She probably wishes those easy days of 1031 exchange were back for her.If you are an accommodator, who are your clients? Primarily brokers and principals. She knew every broker in the world as her little brother was getting out of undergrad. She gave me so many contacts and connections. It was a pretty cool way to get started.
Why do you feel that real estate is such an important piece of a company's growth?It's huge. On one hand, you got the upside and the downside. The upside is potential. Where do you have room to grow? I think of it as first of the people and the space you go to work to every day. You got to be excited about who you're working with and where you're going. When you are out of space, how fun is that? When you think of two people in an office, a tenth person in the bullpen in the warehouse, it's taking pallets that are in between you, where you're trying to take inventory, moving them out to the yard and generally show up things back and forth needlessly.
When you have a lack of it or a scarcity of it and what you experience, as a result, makes for a bad working environment. I sure love when people have a client contract they've won, they've got a good team, a great culture where everybody is excited, they're doing great things and then we can envision what we can do with that. How can we capitalize on this? Where is the opportunity for us if we expand that? I feel like that's the fun stuff. To be able to play a role in that, help execute on that and then to watch it happen for years at a time, that's always super exciting.
When you talk about a good team and a good culture, why is that so necessary when you're in real estate? Isn't real estate transactional? I can get a warehouse from anybody. Explain the teamwork and comradery that you feel you need in industrial?I generally look at it as you are entering into someone's organization. They've got all their key players, have their own company culture, own challenges and trying to execute on something. As a broker, the music stops, you enter the room, and you've got to assess, “Who is everybody? What are everyone's strong suits? What are people concerned about?” I feel like that's the biggest part.
Obviously, we want to have a great culture within our own internal team, but I generally find being sensitive, perceptive and aware of the team that you're working with, how you can complement them, and how you can make the most of what they have. It is interesting to go into different companies and recognize different working environments in different cultures, and then saying, “I got it. I see this is what we're working with here. Here's how I can help.”
I have one client where it's such a breath of fresh air. Every one you work within their team, you get a little bit of hospitality, humbleness, and can-do attitude. It’s what I found with them in their culture. Literally, everyone in the firm is their firm. It made it into the best working relationship where you know they're going to follow through. You've built up enough trust along the way where it allows you an opportunity to then invest everything you got to try, make sure they have a great outcome and do the best. You feel even more responsibility to perform and help do everything that's within your power to make for it to be a success. Recognizing that and being able to mesh with it is probably the most powerful part.
Justin, obviously, in the last several years, real estate has made a resurgence back to being sexy again. Everybody wants multifamily. Why should someone look at industrial over multifamily being the golden child right now?On one hand, It’s working within firms, brokerage and investors that invest there. Secondly, let's say Shannon and I had $10 million or $100 million, why would we invest it in industrial? There's a bunch of different subcategories within industrial. It depends on where you can find an attractive part of the market. One of my favorites is the multitenant or small base space.
That's probably what's most similar to multifamily. What I appreciate about that is in terms of renovations, amenities, dealing with families and the things that happen with personal relationships like death, divorce, with the kids and with schools, with multifamily, I feel like there are a lot more amenity wars where that was like, “Who's got the pool and how big is the pool? My windows are 10-foot tall. Yours are 9-foot tall.”
It’s trying to over-amenitize the projects. In industrial, that's not a concern and not how that asset class works. What I appreciate about multitenant industrial is you're dealing with small and medium-sized businesses. A lot of them are service-based businesses and they're local. If they work in a territory, think like your
Servpro. Your house floods, you call the flood guy to come in and help you out. They have a certain territory. They're going to be there for a long period of time. They don't need all of these expensive amenities and they don't go through reasons why they have to terminate, move out-of-state or move for a job. I've found that it makes for very sticky tenants.