YouSaid · the spoken record

Anthony Dilweg

lines on the record: 140
first: 2023-12-01
most recent: 2023-12-01
sittings or episodes: 1
sources: podcast

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“Interpret the way you ought to interpret it, so you got to ask a lot of qualifying questions, which I love about your podcast. Jack, you do a great job of probing and asking questions. You're so curious. It's really good. So that's when you get to the meat of it. You can see what's going on. I'm just seeing this train wreck.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Talking about unless I was talking about uptown Charlotte in the context of Class Badow Space and Direct Vacancy, the shadow space is the one that's kind of elevated things. And I think it's heading that direction. We have some markets. I've co-started Dan I'm pulling in some markets in the southeast. They do what they call availability space, which is basically sublet indirect. And you like to know the difference between the two because if your direct is eight percent, but your sublet space is makes up 20% of that's here at 28% total, you're going to study the sublet space pretty hard because some people are just testing the market. They may come back and take the space back in. You got to study those tenants. Some of these things I've seen in the markets are, you know, between 30 and 35% in my world as an investor, I read the headlines. I'm like, it's, listen, the headlines are always tricky. The press is tricky. You're going to frame it up.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so it's a really important point. And you're hitting some really areas that makes this thing nuanced. Back to like utilization, documentcy. There's what they call shadow space, which is like sublet space that you know the tenant likely is not going to renew and they're trying to sublead. So we don't like to compete with sublet space because that makes it more difficult. And then you have credit issues if people are delinquent, not paying the rent. So you're kind of looking at, okay, what's the total occupancy, you know, eligible paying tenant? So you could be at 93% on that if everybody paid and it's not relevant to who's in the building who's not in the building, but you have contract leases. And then it kind of goes, then you kind of look at is it, are we in a market that you think that's going to improve and there's stickiness to it or is deteriorating? That all is deteriorating. So when you see stats, when people go, oh, there's 13% vacancy the most it's been when I say 50 and I was and just so I'm clear I wasn't”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“At 50%, you know, that's already true. But you said vacancy. So you mean that literally half of the offices, not only people are not in the building, but they won't have tenants. I mean, that is pretty drastic.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Okay, so occupancy just looks at are people in the building utilization is maybe a little bit more holistic looking at how long are they actually for? But the occupancy data that I'd seen showed, yeah, maybe Castle flatlining at 50%, but that doesn't mean, and to someone who's not in the business, I had to learn this, occupancy is different than vacancy. Vacancy is what, from a financial perspective matters, are the landlords being paid, are you, are there tenants in the building? Occupancy, are the employees and then the people actually using the product and going into the building? So, for example, in the summer of 2020, when you could walk down New York and see all offices, none of them had any lights on, you could get a little worried about are the landlords being paid. But actually, at the time, I didn't know this, but they were. They were because the leases for those are very long. So earlier, maybe 10 minutes, 20 minutes ago, you said you think vacancy will go to 50%. And if you said.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“I am here, right? Well, so we're clear. My sample size is not huge, but I'd love for, you know, for someone that has all their, every one of their employees showed up for education. I'm like, I don't buy it. But that wasn't going on Fridays happen. I think we got to be have an intellectual, honest conversation about where we think it talk to people, ask, you know, got to get to data. There's a lot of conversation. And if it's two to three times a week, which Tuesday through Wednesday, it is what it is. That's why we launched a business small fund on SDRs and Airbnb. We're in small towns in North Carolina right now and like Blowing Rot, North Carolina Helkin, converting old commercial buildings to Airbnb. And on Friday and Monday, we're offering to our tenants to say, hey, listen, take your family to the mountains, you know, enjoy internet. You can do business on Monday and Friday. And I think your Monday and Fridays are going to just create a larger weekend. That's why I think hospitality is interesting, how that's going to play up. And people want the experiential side of part of it too.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“That's where it gets very careful the way people throw words around and stuff like that. So you got to really look at like, I just go back to when people say, oh, yeah, these guys, they're back in the office. I just talked to one of our larger lenders and their policies get everybody back in the office. I said, okay, what does that really mean? They said, well, they say five days a week, but they don't really monitor us. But we have to just make sure we checking in on Tuesday, Wednesday, and Thursday. Like, all right. I'm tired. Every time I have a chance to talk to somebody, I get a little insight. I haven't heard anybody. I haven't met anybody back yet after talking that Monday through Friday full time, which I wouldn't suspect, but it's, you know, it's going to land somewhere in the middle.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“So it's an important question. So, utilization rate would be, okay, a tenant has 40 full-time employees and 10 of those employees are in for the day, for the entire day. I'm going to say an eight-hour day, that'd be utilization rate of 25%. But an occupancy of 100%. I mean, they occupy the space.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Every day of the week, cumulative. So I'm making, I think, first of all, those are nicer buildings. Second of all, I think that's overstated, 50%. And I'm talking to these guys about people going back to the, I think it's, I think they're trying, we need, listen, there's the component that I'm not a doomsayer to say that where no one's going about the office. I think it's hybrid. Maybe two or three or four days a week and maybe half. But, you know, and I don't really like the cat. We're shifting to PACER AI, which is going to monitor more cell phone use so we can see exactly who's in the office, not who we know by cell phone data for how long, so we can market. And you can distinguish between visitors and tenants. So there's a lot of work to be done here. You got to be careful about what statements you make, but I don't know. I'm living it every day. You got to be careful when you're in the trenches because sometimes it gets so dark. So you got to get some elevation to get some perspective. So we try to balance that out.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Their methodology is wonky because what they do is they swipe it once and they count you in, and that's flatlined. They got 2,600 properties in the US in 47 states. And they hit you as a one card swipe, Jack. You go in the building and you count in for the day. Okay. And it went from, they did it right to COVID. They said 100%. They used 100%, which is probably you and I would understand that Fridays were probably half day before COVID anyway. And that plummeted to 15% utilization rate. So people actually go in the office, but it's just a swipe. Doesn't say how long you're there. It went up from 15% in the first 18 months to 40%. Then over the next 12 months, it went to 50% and it's flatlined for less year now.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, but Jack, let me tell you something for every CEO that is telling you that. That says that, and let's say for every 100 CEOs they're telling you that, I'm talking to those CEOs of those 100, I may be talking to a small portion of them, it's very squishy. Their policy about people going back to the office, in fact, if you look at castle data, Castle Systems, they monitor card swipes in buildings.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Companies have to get their culture right to get people back in the office. You got to create FOMO. You can do all these cool kind of trick-down amenities. But if you don't get your culture right and people don't feel like they're missing out and we're a culture, we want to be together, but you better have a compelling reason because right now technology is kicking its ass. It's doing a pretty good damn good job right now. So that's the friction and the tension I see.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“And certainly, Jack, you make an interesting point, right? Because these guys, if they have, if they can play it out and get enough leadway at the lender, it's one thing and great financial crisis. We bought a bunch of debt back at a discount. We tried to negotiate with lenders. They eventually capitulated. We actually felt we had enough visibility to buy back at a discount. This is what we did. And we felt good about the fundamentals. I just think for, you know, certainly for office right now, you can have someone being honest and frank on any conversation today and say they have a clear picture where they think it's going to go. Now there are markers like related group Hudson Yard and New York. Those guys are, I think, doubling down on newer product. There is a flight to quality. I don't disagree with that. And we have a creative single story office dropping in a brewery, doing riding birds around, putting clapping walls up. I think that's good. That's helpful. But at the end of the day, my stronger belief system is.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“And office structurally is broken until Demand is figured out, you know, I think you're going to have some of your largest reach, I think, are under all kinds of pressure right now. You got Blackstone, those guys throw the keys back. We've thrown the keys back. We try to work it out. We got lenders. You know, we're battling lenders right now, restructuring across the board. Our investors are worn out, Jack. Worn out because they've been putting money in. We've got endowments. We have family offices. Had some private equity relationship. But so for a guy like me who's opportunistic value added, if I can survive and get to the other side of this, because we're getting beat up pretty good, I think it's going to be an extraordinary chance to create wealth in the real estate space”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Low guys are expert. We're studying that space pretty hard, but This stuff is what's coming. And I think all these people are white knuckling it, trying to put money in deal, trying to hold on. I'm not saying things can pivot, but I just don't see it. I think interest rates are going to remain higher for a while. I know that's being discussed. That's a big joel.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“And that trends, I mean, Jack, you got five billion square feet roughly. This is CoStar data and CBRE. That CoStar is a primary data source for our industry, public company. Then you got CBRE, these real estate companies jail out, get about 5 billion square feet. The debate is you've had roughly about 400 to 500 million square feet as a float as vacancy. So the debate now is by base case, we're going to be have a billion to billion and a half square feet on top of that float that's obsolete in the next three to five years. Those are the debates that are going around. That's frankly kind of a base case. I'm sorry, I'm not sure what that looks like right now, downside. So there is, we think there's tremendous opportunities to go in and repurpose office buildings. You hear a lot about the multifamily. I think that's going to be a lot smaller than people are hoping, you know, that it's a lot of work. You got to get the building down to 25 bucks a square foot.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“We'll see. I like to look at research. I look at a lot of research and always skeptical. But we've got an office building under contract in Atlanta for it's 100,000 square feet and they're going to scrape and put 80 townhills on it. And I think that we're seeing more of that in our space. I'm really ideal.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“You know, these traditional, like, okay, office goes here and retail goes here, multifamily. I know we've worked over the last 20 years to kind of disrupt that, but I think it's really getting disrupted now. And these cities in the southeast are getting hit by it. Miami's not. Miami's got their own dynamics doing well. But, you know, that's in the suburban office. We see that. And there's stuff in the suburban side that I'd say it's a race to the bottom that ultimately they're going to get scraped and be repurposed or, you know, rezoned property rezoned. We're selling a property to DR Horton housing industry. Speakers, are we 3 million under housed, eight million? Sometimes.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“We are in downtown Atlanta. We're in Dallas, smaller secondaries. Charlotte's uptown area. It's going to take years to recover. I mean, the office is probably going to 50% vacancy if you actually count in sublet space, which people, shadow space is a whole different debate and discussion. Contracting. People want something cool, funky, urban, experiential, and there's this collision between hospitality and office debate, which we're on that board. This just, you got to reimagine the space.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“This is really quick, it's hitting hard, so it's, and it's a big sector, it's not the mall sector, and it's in the heart of cities right now. You got New York, you got San Francisco, you got Portland, you got Seattle, you got Austin having problems. These cities have their hands full, not to mention the suburban stuff. So all that stuff adds up, it's pretty fascinating.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“And they're going to find a way to go say, can we make money with all the capital investments going forward? Ultimately, when we exit. So we run these on retaining tenants, recruiting tenants, and then certainly the stuff you mentioned earlier about the cost to a functional and cosmetic cost in the building, which are pretty significant at times. So you add all that up and then you put a future cap rate on it. Right now, office was trading the five and a half, the seven half. And, you know, we're seeing deals in the 10 to 15 cap range. So it's all upside down. So all these, you know, and plus, because it's so broken, what is the man? What's the future of office? The debate is if the internet to shopping malls is like remote to office now. Well, we had 20, supposedly about 2,400 malls in this country. Now it's down to 700, but that was over 20 years.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“So, when we're new at tenant, for example, does it cost $15 in TI allowance to retain them or $30? Do we have to give him six months free rent or 12 months free rent? Do we have to lower the rent? So there's a front-end transaction cost. So on a 10,000 square foot lease, it costs you $250,000 to pay the broker and to give the tenant some tenant improvements. So that's the front-end transaction cost. And then, you know, Jack, you don't really get paid back on the stuff, you know, for a while. Like you look at, you run these analyses. They're like, wait a second, it's a five-year deal and we're putting up these dollars, good credit, but we don't get a return. The money we all laid and the cost of that money may be two years, two and a half years before we get paid back. And people would bail out of it is you'd find ways to increase your face rate. So the next buyer will buy that income through the higher rental rate. Now, they're going to do their studies and they're going to understand the market conditions. You got to stay within a band.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Ford Assumption channel where you got maybe 25 tenants in a building and they're either rolling next year or in six months or five years from now and you're running analysis against the retention on that. And then what's the cost to retain? So is that component to it? And then”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“So let's anchor on forecasting because that's what our sector likes to do a lot. And structurally, the challenge I think we're having right now, and we'll just focus on office, I think some other sectors certainly are having some of their own issues. Multifamily, I think it's going to be worse than people expect, in my opinion, but could be wrong, certainly. It depends on where and the product type. So we forecast out and we look at variables. We look like, okay, what's the retention of tenants going for? Ford. You know, maybe typically if you use 65, 70%, and now we're debating whether it's 50% or 25%. That's a big, that's a material move. And are the future tenants going to contract or not contract? This is on top of studying your rent roll. Okay, what sector is every tenant in? Look at your rent roll. We got a thousand tenants. What sector are they in? What's the credit? What's the forecast? What's the leadership? What's the culture like? You're looking at all that you're scrutinizing. And then you got them on this, you know, you got them on a...”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“And are the interest rates going to lag? Are we going to somehow get out of this? You know, MMT going to kick back. I don't, you know, pal seems like he's going to hold on longer here. Actually, I think it's probably in some ways really good. Stuff's going to break here. I'm seeing it. I'm on the front line. So I'm seeing a lot of things we're anticipating, a lot of issues here that haven't materialized life. And, you know, we're at 20 office is a 20 trillion dollar sector in the US, roughly if you took 5 billion square feet. And people are talking about rates. I mean, they're talking about maturity of loans the next, you know, 1.5 trillion in, I don't know, 18, 24, you know, 15, 18 months. That's not my concern. It's all the eight, seven, eight trillion we have in commercial office right now that people are being honest and you mark to market, which no one is, it's not pretty. It's really ugly. Not saying you can't get through it and navigate there's all kinds of tricks and have it.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“And your behavior change is such a part of it. And the challenges your mind may be way ahead of really what the market's doing, I find that as a big challenge in our world. So it's a big lagger. So I had a great forward indicator. And I think the interest rates absolutely do impact real estate even more. And I've listened to some of your podcasts about the debate on recession. Are we in a recession? I'm not tired of the conversation. I'm a slice guy. There's different sectors doing braid. Other places are depression. Some are recession. It's very complicated today. I think we want to throw things in bundles.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“It's one of the probably significant material debates in our industry over the last 50 years. Does it correlate cap rates with interest rates? Peter Lindemann is a guy that was well regarded our industry as an economist. He's been at Wharton. That said that you have to really care for these statements, right? Because they're all nuanced, right? So he said, well, you know, they really don't correlate. I don't know. I mean, I've been doing this for quite a bit with the violent upturn that we just experienced or were experienced in interest rates, you know, its impacted this sector pretty, you know, our area pretty significantly plus the 10-year, you know, 10 year now, you know, when it went to five and now it's back to what, four, four, four, five. That's a measurement. It looks like it's going to be sticky there. That's been a jolt to the system. It's like real estate, probably real estate guys, it's such a slow moving business.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Well, since I got my roots in it and certainly was intrigued with the business community, the Fortune 500 companies, tech was expanding or has been expanding, obviously, over the years, finance, fintech. It's just intriguing to get to know the tenants, know their business plan or get a glimpse into their business plan, get a glimpse in their P&L, you know, talk to the CEOs, learn a lot about the business community. I found that a lot more intriguing than dealing with residential tenants and then also shopping centers, although retail is intriguing. I'm sure pretty interesting to a lot of folks, but I just found the business side just kind of where it was going. And it's been the core for this country for a number of years. So it was just an area that, and I thought we were well tooled. We had a lot of talent there, and it just felt like a good position to a good foundational position for the company to steer toward.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Well, depends on the kind of office. Well, depends on the first of all apartment complex you run. If you're a BNSC office, I mean apartment developer, you're probably getting a lot of complaints and you're trying to stay ahead and your tenant base is different. Office, it's a different mindset, right? Because I felt like when we were multifamily, it was more emotional. Office is more, you know, got it's just more sterile, more calculating, more measured, you know, people, you know, it's, you got kind of a commercial mindset, except, you know, when you have the residential, just people seem to get more emotional. So I like the office side because I felt that was more, I was built for that. And like the emotional side for I didn't see you got pain enough for the emotion on multifamily. If I got emotional in office, that's not necessarily bad. Usually, from our experience, it leads to, if you know how to navigate it well, it can lead to some great upside if you know how to negotiate well.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“You got a termination on or a five-year lease. You have an early termination. It was done four years ago. Maybe can we get that kicked out because it helps us with our value? What if we gave you $100,000 in improvements? We'd restructure, try to restructure a whole rent roll. It was a lot of work, but there was a lot of upside in that. But it was just rolling up your sleeves, you know, being thoughtful, being creative, knowing how to negotiate and be assertive and aggressive there. And I felt a lot of people just wait to the tenant to roll before they hit it. Our philosophy was very different. It wasn't easy to do because it was a lot. It's just a lot of work and a lot of moving parts. And you're working with a lot of people that it was hard to get their attention at times. But we've had a lot of success with it.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Then you'd advertise maybe another 10 or 15, $20 on top of it, and that's where you get a nice uplift in the rent. And when you cap it out and sell it, you got a premium as long as you, the governor was the per square foot number. So that was, that worked really well for us. That world has changed materially now. Tenants want $60,000, $70. And it really doesn't make sense. Well, office is broken right now. But the other industrial, we didn't do much industrial did some retail open air retail centers, grocery anchored. And those were classic value add. You know, we would work, Jack, we would work the tenant base really hard. We were very active. What I learned is from starting off is I felt like when I represent a lot of institutional guys, I mean, they were smart, they're bright, I wouldn't call them the savviest group. And I felt they were babysitting a lot. We would go and be aggressive to tenants early and say, listen, this is a three-year-old lead.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“And that hasn't changed. I know it's been more institutionalized. It's gotten more institutional traction and money in it today. And it's done extremely well. Multifamily were valuades. We went in with a lot of folks did here in the last two, three years, which I think it's with rates screaming high is going to hurt a lot of these multifamily guys who bought these kind of B&C products and reposition them. I think they're upside majority of them upside down right now. We did that back in the 90s and did well. It's good timing for it. Wasn't a supply issue in the markets we were in. You know, office was the most capital intensive. I always use that as I felt an advantage if you're super selective and pretty shrewd on how to spend the money. Back then, leases were done. We had a five-year office lease. You'd offer a tenant, you know, a dollar per square foot year for improvements. And then you'd lean on the tenant to come with the money to the table. When they said no.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Anyway, I'm super intrigued to where it's going to head. Yeah. Me too. We'll get into it in a second. But just so you founded Dilweg investing in self-storage, single family, multifamily rental apartment buildings, and then office. How did those asset classes differ? Are some riskier than others or the leases different? And the valuations we could talk about cap rates, how are those asset classes different? How were they different then and how are they different now? So I would say then, you know, which this particular sector hasn't changed a whole lot.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Okay, and then ultimately transitioned into we were more agnostic when I started my company. So we did jump into very opportunistic that I had, and it was self-storage, some multifamily, these are 150, 200 unit, you know, complexes, self-storage, we grew up to about a million square feet, sold part of it to Red Macombs out of Texas. So that was a hot a hot product at the time. It's become very hot in the last 12 or 15 years since I had my roots in office. We did some office and then some flex. So, yeah, we were small. We were boutique-y, mostly North Carolina, then double down and transitioned out of the great financial crisis into office. So I picked the winner. It's been fascinating what we've experienced the last three or four years. Certainly, I know we'll get into it of where that's going and remote working and how it correlates to other real estate.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Side to the third party business. I always felt like wealth creation would be around there, obviously on the investment side, but also, you know, tremendous amount of risk there too, as you recognize, Jack. So all those things, that was young. probably reckless and didn't, you know, I was kind of ready fire aim. So the acceleration was fast and had a bunch of failures early on and learned from really some really good people in investing in macroeconomics. There are a lot of gurus who can say, oh, I know exactly where the 10 year is going to be in your world, in real estate. A lot of gurus too who say, you know, sign up for my course or get invested and leverage. So the actually successful people such as you do not recommend getting into it and doing what you do because it is so risky. You're maybe a little bit less risky than football, but yeah, you know, credit cards. It's mostly apartment buildings, what now is called like multifamily rentals. Single family and duplexes.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“But I really wanted to learn from the ground up. So I bought a number of rental properties. I don't recommend this for someone starting off, but I remember, you know, a lot of my NFL money was tied up at the coast. I invested in a place called Q Island and some of the coastal areas. Not a lot, but I remember signing up for like 12. No, I'm sorry, like 22 credit cards that you could advance those dollars. I used as one of my first down payments on some duplexes. Super try to be clever, try to be creative, but also recognize the element of hard work. So when I got into it, I'm like, it's interesting time the housing market was decently solid. The office market was recovering. I thought it was a great time to be curious and ask a lot of questions and continue to learn with the intent to eventually get into the investment side, less of the broke.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Early 2000s, but in the world of commercial real estate, I imagine they're somewhat correlated, but not the same as single family housing. So what did you start investing in? What drew you to that? Was it apartment buildings, offices? Now, I think I believe you're mostly offices. We'll talk about that. But what drew to that asset class and what was that environment like that late 90s and then to the early 2000s? So, you know, early 90s, when I got in, I got in as a broker, as a tenant rep and I got into some investment sales. It was a good way to learn from some of the top landlords in the area or the region, some institutional landlords. It took me a while to earn in there because I was young in the field. Also, the S&L crisis coming out of the late 80s, that was intriguing. I think the first book, I believe I read was the Daisy Chain, which is all about the good old days when they used to leverage up 110%, 120% guys who get their fees out. So I heard all these stories. I thought that was intriguing.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Find a lot of correlations and a lot of takeaways. And if you were fortunate enough to play for some great coaches, like I felt like I did even in the NFL, Indian Fante, they're great field generals. So you watch them, you observe them, you ask a lot of questions, kind of like the Socratic approach to my belief system on questioning folks also, you know, being thoughtful and being a critical thinker how you assess things. All that comes together and it's a pretty powerful experience. I feel very blessed that I had that opportunity and able to transition into the business world. So it's the mid to late 90s. You enter the world of real estate. I believe you found Dillwag, your firm now in 1999. That world of the late 90s, I'm not a real estate guy. I know that housing had been going up and there was going to be a huge housing bubble in the”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“You could apply from football to real estate. Any analogy at all? Or no, is that getting to poetic? Well, there's quite a bit, frankly. I mean, what drew me to real estate was hit a lot of my press points. I love the deal concept, engaging with people, kind of asymmetrical negotiations, always trying to find ways to create value, tons of inefficiencies in the business. There's a community component to it. Certainly, you know, the team part is important driving folks to excellence. And then, you know, it's kind of what your spectrum, your risk tolerance is. And depends what part of real estate you want to get into. So in plain professional sports, a lot of those things carry over. I don't know any too many athletes that ultimately do transition into the business world. Especially those who create their own enterprise don't.”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT
“Choice because I figure not a bad school to go to, and earning a scholarship was great at the time. At Three Sisters, the University of Maryland. So I would end up probably there, but eventually played there under great coach Steve Spurger. I'd like to tell people that some of my business acumen came from him indirectly. So I like to share that at times. And then was fortunate enough to get drafted by the Packers, Green Bay Packers, and then played professionally for about four years. And then ended up on a couch in Shreveport, Louisiana, and the Canadian football league my last year and I pondered quite a bit on that couch going, do I want to continue playing football or had an inch to get into business? Always loved the entrepreneur side. So I jumped into real estate in the early 90s. What drew you to real estate in particular? And is there any football like many sports, like almost all sports, it is, you know, physical, but it's also strategic. Is there anything?”
2023-12-01 · Forward Guidance · Pain In Commercial Real Estate Will Be Worse Than In 2008 Great Financial Crisis, Argues Veteran Office Investor Anthony Dilweg · IDENTIFIED FROM THE TRANSCRIPT