Reinvention with Gaurav Khanna

Welcome. This is the insider's edge to real estate investing with James Nelson, the principal and head of Addison Young's US Investment Sales Group, and his co-host Kim Trohler from his investment sales team. 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 are your hosts.

Welcome everyone to episode number 3 Episode number 244 of The Insider's Edge to Real Estate Investing. This is your co-host James Nelson here with Kim Troller. And today we're going to be talking about reinvention with my friend Gaurav Khanna. And you're going to learn about entrepreneurship and value creation. Gaurav is founder of ValAd Partners. He's also an adjunct professor at NYU Schack Institute of Real Estate, where I've had the fortune of guest lecturing for him there, and also a former executive at Vornado Realty Trust. Lastly, we're going to also hear about his experience at LPQ. Gaurav shares his journey from studying architecture in India to building a career in New York real estate, including the hustle that helped him land his first job.

Right. You'll hear about expanding LaPanne globally, creating value through architecture and real estate strategy, and combining design, leasing, development, finance into a holistic approach to real estate. Gaurav also discusses why professionals should develop interests beyond their careers. Including his decision to learn the drums and perform live on stage. So, Gaurav has such incredible experience from his degrees from Harvard and Pratt to being at Borneo to starting his own company from the ground up. It's amazing seeing how his background has shaped his investment perspective as well. He knows how to visually reposition an asset and how to understand what the actual tenants and community want and need.

Yeah, Gaurav, I love that he takes really a visionary type approach to investing in real estate. And he talks about how his experience as an architect has made him a better investor and thinking about how to reimagine retail space. And he talks about in the interview how he keeps a drafting board at the table.

Right.

Sometimes he just needs to sketch it out. So, he's gonna talk about, you know, and how to reposition retail and how to create, cotenancy. So, I think there's a lot of great lessons here. So, we're excited for this episode. We are gonna have a break and a word from our sponsor, but we're also gonna have a clip. Gaurav talks about how he learned to play drums. I thought he'd been doing this for years. No, he— this is only in the last year.

Last 3 months.

Last 3 months, even better.

Yeah.

So, love the can-do attitude. We'll make sure and share a clip from one of his recent shows there, and then we'll get into the interview.

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Welcome everyone. Today we have with us my friend, Gaurav Khanna, who is founder of ValAd Partners. He's also an adjunct professor at NYU's Schack Institute of Real Estate, and also the drummer, and you all are gonna hear a clip in a recent rendition of Sweet Child of Mine. So, Gaurav, maybe we should start there. I mean, we're gonna talk a lot about real estate, but, and for those of you who are listening to this live, make sure and go back and look at the post-production, we're gonna put in that clip. But how did you decide that you wanted to pick up the drumsticks at this stage?

Well, no stage is too late or too early. And what you're gonna hear is not a story of real estate or a real estate professional, but a true story of like how to hustle, how to always think outside the box, how to push your limits and just go for it, which is what I did over the last, 20 years, a decade at Vornado Realty Trust, La Pan before that, and my initial years as an architect. And it's, it's about creating multiple identities for yourself. Because one thing I realized, you know, when you are in the corporate, in the institutional world, your identity is your title. Right, which I thoroughly enjoyed, and a lot of gratitude for being in those positions. But then what's beyond it? And when I left the corporate world in December of 2019, to be precise, 4 months before you know what, right? It was like, I wanted to do a lot more things, which I couldn't do under the— as a senior person under an institutional umbrella. So teaching, being able to go and share whatever knowledge I had earned over the years, and my holistic experience in real estate value creation. All those things were being rolled into all that I was doing. And then I had a very strong passion for music, especially '80s and '90s rock. And I ended up buying a very expensive drum set for my son. 3 months later, he's like, "This is too easy. I want to switch to guitar." And now I'm staring at this beast in my house, and I'm taking him for these classes. And I convinced the guys who will run these classes at School of Rock, like, you know, can I be a part of the adult band? They're like, do you know any instrument? I'm like, no, but I would like to learn drums. He's like, learn drums, and then we have shows every 3 months, we'll put you on. I'm like, I don't think I'm gonna learn if I don't have a reason to learn. Put me on the show. And it was a very steep learning curve, 3 months, and I performed the first shows. I did 6 songs, including the opening song by Seagulls. And yeah, so far I've done like 4 or 5 shows. I have another one coming for which I'm sweating and my arm is all sore. I'm doing Painted Black by Rolling Stone. Nice.

Oh yes.

1/16th, like, concert. So yeah, it's about having, you know, in real estate business, we get so caught up in things. You need a break, right? And everyone figure out their own break. And this is what give me, this is what helped me reenergize myself back to be performing in the arena.

Yeah. That's amazing.

I love drumming as a metaphor to being successful in the real estate business. I mean, there's so many elements. I mean, first of all, the fact, and when I first saw the clip, I said, "Ravi, this is really cool." Like, how many years have you played for? Years? 3 months. So the fact that you committed to learn something new, to put in the work, right? The hard work to get to that point, you know, the repetition and then the creativity, being able to work with others, you know, so it's, what a cool thing.

You know, I just say one thing which is important because a lot of time we know how to talk, right? And in real estate, everyone is talking. What I realize is, Every, in any business, especially real estate, it's more about listening. So, when you learn a new skill, you rewire your mind to listen, right? And to listen to the thumping, listen to the tapping. And I think that itself feeds back into the bigger circle.

Yeah.

I imagine it's not only just a break from real estate, but it's actually enhancing the work that you're doing and like kind of stimulating that creativity. So, I know that you have advanced degrees. In architecture, and you also were at Harvard as well. I think your architecture degree was at Pratt, correct?

It was in India. My architecture degree was in India.

Oh, amazing.

Okay.

And I did my first grad study when I moved to New York in 2002 at Pratt. And then in 2009, I went to Harvard.

Great. I'm curious to hear how your architecture background has shaped the way that you're viewing real estate, especially when it comes to repositioning and conversion deals. That it's a really unique skillset and background to come from. So I'd love to hear about how you've taken advantage of that in your projects.

Absolutely. I would say my life, professional life unfolded in 3 tranches. The first tranche allowed me to go very deep into architecture. The second tranche allowed me to go very deep into leasing and development. And the third tranche at Vornado allowed me to go very deep into capital market and finance. Now, when you look at real estate as an asset type, it's not trading paper, it's not securities, it's real assets. What do you need to create value in real assets? You need the ability to create a vision, which is what I learned from my architecture days. So now, believe it or not, at my office, I actually have a drafting table. Any project that I'm working on, and I'm working on some big projects, I have Gensler and some other firms, I do a lot of designing because what I'm doing is, along— as I'm doing those sketches, I'm thinking about the leasing proposition, the end-user experience, all those nuances which comes and bite you back at a later stage. I'm thinking of those upfront, and I'm running financial performance for each of my sketch alongside. So, we are seeing a full 360 on any and every idea that's going on paper, which is super important now because easy deals are done, right, James?

Absolutely.

Previous cycle was a lot about financial engineering, and I totally enjoyed it, working at Bonito, acquiring some of the biggest marquee assets in the city, and even during my Lapin days. Now, it's about rolling up the sleeves and really thinking and really pushing for the right value. So to answer your question, it's super, super important, you know, how it unfolded. And yeah.

On the topic of reps and using that architecture background, I think you told me last night that you opened 180 stores for LPQ. Is that correct? I don't know how long of a span that was, but I've gotta think that not all these were cookie cutter, you know, just slide the box in in here? I mean, I'm sure doing that amount of volume, you had to figure out, you know, almost like a Tetris, you know, kind of put the pieces together. So what was that experience like?

So, you know, let me just even take a step back of me, a young 20-something landing here in New York, not knowing anyone, first time sitting in an aircraft, because 25 years ago, flying in India, like air travel in India was for the few privileged ones, right? Coming here for my education, knowing that I'm going to a private institute and I don't have the funds. So I had a 3-month window where I had to find a job. Otherwise, I was just gonna enjoy spending my savings in a beautiful city, New York, and go back. This is— we are going to August 2002. Join Pratt. Went to the program director, "What job can I do?" "Yes, you can work in the library." I did for half a day. I would have killed myself. A week later, someone found me a job as a busboy at a restaurant on 110th and Broadway. And I got promoted within 2 weeks to be the main bartender. I did a quick bartending crash course one weekend. And, and whatever time I had between classes and my bartending job, I would walk around New York City with my architectural portfolio. I didn't know anyone, so there were no phone numbers for me to call, but I got a list of architects from Yellow Pages. Remember that?

I do.

I just started— I do.

You can Google that now or use AI, ChatGPT.

I started doing cold dropping. I would just show up. Can I speak with the principal of the firm? Who are you? And this is right after 9/11, so It wasn't a great time. And fast forwarding a few months, one doorbell at an address called 237 West 35th Street, 5th floor. This woman opened the door. Who do you want to meet? I want to see the principal. Do you have an appointment? Of course not. Let me just leave my resume. This guy walked past and he saw me. He's like, come in. I'm like, thank you. He's like, What are you doing here? I've seen you at the bar.

Yeah.

God bless his soul. He gave me my first shot. He sponsored my H-1 visa. And then I worked there and then transitioned to La Panne. And just a little tangent, but fast-forwarding 25 years, right now as an entrepreneur, I'm doing the same hustling. Now, the doorbells that I'm ringing, those are not architects' office, but developers and investors and partners and public agencies., but it's the same hustling. So one thing which I tell all my students is you need to hustle. Going to your question on Le Pan, joined when they were a mom-and-pop company. There were 4 people, 5 people. One person who was just joining was Jay Wainwright, who was the founder of Cozy.

Oh yeah, I remember them.

He had just sold, Jay and Shep had sold Cozy, and they were now starting to work with Le Pan as a consultant. And I was the architect who was doing one or two of their stores, right? Or the junior-most guy in the hierarchy. And a few conversations with founder Alain Komuth, and there were two people, Alain, the creative genius, that crazy rock star, and Vincent Herbert, you know, who was a very successful investment banker who had bought Lapin, small little thing. Mm-hmm. Ironically, they realized that I spoke both their languages. I spoke Alain's language and I spoke Vincent's language, business and design. And they asked me, "We want you to join." I'm like, "Join a restaurant business? I don't even like food. I wish there was a pill." No, you would have fun. Vincent is an extremely charismatic guy, great mentor, great friend now. And joined and Just scaled, like, you know, started opening New York. The first location was in Chelsea, followed by 68th and 1st Avenue, followed by Bryant Park. And so yeah, New York, and then whatever success, whatever formula we were using in New York, where the goal was to stabilize the store in 2 years to a $1.5 to $2 million kind of a volume with the right selection, we started hitting it. Very early on. Again, where I used my architectural understanding very well. There was a space, an old Kenneth Cole store at Bryant Park on 40th Street, which is a La Pan now. And the space was not getting leased because New York Fashion Week used to happen in Bryant Park. So 40th Street was a dumping ground for all the generator sets. Right. And I looked at the space, I did some study, some research, realized that starting next year, Fashion Week is moving to Lincoln Center. This is right across Bryant Park. And no one could see the space because the Kenneth Cole stores are built inside out. But as an architect, I blurred my eyes and I'm like, this could be a very successful La Pan. I convinced the company, we signed the lease one year in advance in a neighborhood which was an absolute not neighborhood for La Pan because it was only in residential neighborhoods. And this is— an office neighborhood. Through the year, I got fired so many times. Vincent kept saying, figure out a way to get out of that lease. I don't think this is going to do well. This is going to do well. I'm like, Vincent, let's wait. We built the store. The opening day, everything went wrong. They were— they closed the street that day, because they were shooting that movie, Sex and the City Part 2.

Oh.

So we couldn't get deliveries. And we had a major GLI, Global Licensing Conference, in the store, opening ceremony and all the, everyone is coming in. Anyway, the store opened and it became the number one store for La Pan.

Wow.

And that strategy of going into daytime neighborhood allowed us now to come up with a new formula, which then we started opening in Washington, D.C., I expanded L.A., Orange County, Westchester, and then same formula, opened the first location at an airport, at Frankfurt Airport, followed by Düsseldorf, right? So Germany, France, already had a few original locations, Belgium, London. It was fun. There was a time where I would start my week in Mexico City and end in Moscow.

Wow.

Wow.

I mean, So I read that this expansion spans over 20 countries. I imagine that the strategy would have to shift slightly when working with all of these different markets. So obviously you have the blueprint from New York and that's where the formula was created. But then as you're kind of expanding into these other markets, how did you have to shift your strategy? Oh, absolutely.

Absolutely.

The biggest shift happened when we went to Middle East. Lapan is about big community table where everyone sit around, break the bread. Middle East, separate sections, right? So, and even the food offerings we had to change. So yes, there was a localization in every place. And Alain, the founder, and me were almost the first two people who would go to any new country because I would be scanning the market from a real estate perspective and building relationship with brokers. And putting a team together, and he would be like sniffing it from a food perspective. So yeah, it was a journey. And ironically, the last store I opened for them in New York was in Central Park at Mineral Spring. The business model was completely different because this is not a 365-day market, right? It's 6 months, 7 at the max. So how would you put the economics together so that you are super profitable in those 6, 7 months and then literally closing down when it's snow, no one goes to Central Park, right? And the last country that I opened, well, 360 for me, which is when I decided I need to move, was India.

Mm-hmm.

And India, the challenge was the local franchise partners. Yes, everything is fine, but we need to localize the menu. We are gonna use all sort of spices and everything, and we need to have Coke products in our store because it's a dinner market and the real estate in Mumbai is super expensive. It's a dinner market. Usually I would not get involved in food conversations, but being this India, I was not only overseeing real estate, I was also looking at all the food offerings and stuff. And a breaking point came where they're like, okay, we need to have rum and Coke. And Aalan almost walked out of the meeting. Mm-hmm. What are you gonna do with my brand? Anyway, so that market opened and that was the time And yeah, I left and decided to go to school to get a view of, make myself more rounded because I didn't have any formal training in real estate till now. And I'm like, I'm looking at another 50 years. So went to Harvard, they have a great program, Master's in Real Estate, which I did. I cross-registered in every school, I did economics from from MIT, Bill Wheaton, and took audited classes at the law school, took finance class at the Kennedy School, and most of my classes were at the business school. So I kind of ended up getting an amazing holistic experience biking the hell out of Cambridge, going on always on the other side of Kennedy Boulevard because I only have 5 minutes to get to my other class. Right.

I was gonna ask if you were kind of aware of the real estate investment angle as you're opening up all these stores. Obviously you have landlords, who are profiting from that. And so, was that kind of that financial aspect of the value that you were creating, maybe that led to your getting that more formalized training. Was there ever any thought from the founders there, hey, maybe we should be owning our real estate? Should we buy, say, a leaseback? I mean, a lot of these chains today, a lot of them, you know, the corporates do go in or, you know, buy the real estate, lease it back. Did it ever get to that or not?

I was a protagonist who, brought it up to Vincent. I'm like, Vincent, we should do this. I just figured out this is a very win-win formula. He's like— and then, of course, I quoted McDonald's, right? Vincent is like, Gaurav, no. And for all the right reasons, right? You know, you need to build— it's a different business model, right? But yes, it did come. And it kind of became— I remember I was opening, and this whole idea of going back to grad school to learn the other side of the business came through this gentleman in in Melrose in LA named Sina Zaat. I'm sure people listening would know him. He has a company called NASA Management. And I did first Le Pan location with him. And then every time I would go to LA, he would drive me around. What do you like? What do you like? And third visit, I bought this building, I bought this building, let's put a Le Pan here.

Wow.

And so that kind of, I'm like, wow, there's real value to what I'm doing here.

Right. Right. So what, after school, then what was the first job then in the real estate space? Vornado was right into Vornado. And you started as an analyst there, or what?

Talk, talk to us about your journey there. Vornado. Okay. I've, I've been so, so blessed that every time I've decided to take a plunge back into the market, it's perfect timing. First, 2002. Now we are talking 2009. So there was no conventional way where I could get a job, right? And I learned that there's a show called ICSC. Now, it ended up clashing with my final exams at Harvard. So I convinced our professor, Rick Pizer, that I have to go for the show. I'm like, getting great grades, all that's fine, right? But I need to go for the show. And I don't know how I semi-convinced one of the professors to do that one exam, which I remember doing it from one of the hotel rooms. And then I spent 2 days at ICSE, met with a lot of people. That's where I bumped into Ben Shaw and Sandeep Matrani. And as a part of one of my, my thesis, I didn't do a conventional Harvard requirement thesis as my final. I did a business plan to create how to create more value in retail. Like, you know, coming up with those ideas. And at that time, Vornado was also looking at scaling in India. So my wife called. I've always had that suitcase mentality where bags are packed, next year we are moving back. And I had it till 2015 anyway. [LAUGHTER] So I just presented that business plan to whoever I was talking to. And, uh, Vornado ended up really liking it, but they're like, not India, join here, get to know everyone. And I joined, and my original role was, um, so not as an analyst because I had experience. So I joined as, uh, I think it was a director-level role.

Hmm.

Uh, but my focus was— my job description was looking at the Vornado's existing portfolio and figuring out the retail portfolio and figuring out creating more value in that portfolio. There was an asset in Poughkeepsie where rear space no one was renting. So, I started putting up a storage unit business plan, right? Or how to carve out an outparcel, like those kinds of things. And in the same attempt, Wayne Town Center came to my desk. And it was Ben Schall, who is now the CEO of AvalonBay. He was gonna be the deal captain, but he was very busy also running the shopping center business. So he pulled me in, and in Wayne Town Center, I did exactly what I do now. I did some sketches and I did a simple one-pager pro forma next to it, which resonated with Steve more than seeing a 20-page IRR analysis and everything. Anyway, ended up buying it. It was an intense due diligence, a lot of fun things. And we closed on December 31st, if I remember correctly.

12.

And that week was quite something. Yeah, another great— and so that kind of took me out of, okay, forget asset management, move into acquisitions. I'm like, I don't know any leasing, any investment sales broker. Sorry, I didn't know back then. But I knew every leasing brokers.

Right.

And I started sourcing deals through leasing brokers. And those were some of the most pure off-market deals. Because the owner hasn't really thought of selling. So that kind of became my edge. And then I was asked to move from Paramus to the main office, 44th floor, and had an amazing time with Wendy Silverstein, Michael Franco. And that's where I spent most of my time then. And then the Fifth Avenue buying spree and SoHo and Penn Plaza. 2016, '17, completely the focus was on Penn Plaza. So, you know, I got involved in the overall master planning, and I was acquiring— I was doing all those assemblages, going one building owner after another one, you know, sometimes using a beer to do it, sometimes just be out there. And it came down to this last guy. He had bought all the sites at the corner except this one guy. Which was Gary Gross Pawn Shop, not Bond, Pawn. If you remember back in the days on 34th Street and 8th Avenue.

Ah.

And he's like, I can't sell, Gaurav. I like you, but this is not a real estate asset for me. This is my life because my father started the store 100 years ago. And I'm working here. My son-in-law is working here. My grandson is working here. So we are not going to leave. Which got me a title of— Cliff Broser, who was at Borneo, he gave me a title, "You have patience of a saint." I pursued him for almost 2 years, right? And when other developers were starting to buy, and ultimately he's like, "Now I'm ready to talk, but you need to talk to my dad." I'm like, "Gary, your dad? You told me he's close to 100 years old. When can I come to your house to see him?" What do you mean by coming to house? He's in the store.

Hey, Steve!

Hey, the guy! Steve came out, we went across the street, sat at TikTok Diner.

Yeah.

And yeah, that allowed that assemblage to be complete, which Bonito is going to start construction, I think they announced next year or something.

Amazing.

So to circle back to Waynetown Center, because I'm from Montclair, so I'm actually quite familiar with that area. If I'm remembering correctly, it's like 700,000 square feet. Of retail. What was the leasing strategy like there? And was it during a time when enclosed malls were struggling? Did you have an anchor?

So JCPenney ended up, JCPenney was there, right? Which became Costco now. And leasing, much of leasing happened way after me. I acquired it, right? And there were some ugly lawsuits which were around there. First time in my life I had to go for depositions. You know, there was something to do with one of the tenants had something to do with the previous owner. And anyway, no, leasing strategy was straightforward. You find a new anchor tenant, right? And then once you find the right anchor, then everything around there can gradually get enhanced, which is pretty much what my strategy right now, you know, in the assets which I'm developing. You know, you find the right anchor, you know, placemaking is becoming a new term now.

Mm-hmm.

When I was doing La Panne, I was always thinking of placemaking. How can this really activate the street, and more importantly, create value for the rest of the building and the neighborhood. That's what placemaking is all about, right? So, um, that was the thesis at Main Town Center. Shops at Georgetown, another asset which I acquired in Washington, D.C. And over there, the idea was demolishing it when demolishing was not really a term, or maybe it was. This is— I'm going back to 2011-12.. And another very, very successful conversion that Oneiro did in Washington, D.C. market. Yeah.

So, talk to us now about Valad. What was the impetus for you going out on your own? And then, tell our listeners about that platform and what you do.

And also, just how those REIT years, like, what they taught you that you couldn't have learned elsewhere before you made that jump.

Oh my God. I cannot feel more blessed than how life has unfolded. Bit, like my initial training as an architect, then Le Pan quotidien, then Vornado. I wouldn't ask— and even the last 6 years, because I started Valad in December of 2019. A lot of gratitude for how the last 6 years have made me who I am. You know, one thing that was very consistent— so now Valad, this is my entrepreneurial venture. right? And we know that not many people in the city take a plunge into entrepreneurship in real estate because very— a lot of capital, and either you have family offices or someone backing you. But right from the beginning, even from the small architecture firm I, I joined, I somehow was always in very entrepreneurial environment, or what you would call entrepreneurial, right? Where, you know, so at Le Pan, it was such a small company, 4 people, pretty much do everything. My first business card that Vincent— I'll forward this to Vincent, and he would remember this— my business card got printed, which says Director of Real Estate, Design, Development, Legal. I was like, is this some sort of a joke? No, but this is all what you are doing. But no one will take me seriously. So it was very interesting because it was always very entrepreneurial. Right? I was always like, go build relationship, source deals, bring them full 360-degree. Same thing pretty much at Vornado. Vornado has an amazing culture, right? It was an amazing— where, when I kind of— once I kind of understood the mandate, I was just going out and meeting with people and sourcing things and putting it together and then bringing it to a full 360. So my, I would say my entrepreneurial training kind of happened in those shops, right? Fast forwarding to Valad, what is the real impetus, right? There was a lot more I wanted to do because, you know, when you're in institution, institutional world, right, you know, your title kind of defined you. And I was a Senior Vice President of Acquisitions and Capital Markets, which kind of defined acquire, but I wanted to get into development. I wanted to oversee the asset. Mm-hmm. Right? I wanted— I didn't want my role to be over. And that is something which was always kind of getting me restless, right? I would attend all the leasing meetings, whether it's office leasing or retail leasing, because I'm like, okay, for me to be a good acquisition guy, I need to know what's happening. Because one thing very early on in my career I learned, commercial real estate is not about location, location, location. It's about leasing, leasing, leasing.

Hmm.

So, I was so plugged in on the leasing side. So, at Ballad, it's the way we look at the asset. First, create a vision. Like, I always like to use Tony Goldman, who was a visionary for SoHo and for Wynwood in Florida, right? Like, right? And other visionaries, big visionary companies like Jamestown, who went to Chelsea when no one really— who went to Meatpacking District, where unless you are a meat trader, you don't really have a reason to go.

Right.

Right? That is what really influenced me, that always looking for what's coming, right? Like how Steve Jobs would say, like, we don't need to do any customer survey. We need to know what customer want, create it, and greet them 4 years down the line that, hey, we have a product ready for you. And that's what has always kind of, you know, inspired, and my training has allowed me to be able to create those vision, like, what would ultimately make a human being walking into that space, working in that space, happy and content, right? How would it improve the productivity, you know, how, like, you know, not only at work, but overall health and wellness, which if you remember my little stint with Marc Messier. Yeah.

So yeah.

Yeah, speaking of health and wellness, I know you mentioned biking all over Cambridge. So you've left a massive impact on that space. I know that it seems like a big passion of yours. And we saw that you had a strategic partnership with RightFit. I'd love to hear more about what that actually entails From what I understand, you've kind of revolutionized fitness and wellness spaces in India and the Middle East. And you've also completed health and wellness concepts with Honeycomb and Hudson Bay Company. Yeah. So yeah, tell us, what does this mean to you and what do these partnerships sort of entail?

You know what, this is very interesting. I hadn't thought about all these things because I'm trying to simplify my life and my business pitch, right? So there were a lot of things as an entrepreneur starting 2019 that I did. So '19, I left the corporate, the goal was to reposition retail real estate. And we know back then there was a lot of distress, right? A lot of these big boxes all across the country, which were vacant now, the Toys 'R' Us of the world, the Circuit City of the world, and not everything was going to become a mixed-use asset. So, I was always pushing and thinking, what should be the new anchor, right? The anchor of big departmental stores, which was envisioned by some geniuses 40 years ago, 50 years ago, helped create all these big companies, right? All these REITs, like Steve started his business from— Started the business from that side. And I was like, okay, but departmental store, but those goods are now, you know, the whole Amazon effect, you know, online. What could be the new anchor? Right? And this is before COVID This is like, this was going in my head in '17, '18, '19. Health and wellness, because I'd seen that there were a lot of— boutique fitness was becoming mainstream, like SoulCycle, Barry's Bootcamp, Brooklyn Boulders, right? And I happen to be friends with some of these founders, right? Lance Finn, who is the founder of Brooklyn Boulders, he's a very close friend of mine. And what I realized is that these guys had managed to open 5, 7, 8 locations in main cities., right? But they couldn't really get to suburban markets, right? Because in suburban markets, what are your options? You go to a mall, you lose your identity. And I had the same problem when I was expanding La Pan. La Pan never went to suburban markets because mall, you lose your identity. Shopping center, you don't control your co-tenancy. High streets don't exist. You only have like one Greenwich Avenue or, you know, Summit. You know, in New Jersey. No option. So my idea was you can buy or lease these big boxes located in very, very affluent neighborhoods, right, and convert them into a collective of boutique fitness. Because if you're a Soul fan, you can't go to Soul 5 days a week, you're gonna kill your legs.

Yes.

Yeah. Right? And people who are like, you know, fitness fanatics, they like to like try different things. And that's why I studied like the like most of these guys back in the days were like all clustered in Chelsea, right? Or like, I'm like, why can't we create these pockets elsewhere? And I don't know how I'm doing on time.

No, you're good.

You're great. So yeah, that became the foundation of Honeycomb that go buy this distressed real estate. Right? And create more value by creating a collective of health and wellness. But why stop there? Fuse it with healthy food options like Lapin, By Chloe, many other brands who are like healthy food, organic food. Why stop there? Fuse it with medical concierge. Right? And I was like literally going and speaking with all the doctors at HSS and this. Would you come to— if we create something like this?

So smart. Yeah, because otherwise—

Brilliant, right?

Yeah, I mean, just make it all easy. And again, the synergies between it. —now grab what I love—

I'm sorry, I'm sorry to interrupt you, and you can't top it, brilliant idea, you can't top it without getting a partner like Marc Messier.

Yeah.

And getting blessing from Ike Jara, close friend of mine, a mentor.

Yeah.

What could go wrong? This is December 2019. We're like, what could go wrong? Yeah.

I mean, one thing I'll add about that is it's amazing how post-COVID everyone's been talking about experiential retail. But you've spotted this trend, you know, before COVID even hit. And I think a lot of these trends across retail and office were just exacerbated by COVID, but they already existed before.

So, you asked a question on the Right Fit, right? Jay Wright has become a very close friend of mine. So, we met right after. So, when I'm putting this together, I'm like, okay, but we don't have that operational expertise. That's when I met with Jay. I don't remember who made the introduction, but him and I clicked very similar personalities, and then his creations everyone knows about. And we put our head together. So initially for Honeycomb, the concept I was looking at developing, but then all 2020 and then COVID was just dragging, like, and getting— creating a collective, just the idea became repulsive to anyone. But Jay and I stayed friends, and then we started looking at more things beyond just this collective. And my learning experience from that year, those 2 years, and Jay's expertise, we So his expertise in health and wellness, like his, what his forte has been for the last 20 years, was my forte on the retail and real estate side. It was a very logical thing to join our forces. And then, you know, we did a bunch of things, you know, all under my Valad advisory bucket. You know, because yeah, it's, you're doing placemaking, retail, everything is, it's one. Yeah.

Right. Yeah. What I love what you've done at Valad is it's truly entrepreneurial. On one hand, you're doing advisory. We've done some great work together on behalf of nonprofits where you're basically their outsourced real estate arm. And believe me, we see so many of these nonprofits who have this incredible real estate, but they don't have, you know, unless if you're a massive operation like the archdiocese, we've had Paula, we've had, uh, Carruthers come on the show here. But, but if you, if you're just, you know, a standalone church or even a smaller organization that doesn't have that real estate, uh, expertise in-house, I mean, what an incredible service that you do there. Um, but, you know, helping with joint ventures, doing your own real estate investments. So it's been, um, very exciting to see kind of how you, you scaled that, that platform and help others figure out how to create that value. Um, one of the ways that you're doing that is through, uh, your, your MBE work. And so maybe just for the audience that doesn't understand, or maybe you could tell about that program and how that can help benefit projects.

No, absolutely. So MBE, or also known as MWBE, is Minority and Women-Owned Business Enterprise. It's a certification and affiliation given to companies where the founder or the primary owner is minority or women. And WBE has been more famous, MBE hasn't been that famous. So a close friend of mine, a common friend, like maybe a year ago, asked me, hinted me that, "Why shouldn't you go for this?" Because every and any big development, and especially if there is any public-private partnership angle, require X percentage of work, whether it's on the consulting side or even sometimes as an ownership awarded to firms who have MWBE. MB affiliation. EDC, New York Economic Development Corporation, EST, Empire State Development, Amtrak, MTA, they all have a requirement that if you are working on these big massive mixed-use or TOD projects, you need to have some affiliation with an MB firm. So I was like, why not make it an enhancer to what I already do? And almost all my training has been on the private sector. Now my deep desire is to bring that to bigger projects. And just like how I help create value at LEPAN and at Borneo, create value for this sector, bring that mindset into the sector. And I recently ended up working— so we got affiliation just a few months ago. And I'm like, okay, what do we do with it now? We got invited for an RFP for for a 48-acre mixed-use development in Queens. Yes, 48-acre in Queens.

I don't know where you'd find 48 acres.

Exactly, smack in the middle of it, in a town called Creedmoor, which is just south of Belarus and a little north of Jamaica. And I ended up going for the tour over there, and I'm seeing all these affordable housing developers who are amazing. They know everything about it, right? And but what I realized is that they don't know much about the whole ground floor experience, which is so, so, so important. And fast forwarding, one of the groups looped us in, right? And we just finished that submission and very proud of our work products, hoping we get the project awarded. But that also kind of educated, gave me a crash course that there is a huge need in these public-private sector because— Yeah. You know, majority of the value, the capital stack is second floor and above. Right? And that's what everyone focus on. Even private developers, the best residential developers, they know what to do second floor and above. But first floor is sometimes, or mostly, just designed, built as an afterthought. And then, when the space is ready for leasing, then you call a leasing broker and then they're out there. And then, if the potential is X, you're only getting 50% of the X because the space hasn't been conceived well. Right? Or if it's a bigger project like Creedmoor, you need to be very thoughtful about the merchandise mix, how you would think in a mall. Why don't you think of it on a street grid, which is going to be 48 acres?

Hmm.

That's where I'm kind of now plugging in what I have learned, right? And, uh, of course, initially in the initial meetings, what are you talking— who's this challenging everything that we do? But then Using the same tools that I've used, like my simple sketches and a one-pager pro forma, convince everyone. I love that.

So over the past 7 years, as you've been building out Valad, what does your current portfolio look like in terms of asset types, markets, and then outside of New York, what are the other cities that are most interesting to you?

So, you know, once again, I'm simplifying, Right? So, I started by doing 2020, '21, New York, not much happening. I started doing advisory assignments here, helping not-for-profit, helping other building owners who do not have that institutional level of expertise in-house, right? Whether it's helping them with refinancing, helping them with coming up with a new vision of the asset and so on. And then, for investing, I'm like, okay, I do want to get active on that. Front. And I ended up going to some tier 2 cities where I look for the local me, some local friend who I've known from before, and see what they were doing. And then I started partnering with them. So I have a small exposure to Georgia, you know, some exposure to Richmond, had some exposure to Fort Lauderdale. But last year, I decided my focus is all back to New York Metro. Mm-hmm.

Mm-hmm.

Right? So, in New York, you know, apart from all the work I did at the institutional, on my own for Valad, we just closed on our first asset, first building, which is a very large building in Brooklyn with some amazing partners. I couldn't be, you know, more thankful. Where their expertise in residential and my expertise in the retail,. And we are talking about a massive asset. Like, it's, it's going to have a big impact in that market. We're talking about like close to 300-400 feet of wraparound frontage, which doesn't exist.

Congratulations. I'm so excited to see what you guys do there. What about New York keeps you believing in it as a city?

New York is New York, man. Like, you know, all the— I don't think if I had landed in 2002 in any other city, I would have been able to create these stories, right? Like growing up as a kid in Delhi, right? I remember having this poster in my parents' bedroom, you know, of the skyline, which as a 2, 3-year-old, I don't know what that was, but I knew because it had a sign, a red sign saying New Yorker, right? I'm talking about the sign of the, you know, the famous sign. Yeah. Which was—

Yeah.

Before Hudson Yard, it was visible. That's how new that's a city. And now —whatever—several years, several decades later being here and also in some capacity having an impact on that sign. I think that's what New York is all about.

Amazing. Grav, as we start to wrap things up, so you teach at NYU's Schach Institute and you also mentor several professional athletes. So, we could spend a whole nother hour talking about kind of the fundamentals and how do you you know, what do you teach, but maybe more just the approach. When you have someone new coming into your classroom, and again, we have listeners to this show, they might be in college now, they might be adjacent to real estate, but they're learning how do you get into the business. I mean, what is the approach? I mean, what do you tell that NYU student? I guess, if they're already committed to Shaq, that they probably are, you know, pretty focused on real estate, but I'd be even curious with those professional athletes. I mean, what do you tell them to get started?

Not much different from what we covered in the last 45 minutes, right? Simple life lessons, right? All interwoven with all the fundamentals of real estate that you need to know. Having the right mindset, of course, you know, how to build pro formas, like doing yield on cost calculations, creating IRRs, or multiples, like all those things are obvious, right? But my approach is way beyond it. Like, I don't use any textbook in my class, right? I just teach from my personal experience, a lot of anecdotes, a lot of case studies. You know, a very close friend of mine, Tom Archenault, he's the one who brought me into the program. This was back in 2020, right? And he— and what really attracted me, he had a very similar approach similar way of teaching, and that resonated. And we actually spoke with the dean back then that this is what our approach is going to be. So it's giving them the fundamentals of real estate, but putting everything in context of what happens on the street.

Mm-hmm.

I'm known to just walk into a class and just throw a case study at the student, which I just cooked up. You know, I walk past a building and something came to my mind and I'm like, okay, imagine yourself to be an analyst or associate in a firm. And, you know, your CEO asks you what's happening with that building. How would you put a quick pro forma or some sort of evaluation thesis in 15 minutes? And that is something which really energized the students because they get to like really think like an owner.

Mm-hmm.

My goal is that you gotta be thinking like an owner. And also lately with what's happening with AI, my big push is like making sure the students are strategic thinkers. A lot of people think coming to school, oh, we learn how to build Excel models, we learn Argus, and we're going to become a great real estate professional. Not entirely true, right? You need to be— you need to get from behind the desktop out there on the street meeting with people like Real estate business, it's not like real asset, it's a business of people disguised as real asset.

Mm-hmm.

Right? You need to go out. Like one of my phrases, go smell the bricks. And I remember many years ago, and I had a very similar approach even when I was at Borneo, we had a lot of interns and I was very near and dear with a lot of interns. And I would say, go smell the brick. And I remember sending them to this asset on the west side, which happened to be the area where all the horses from Central Park would park. What do you—

The carriage houses.

Carriage houses, thank you. And how was it? Yes, it smelled like shit. But that's what it is. You have to go out, you have to network, you have to meet with people, you have to think like an end user. Like I tell them that, you know, oh, how do we understand retail as an asset type? Do you shop? Yes, we do. What trigger when you go into that shop? Like, how is the merchandise placed? What is the location, the foot traffic, the signage? So you've got to always feel like an end user, right? Like in, you know, I'm doing some conversions right now, as you know, like some office buildings and hotels into residential, right? Which is a big theme right now. I've been on the team in my advisory side for the last 4 years. You know, so do you enjoy being in this space? You know, is the volume of the space feeling okay? Right? Office, do you enjoy going to the office? Why is everyone putting so many amenities? Because they want to improve the end-user experience. That's the best way to learn real estate because it is something that you can— maybe industrial is one asset type you cannot, you know, do that kind of a correlation with, right?

Yeah.

But other asset types, it's all about us.

Yeah. Great. One last question before we wrap things up. You mentioned the importance of hustling and persistence, and I'm just curious, what drives you? Is it just the love for people and learning new things? What motivates you to keep going when you can't raise the capital or you can't find the partner or the deal falls apart? How do you maintain that persistence?

Great question. By having one north star, My north star is helping people contribute, create value. Whether I create that value as a drummer in my band, by the way, I didn't know drummer role is one of the most important because if my beats are wrong, everyone is going haywire. So you'll play Sweet Child of Mine, I don't want you to play Bad Reputation, which I did and I was off and then everyone was off. Anyway, that's— You gave us the good clip. With my helping the students, helping these NFL athletes, you know, because they did very well in their few years. And we're not talking about the Tom Brady's, or like, there were people who were in big teams for 2, 3 years, but then they come out and they do not have any understanding of how to invest their capital, helping them, helping nonprofits, profits for something they don't know, they don't understand. One of my clients jokingly told me, you know, it's like, we don't like swim with sharks. I'm like, you mean, what do you mean by me? Like, you're a baby shark, we want you in our camp. Just do the right thing, create a win-win for both sides, for every side. Like, why does it have to be like, you know, so that's what kind of motivates me. That, you know, now why I want to get involved in public-private partnership projects, because I see a lot of projects where retail isn't great. And as a New Yorker, I want to have an impact. I have a better vision for that big parcel of land that EDC has leased to someone.

Mm-hmm.

Right? And why is no one doing anything? Okay, I'm sure there is politics involved, right? There is all sorts of bureaucracy, But I want to— that's my North Star, like help people, just help people create more value.

I love that concept of a North Star, but it really, it is all about the people.

Well, Gaurav, this was awesome. Thank you so much. I am not— I knew this was going to be good. And your story is unbelievable. You know, the timing, the experience, and we just so appreciate your sharing this with our audience. And we appreciate all of you who tuned in. And as always, uh, do people tune in still? That's, that's not a thing anymore. I think they just— whatever you do to, to consume this, this content, uh, because I told my guys, like, I don't know if it's live, but do you want to watch?

They're like, we don't know how to watch something right now. Yeah.

Uh, but thank you. And, and yes, uh, whatever channel you are on, uh, forward this to a friend. I mean, we've It's the best thing you could do. I forward podcasts all the time. Tremendous benefit here. So thank you again for joining us. Until next week, this is your co-host James Nelson here with Kim Troller. And maybe we'll close out with the rest of Sweet Child of Mine. So, Graff, thank you for sharing that.

Thank you so much. Thank you so much for having me.

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