YouSaid · the spoken record

Bill Lenehan

lines on the record: 81
first: 2022-12-06
most recent: 2022-12-06
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Versus having to sort of accumulate all those experiences yourself, oftentimes from hard knocks and not wanting to repeat hard knocks. And that's, I think, super helpful. Get coaching. Just be committed to continuous learning. And there's just so much amazing content out there. I remember when I was at Farallon, it would be like an amazing day someone finds some kernel of information. And I remember like it was yesterday. Someone found a facsimile of the old Warren Buffett partnership letters with hand scribbled notes from an investor in the 60s in the corner. We all copied them and we read them like crazy. It was terrific. It was hard to find that stuff. Now it is overwhelming. Like your podcast, I mean, the ability to go on a vacation and come back having talked to 20 interesting people is just phenomenal. So be committed to continuous learning and my coach has really pounded that into my skull and it's made for a much more fulfilled.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“It was brutally difficult fighting tooth and nail to get investors' money back and be good fiduciaries at Faroon. And the deals ended up being good ones. Taking those experiences, really reflecting on them and getting a ton of value later in life, and I still get a long ways to go, hopefully to learn from. Let me give you one final one, and I know I'm giving you more than one five years or so ago, I hired a coach. He's a very private person, so I'm not going to name him, but I hired a coach and really dedicated to getting better at things and learning from other people's experience. And that has had a profound impact on my effectiveness personally and professionally. So what I would say is to the extent that you can get coaching and you can find someone who can help you take that on. There's so much that you can benefit from other people's experiences.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Parents lived in a triple decker in Boston, and my parents moved to the suburbs. My parents were the first ones to go to college, my mom to medical school. Ton of investment in me to go to boarding school, to go to Clare Montau, which was an incredible experience. What I would say is even the things that at the time that seemed brutal, the financial crisis, I lost 70 pounds in 2009, 2010.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Obviously, my spouse, we're a partnership in any scintilla of success I have is shared with her because of that, whether it was when I was losing my job at a hedge fund and through some cosmic spark of luck was able to get a job as a CEO of a pretty big company. So not unemployed, but CEO of pretty big company. But it happened to be in an hour north of Toronto and we had two soon to be three young daughters. And we had made the decision that that's something we need to attack and that it would be very hopeful to do that. That would be one answer. Another answer would be obviously an enormous amount of investment at a young age by my parents in my education would be a terrific one classic Irish Catholic.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“And miraculously, they're not down a lot. So obviously 2023, that's what's going to happen. I mean, it's just writings on the wall. And the credibility that these firms have with investors, I think, will be shaken because of it. But at the very basic level, when firms like Blackstone or Prudential, TPG, wonderful, wonderful institutions of real estate investing can't get loans from Wells Fargo, Citigroup, Barclays to buy buildings, there's a serious problem, and that is the state of play in America right now.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“And we have very attractive hedges in place. But overall, it is a seized up capital markets where stocks have gone down and access to equity has gone from very ample to non-existent for most. Venture capital, I was with a prominent venture capitalist a couple weeks ago, and her comment was 70% of these companies are walking dead. If nothing changes, they will not be able to raise money to continue or if they do there will be substantial down rounds. Now, not to be sarcastic, the only place that hasn't seen massive markdowns commensurate with risks that was taken is private assets. So you look at LBO funds, venture capital funds, non-traded REITs that are like us but don't have a New York Stock Exchange listing.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think is the technical term for the market environment. Capital is very important for my company. We raise equity, we raise debt, we can calculate to the third decimal what the weighted average cost of capital of our equity is, and that's perpetual. We can look at what the financing is, look at the bank's tombstone to celebrate the deal. It goes out a couple decimal points of what the cost was. And we buy buildings that have hopefully very consistent cash flows. So what we pay for them, we can estimate. So in many ways, cost of capital is my cost of goods sold. Cost of capital is like if you were in the oil business, what it costs for you to get it out of the ground. If you can get out of the sand inside Arabia for $3 a barrel, you're going to look a heck of a lot smarter than it costs you $65 a barrel to get it out of the tar sands and Saskatchewan. The easier the cost of capital there is, the more successful we would be. We have an advantage in that we raised a bunch of equity this summer.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Some switch that you can flip and have a very successful career, but also a stress fruit relief. But people are much, much more focused on it. I think as a company at Four Corners, we encourage people to take vacation. If people are sick, they are very much encouraged not to come into the office. That wasn't the case 20 years ago. Vacation in many ways felt like days you were stealing from your employer. The answer to how many days a week that you should work was work on all days that end and why. And that's what your employer wants you to do. And now it's, I think, very different. And I think if real estate doesn't accept that, it's going to have challenges. All those trends sitting on top of incredibly positive trends for the human condition makes it really, really exciting to see what's going to happen. I tried my absolute best to be the most positive person you could be during COVID. I would reflect that the most”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Unbelievable book. I mean, we're going to live longer. Our children are more likely to be healthy. We're going to be active longer. All these wonderful, important trends. You're not going to read about that on the New York Post, but these are important trends. How we live our life has changed. I was at this conference. We were providing lunch to people. Everyone's having salads. No one requested a soft drink. The three martini lunch is a thing of the very, very distant past. When I got out of college, someone would have said, you should learn to play golf because business deals are consummated on the golf course. Today, be into running or cycling or CrossFit because business deals happen at the CrossFit gym or on the squash court. I think people have thought much more openly and talk more openly about mental health. I think that's really positive. And work-life balance, I think if you're going to get ahead, that's always going to be a challenge.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's start with the overall trends, which are enormously positive. And there's a great book called Ten Important Trends that every smart person should know.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Especially, and I'm not a macro expert at all, but especially as we begin to compete much, much more heads up with a state-controlled entity in China that while they're not necessarily the best capital allocators, and I'm not saying that they are anywhere near what the free market system can do if left to its own devices over the long term. But it's probably a good thing that we're going to be focused on building real businesses that have a real reason to exist versus some of the nonsense that we've been in the last five years.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“In our country, we were predominantly farmers. Now, how many farmers do you know? I know some from Montana, but pretty limited. It used to be we would have both been farmers. So there's been an enormous amount of change that will continue. I'm really, really excited to see as venture capital money goes away from funding things predominantly on what will attain the highest valuation within a year too. Okay, let's create another crypto exchange. I heard they're always worth a billion dollars. As that capital goes away from that to probably a period of less investment, but then back to things like can we address real problems in society, that will be really, really interesting to see what the impact of that is because I think we've spent an enormous amount of money and time on things that were relatively distracting and that's not valuable.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't think so. I think that it is human nature to always feel like now is the time that in the many millions of years that this world has existed, it happens to be this Friday that requires the most, and I'm the person to come up with it too. That's the human condition, the human conceit. I think there's always going to be a tremendous need for change, and those who embrace it succeed. But to say that It's more important post-COVID than it was post the flu pandemic of X to focus on health and wellness is a logical fallacy. I'm sure there was an enormous amount of change during the Industrial Revolution. I'm sure there was an enormous amount of change post the invention of electricity. I think there's probably enormous amount of change after the institutionalization of agriculture.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Shoes, but no exciting places to eat, those malls die. It takes a long time, but those malls die. A similar thing might be what they're alluding to in offices, the new mall. If you do not innovate, if you do not invest the capital and some of these businesses and some of these buildings don't have a capital structure that facilitates reinvestment, your value is below the debt. Your company as a reit must distribute 90% of its cash flow to investors to maintain its REIT status. reinvesting in the building really ensures as my pet theory reinvesting in building is the path in order to maintain and increase value”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“About malls, the dogma was malls produce great cash flow, and you don't need to reinvest in them. And the whole purpose is to get the retailer tenants to market. That was dogma. If you let that be dogma, that created issues. The saying in malls was they're at least not building any more of them. That's not true. We build new malls in America all the time. What we do is we build them on top of existing malls. And I mean that literally one mall on top of the other. We invest an amount of money many times greater than the original construction cost of them all, modernizing them all. Phips in Atlanta Century City in Los Angeles as just two examples. So those that are investing and making those malls interesting, dense new tenants, exciting restaurant concepts win. Those that allow the mall to become 70% teen apparel, a mall that has 19 different places where you can buy a pair of Nike.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a saying every morning in the jungle a gazelle wakes up and it has to be faster than the lion or it'll get eaten. And every morning a lion wakes up and it has to be faster than the slowest gazelle or it won't be able to survive. That's true in real estate. That's true in business. That's true in football games. You have to innovate and you have to be running fast because there's constant change. You asked a really provocative question of what makes great investors. I think it's understanding that there's change, not having FOMO because change is really interesting. You can spend your life thinking the world's being reinvented every 10 days. But you can also get so locked in to something that you know or something that worked previously or something that makes you feel comfortable, something that you heard someone one day say and get locked into those things, that can be as equally dangerous. So true the common”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“But I think there'll be a little bit more of a level playing field. And obviously, we think a lot about this at Macy's, having both stores and online, this omnichannel-enabled ecosystem, I think will be very critical and sort of a customer expectation that I can return in store, I can buy in store, I can ship to store, I can ship to home, that sort of dynamic.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“This is the only country that I know of where free shipping on any online order is sort of like an American birthright, despite physics. So if I ordered a bag of charcoal, I would be irritated if I had to pay for shipping. Low value, heavy, awkward. And I would tell you that if I were to ship a bag of charcoal to you, if we went to the local UPS store and tried to ship you a bag of charcoal, I would pay an enormous amount. But if I ordered a bag of charcoal on charcoal.com, I would expect it to be shipped to me for free. So level playing field on tax, new thing, perhaps a little bit more of a level playing field on shipping. And lastly, the wave of VC money that was invested in a lot of these things going away, let's see how physical retail does. I'm not saying that online shopping is going to go anything but up. I'm sure will.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Emotional experience to go to really great retail discover products, receive services, and I think another trend that will be hard to see. But A, as there's more level playing field around taxation, which has really happened only in the last handful of years. One, two, that perhaps there'll be some more”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Loss on a Class B mortgage. So obviously the equity is gone. The equity loss was 100%. The average loss on a Class B mortgage is something like 85% when it goes into foreclosure. You eliminate all the equity and you turn the debt into 15 cents, 20 cents, 30 cents on the original dollar, all of a sudden it can be something totally different. It can be self-storage. It can be the Chick-fil-A that's put in the parking lot. And by the way, we're way over parked in retail and technology is going to impact how parking lots are used, but subject maybe for another day. That basis reset opens up all sorts of possibilities. But as far as great retail, very well executed where capital is reinvested to keep it fresh and interesting, tenanted with fresh and interesting tenants, great retail is still great. And it's a terrific, evocative.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Retail is very complex and fashion retail is very, very complex, having to sort of reinvent a business every 13 weeks as the seasons change. What I would say is we are dramatically over retailed in the United States. We have much, much more retail square footage than in other places. We are a big country in Europe. If you were to start a supermarket chain, you would very likely be taking over other people's supermarkets and putting your branded supermarket in a remodeled version of an old supermarket. In the United States, you're likely to find raw land and build a new supermarket. Question is, are we overbuilt or are we under demolished? We are definitely under demolished in the United States. And that's okay because when it gets to even asking that question, real estate that you think you might be demolishing has already lost most of its value and the basis will be reset substantially. What do I mean by that? The average...”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“If it costs that much to build a new building and you haven't had substantial appreciation of the existing building stock, land should be impacted negatively. But technology will have a purpose in that as well, in trying to find ways to construct things in a more cost-efficient, prefabricated way, perhaps finding ways to remodel buildings, get more use out of buildings through technology, et cetera.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“What are the implications of that? One is they'll build less. The second is they will remodel more, remodeling costs are cheaper. In some cases, that will have an impact on land because land is sort of the residual factor in real estate construction. So when you read about someone paying $30 million for an ocean front pad of land next to Tom Brady in Florida, certainly they're going to put up an expensive, nice house. But the calculus is backing into this is what the per square foot value of an already built new house would cost. Subtract construction costs, which are relatively calculatable, and the residual is the land. Well, the opposite happens.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Bags of ice at local convenience stores because they couldn't get ice makers into their restaurants. Those things never happened other than in very rare emergencies. That being said, the real question long term, if it costs 140, 150% of 2019 costs to ground up, build an olive garden, Burger King, office building, hotel.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Gosh, living it personally and professionally. Redid a kitchen at my house this summer, completed in August. I hope that the stove will be installed tomorrow. I had a brand new kitchen for four months with a 25-year-old stove. We couldn't get the stove. We installed a refrigerator. We bought it used because we couldn't find a new one. That's changing quickly. We're catching up, whether it's chips in China or supply chain or all of a sudden a rush of demand. That'll be caught up, my guess is, by the beginning to the middle of next year. Lumber prices spiked and have now receded. I'm using my personal anecdote, but I could tell you anecdotes about HVAC air conditioning shortages at Chick-fil-A, meaning that they can't open otherwise completed Chick-fil-As. Or I can tell you stories about branded restaurants having to buy.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“You a silly example, as I mentioned, a little house in Montana. I just built a Zoom room in that house in an unused closet because I feel like we're going to be doing this for a long period of time and adding some technology so the lighting's a little better, it's soundproofed, et cetera, is going to become part of how we live. And it wouldn't surprise me at all if Zoom rooms are like wine cellars where 30 years ago as a use case that didn't exist in mainstream and then became pushed down to quasi-mainstream.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“What if a great customer who drives a diesel pickup truck parks in that spot? And you can only have a couple because they cost $40,000. The idea then was that you would charge empty to full a Tesla in 30 minutes, and that's why you needed this very powerful device to do that. Now, chargers might be $4,000. And they may not even intend to go from zero to full. They're just used because you happen to be going to the store and you plug it in for eight minutes while you get your coffee and you come back and your car has gone from 60% charge to 68% charged. Well, now when they're $4,000, you don't need to use your best parking spots. You can have 10 of them and perhaps the top of the charger provides marketing. Here's a QR code for half off a glass of wine at the bar while you wait. There's that level of technology that we're right at the cusp of it.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“One side point on technology and real estate there's a really interesting venture capital firm I'm not associated in any way called Fifth Wall and that might be a website that folks could check out really alone in many ways thinking about technology for a built world and advancing some of these companies the construction of buildings is quite similar to what it was 50, 100 years ago I'm putting architecture aside I think that we are going to see more technology enabled construction it will change let me give you just a simple example of that if you put a charger for your Tesla in front of a building a couple years ago that might have cost 40,000 dollars so you're taking the best parking spots you have you're spending a ton of money and you don't know whether there'll be adoption and it's difficult to regulate because”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“If we're going to charge, in this case it was mostly hedge funds, market leading reps. How do we make this building the most cyber secure building in the United States? Because those hedge funds, they want really nice space, but they'd love to be able to tell the universe endowments and invest with them. The reason we're in this building is because your money is safer in this building than any other building in the United States. That's really next level thinking about technology that our industry isn't there yet. It's getting there, that's how I would put it.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“As easily as 1922 as 2022. One of my friends was very technologically savvy. Her comment was, no, we should be using the internet to find everything there is to know about all of the tenants that we're trying to attract. If the founder of this firm who we really want to land has a favorite restaurant, we should ensure that favorite restaurant isn't on the bottom floor of the building.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“In a very substantial city in the United States, and they were building a big, big building. The approach to filling that building was the same as it would have been 100 years ago. We're going to build a really nice building in a market that has very, very low occupancy. It'll be the best building. It's super well located. We will charge the market's highest rents. Tenants will come to us. We will have intermediaries called leasing brokers. And wah, one day it will be full.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Those types of things are going to be table steaks for retailers, for real estate owners as what the expectations that has become. And young students are going to say things like, did you expect me to just stand in line? Did you expect me to just wander around to find what I was looking for? Do you expect me to be walking around a conference with a printout? That's just part of every aspect of life. I think if you're not as a senior decision maker in business saying, how am I using technology to make this better? Is this the same way as we could have done it 100 years ago? And if the answer is yes, you should feel like it's going to change because the rate of change of technology is really substantial. We're catching up as an industry. I'll give you an example. I have a friend who's on the board of large publicly traded company that invests.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Development for retailers is marketing. The app is our most important marketing tool, by the way, the efficacy of traditional ad spend is just declining at rates that would be hard to comprehend 20 years ago. We're very, very desirous of technologically enabled buildings. We're catching up as an industry to the smartphone. People who do it better have the capital to invest in it better. And this doesn't have to be super complicated stuff to really make a difference. I'll give you a simple example. I was in an Apple store, which is obviously super technologically enabled. They were able to say, we can't see you now. We're very busy, but we will contact you and it will be seamless. Go enjoy your time at the mall. Feel very confident that you don't have to stand in line to get the service you need. And they gave me 40 minutes of my day.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“A human. They want their orders to be checked by AI. They want to be able to check into the hotel without talking to a human. They want to be able to resolve disputes with a retailer, without talking to a human. They want to be able to go into a Macy's and use their smartphone to navigate the store to learn about product.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Chuckling because when I started in real estate 20 years ago, everyone had these kind of calculators, HP12C. And I was told almost overtly, don't trust any CFO who uses a different kind of calculator. It was really, really old school. And we thought of ourselves as we're the bricks and sticks guys, we're cash flow oriented, we buy buildings. It's based upon local market knowledge. That's being very quickly replaced. And real estate is now catching up. If you want to attract talented people, young people to where you work, they want technology. They want it to be technologically enabled, not just the real estate, but what they do for a living. So we could talk maybe a little bit about how we use technology in our process. But one of the major reasons to use technology in our process is because it allows us to attract really talented people who do not want to do the job the way their parents or grandparents did it. But the physical real estate, they also want it to be technologically enabled. What does that mean? They don't want the drive-through to be simple.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“That are more efficient, utilizing solar, which has come down very substantially in cost, and having some level of accountability to the impact of the buildings that we own. And that is something that is absolutely a big trend within public companies. So perhaps another reason to own REITs is that we're more focused on these things than private owners are. We'll have SEC reporting requirements on the impact of our buildings in the very near term. Again, none of these trends we're going to talk about should anyone say climate. Okay, so let's just buy things in Saskatoon. Because it's definitely going to be cold there for many, many years, or climate's going to happen, so we can't invest in South Florida. I just think it's something to put on the palette of considerations in a more real way than 10, 15 years ago.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's a difficult one because, while I think there's scientific consensus, there isn't individual consensus. There isn't regulatory consensus, although it's building. When global warming impacts what I'll call felt temperature, you're going to see things like, will Phoenix be as attractive all else being equal and it won't all speed be equal? But if all else was equal, will Phoenix be attractive? If it's over 100 degrees, 120 days a year versus 100? Will Tahoe be as interesting a place to go skiing 15 years from now as it was 15 years ago? What's the chance that if you went up the first week of December now you would have skiing versus in the past? I also think climate is going to really speak to building building”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Provide a terrific way to learn about real estate. I talk on college campuses all the time and people ask, what would you do to learn more? Pick four or five companies in the real estate space that you have a natural interest in. Read their annual letter. Read their reports. We put out supplemental reports in addition to our normal way company reports. That's all sorts of information in it. So you could learn a lot about these companies and you could get financial exposure. They pay dividends. They're typically pretty conservative. I think it's a great way. And again, as I mentioned, much more diverse. It's not just departments. It's not just malls or just office. It's very, very diverse. You could put together a very large portfolio and have none of those four food group property sectors if you wanted to.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“And you want to spend your time thinking about that, you could go by historically, you buy a mutual fund, those mutual funds had substantial economics related to the person who's running the fund. That has largely been disintermediated by index funds, but you could still invest in a fund that's actively managed by professionals who spend their whole life thinking about the 20 companies that are in NetLease and could tell you why four corners is different than one of its competitors down to the minutiae. You could invest in a private equity fund. That private equity fund could be very broad, global, all asset classes. It could be a student housing fund that focuses predominantly on sunbelt markets. I think REITs provide a terrific way to get exposure to real estate. I think they”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Into a partnership and deal with all the complexities of handling different partners and K1s and all this stuff. And he's gone by REAP. So one of the reasons is this is relatively new as an asset class compared to other kinds of stocks. And it takes a while, I think, for people to think about new sectors intelligently. I think we're there, but 10 years ago, there was still an evolution. As you mentioned, it's just like If you said, I want to get exposure to companies, you could say, well, I could start a company, I could invest in a company that already exists, but perhaps I don't want to be limited to local companies. And you could go buy an individual stock. Well, that's considered pretty risky. But after 10, 15 stocks, the benefits of diversification are already there. But perhaps that's too much work and you are certain.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Had dinner last night, actually, with a just retired tax attorney who over his career we went through all the different subsectors of REITs that this individual basically helped create. There wasn't such thing as a timber reit. And if you wanted exposure to that, you had to buy a forest or you had to buy...”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think that that is something beyond the mall industry, beyond the office industry. We need help, but to the extent that you don't feel safe going to a mall, you don't feel safe going to your office. The alternative of staying home and ordering online or the alternative of seeking out a workplace that is fully remote becomes much more attractive. And I will tell you that the talk of the conference not to get too in the moment, the talk of the conference, and this is a conference that had most of the publicly traded real estate companies, most of the financial advisors to those companies that arrange capital on Wall Street, and most of the investors was this city isn't showing very well. This city is dangerous. The anecdotes were challenging. That's not great for our industry. It's not great to help catalyze investment and a return to”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“For me, or I will only focus on cost and therefore I have to probably put some of those things back into the system in order to track team members to me. So I think what they're saying when they say office is the Noumont is external catalyst, difficulty investing capital because rates are higher, uncertainty about future rents, and therefore an asset class that has deteriorating fundamentals over a very long period of time. I would point out in malls, that happened over a very, very long decade-like period of time in office potentially will happen faster than one final comment of the similarities between even trophy city CBD office and what's happened in malls is downtown areas in the United States right now are not nearly as safe as they were five years ago pre-COVID malls are not as safe as they were and”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Undifferentiated office is really, really difficult to draw team members to. And I say this with some experience because I'm sitting in a suburban Class B minus undifferentiated office building that has had no investment in. I'll give you as an example of that in our bathrooms there are still ashtrays. So a tenant who has said I want to take every penny of distributable cash flow and put it in my pocket. I don't want to reinvest. So what is the only lever as a tenant who is rent? I will either move across the street to an amenetized building where they're providing reasons for my team members to come in, where they're perhaps thinking about things like food and beverage.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“What happened over a very long period of time is the malls were not invested in. At some point, it might be in a good neighborhood, but wasn't nearly as valuable as the remaining houses. The problem is that retailers spend roughly 10% of their revenue on rent as the productivity of that retailer declines, there is a point in which even for free, it is not viable for the retailer to operate. On malls, substantial starving of the properties for capital and reinvention because mall owners were super focused on distributing cash flow to investors. The thing they say, well, think about Mallus is you don't need to reinvest in them much and therefore that's why they're so attractive. Office is potentially going through a relatively similar dynamic that class B”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is are in my mind very different talking about malls by number is silly. Get to your question about office. I think what they're saying is a sector that has become structurally disadvantaged by an external catalyst in the case of office COVID remote work, in the case of malls. It was Amazon online shopping, what they're probably underappreciating is the level of capital investment having as much, if not more, impact on the sustainability and viability of the real estate. You look at malls. When I graduated from college, you could have chosen a subsector to specialize in, unquestionably it would have been malls. They were the creme de la creme. It's what all European investors wanted to invest in because they were perceived to be very safe.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“The top five are worth more than the bottom 200. Alamoana Center, Roosevelt Field, Aventura, Sawgrass Mills, Houston Galleria, Unbelievably Valuable, irreplaceable, incredible retail demand, etc. When someone talks about a mall, they are one mall each. So too is the mall of Walla Walla Washington, a mall in Helena, Montana that's both very small was never worth much to begin with. And the smaller, more tertiary malls, especially there's more than one mall in a town, are very, very damaged. But how much does that really matter? Well, it doesn't matter a lot unless you are a tenant in one of those malls or you were the family that owned one of those malls. The best malls in America that we're all the value.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“On the board of Macy's when I was a feral and we bought a big mall company with Simon. So I thought a lot about malls. Let me just start with anytime anyone talks about malls as if malls are one kind of thing. You should run away. They don't know what they're talking about. There's a thousand 70 malls in America, roughly. So let's just say 1,000.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“That looking at the Burger King. So I think rent and credit are the two things that wouldn't necessarily be logical to someone who's just thinking about it really quickly. Terms of the lease would be another guarantor, which is part of credit. Perhaps it's operated by a small entity, but there's a guarantee from a larger entity that's insuring payment.”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think the really interesting way to put that is half the things you'd be able to see with your eyes and half the things you wouldn't. And we tend to overemphasize the things that we can actually see. So you would look at, I'll specifically answer your question just one second, but you would look at it's a Burger King and it's busy and it has a drive-through and there's line out the door and it's next to a Costco and it's in a wonderful town. What you wouldn't see is how high the rent is And I can show you Burger Kings that have $60,000 worth of rent and I'm sure there are Burger Kings with $260,000 worth of rent. There are Burger Kings that are owned by public companies. There are Burger Kings that are owned by the parent company of Burger Kings and there are Burger Kings that are owned by a one person franchisee who has a lot of financial leverage and isn't someone you want to partner with in business. You can't see”
2022-12-06 · Invest Like the Best · Bill Lenehan: Investing in Commercial Real Estate - [Invest Like the Best, EP.306] · IDENTIFIED FROM THE TRANSCRIPT · source