that's really the big benefit of doing them one by one. And we will see which one was the bet, which was the better. I don't believe this will be a one and only. Sorry, go ahead.

No, I said it's great that you got both opportunities out there, but that was a really good explanation of the difference of doing deal specific and the funds, especially for our listeners looking to start out. So I want to go back to something you said earlier about the ability to code gp and this is something that I've told our listeners before. Sometimes when you're starting out and maybe you have this incredible deal, but you don't have the capital, you don't have the ability to take it down and, and maybe you want to keep it so quiet that you don't share it with anyone else because you're afraid that you'll lose it. And that ultimately is what happens because you don't have the ability. So for those of our listeners who have a distressed opportunity and if they were to call you and say, matt, I got a deal, so what would that have to look like to get you interested? And then what are you looking for in that sponsor? What if it was even like a real estate broker, someone who said, look, you know, Matt, cards on the table. I've never done this before, but I've got a connection. I know this banker, I've been tracking this property. It's an incredible. We've got a path to get to the real estate. I mean, what would you need to hear from them that first of all get you interested in the deal? And then are you able to overlook maybe someone's inexperienced?

Yeah, I mean, often someone's inexperience is our opportunity because if they had enough experience, they wouldn't need someone like an ardent or if they had enough balance sheet. And we're going to underwrite the deal ourself anyway, so we'll challenge their assumptions. And it's been a fantastic vehicle for us. We've done well over a dozen CoGP relationships and in some of those relationships we're on our third, fourth, fifth deals and so really excited about the strategy to get excited. It's simple. We just need to see a deal that we like. I mean, that goes back to being deal junkies and wanting to. We invest material amounts of our own capital alongside our investors. So my first bar is, is it a deal where I want to put my money and my friend's money and Arn's reputation, period.

Let me press you on that. And I think the fact that you put your money where your mouth is and invest alongside your investors is great for a vote of confidence, but again, is it replacement costs? Is it, hey, I think this property on the open market's worth 20 million bucks. But you can buy it for 10. Is it just that you're getting a cheap buy on it? Is it that there's a way to reposition it? What are the ingredients of a deal that jumps off the page for you?

Yeah, you know normally a good story to how the deal came helps but I'm fortunate we have a team of 40 professionals. I think earlier you mentioned one of the things about Ardent that sets us apart is we can get a deal on a Monday and close on a Friday. So I think it's just at bats. I think it's, you know, sending a deal over and let us look. And normally if that broker you mentioned or that early start in their career thinks they have something, what does think you have something mean? It normally means I have a really one of two things. It's I can make a lot of money on this deal. I can put in a dollar and make two, three, four or have a really brain dead income stream that is not being priced accordingly. Right. I have a 7, 8, 9 yield on something that in today's world should be a 3, 4. And this is where I hope Arden can be a good partner for some of your listeners. We can do either. We are not tied to a 2 year horizon or a 10 year horizon and we're not tied to a 12 IRR or a 25 IRR. We're looking for the best risk adjusted return. If you told me we could go buy really good quality credit and or multifamily which may be seeing some stress but wide of market cap rate or hey, you can buy this office building but we know there's a tenant that's going to grow even though the market's price will leave those things. That's the key to the business and that's what I love about real estate is it's imperfect. No two deals, we learned that in our early days in our career. Right. No two deals are the same and you're hunting for that. Those little nuggets of information that help push you over the edge and sometimes you're wrong. When in the business we're in it'd be a lot easier to just pick one asset class and maybe two markets. You're not gonna be wrong as often but you're probably not gonna have as much fun either.

There you go. Well that's great advice for what to look for in a deal. So Matt, we only have a couple minutes left and this has been awesome so really appreciate your taking the time. So you know, maybe I don't know if there's a Couple, you know, pieces of advice that you would give someone looking to get in the business again. I know you teach at nyu. What do you tell your students about starting out? What kind of advice would you give somebody?

So first, I think I owe you an update bio. I've not taught at NYU since my first job, although I have kicked in your bio.

I think what's the teacher always attach?

I know I have. I have kicked it around down here in Georgia. A good friend of mine is an advisor in the real estate program at Georgia Tech. And in Georgia there's some fabulous schools. Regardless of what you northeasterners hear about the state of Georgia, there's some smart people doing really good stuff in the middle of this corona. But my advice far number one, build real relationships, period. End of story. If it just stopped there, you can always hire or use computer programs, software to figure almost any bit of data out. The one thing that cannot be replaced is your reputation and your relationships. Having people call you because they believe you can perform and you're a good person. I think there's both relationship. It's not just, hey, Matt's a good guy, but it's also we do what we say we're going to do. We give negative feedback if it's do in real time. So build real relationships and own that. And you know, my other advice would be like, I think you made, you were making the point earlier, which is, don't ever let a deal get in the way. Like one deal or one would get in the way of a career, right? To us, we took 100,000 investors or sorry, I'll go back, I'll date myself. We took investors at 50,000 a deal hoping that they would grow into something more. And some of those never grew, but they were great relationships or they referred us to other people. Some smaller deals led to bigger deals, winning every last bit of a negotiation. It's a really fine line. And it's one thing when I'm wearing my fiduciary hat on behalf of an investor, it's another thing when I'm negotiating with the code gp, right? Because when we're negotiating with our co gp, that's somebody who brought you their deal and we have to respect that, right? So beating them up, even though we know we could, because it's a week before closing and there's nothing and there was information, life's too short, it's not worth it because hopefully that person will remember that you didn't take advantage and you went there. And that goes for a general partner, a co general partner. It goes for a bank that you're buying from, a bank you're borrowing from. You know, it's a fine line because you do have a fiduciary responsibility to your investors, but where it's not going to impact them. I would build relationships that will last a long time. I mean, I'm 43. And James, I'm hoping we're having similar conversations 20 years from now and 30 years because I don't know what else we would do. And I hope this is where we're at. You might want to be on a beach somewhere, but I kind of, I love the. I love this. So you want people that are going to call you. And to me, that's my one and only bit of advice.

Well, that's great advice. And really do this business from anywhere. And so even if I'm on that beach, I know we'll still be in touch. And I just could not agree with you more about the importance of your reputation and relationships and that's what makes this business so much fun. So, Matt, really appreciate you joining us today. You got an incredible story and really appreciate your sharing it with our audience.

Thanks, James. Appreciate having me. And can't wait to catch up soon.

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Ryan, what advice would you give to our mentees and those looking to succeed in the business with regards to sort.

Of leveraging your network? And I know we brushed upon this last week with the Rhodes Associates call, but one thing I found really helpful was having an Excel sheet sort of tracking everybody I've reached out to and spoken to and what I personally did. And I'm sure your schools have a similar database is I went on the alumni database, made a list of firms I was interested in recruiting at and just searched, spent hours searching the database, compiling a list of people that work at different firms, noting what the position, what group they're in and then just cold emailing them saying, hi, I'm xyz, I go to Fordham, Columbia, nyu, whatever the school is. And I would just love to have 30 minutes of your time to speak and learn about your career path and how you're liking whatever firm they're at. And I think doing that, you know, even if you have a 1020, 30% hit rate in terms of receiving a response. That's, you know, a lot more than you would have had if you weren't doing anything. So that, that was very helpful for me. And then just making sure to, you know, track how you're put in touch with that person, doing a little research online to better understand their background, and then just following up if you don't hear back from them after a week or two. You have to remember a lot of these people are extremely busy and unfortunately, when they see a cold email, that probably falls towards the bottom of their to do list. So sometimes it slips between the cracks. And just being persistent, don't feel ashamed or embarrassed about following up and just kind of going through that and just being very, you know, determined and again, persistent throughout that process. And that's actually how I ended up at RXR too. So you never really know how or who you'll meet going through that process.

You brought up a lot of great stuff there and I'm glad you brought about tracking and especially who you've met with. I keep bringing up Paul Massey, but his advice was if you're at a crossroads in your career, go talk to 100 people. I know that might sound extreme, but if you're going to do that, or even 50, you need to track who you've met with, what the conversations are. And I also like how you said don't just rely on email because everyone gets flooded with emails today. Write a handwritten letter, do something different, write a thank you letter, give them a phone call, pick up the phone. I mean, you'd be surprised how few people. Because I get resumes all the time and they just email and then sometimes I respond, sometimes you say, look, we're not hiring right now, but stay in touch. And that's it. You never hear from the person again. Those who make a consistent effort of every being politely persistent, maybe not every other day, but every week. And then every other week maybe they're sending me an article. James, know you're active in this space. I just saw this release. Maybe you'd find it of interest. And I start saying, wow, this person's really looking out for us. This person is really conscientious and, and we look, that discipline that you're talking about, Ryan, that follow through, those are also traits for a successful real estate broker. So I think those were some great examples you brought up. David, you look like you had something you want to share. Yeah, thanks. So I got to hop off in a few, so I'll just Throw in my two cents, if you don't mind. All of our interns that we have at Ekman Ziff, I record them to carry around a pencil and a pad all day during the summer. Because my philosophy is, the only dumb question is a question you've already asked, but otherwise, there's nothing that you should feel embarrassed about asking. None of us are born knowing what DSCR stands for or what CAGR means, so it's okay to ask it. What we generally do is I tell them, like, throughout the course of the week, take notes or write down any questions you have. Have. And then once a week, carve out 15, 30 minutes and let's go through all your questions and write down the answers. Because you don't get ahead without learning. And there's a lot that gets said that if you pretend like you know because you don't want to be embarrassed, you'll be embarrassed down the road when it turns out you don't know what some of these acronyms or some of these terms are. And then the other advice I would give everybody is if you can try to be Laura Jackson's kayak partner. I think that that builds character. That's great. Thank you, David. And David is an incredible expert in not only investment, sales, debt, equity, having been in the business for a while previously at East Dill. And I love what you're saying about taking notes. I mean, I'm always. I'm the kind of person where I carry along my iPad and I have my virtual pen here and I take notes and then I can actually search for them. But we'll sit down and have a team meeting and everyone's just nodding their head, but no one's taking notes. And I'm thinking, how is anyone going to ever remember any of this? So really important to take notes on conversations and learn from them. Lauren, you already gave some great advice about networking and anything else, tips for success that you would share.

James, I just need to interrupt for a second. Sorry, Lauren, but I have to jump to another call.

Rob, can you. Then can we ask you quickly about, you know, what tips you would give for success? Because I wanted to hear from you as well. I was just rounding out the board, but go for it.

All right.

If you could give us a minute, if you got a minute.

Yeah, I was trying to bail right before that, I guess, you know, similar to what Ryan was talking about earlier in terms of work ethic. And Alan can probably attest to this because I also work for Todd Waterman, like, he works currently, and Todd's pretty demanding. He's a good. He's a great guy, and he's. But he expects a lot. And Todd was my. Even though I'm a couple of years older than him, he was much older than me in real estate years, having come from a very top position at Tishman Spire. He came to run the New York office for Rexon when they first entered New York, and I joined soon thereafter in late 99, having been a broker for three years at ESG, a tenant rep broker. So Todd gave me my first shot as a leasing associate. And I basically feel like I'm a mentee of Jerry Spire, having worked for Todd. And when I first started it, you know, I just didn't even look at a clock. There were certain things, you know, I knew I had a lot to learn, and I wanted to move ahead and move ahead swiftly. So I just put in whatever effort was required. And a lot of it had to do with even just doing spreadsheets. We did our own internal analyses. We didn't use. What's that? Canned Argus? No, not Argus. Because I wasn't on the acquisition side. I was on the leasing side. But there's a. Does anybody work with it Yardy or something like that? Some type of. That's what. Pro Calc. So Pro Calc was developed by a couple of former brokers, and it's basically a shortcut for analyzing deals against your pro forma, basically. But we did it from scratch at Rexon, and Todd gave me a template that I guess he probably used at Tishman's Buyer. And we had, you know, some really complicated analyses. And rather than like, asking questions like, how should I do this? How should I do that? I really just spent the time, and I'd literally be there until midnight some nights just trying to figure out how to analyze something using Excel. And if I didn't know how to do it in Excel, I'd look it up. And you just really. There is no substitute for hard work. And it's not just to punch a clock and prove to the boss that you can work those hours. It's actually, you know, just having that desire to learn and do it on your own and showing the people above you that you're diligent in that way and not, you know, because that's the one mistake that most junior people make, is they ask too many questions about, how do I do this, how do I do that? Rather than first really giving it a 150% effort to figure it out on your own, no matter how long it takes before you then go and then you can demonstrate what you did to try to find it out on your own. And that goes a long way. And it's so appreciated from the people above you that you really showed the took the effort to do that. So just jumping on what Ryan and Alan were saying earlier, but it's really the work ethic and putting in quality time, not just doing it to prove something awesome.

Thank you so much, Rob, for sharing that and jumping on the call. We know you got to run, but.

Yeah, my pleasure. Thanks, everybody.

Appreciate it.

Doing a great job. James, Jeremy, talk to you soon.

Good.

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