67: Tenacity With Jessica Zaski

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This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis and 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's one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

Welcome to episode number 67 of Real Estate Investing Live from New York. This is your host, James Nelson, principal and head of Tri State Investment Sales for Avison Young. Wow, what an interview last week with Joel Breitkopf. You know, a lot of you have been asking me about how to raise capital. It's one of the concerns hesitations for many of you to jump in the game. And so that's why I reached out to Joel. As you'll hear, he's really the master of really building these relationships over time, doing right by his partners and gave some great food for thought. And while you're at it, if you're listening to prior episodes, go back and listen to Jordan Vogel's episode as well. I love how he talks about how he raised money for his first transaction and it was down to the wire, but he got it done and it set him on the path of success, which I hope you all are now on. So before I introduce today's guest, I want to share with you all a question. And I'm from now on going to be answering a question from one of you which I think would benefit all of our listeners. And so I received a text and this was after a show a couple weeks ago when I gave my cell phone number and I said, you know, call me, text me. And an investor from Tokyo said that he has a 1031 exchange and he was considering investing in an apartment to buy. And he asked me what did I think about exchanging into a specific apartment. And my advice to him was I said, well, look, typically if your goal is cash flow, buying an individual apartment is not going to yield the highest return. Typically, it might be a 2 or 3% return. But if you can see yourself long term living in the apartment or maybe even reselling it, look, there's no surprise right now that apartment prices have taken a significant dip. And he did tell me, yes, one day I might very well like to live in the city or at least have a pied a terre. I also gave him some advice on the 1031 front because if you are going to buy an apartment or house and you plan to eventually live in it, there are requirements that you do rent it out first. So that's what I'm here for, advice as a sounding board so you can connect with me at James Nelson NYC, whether it's Instagram, Twitter, LinkedIn and feel free to message me questions. LinkedIn is probably the best medium for that. And if I pick your question and think that'll get good benefit for the group, I'm happy to share it here live on the show. Okay, so now onto tonight's guest and we have with us Jessica Zaske, who is co head of acquisitions for Acadia. And I've been trying to get Jessica on the show for months. She's got such a great perspective and I want you all to hear about the world of retail, which of course has shifted even before COVID with the E commerce and I think she's got some great insight into that. But also how to pick locations. And Acadia, they have over 13 million square feet of retail, not just in urban cities but also grocery anchored. So I think you're going to get a lot out of it. But I am entitling the show Tenacity and she referred to it in the show which she attributes her success to sticking with things and seeing things through. So I hope you do the same. And with that, we're going to take a brief word from our sponsor and we'll be right back with that interview with Jessica. Thank you. Hi everyone. I'm here to tell you about an exciting new real estate investment course which is going to teach you everything you need to know about investing in commercial real estate. My friend Doug Marshall, who I've had the pleasure of having on my podcast several times, he's also the author of the bestselling Mastering the Art of Commercial Real Estate Investing, has launched a program called the Great Game of Real Estate Investing. Doug, tell us a little bit about why this course is different and why people should take it.

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You are listening to Real Estate Investing LIVE from New York. To find out more about James Nelson or Avis and young, visit avisonyoung.com now back to our show.

And now it's time for our Investor Spotlight. And with us today is Jessica Zaske, who is co head of acquisitions for Acadia Realty Trust. Acadia, which has a portfolio of 13 million square feet, is a real estate investment trust focused on delivering long term profitable growth via its dual core and opportunity fund platforms. They invest in the gateway markets looking for dynamic urban and street retail corridors including New York, Chicago, Louisiana, San Fran, D.C. and Boston. They manage opportunistic and value add investments through a series of discretionary institutional funds. Jessica, wonderful to see you. Thank you so much for joining us today.

Thanks. Happy to be here.

Wonderful. So it would be great if you could tell our listeners a little bit about and you can take it all the way back to your childhood, but where you started through school and how you came to end up in real estate.

Okay. So I took a winding path to.

Getting into real estate investments, but I'm glad I landed here because it's truly.

What I'm passionate about.

Was born in the Detroit suburbs and grew up there. And actually Detroit is sort of a, is more of a real estate town than a lot of people would give it credit for. But, you know, that's really not where I caught the bug. I went to undergrad at Northwestern just north of Chicago, and always knew that I wanted to do something in business. My dad had been in the automotive industry and was, you know, more of a finance guy. But I still focused on psychology and econ and undergrad mainly because I just wanted to pick a major that I was interested in in the liberal arts context. So really had no finance background whatsoever and actually started out on what I'll call the very creative end of the business spectrum, which was advertising. So I worked in downtown Chicago at Starcom, which is a division of Leo Burnett, and quickly realized that being a junior ad person or media buying person is not Mad Men.

Right.

It's not that fun. It wasn't fun at all. So I was sort of on my journey I went in, I actually just through relationships, joined the marketing team at Merchandise Not Properties, which is actually owned by Vornado. And at the time Chris Kennedy was running it in Chicago. So sort of an iconic building, the Merchandise Mart in Chicago, but also holdings in Los Angeles and New York. And so even though I was more on the marketing side of things, I got to understand the business and the real estate end of things. Obviously the driver was ultimately the tenants and the trade shows and producing those income generating events. But that wasn't quite making it for me. So ended up spending some time in New York, actually in sales. I said, look, marketing is sort of where you go where you can't prove your return on investment and you don't get compensated for it. So moved to New York like every young woman who watched too much Sex in the city in the 90s and worked in sales. But it was architectural sales, you know, design and design products and was help building out a lot of offices for law firms and hedge funds and got to know some people at Tishman Spire and related and I thought this is what I want to do. I want to buy big buildings. And you know, it was 2006 so it still was like sexy boom time. And everyone said you'd be great at that, but you don't know how to open an Excel spreadsheet. Why don't you go to business school? And I thought, I love learning. I've always thought I'd probably get my MBA like my dad.

So went to business school, somewhat mistakenly thinking that it was a good way to transition into real estate investing, and then came out in 2010 and one it was a point in the cycle where no one was was hiring and people were just gearing up, I think at least in the retail world to start buying again. But also sort of with a lot of experience professionally and an MBA but having not had any job experience in real estate. So sort of that double bind I think other people have encountered. If you aren't in real estate, it's hard to get into real estate. But fortunately, after a lot of conversations and looking high and low, I connected with the former CIO Joel Braun of Acadia, and they had a position open on the acquisitions team. I joined and have been here ever since.

I love your story and how you found your way into the business and I think it's great that you focused in college on what was interesting to you and kind of trying different things out and starting in advertising and getting that perspective and then the perspective as an architect would See space. And I'm sure that certainly helped you in your career to have a little bit of a different experience. But that last point that you touched on, certainly in a challenging job market, which you could say we are experiencing today, the whole question of when might make sense to go and get a master's degree. To your point, you didn't have real estate on the job experience, you went first to the masters. We have a lot of listeners to the show who are aspiring investors. They want to take their game to the next level. If you could kind of go back in time, do you think before you had that master's degree would have made sense to go work at a real estate firm for a couple years, maybe take classes and now there's continuing education that you can kind of take along the side, or was it really just more of a function of the job market and timing that made the job search so challenging at the time?

Yeah. So a couple things, one I just want to clarify. I'm not an architect, but I did work, yes, with architects, sort of project managing and building out office spaces. So. But yeah, that did give me part of my real estate bug, commercial real estate bug. But, you know, I think the job market was, you know, pretty bad. But I do think, you know, there's just sort of that catch 22. It's sort of like everyone. And real estate is so unique because, you know, it's. There's a lot of smart people, it's competitive, but it's also, you know, sort of this industry, this people are very passionate about it. Right. It's almost like a lifestyle. At least that's how I feel. You know, a lot of my friends are in the industry. I sort of like live and breathe it, you know, So I think it's just hard to like, get in if you don't have that cred that you've done it before. But you know, what I would say about that is one of the, I guess, personal attributes or just sort of, you know, you have to bring to my job. It's sort of this tenacity, right? You have to be a go getter. You're chasing deals, you're, you know, getting creative about how you find deals, how you structure things, you know, how you, you know, just bring partners on, et cetera. So I think that was sort of, it was sort of always that way that I just had to be, you know, if you're coming in late to the game and you didn't do a couple years of banking out of undergrad and then you Know, get a real estate job. You just have to be, you know, scrappier about it in some ways and really just, you know, go for it and sort of demonstrate your commitment.

You know, I love that you use that word tenacity. It's a word that I use a lot and I think is one of the most important traits to success in this business. My grandfather, who's a real rags to riches story, he was in the automotive business, but, you know, grew up in a one room schoolhouse in Missouri and fast forward 50 years later, had multiple dealerships across the country. But you ask him what was the key to your success? Said, tenacity, not giving up. And I think we've heard many similar stories where they told no so many times and just keep asking the questions, keep reaching out. So I want to hear a little more about that connection to Acadia. So how did you. Was that through a former job that you knew people there or how did you ultimately get in front of them for a job?

Well, ironically, as you know, I'm a big networker and I sort of feel like I know everybody, but I didn't know anyone at Acadia and it wasn't on my target list, honestly, because I was in the city and Acadia's main office, we didn't even have a city office at that point. So it really wasn't on my radar. But I answered a bunch of postings online. I think it was. I can't even remember select leaders or one of those. So again, sort of not normally how you would tell someone to go about finding a job because you submit a resume when you're a more junior person to a posting on a website and good luck if you ever hear anything. So it was total serendipity. And I came in and just really connected with Joel, who was CIO at that point. And yeah, it was just, it was great that it was a good fit. And so do you remember what he.

Asked you in that interview or kind of what you said that? Because I'm sure even at the time there was competition for the position. I mean, you're in acquisitions. I mean, maybe you were competing against other candidates who had experience doing acquisitions. So do you remember kind of what you were able to impress upon him on why they should take a chance on you, so to speak?

You know, I think at the end of the day he saw that I would be a good deal maker and a good, you know, sort of sourcer and get things done. And the role was more of an analytical role, which, you know, I think I have a skill set for certainly, but I didn't have a demonstrated work history, you know, of having, you know, doing underwriting, et cetera, you know, so I think. And that was, that was ultimately what it was coming out for. But I think Joel was looking further down the line, you know, for someone who would turn out to be, you know, more of a leader and a deal person in the group. And, you know, I think that's what I wanted to do. That's, you know, you have to take those stepping stones and put in the time. But ultimately that was where I was going to bring value to the team.

And that's really. Well, that was great foresight on his part and clearly it proved out. But it is the skill sets of being a good analyst versus a good deal person. It is a different skill set and it's rare that you can get that in one person. Even on our brokerage team of over 30 people, we have dedicated analysts and they're running numbers all day and they're whizzes when it comes to modeling and doing the research and the diligence. And they're just hardwired for that. Where the salespeople are really, you know, they're out on the front lines, they enjoy, you know, talking to people and, you know, trying to put the deals together. So, you know, clearly you had both. But I'm sure having that introduction to the business, having that knowledge of the numbers was probably very helpful for you as you started looking at deals for acquisition.

Yeah, I mean, I ran all my own numbers for probably the first five years just to make sure, just to maybe prove to myself and everyone else I can do it. And then when you're traveling all over the country and going to conferences and meetings and then going back and running your Argus and Excel models, you're finally like, wait, I should relink, I should delegate. So, you know, it's. At some point though, you know, it all clicks and you don't have to be in the model to look at someone's underwriting and know what's, you know, you just. Your gut, you know, whether it makes sense or not and you know, whether it's a good deal and you know, when something's off. So it's nice to finally be, you know, in that seat for sure.

So just to dig a little deeper on that. And you talk about kind of having that gut feeling, but what in your mind makes for a good real estate deal?

Profitability, the appropriate risk adjusted return, which, you know, I mean, I sort of say that Tongue in cheek, of course you want. We're all ultimately doing this to make money. But you know, I think with retail in particular over the last several years, so not just in the last 12 months during COVID where our industry in particular retail real estate has undergone some of the most us in hospitality, probably some of the most severe turmoil, although I'm not diminishing the office impact or multifamily. But Even before that, 2017, 2018, the retail apocalypse, they say with quotations, there was just so much change. So I think sort of continually stepping back and asking yourself, does this deal like am I evaluating this deal or underwriting this deal according to the old principles? Right. What is the appropriate risk adjusted return? Am I pricing in risk accordingly? Am I thinking about reserves and rollover the right way? Are cap rates appropriate for sort of what's happening to the income stream? And there was up until recently a little more clarity on the financing side. So that was easier to think through. So I think there's a lot of good deals depending on the profile of your capital. But for me it's just been for us at Acadia, thinking through how the world is changing and how our tenants businesses are changing and how that underlying cash flow and sort of the certainty, the credit, et cetera, is evolving.

That makes a lot of sense. And I like what you had to say about making decisions based on the current realities. And I guess the question and look, retail was already challenged before COVID with the exponential growth of E Commerce and now Covid has certainly accelerated that. So as you're looking to make decisions now, do you think this is kind of a moment in time where certain businesses will actually even thrive based on what's going on, where others we're hoping will come back. Do you look at this as a moment in time or are you really now trying to think about investing once there is a recovery? What is the future of retail? I don't know if I'm making my question clear, but again, this is a.

Very specific what is the future of retail?

This is a very specific moment in time. Are you making long term investments right now based on the fact that a lot of retail is shutting down, or are you thinking now almost forward? What is this going to look like after a recovery?

A few things starting with the beginning of your question or sort of a statement. No one disputes that E Commerce and the increased adaptation of E commerce by the consumer has disrupted the retail industry. What I would say though is that it's not just, oh, people are shopping more online and they're not shopping in the store. Because if that were the case, then you would see some of the retailers that have really stumbled in recent years not stumbling and not losing, seeing declining sales. You just see those sales shifting to the online portion of their channel, their omnichannel, and not the store. I think the issue with E commerce is that there's no barriers to entry. So anybody can come online, whether it's through Amazon or Etsy or any other platform, and sell their goods. Right. So it's just, you know, the pie has just been sliced into infinitely more pieces in terms of your competition. If you're a retailer, almost no matter what you're sort of selling. And then Covid exacerbated that. But I think what Covid for us and we spend. I'm fortunate at Acadia that we haven't. We have this integrated platform where we have in house leasing and property management and development. We get to have those talks, those relationship calls with the retailers every day. Covid has really actually impressed upon a great many retailers, and we see that brick and mortar retail is essential to their strategy, to their omnichannel strategy. By the way, brick and mortar fulfillment is still the only profitable means of fulfillment, whether that's a customer walking into a store and buying a product, whether it's using your Target app to order something and then click and collect, drive there and pick it up, or even whether it's shipped from store, which is still profitable, whereas shipped from a distribution center when someone orders something online is not. And that's true for most retailers, no matter what the category. So I think, look, brick and mortar plays an integral role in anybody's strategy. And we see that because we've seen that sort of exacerbated through Covid, how people can use the store and the physical presence. But what also we're seeing is luxury. Luxury is out there looking for space in all of the major markets. They want to be on the streets. They, you know, their main channel is in the stores. That's where they, you know, they connect with their customer. They create a luxury experience they can upsell. You know, it's the whole lifestyle. So, you know, they get it. All of the major luxury houses are touring now and looking to expand space or upgrade, you know, their spaces and many others are too. We see that in the power space, you know, people like Burlington and Skechers and five below the TJ Maxx brand, they're in brick and mortar expansion mode. So do we have too much retail square footage in the country? Absolutely. Is the face of it shifting and the way that the retailer uses it? Yes, certainly. But if you sort of understand all those nuances, there is still a place for brick and mortar retail in a variety of property types. And so I think it's a great time to be an investor if you get it, if you're specialized and you have those relationships and you understand the dynamics and they're changing every day. But that's what's exciting, certainly about where I sit.

Your perspective on this is so helpful because you're invested in soho where it's high street, but you're also doing open air malls, grocery anchored, and you're hearing from the tenants every day where they want to be, where they want to expand. I would imagine that is hugely helpful as you think about where to invest because you have a built in advantage, I would imagine. And I've seen a lot of your purchases in soho and maybe you can talk a little bit about even focusing on a specific street. For example, I've seen on Green street you've picked up multiple properties and I would imagine clearly you've done the research, you like the corridor, but you probably also know who are the tenants that are there, but also who's missing. And so I've got to imagine when you buy one of these retail, where maybe there's only two or three years left in the lease, you probably have a good handle on who could go in there next and at what rent.

Yeah, I mean, I'd love to have a better handle on it, but that's just to stay obvious. Obviously it's very rare to peg all of that before closing on an asset. But yeah, I mean, look in corridors like Green street and Soho or just soho as a market, which we are long term bullish on, but they're streets. It's block by block, it's corridor by corridor. In terms of the haves and have nots, some of that has to do with format, you know, like Broadway. Nothing inherently wrong with it. However, the format is somewhat challenged for where, you know, the retail preference is trending these days. There's, you know, we see that on Michigan Avenue as well. You know, there's sort of gone are the days temporarily, I think, you know, some of that will come back. But you know, the three, four level, you know, 40,000 square foot store, you know, there, there is a place for those, but how many of those and at what occupancy costs. So there's those changing dynamics. But I guess Green street in particular, what we liked in 2019 and we're still seeing play out is there's a positive supply demand dynamic. From an owner's perspective, there's just not a lot of vacancy and there's just great co tenancy and retailers. Luxury has sort of always figured out how to cluster with complementary even if they're competitors. It's sort of this complimentary merchandising mix. If you go on a street with all of your pure set and I think all retailers are realizing that the shopper today is sort of ultra picky and it's like, well, I want it all in one street and I don't. I'm not going to go out of my way to a store just for that store and maybe Apple, but besides that, I'm sort of going to walk the corridor and hopefully there's a variety of different stores that I would shop in all in one cluster. So that sort of checks that box in terms of what we look for. What we bought in Green street was a little bit further south and actually most of Green street in particular sort of hadn't gotten to these out of whack inflated rents that were not reflective of the sales that the tenants were doing. So that's, I think continued to bode well for that corridor is things didn't get out of control because in our experience, retailers are increasingly mindful of their occupancy cost 4 wall profitability is important and, and certainly there's a halo effect. We know when they open a store, the sales in those surrounding zip codes go up. Obviously in Manhattan you probably have sales around the world online that are also go up because of the strong international tourist element. We're not as landlords getting a ton of credit for that baked into our rent. At this point, hopefully down the line, the supply demand dynamics certainly help in terms of driving the rent. But either way, we at Acadia are not buying retail where it's sort of the rents, whether it's existing or projections, can't be substantiated by the type of sales that the tenants are doing in that corridor.

I love how specific and deliberate you are about your investing. And it's not just about a market or a sub market. It's actually street by street and I guess besides co tenancy for our listeners, how do you pick the street? Especially if you want to be pioneering and you want to figure out, you know, where's the next spot that's undervalued? I mean, how do you really pick those streets?

You know, it's really, really tough because there's a lot of, you know, there's a lot of people out looking for that. Right. But you know, again, I think it's as I said, sort of this capacity for growth in the rents which is generally preceded by a capacity for growth in sales for the retailers as well as that supply demand dynamic. If you have, even if retailers want to be there and are doing strong sales, if you have 20 vacant storefronts for them to choose from, as a landlord, you don't really have much pricing power. So we bought in 2019 on Melrose Place in Los Angeles and what we liked about it was it was a few blocks. It's just a finite strip with really strong again co tenancy and it's cute, it's fun to walk, it's got some Instagramable glossier and Alfred's Coffee. So it had some luxury, some aspirational. It sort of had this really great dynamic and mix. So that's certainly something we look for. That's not a new discovery. I'm still trying to put money out in Williamsburg, but I applaud those who have before because again, Brooklyn is increasingly sort of becoming its own sort of, you know, self contained, you know, live, work, play and you know, Williamsburg I think is, is where it's at for many of those, you know, hot brands, particularly the, you know, direct to consumer, even some luxury. So, you know, how do you discover the next best thing? It's, you know, it's, it's tough. But I think listening to your retailers is probably, especially some of those younger hot brands, one of the most important things. But you also need some of those other dynamics I spoke about or it's just hard to invest and make a profitable investment.

I like what you had to say about the size of the corridors because I want to get this right. I think it might have been Jeff Sutton who said that he prefers investing on Fifth Avenue retail. And when we're talking Fifth Avenue retail, he's talking about around Rockefeller center, you know, really the most expensive retail in New York City as opposed to Madison Avenue, because Madison Avenue, if you think about it, you know, the brands stretch from 60th street on up to, you know, well into the 80s. And so there's just, there's so many blocks, there's so many choices where, you know, if you want to be, you know, really prime Fifth Avenue, there's call it five or six blocks. So that reminded me of that when you talked about Melrose. Maybe talk a little bit about your decision to be in gateway markets. Obviously you got Chicago in there as well, but what's stopping you from say, I speak to a lot of investors out there who are looking at Nashville or now Austin because they've just been magnets for job growth. What do you think about looking into those markets?

You know, we are actively looking in those markets. You know, if you're talking about street retail, I think the challenge there is, there's just not that much of it, you know. Right. Like there's one or two corridors in some of these. Smaller, you know, smaller in terms of retail markets like in Austin or Nashville, the rents are, you know, sub $100 a foot. And you know, it's just, I don't know that we're necessarily built to sort of pick them off one $10 million investment at a time and sort of aggregate that way. Now, we successfully aggregated on Armitage in Lincoln park in Chicago. And so I think we would do it again, but logistically it's a little more challenging and these street retail corridors are not particularly robust. Now one place that we did, we have done that is we own a portfolio on Broughton street in Savannah and we worked with a local partner to aggregate a portfolio. And I would say that the tenant mix there is still evolving. So the other challenge sometimes we run into is the time horizon. How long is it going to take to sort of put a corridor together? Because certainly you don't control everything, you know, so. But in terms of overall markets, you know, we'd love to be in Texas and you know, I look at, you know, a variety of opportunities in the four large markets in Texas, you know, and a lot of that's more in the, you know, either grocery, anchor, anchored or power center space. More on our fun side, but love the growth story there, the diversity. Texas is not just energy. It's not just oil and gas anymore. Same with the Southeast, Atlanta, the Carolinas. So we are actively and have been for a while looking at those markets as well. Certainly with Austin and Nashville, you do have to be careful about sort of, I think, having to underwrite a lot of rent growth in a very short time to be able to price the deal because they're just so hot. So we're appropriately, I would say, disciplined about thinking through some of the hottest markets.

That makes a lot of sense. And it's got to be the right scale and you're not going to come into a market just to do a one off. So. Well, I guess the good news is we've got our listeners tune in from all over the world and I remember looking at one of the reports and that they do break down our listeners by state and we actually have a very large contingency coming out of Texas. So appreciate your listening and who knows, maybe someone listening. And we'll have your next deal. Call me in Austin. Yes. Well, great. So I want to talk a little bit more about how you source opportunities because as co head of acquisitions for one of the largest retail buyers in the country, I don't know if you're looking at 10 deals a week, 100 deals a week, how you filter them. And I know you've bought both on market and off market. Typically you might think, well, a publicly traded company, maybe they're not so nimble, maybe they're slow. I got to imagine that if you're doing some off market, when you need to, you can move very quickly. A bunch of questions there rolled into one, but I guess for starters, maybe talk about that funnel on the opportunities you see, where do they come from and how do you act on them?

Yeah. So my co head, Reggie Livingston and I, we not only sort of set strategy across our two platforms, our core and our fund with Ken, our CEO, but then we kind of divide up generally geographically, we sort of divide up the country, but a lot of it is relationship driven. So, you know, there's the brokerage side which is, you know, can be on or off market as you know, but you know, making sure we're having coverage, you know, in terms of investment sales in all the major markets and across all of the national platforms and building those relationships such that, you know, you are, you know, I mean, reputationally, fortunately we are, you know, we have a strong reputation. So we do get those calls, you know, when someone just has one, you know, maybe one call that they can make on a property. But you know, so we've got certainly, you know, focus on coverage in the brokerage community and then, you know, also on the principal side and I'll get to, in a minute, increasingly on the lending side as well. But you know, in our major markets, at least our core markets, you know, we have, you know, deep relationships with all of our competitors and partners. And a lot of our deals are with partners, but, you know, the majority are not. So I think it's just, you know, sort of being there, right. Sort of building that reputation, you know, for being well capitalized and smart and as you said, nimble. You know, it's, it's an internal joke. We got a deal done a couple years ago in two weeks, sort of from agreeing on the LOI and diligencing by the way like a 30 tenant power center. And we were like, oh, we closing in two weeks. Yeah, yeah, closing in two weeks. And we never. And we, Ken loves to sort of tell people that in terms of how fast we can move. And Reggie and I sort of say like, no, no, no, don't, don't get that out there. We never want to have to do that again. But all joking aside, I think we are the most entrepreneurial of the institutional, so we can be creative and flexible. And that's what a lot of our conversations are today is there's not a lot of retail or mixed use, retail driven product on the market. And I think it's coming, you know, and sort of conventional wisdom would say, well, there should be more distress, right? And I think, you know, that's unfortunately, you know, coming as well. But you know, a lot of our conversations are with those relationships or just sort of reputationally based that, you know, we can we be, you know, can we recap, can we be the prep equity? Can we be the bridge? Can we do the whole stack in terms of the debt and maybe then bifurcate and sell off the senior piece? And so sort of can we think creatively whether it's working with lenders who have an issue or borrowers have an issue, can we think creatively around structure? So we try to sort of, we certainly every so often it's like, oh, I want that property, let me make some calls. But I think in general it's all about the people, whether it's the brokerage firms or the principals or the lenders sort of being everywhere and having the word out there.

And what would you, I guess for the brokers listening to this show, I mean, what would be the advice to them? I mean, when they're bringing opportunities to you, what's important and what do you want to hear from them?

You know, I guess insight into the seller is, you know, obviously the property information, fine, that's a no brainer. But you know, I think what's probably most frustrating and certainly doesn't discourage me necessarily, but it's helpful to have a seller who actually wants to sell. You know, sometimes I get calls about things that you're sort of wasting your time on, which you never know. So I always spend my time on it. But it's somebody that has an interest level and probably some level of realistic expectation. I think there was certainly a point. And you remember these heady days where sellers would be promised sort of unrealistic numbers and get hung up on that. And so you were Sort of stuck right out of the gate in terms of making a deal. But what I also, some of my best broker relationships, guys and gals that I talk to all the time. It's also like, don't get discouraged because we all know we look at 100 deals and you might find just a handful that really fit or really you get far on. So it's sort of just like, churn them out, look, take a look and just keep trying.

Yeah. The seller's motivation is so critical to understanding the type of opportunity. And you'd be shocked how rarely I'm asked, james, why is this person selling? And to me, you're right. An upmarket, a discretionary seller says, oh, I'll sell if I can get this price. I mean, that's probably not someone you want to buy from today. And sometimes they're not going to reveal, oh, there's distress. They're having trouble refinancing. But maybe it's an estate sale. Maybe it's a partnership dispute. Maybe it's an owner occupier who closed down their business. I mean, those are motivated sellers. And I think it's so important. So, yeah, Jessica, we really appreciate perspective. And we only have a couple minutes left, so there's two more things I want to ask you. And your company was named a great place to Work. And you talk on your website that Acadia stands for Integrity, Intensity, Intelligence, Innovation, and have built an environment that encourages our employees to step out of their comfort zone and work creatively, helping to make us not just our portfolio best in class. So maybe you could share with us what goes into a successful company and making it a great place to work.

You know, I have to give credit to Ken Bernstein, our CEO, because I think it starts from the top down. And, you know, Katie is a place where you are definitely called upon to be sharp and on your game and dedicated and think, you know, intelligently and creatively about things. But we sort of have a no jerk policy, right? And so, you know, we just, you know, egos are checked at the door. And, you know, it's just, I would say from the top down, from Ken, from all of us on senior management. You know, it's just, it's a place where I think, you know, younger people are nurtured to, you know, take the next step and to grow. And, you know, we sort of teach them to think how to think about whether it's investing or leasing or managing property or accounting. You know, I just, it's. I think it's all about. From the top down, you know, how we hire and sort of how we treat people and conduct ourselves every day. So it actually, it's not just, you know, marketing on our website. I actually think it's really true.

You know, could not agree with you more. The people, the culture, it's got to come first. And we have the same thing in our bylaws at Avis and Young and we've asked top producers to leave because if they aren't team players, if they don't get it, it's just that can spread throughout an organization and you want people who are team players and are make it a pleasure to work. That's really great to hear. Lastly, what advice would you give to someone looking to start out and maybe make their first investment? What would you say to them?

Capital is key, right? I mean, we know this is a capital intensive industry. So I think probably the hardest part is getting your money lined up and striking the right deal. So I think that is probably a piece you want to think long and hard about. But also track record, right? If you're just striking out, particularly if you're investing with somebody else's money, you want to think about being the right fiduciary and being smart about that investment and the track record that you build. It's tough, right? Especially in New York where deals are big and things are competitive. But sometimes starting small, as we know from starting small or even unglamorous, the property might not be very high profile or sexy, but if you can, can make a great return, that's very attractive. So, you know, even if something is modest or unexciting seeming, I think it can be exciting from a home run deal perspective.

Awesome. Well, Jessica, you've given our audience such incredible advice and things to think about and your perspective on retail and its evolution and what it takes to have a wonderful company. Just can't thank you enough for joining us today.

Thanks for inviting me.

Wonderful. So this is your host, James Nelson of Real Estate Investing live from New York. You can find me at James Nelson NYC on Instagram or Twitter or LinkedIn with me. I want to thank you again for tuning into the show and telling your friends. Please remember to subscribe and leave your comments on itunes, Spotify or wherever you get your podcasts until next week. And thank you again.

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, Avis and 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.

Thank you for tuning in this week to Real Estate Investing Live from New York. Please join your host, James Nelson for another program next Tuesday at 7pm in New York, 4pm Pacific Time on the Voice America Business Channel. All shows are rebroadcast on Wednesday mornings at 7:00am Eastern Time and 4:00am Pacific Time, as well as always on Demand. We'll talk again next week.