Connecting with Christie Philbrick-Wheaton

You.

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world. Now here's your host.

This podcast is for educational purposes only and should not be relied upon for investment decisions. The opinions expressed are those of the guests and not their companies. Listeners should not act upon the information without first seeking appropriate advice from an accountant, lawyer or other professional.

Welcome everyone to episode number 197 of the Insider's Edge to Real Estate Investor. This is your host, James Nelson. Wow. We are coming up on episode 200. Amazing. We will be having a best of show for 200, so get ready for that. But today we have an incredible guest with us, Christy Philbrick Wheaton. I met Christie through our Colgate connection. She has a role as Senior Director of Business Development and Client Services for New York Life Real Estate investors. She actually hosted a breakfast for Colgate's Real Estate club. Got to know more about what Christie's all about and you all are in for a real treat. She is a mom that's right there with her LinkedIn profile. Having started her career at Vornado, going on to work at such places as Carlisle Aries Management and today in that role out there on the front lines for New York real Estate life. What an incredible perspective that she has. Not just from the investing standpoint, she's also a self proclaimed real estate geek. So she we really get into this episode on the research behind the trends and and she talks about the story behind the deal and how many of you think about what is the story, why are you looking to invest or if you're a broker, why are you selling this piece of property? So we really do a deep dive there and then we get into this incredible conversation about culture and how you grow your company in the right way. How do you really build that culture? This is a wonderful episode. You're going to get a lot of actionable advice here. Now just a quick note. The first seven or eight minutes as we're live streaming this, this the audio was not picked up through the microphones. I think you'll be fine. You'll hear it through the computer. But if you might say, oh James, we're hearing a little bit of echo usually the show. And thanks Nick to our producer does such an incredible job with making this show the best possible. But you'll say, James, this audio is not up. Quite up to typical snuff. Don't worry, hang in there. After minute eight or so you'll pick everything up crystal clear. So as always, thank you so much for listening. Thank you for sharing this with friends. It is a huge compliment. Not only when you subscribe you like this, but you share it with someone, you're going to get something out of the show. You can think about maybe two or three people that will benefit from this. I do this all the time, right? I don't just sit here and ask you to do these things because you know it helps this show, right? When you take the time to share an episode, an article with a friend that you know that can be helpful. Like it really shows that you that you're looking out for someone, you're caring, you want to be helpful. It's a great thing to do. So we're gonna have a brief word from our sponsor and we're gonna get right into that interview with Christy Philbrick Wheaton. Thank you.

A different approach to putting our clients first Avis and Young's Tri State Investment Sales Group sells multifamily office, retail, development and specialty sales throughout the New York metro area. As experienced thought leaders in their industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and teamwork. We share core values of hard work, integrity and expertise. We put our clients first providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter, LinkedIn and Instagram amesnelsonnyc to learn more.

Welcome everyone. So excited to have with us today Christy Philbrick Wheaton who is Senior Director of Business Development and Client Services at New York Life Real Estate Investors. Christy has an incredible background. We're going to get into it. She came over from Waypoint Residential. She's worked at such places as Carlisle Areas Management. Maybe you've heard of them. Started her career at Vornado. Most importantly she went to Colgate. So we are fellow alums. Christy was kind enough to host our Real Estate Council recently at a breakfast which was amazing and so Christy, thank you so much for joining us today.

Thank you so much for having me. I'm truly honored to be here. You had an incredible roster of guests and it was really exciting to be Asked.

Awesome. So look, we have, I have your formal bio here, but when I was amazed when I went to LinkedIn. LinkedIn, just to check, you know, number one job title, Mom.

Right.

So mom and then senior director of Business development and clients and then real estate geek.

Yeah.

So let's, let's, let's get into it. You are mom, first and foremost.

Absolutely. And I mean it, it takes all forms, right. I have, I have three kids of my own, and I have three kids that. They're my partners. And so it's like we have, we have the Brady. Yeah, we are. We are the Brady Bunch.

Okay.

It's wild.

Some of our listeners from their, like, 20s and like, the Brady.

So very like, full, fun, loud household and includes things like, I was getting ready to leave for the train this morning. I was dressed, people were fed, everybody was walking out the door. My son comes back in and he's like, mom, I need you to adjust the kickstand on my bike. And so like, I'm out there fully dressed, ready to go to the train, like. But then Alan Wrench adjusting the kickstand on my son's bike so that his pedals don't hit it as he's biking to school. So it's like, you know, that that is my, my number one. And I obviously, as a real estate geek, absolutely love what I do and that, you know, makes, makes my life, supports my kids, keeps the roof over our heads. And that's awesome.

It's great.

So we both, again, time up in Hamilton, New York, Colgate University. We've had several of our fellow alums and not just plugging Colgate, although we are clearly raving fans, but some really good episodes as well. Chad Cooley, Thomas Campbell. So again, definitely go back and listen to those. A couple of those episodes. So. But we know Colgate Liberal Arts does not have a. Certainly did not have a real estate program when we were there. Now has a real estate club. But I don't know about you. When I graduated from Colgate, I didn't even know real estate was a thing. So tell us a little bit about your journey.

So I knew real estate was a thing. My mom in the 70s and 80s had been an acquisitions officer at Equitable. And back in those days, they had a great training program for new professionals. So she joined that group and absolutely loved it. She was there about 10 years, maybe a little bit longer. And ultimately, when my younger sister was born, she decided to stay home. But real estate was the bug that she could never kick. And so as A small child, you know, kind of got dragged all over the place looking at property. And it was like anytime we went anywhere, it was, oh, that's for sale, that's for sale. My dad jokes that like, there was nothing she didn't want to buy and she would, she would add for the right price. So it was something that was kind of in my blood early.

Did you think about going to a college at the time that had a real estate specialty guy?

Absolutely not. In fact, I thought I wanted to be an attorney. I wanted to do, I wanted to practice real estate law and, you know, went to Colgate, thought I was going to be an econ major. Ended up going a totally different direction. Did take the LSATs, but then got a job instead of applying directly to law school. At my first job, met a lot of real estate attorneys who didn't seem to really like, truly love what they did. There's a lot of paperwork.

This is before Tornado.

So this was while I was at Tornado, you know, met a handful of attorneys through things I was doing and I was like, maybe I don't want to do law school. But at the same time, my major was so far afield from what I was doing that I knew I needed more book smarts to apply to the practical knowledge that I was picking up on the job. And so at that point, about a year in, I started the NYU Shack program and did that part time. So was working full time, going to school at night and took two classes a semester. And I'm like a super nerd. I met my main front row sitting, hand raising, homework doer. And so that program was fantastic for me at the time because it was really gave me kind of the tools to decode what was going on around me.

Yeah, it is amazing though that you have both of those skill sets because if you, you know, taking a Briggs Meyer, you know, assessment or whatever it is, I mean, what we find is on the real estate brokerage side, usually they're a 9, 7, 6, 2 or what, you know, whatever it is, they're kind of wired to sales and they go out and they can talk to people. They're extroverts, or if not, they at least, you know, they're okay to socialize and do all that where you have people who are truly analytical, who are, you know, they love sitting down and doing the numbers, but if it's like put them in front of an audience and like, you know, they're going to panic. So, you know, clearly, and I don't know if there was some kind of transition, you know, in your career. But, you know, senior director of business development and client service, like, you are on the front line. So on one hand you can do the numbers. You love getting into the details, but you also don't mind, obviously you're here and, you know, hosting events. So, like, how are you just a super freak in that regard or how did this all come together?

Yeah, I'm a total combo. So I, you know, like, nothing gives me more excitement than, like, solving a really difficult problem. Like, I'm, again, I'm nerd. So, like, when I commute to and from work, I'm sitting on the train and like, playing puzzle games kind of thing. So, like, that's, that's the analytical side of my brain and it keeps it happy.

Yes.

And along the way, I gained enough knowledge in the various pieces of what I need to be able to go out and have those conversations with prospects, investors, people in the institutional community. And I love the stories, I love the details of the assets.

Right.

So being out in the world and being able to tell those stories of why we bought this or how we added value to this asset, or what kind of a life cycle was with the initial plan was, you know, how things went as planned versus not as planned. And, you know, kind of the recalibrations you make along the way in order to make something as successful as possible in any given macro environment is really kind of exciting to me. So being able to educate and tell those stories is something that's really core to what I do professionally now. And if you had asked me 20 years ago, you know, do you see yourself in business development, I would have said absolutely not, right? No, no, that's not me. That's not what I want to.

But there's also that client service piece. So, Ed, in your role, what is your mandate? What is your day to day? Is it solely client facing or how does this work?

So it's client facing and it's also product development. So taking the information that we're gathering from the market as a whole and looking at our platform and what we have expertise and the capability to do, and creating products that meet the needs of market players. So that. So it's a little bit of a combo. So it's going out, building relationships, growing our network, meeting people, meeting people who can introduce us to other people, but then also a bit of data gathering and looking at the bigger picture and looking at trends and kind of anticipating what we think will be really interesting investments.

And I would really imagine that if you have a hand in the development of these products that you really not just know, but you believe in what you're offering, as opposed to the, you know, proverbial empty suit that comes in and they're trying to sell whatever it is, you really understand the why is that?

Absolutely. And that was so core to making that move over to business development. You know, I wanted to make sure that it was really authentic and believing in what we're doing and knowing that and we're offering something that's differentiated and really value accretive to prospective investors.

And were you always in this role? I mean, even starting off at Vornado or maybe talk about the work you were doing at Aries or Carlyle? Maybe talk a little bit about that journey and kind of your career path?

Sure, yeah, absolutely. Well, it truly kind of started on the analytical side. So my first role at Vornado, I joked that I was like the full time intern. I was the body that got thrown at anything and anything, anything and everything, everything that was happening and needed to be done. So I got to work on some really exciting stuff. At that point, Vornado was involved in the RFP for what became Moynihan Station. That was 20 years ago.

Right.

How amazing is it to see it come to fruition now?

Incredible.

And you know, on big public projects like that, it does take so long for them to come to fruition that, you know, it's like seeing all the renderings, seeing what the possibilities were in for that neighborhood. And Tornado has done just a tremendous job of renovating the assets that they own over there. I think when I was there, and this is going back 20 years ago, they had seven or eight buildings in the neighborhood. So really critical mass to be able to transform a transportation hub, major transportation node within Manhattan.

So it is amazing. So you see kind of start off as a full time intern or whatever you want to call it. I mean, I would imagine today if, if for our listeners, if they wanted to apply for a job at Tornado, they'd probably need a master's degree. I mean, was it just kind of the opportunity at the time?

So a Colgate connection, Believe it or not, there was a Colgate alum who is four years older than I am, and she was there and I knew her through one of my cousins who was a classmate and friend of hers. And so she introduced me, brought me in, I met the team and ultimately got a job started. I think three days after graduation or something. I came home, like quickly unpacked and was like, okay, Start my new job.

Not, not to break the flow. And for those of you who are tired of hearing about, you know, Colgate and the Red Raiders, I mean, the point is, wherever you went to school, you know, you have a community there. And I always recommend, let's say you're looking to start off, maybe you're moving to a new city, your new job. If you are not checking LinkedIn and you are not saying, okay, who went to my school in LA or wherever it is, and reaching out, I mean, those are, you know, fellow alums want to go out of their way to help people out, build your network. You automatically have something in common. Like, I mean, this might sound basic, but it's like rare. Like, I even like, as I'm trying to help now, my, my middle son, he's a senior now, he's looking at colleges and so he's thinking of schools. I'm like, hey, who in my network I know who went to these schools? Not even to like say, hey, can you help them get in the, you know. Yeah, but, but just, hey, how was your experience? What was it like? So it's a powerful tool, use it. Sorry, I digress.

No, but you are, you are preaching to the choir. I mean, all day long and especially in the business development world, I got a really great piece of advice from a former colleague who's very experienced in that space. When I first kind of made the transition to business development and I was like, man, cold calling is so hard. And like people don't respond. He's, Kristi, let me. He's like a warm intro is worth three years of cold calling. Oh yeah, and it is so very true. So like reaching out to your network, developing those relationships, getting to know people in just like a really personal, authentic way. So important because then you know, when you're on LinkedIn and you see that it's a second degree connection, but that person who connects you to them, knows you well, potentially knows them well and can make that intro that is so, so important.

I hope you all are taking notes because even if you're saying, well, James, you know, I'm not looking to go work at a big institutional shop and do you know, business development, client services. But it doesn't matter what aspect you are in the business, whether you're a broker, whether you're going out trying to raise your first fund, you know, you are going to have to meet new people, expand your network and Christie's clearly the master of this and understanding you. How do you find those common bonds? How do you connect the dots. Really important. So again, I don't want to skip over that. So. But you know, I actually did not give that much of a proper introduction to New York life real estate investors. So why don't we do that now? Actually, we're going a little out of sequence, but that's okay. We're having fun here, so let's do it. What is talk about the platform, what you all do throw in, you know, the stats, the assets under management. You don't have to. But what is, what does your world look like? Just so, so people can understand the types of real estate and products.

Sure, absolutely. So we have just under 70 billion of assets under management. We're about 67, 68 billion as the second quarter. And we invest in debt. We are commercial mortgage lenders. We also invest in real estate securities. So CMBS and sasb, Single asset, single borrower, for those people who aren't familiar with lingo. And we also do equity investing as well. We invest across the United States. We're in over 140 markets. We have five offices.

140 markets, yes. Okay, let's just, I mean, we all heard 70 billion of assets and like, you know, sometimes we get a little bit, you know, you hear, you hear billions that you have a hard time kind of getting a sense of what that encompasses. But 140 markets, like, that's a lot of geography to cover. So how do you, I mean, and some of the stuff you're doing with partners, you're doing with borrowers. But I also, I believe you also invest directly.

We do.

So it's not just like, oh, well, hey, our partners in San Antonio, let's check the box. Like, I would imagine a lot of that is really doing the work. Right.

Well, and the beauty of investing the way we do, which is playing across the risk spectrum and up and down the capital stack, is we have a tremendous amount of data.

Right.

So we have about 180 professionals on the real estate investors team. We're spread through five regional offices in the U.S. new York, our largest. We're at the home office in our headquarters building.

Love it.

San Francisco is our second largest. And then we've got smaller offices in Chicago, Atlanta and Dallas as well. And each of those offices is staffed with both lending and equity teams that cover their geographic region. And we also have appraisers, we've got engineers, we've got architects, We've got a really wide range of deep expertise on our team. But the exciting thing is having a team that big Having a platform that big, our scale and our scope gives us. Again, we were talking about networking. I mean, just an incredible network to be able to reach out and see things that maybe other people don't see. And also having a long and deep history of being a lender and also being a relationship lender. So we have a, a lot of borrowers with whom we've done not just one deal, but two or five or ten deals with over the years. So we get to know people really, really well. And we're also very solutions oriented, which makes us a good partner to work with.

Yes, right.

So that certainly helps us from an access perspective, but from an asset class perspective, a markets perspective, I mentioned over 140 markets. We play in all the major food groups and some of the specialty assets as well as we do, as you mentioned, we do things direct, we do things with partners and we've got just a really kind of exciting platform in the sense that we talk to each other.

Right, right, right.

So we're able to use information that our teams in various locations are providing.

You know, it is amazing. Again, not just the geographic, but the ways you play up and down the capital stack and different roles. I would almost, I mean, does it become even more challenging to make a recommendation? So let's say that I'm, you know, XYZ teachers pension fund from the state and we come to you and we say we would like some diversification into real estate. I mean, I doubt anyone ever comes with that basic of a question like, we have no idea where to invest or what to invest in. But like, clearly there are a lot of options. So how would you guide that investor even to start thinking about what a diversified person portfolio looks like from a geography standpoint, from an asset class standpoint, from what role they want to play in the capital stack? Like there's, you know, again, I doubt you ever start from scratch with that, but like, where do you even begin?

So it's, for us, it's an unlikely scenario that it would be that level of guidance that people are looking for. There are investment consultants in the space that typically help with that type of portfolio construction for institutional investors in the US and abroad, I should say.

But I think that, so you're not the sole advisor. They're coming to you because they know, okay, you've got, you know, this, this platform, you know, this asset class. We need exposure in the south where it is. They're coming to you because they know you have that, that product.

Yes. Or we have, or we have access to It, Right.

Okay.

So I think that's actually the really fun thing about working with investors and prospects though, because when you get to know people, you get to understand, okay, what is your current portfolio look like? Or if you're starting from scratch, what are your goals?

Right.

So what is it that you're looking for? If you are, for example, a public pension fund and you've got X many retirees, and here's the demographic of your population of beneficiaries. So you're looking, you know, for a, call it 6% return. Here are the kind of things that could be interesting to layer into your portfolio versus, you know, maybe a family office that has exposure to real estate already and they're looking for something that's going to complement what they have.

Right. Are you really taking a deep dive on their current real estate holdings and figuring, helping them figure out how to complement it or is it just, you know, they come to you and they say what they're trying to solve for and you're kind of guiding them.

It's really specific to the investor.

Right?

Like, it could be, it could be a range of things. There are some investors who say, like, hey, we did this on our own and we need help and advice and can you take a look at what we have? There are others who say, you know, like we, we just need you for this. And so this is what we're interested in doing alongside you versus, you know, help us figure this all out kind of thing.

Right, Right. So, so now to kind of flip the, on the other side. So, so as you're looking to build these platforms, portfolios, you're, you're speaking to, and I know this, maybe this isn't your role, but, but someone is going out finding partners, finding borrowers, acquiring deals. Right? So you know, to, to what experience you have in that space. Because I think a lot of, I know a lot of our listeners are, you know, maybe they're investing right now with friends and family money. They are thinking like one day they would love to grow a portfolio and partner with, with, you know, an institution like yours. You know, what is the advice? What do you look for in a partner? Because again, you then are, you know, you're investing on behalf of, of, you know, other institutional investors. So I'm sure you're, you're trying to check the box to make sure that these sponsors are, are credible. So where, you know, but how do, how does someone make the leap? Right. I always wonder. It's like going from like private friends and family to like taking on an institutional partner.

Yeah. And I think what we've seen the most of really since the gfc, is it's kind of asset class specific. So if you're a specialist and you're focused on one asset class and you start with friends and family money, there are some asset classes that have kind of ridden the wave and gotten really hot, that are easier to kind of make that switch to institutional capital, partially because you can find assets that need bigger checks, because institutions will typically write bigger checks than friends and family money will. It depends on your friends and family, though, of course. And so there are a number of deals that are too small for institutions to look at.

Right.

So some asset classes, like some of the smaller Nichier things that are harder to find big check opportunities in something like small self storage that's been, you know, a lot of it was fragmented in mom and pop. Those are smaller deal sizes, typically depending on where they are, but smaller deal sizes. So it's harder for a large institutional investor to say, okay, yeah, I'll give you $5 million for that, because they have to do the same amount of work for that $5 million deal that they would have to do for a $50 million check.

Right.

And they just don't have the bandwidth to be able to underwrite that many deals to get scale in that particular asset class. So, one, I think it's asset class dependent. But two, if you are looking to move from friends and family money into institutional backed investing, your track record, the tenure of your team, you know, how long you've worked together, what you've been able to accomplish, honestly, how many cycles you've been through together and separately. But, you know, what your track records have been through. Those cycles are so, so important to attracting institutional capital. Because, you know, I'm 20 years in the business and I've now seen two kind of bottoms, right? So you see, you see it going up and then you see it coming down, and then you see it going up and down. And then it's like you learn the most in the down cycles. And this is something that, like, I've told my team. So when Covid started, I said to my team, I was like paying really close attention because this is a fantastic time to learn to learn about the industry, to learn about, you know, working with your clients and helping people work through issues and their needs. Because obviously a pandemic was something that we hadn't seen in 100 years. So it was like, okay, how do we, how do we figure this out? And it's the down cycle is a great time to learn. So when you're seeing a manager who has not had a down cycle and they've done really phenomenally, but it's been on the upcycle, you have to be a little bit more cautious than you really have to kind of sharpen the pencil there to understand was it a tailwind or are they really differentiated and excellent at what they do?

Yeah, I could not agree more that when things are challenging, that is the time to learn and that is actually the time to step up your game. I mean, I think many people have the tendency, oh, the market's tough, nothing's going on. Okay. I'm going to sit on the sidelines. I'm just going to be one of the, you know, the herd that is just going to say, oh, the market's impossible. You can't get anything done. And I have found, at least personally, and I've seen other really successful investors really double down in tough markets. And at the time it's like it doesn't feel like anything's happening, but like you are gaining ground and you are ready. I mean, I saw this as I'm sure you did Great Financial Crisis 2009. Like all of a sudden the market turned in 2010. You know, we ended up selling off all these loans.

Yeah.

Dollar volume doubled every single year. It was this incredible run after. But again, if you just kind of sat out 2009, 2010, you, you not been there. You know, one thing that we talk about in my book is that when you're starting at not even starting out, let's go with your four or five years in the business, you've been doing the friends and family thing and you're ready to make that leap. Sometimes the best way to do that is to bring on a great partner who has that institutional experience. Because the one thing I just didn't want our audience, some of the newer investors, to lose hope is like, oh, well, I haven't been through a down market, so I can't have the prospect of doing a large deal. Well, you could bring on a partner who has that experience and you work together. Does that make sense to you?

Absolutely. Yeah. Yeah. I think having that experience on your team is incredibly helpful.

Good.

Right.

So I want to now talk a little bit because you are the self proclaimed real estate geek. Right. So let's talk about research now. You know, I don't know if again, another thing we talk about in the book is like having a thesis, like really having conviction on what you're doing. It's not just like, oh, I want to buy industrial because it's hot. Like, that's not like a thesis, that's just like, let's ride the market, like really having something thought out and what's helpful. And I want to get to that kind of business plan aspect, but I think you can't do that until you do the proper research up front. So totally. I, I'd be very surprised if you told me that when you do research you just rely on like third party stuff, like, how do you really dig in? And like, what are the metrics that you really look for? And when you're thinking about, okay, we're in 140 markets, but let's talk about where we're looking to double down and let's maybe talk about some of those markets where we want to dispose of some assets. What are those indicators that you're looking for? What is that? Research?

Yeah. So full disclosure, I am totally spoiled being part of a large institutional platform because we have our own in house strategy and research team. So they take third party data, they collect data from the markets that we're invested in, from how our properties that we're lending on and the properties that we own are doing. And they kind of synthesize all of it to create house views as to where we think we want to be, what asset classes we want to be pursuing, where we think the market has kind of hit its peak and we should be getting out, which makes us really nimble, which with a huge platform like that, you would think, oh, okay, maybe it's, maybe they move kind of slowly. But we are able to take advantage of that research capability that we have in house to look at all of those market metrics. And then historically we look back 20 years for each of the markets that we're in and each of the markets that we're looking at entering and saying, okay, you know, standard underwriting, when you're underwriting a real estate deal, what do you write for inflation?

Right.

Like, what's your expense growth on an annual basis? You say 3%.

Right.

That's like everybody uses 3%. Everybody's used 3% for 20 years that you might be in a market where your rent growth has been 0% for the last five years.

Right.

How do you figure that out? I mean, obviously you're looking at the stock, you're looking at the pipeline, but how about something like a leading indicator? You know, job growth would seem like a pretty good leading indicator. Now some people work hybrid, so does that, you know, can you Just rely on job growth. There's got to be a lot of things like how do you pick like these emerging cities where, you know, what's next, where's the next opportunity?

I mean there have been some great studies and stats that have come out through, you know, post Covid era. One of the things that I find most interesting is the U haul rentals. So like you can see where the population is going. Oh, you gotta find it. It's a great.

That's public. Like you figured that out or not?

Yeah, you know, I don't know if somehow but we found it, you know, whether we pay to have access to it or if it's a, or if our team found it somewhere. But the U haul trends are really, really interesting.

Oh wow.

And also the US Census trends of.

Where we have a heat map. Yeah, but U.S. census is once every 10 years.

Yeah, but then you kind of have like interim adjustment stuff. So we've got, we have a heat map of the US of kind of like where people are leaving and where they are going and where population is growing versus shrinking. And you know, it makes sense. When you look at that map, you're like, oh, okay, I see it. And I actually saw an article yesterday on you know like state tax rates and what that looks like on a map. And when you look at those state income tax rates overlaid with that population shifting chart, you're like, huh, yeah, makes a lot of sense. Yeah.

But I think you, I'm sure you're also thinking about the long term because I know post Covid, if you look at, at the U haul, you know, study, if you will, you would see like a mass migration out of New York. But is that long term, Is it short term? Are people coming back? Like these are things that you have to consider because just they're moving one way doesn't mean this is going to be for good. Right.

Well, and that's a great question. Right. Because you're looking at those population shifts along with business moves.

Right.

You saw a lot of businesses move out of states that are not necessarily tax friendly to businesses.

Right.

Towards states that are more tax friendly to businesses. And the question is, are they going to stay?

Right.

And is that price of your employees.

There you're probably staying for more than just a couple of years. It's something that's going to prove out over the next decade.

Right.

It'll take time for people to move back.

Yes. Yeah. And we hear investors talk a lot about going to business friendly states and. But then the question is, okay, well, is that priced in? Right. So are returns tighter in those markets because there's more, you know, demand or if there are, you know, certain taxes or whatever you know, regulation that you have to account for, I mean, that should be priced in. So again, I'm sure we could spend a whole hour, you know, talking about all the considerations, but it is, it seems like to me that really, you know, you all are doing the work to really, you know, figure out and have conviction. Now, this house view. So how much of this is like kept, you know, in house? Right. As opposed to. You put out a lot of great research and reports as well. Right. You know, Office, for example, that, that's one that obviously a lot of. There's a lot of chatter there. So do you all have a view on Office right now that you're sharing with people or.

No, our team, our research team just published a paper, so the timing is perfect and I'm happy to send it to you and we can post it with the show notes if you want. Would love that. But yeah, so it, Office. Office is very market specific, you know, as, as is anything.

Right.

But there are some markets where Office has done phenomenally well over the last three or four years, despite Covid, despite people working from home. And then there are other markets where it's been a real challenge. But you know, some of, some of the larger gateway markets, and this is, this is me talking, don't take this as house views, but there, there are some larger gateway markets where the right building in the right location, there's great opportunity there because, you know, the market is not. That city is not dead.

Right, Right.

So, you know, looking at the tenants in the market, the activity where the business growth will likely be within that market can help inform the right decisions. And also the pricing.

Right.

Like what you want to pay. I mean, some of the pricing is so depressed that there are great deals to be had out there in office if you can prove out the story for that asset.

Right, right.

Yeah. And we've certainly found that even within a city, you know, depending on the submarket, depending on the quality of the building, I mean, huge difference. So, I mean, that definitely goes back to the data question. And really, you know, when people ask me, how's the market? It's like, okay, well what market? What are we, you know, where. So it's, it's so it's so the specific. So I'd like to now talk a little bit about what your typical day, week. I mean, again, you were out there on the front line like, what does that look like? Are you actually going, you know, traveling all over the country? Are you sitting down? You're meeting. I mean, what, what is the, the approach and all of the above?

Yeah, I'm traveling. I'm going to events. I'm meeting with people in their cities, having zoom or teams meetings from New York. I am working on materials creation and prep and, you know, doing portfolio reviews with investment consultants and investors and working with our team through, you know, what we're looking at from an activity standpoint. So a little bit of everything. But then I also sit in on as many of the investment committee and clearance committee and, you know, pipeline calls as I possibly can because I am a real estate geek at heart. And so I love hearing the deal stories because each asset, and I think that's part of the beauty of our business. Each asset is different and, you know, really truly keying in on what sets it apart and why are we buying this or why are we selling this in this market is so important to what will ultimately communicate to our investors or prospects or externally. So really getting in and understanding the nuance and the details of each of the assets is something that I'm totally nerdy about. And I want to know, I want to know so that I can help to tell the story.

The story, it's so critical. And we dedicate a chapter in this book to seller's motivation because it's that important to understand. And I mean, how many times are investors buying something they don't even know why the seller is selling? Right, the profile. Right.

Yeah.

And then why is it an opportunity is, you know, what we're really talking about is not just like a macro approach. Like, what is it specifically about this story?

Yeah.

So how do you get to the bottom of the story, so to speak? And like, how do you, you know, what are the important components of a story?

Yeah, absolutely. I, I love talking to the asset managers because they, they work very closely with the property management team. They work very closely with the leasing agents or, you know, service providers on that building. And so they just have a of lot wealth of knowledge and information. And, you know, our team is phenomenal. I love the people that I work with. They're, they're so good, they're so detail oriented. So to be able to sit down, you know, when you're crafting a case study for, you know, a presentation, investor update, something like that, to spend 20 minutes on the phone with the asset manager and say, okay, I've got, I've got the pictures, I'VE got the stats, you know, tell me about the life cycle. Tell me, like, since we bought it, what, what have been the great things? What have been the not great things? What's a challenge? What are you excited about? And just tell me everything you can about this so that I can figure out how to put it on a page.

Right.

And, and really make it pop. Because that's ultimately, that's what we do.

Right.

Like, we've got, we have this team of experts who works very hard to design and execute business plans to be as profitable as possible. So for us to be able to leverage that team that's on the ground that has that knowledge, it's really so, so helpful.

Yeah. And again, whether you're an investor or a broker, and we always tell our team, you know, look, you don't just rattle off the deal metrics. It's really kind of the. Why? What's the opportunity? What's the upside? So it's not just like, oh, this is. Okay, well, y. Okay, what else? What am I doing with this property? What is it that makes this an interesting opportunity? And again, to be able to succinctly put that in a couple points, I think is really important, whether you're brokering, whether you're raising capital, informing everyone what's going on. So I think it's so important again to kind of like dig through the data and really figure out where are the opportunities. Right.

For sure.

And where are the challenges. Right. So getting ahead of those things where, okay, we are making a decision to dispose. You know, this is why.

And you know, we talked about learning the most in a down cycle. Sometimes things don't go the way you planned with an asset.

Right.

Like you could have a challenge with getting a variance on something that you're trying to build or expand, or you could have an issue with the diversion of groundwater, or you could, you know, any of these things. And it, what really I think showcases the talent of your team is how you overcome those unanticipated obstacles.

Right.

And that's how you can tell whether a group is, you know, mature and experienced versus oh my goodness, this is the first time. And we don't know what to do about this. You know, when you have, when you have team that has been doing this for a long time and understands the market and understands the nuance, they're able to adeptly navigate challenges.

Right.

And IRR is a time weighted return.

Right.

So the longer it takes you to navigate challenges and ultimately be able to execute a business plan, the more it impacts your irr. So that's where kind of the analytical and story piece kind of comes together.

Right?

Yeah, but, yeah, and I love talking about it as we all do, the upside and the wins and where the opportunity is. But equally important again is where the challenges and, you know, uncovering. And I know we actually spent a lot of time. So when I was speaking to Ari Shalom's class, who also has been on this podcast, you definitely listen to that episode down at Wharton, there was a lot of discussion about, you know, how do you uncover, you know, not just the opportunities but the issues. I would imagine that if there is a problem, you know, that or a challenge that you are addressing that upfront as opposed to just saying, well, you know, let's just hope we can overcome that and then maybe no one will notice. Right. I'm sure, you know that there's a lot to that.

Yeah, absolutely. And that's something that, you know, the core of our culture is very focused on. You know, we want to understand and be able to kind of put a box around every risk that's associated with a specific deal before we get to the point where we're moving forward with it.

Right, right.

And yes, you can't catch them all. It's not possible. There are going to be things that pop up. Regardless of how detailed your rubric is and, you know, the checklist that you're going through of, you know, every possible risk on an asset, there are going to be things that you don't find this is true for everyone. You know, you could be the most risk conscious group that ever existed and something will come up. But really being able to quantify and understand those risks and have a plan as to how you mitigate those, prior to getting to a point where we're going to investment committee or going to clearance council, clearance committee and having senior people on those investment committee and clearance teams who then ask really hard questions, they're reading the memo, they're talking to the person who's brought the deal in and saying, okay, well, we've talked about this and this, but given what we know about this market and there's something else that we think we should be considering. So how are you thinking about this? And so it's that, that back and forth and kind of collaborative problem solving risk assessment process that we take really, really seriously before we, you know, move forward with any deal.

So how do you, and you mentioned culture, you have 180 people, you're in various offices. So how do you ensure that everyone has the Right. Approach culture and that you can like work together in the best way possible, but that there's consistency amongst the organization.

Yeah, that's a really great question. And I think culture is one of those things that's hard, right. You have to work really hard to maintain and build a culture that you want your company to have.

Right.

We have an incredibly long tenure of our team, which is certainly helpful when it comes to culture. We have a number of people who've been in the group for 30 years or more, which is really impressive, I mean, especially for someone like me who joined kind of halfway into my career and I've been there two years and I'm like a newbie. But being able to share that culture with our junior team and to truly foster the type of environment where people want to stay for 30 years because they want to be part of a team that, you know, is super collaborative and critically thinking through issues and doing exciting stuff. It's hard to do.

Right.

So we kind of attack it on a couple of different fronts. One, you know, we've got five different offices. We do things within our offices, right. Like we have social events, we do things together, we have an open meeting setup. Right. So every Monday we have equity pipeline. Every Tuesday we have capital markets and everybody's invited to those companies. So you can be on, you can be hearing what's going on, what the team is working on, what they're doing. Great way for our junior team members to learn from some of our more senior people who are presenting deals or talking about what they're seeing in the markets. We, in addition to doing stuff together and having open meetings, we also once a year we do this really awesome and fun three day event. That's our national meeting where everybody comes in and we're all in New York and we spend three days together and we're workshopping, we're problem solving, we've got topics that we're talking through. We mix everybody up so that you're not sitting at a table with your friends, you're sitting at a table with people who maybe aren't in your office or you don't get to work with on a regular basis. And it's a really nice way to get to know people from other offices. And it's professional development, it's goal setting and moving our team forward for the coming year. And then we also have, you know, sort of culture setting groups within our team. So we have a women in real estate group where we get together and we do a book club or we'll do like a TED Talk debrief or, you know, volunteer events or make it. This last year, we did cards for women who are recovering from cancer. You know, it's. It's a great way to kind of get people together, get them talking. We have a DE and I committee. We have a formal mentoring program that's within our real estate group. So it pairs our associates with more senior professionals who can be in a different office to get to know them and, you know, to make sure that our bonds are strong within the team. And then everybody, you know, has an opportunity for professional development. So it's a very friendly and supportive culture. It's something that, you know, kind of immediately drew me in as I was. One of the things I love to talk about is as I was interviewing, I met a lot of people.

Right.

And a number of those people I met in teams. And the thing that was really fun about meeting two people at once, which could potentially be intimidating as you're going through an interview process. But the really nice thing, being on the candidate side and seeing that is you see the level of respect that people have for each other and how they work together and kind of how they listen to each other and how they build on what the other one is saying. And I've been so impressed with our team kind of throughout, you know, not just that interview process, but in the two years since I've joined. We have. We have a really tremendous group of people and I. That carries through into the way that we do business. You know, we pride ourselves on doing what we say we're going to do and being really collaborative with our partners and our borrowers.

Right.

And I mentioned solutions oriented earlier. It's core to who we are.

Yeah. Wow.

Yeah.

You just said so many incredible things. Thank you. Thank you. And I think it's really important. I mean, it's. It's the most important thing. Right. It's how we, you know, do things. And a lot of the. And some of you might be listening and saying, you know, James, this is great, but I don't have. Have, you know, five regional offices, 180 people. But it doesn't matter if you have, you know, two people that you're working with.

Yeah.

You know, that culture. And as you build and the right people and how you do this, and maybe you're expanding into another market and how do you keep that consistency and how you do things? And what I heard was. And I think a lot of this stuff kind of disappeared after Covid, like, oh, we can just do this all virtual. Right. But I heard a lot of, like, in person things. I also heard that you're doing a lot of things that aren't maybe, like, specific to the. The business, like going out and doing good together. Right. And it's, It's. I think also when you say we have people that have been with our company for 30 years. Right. You know that again, you are really creating an incredible culture there. So this has been amazing. Thank you so much for sharing everything with our audience. You know, the closing question on this note, because I think it is so important, is, and maybe this is for someone who's in college right now, maybe it's. Maybe it's Colgate, maybe it's somewhere else, maybe they're getting their masters, but maybe they're at a crossroads and they're thinking about what do they do next? You know, this. This culture question, the importance in, like, being in the right place or even the right partner. Like, how do you. How do you figure that out?

That's the million dollar question.

Right.

It's. It's. It's hard because there are a lot of places that, you know, through an interview process, you may think, like, yeah, this place is awesome. This is exactly where I want to be. But it really kind of takes time to dive in and figure it out. So I think as you're figuring out where you want to go in your career and what you want to do, talk to as many people as you possibly can. And if you're evaluating a new opportunity and the potential to go somewhere to join a team, talk to as many people as possible who know them, who've worked with them. You know, person specific. You know, just try to. Try to find as many people as you can to learn more about that. That group and that team. Because really, you know, we spend. Even though a lot of us are hybrid now, you spend so much time with the team that you work with, you want to make sure that culturally it's great fit for you and for them.

Yeah, right.

Because that's the way you grow and develop and learn as an employee. But it's also the way your firm gets the best value out of their hire.

Right.

So that cultural fit is so key.

Yeah, I love that answer and the importance of talking to people. And one of my mentors to this day, Paul Massey, would say, whenever you're at an inflection point, go talk to 100 people. People. Okay, so does it have to be 100? Could it be 37? But, you know, asking, you know, again, trying to figure out and Sometimes it's not, you know, that person, maybe they know of someone or you're trying to triangulate. I think what he would also say is it's important if you are at an inflection point where you are in your career, talk to your employer, your, your boss as well to say, hey, look, I'm looking for the next challenge, the new, the next growth thing.

Yes.

And you know, and where my passions are. And I'm thinking of doing this and I think for so many of you, you might be, you know, you know, scared that you have that kind of conversation, say what you're thinking of leaving here, you know, here's your two week notice. Get out of here. I mean, I can't tell you how many times, you know, there's been times where it's like you get that notice and then it's like, okay, well couldn't, if we had the conversation, I could have helped you. Right. And it's like when someone on our team says, hey, James, brokerage has been amazing. I've learned so much. But like, I want to go to the principal side. Awesome. Let's talk about that.

Let me, you help.

So, Christy, this was amazing. You said, I mean, just incredible advice and I know everyone's gonna get so much out of this. So thank you so much for joining us today.

Oh, absolutely. Thank you for having me.

Wonderful.

Really awesome.

And thank you everyone who joined. I know some of you have been live streaming with us. That is amazing. We'll be posting this as well. And for the those of you listening to this, whether it's Apple, Spotify, wherever you get your podcast, we really appreciate your liking the show, subscribing, sharing it with a friend. That's how we get the word out here. We are here to help you gain the insider's edge to real estate investing. Last, if you've not done so already, go to james nelson.com this site is not about me. I built this site for you. There's incredible information, not to mention show notes, how to get ahold of Christy. So thank you again as always, until next week.

Thank you for listening to the Insider's edge to Real estate investing. We appreciate your subscribing and sharing with your friends. If you haven't already, please connect with James at James Nelson NYC on LinkedIn, Instagram and Twitter. Please also visit jamesnelson.com where you can find the show notes and other episodes along with an exclusive video series and other helpful resources so you can gain the insider's edge to real estate investing.

Until next week, Sam.