CRE News Hour 7/12/2019
From the business desk at st broadcast news this is the c. arina news hour. I'm steve lou. Beckon on this edition of the sierra. News hour will talk with dan paul mirrors c._e._o. Of view see funds about his company's approach to real estate finance a conversation with john seabreeze of marcus miller chap about the controversy over rent control in in chicago a look at how net lease real estate's doing in the motor city with michael carter in the detroit office of s._r._s. Real estate partners and we'll chat with julie chase managing director of public relations for street cents an agency that has an unusual joint venture arrangement with c._b._r._e. We'll be back with the top news stories right after these messages <music> turn earn your podcasting passion into profits the book the business of podcasting describes the business side of podcasting including how to become a professional national podcast. You'll learn about position your clients expertise who podcasting to plus the best business models how to find clients and much more visit the the business of podcasting dot com today. You can't wait for the media to cover your company buzney. You have to be the media. Take advantage of the power of audio and video. It's the best way to showcase your expertise to prospective customers. Let the lupatkin you bet can media companies handled the technical side. We're award winning audio and video producers. We can help you produce podcasts and video programs remotely or in our fully fully equipped studio in cherry hill visit being the media dot com for more information now. Let's take a look at some of the headlines in the c._r._m. Marketplace jones lang lasalle completed its acquisition of h f f one of the premier capital markets. It's advisors in the industry h f had more than six hundred fifty million dollars in revenue in two thousand eighteen mark gibson former c._e._o. Of h f f is joining nj l l as ceo capital markets america's and co chair of its global capital markets board. C._r._e.'s been selected to provide facilities in project check management and related services across the province of british columbia's seventeen million square foot real estate portfolio managed through the provinces ministry of <unk> citizen services. The portfolio consists of a mix of least owned and managed assets includes offices courthouses correction centers and warehouses m._r. p._o. Realty developers and managers of commercial residential mixed use and industrial real estate across the mid atlantic region joined with creek lane capital a national real estate investment management company to acquire thirteen acres of land in river north nashville a designated opportunities zone where they're planning to develop a one point three camilion square foot mixed use project along the cumberland river in the landings primera a leading real estate development investment management firm broke ground on. I harbour plaza development in santa ana california the projects forty thousand square foot restaurant retail office and medical property located in and one of santa anna's busiest areas. It's the first of two opportunities zone developments for the firm in that city construction on the project's expected to begin in the third quarter order of twenty nineteen. You're listening to the c._r._a. News hour from st broadcast. It's news dot com since twenty ten boston-based u._c. Funds as invested in more than one hundred and fifty transactions and two billion dollars of equity u._c. Funds has more than sixty five employees and describes itself as a goto provider of sophisticated capital solutions. It has a primary focus on multifamily investments but works with clients to develop financing solutions across all the sectors of commercial real estate. The company's founder and ceo dan paul amir was also the co founder president and ceo of potomac realty capital and originated three billion dollars of various commercial real estate assets. He's been in the real estate and financing business for more than twenty five years cultivating strong relationships with both leading senior lenders and real estate entrepreneurs dan. Thanks for taking the time to talk to us about u._c. Funds quarter steve so tell us where you're at you. <hes> you've got a hundred and fifty transactions in two billion dollars of equity under you built in the last nine years. <hes> what do you see going on in the funding market and what are some of the trends are keeping an eye on what we've had a really great nine years and <hes> very successful platform where <hes> really on the verge of tripling in size it raising more capital title that <hes> you know very ample capital now but raising more and we've got a phenomenal team of professionals that have been with me for are you on average about thirteen years so we've got <hes> yes <hes> twenty year veterans and <hes> ten year and then in between so <hes> tremendous experience and we're looking forward to growing and <hes> you know it's a competitive market but where we're very experienced and <hes> <hes> we think we're one of the more is not the most sophisticated financial allies in the industry. So what is it that you do differently from some of your competitors you. You've been in the business yourself for twenty five years plus you know i think there's a lot of different touch points to answer that question. <hes> you know the first one is. I think we're a reliable lender. You know we we do a lot of work up front and we're quick on your sizing up a deal on getting a term sheet together and <hes> relationships matter and you know we <hes> collectively. We're very cohesive team. I love what i do. I want to be doing this forever and <hes> you know i signed. I literally signed every single term sheet. So that goes <hes> goes to reliability liability and you know that's <hes> that's a key point when we are measured against competition where it's typically <hes> you know a junior or middle <hes> level sales guy that finds a term sheet and then they try to figure out how to get the deal done you know i'm the voice of the the credit committee committee and <hes> we do a lot of work front and and signing that term sheet makes a big difference <hes> we also have all the key disciplines of the lender under under one roof and that's different too and that includes our servicing company so when we talk to <hes> sponsor bar customer and we tell them yeah you know there's there's one phone call that goes into your central headquarters in boston and all your answers. You know come from you. You know there's the decision makers including you know the the processing of getting money in their contractors scans which is a draw draw process that really resonates with our group of bars which are typically <hes> the best most entrepreneurial ours any industry so what are the most popular kinds of financing proposals. You're seeing these days. What are people buying. What did they see as the hot spots for investment and how are you approaching helping them. Make those investments well. We are a one stop shop for commercial real estate capital solutions solutions and you know in in english that means <hes> we we land on all the different <hes> real estate types which are comprised of the multifamily sector in retail retail and <hes> and land and industrial so <hes> and we also provide you know short term transitional white bridge loans which are first borders lows. We'll june mezzanine financing preferred equity equity roundup destruction loans and <hes> through our trading desk. We also provide long-term permanent loan solution so we are truly a one stop shop for commercial real estate capital solutions and now it depends it depends what deal comes in you know we <hes> we can provide a creative alternatives of financing <hes> source for the for our bars. Are there any particular sectors that you like compared to others <hes>. Are you focusing on retail retail. Are you more interested industrial. Which ones do you like well. We're <hes> we're known as a relationship lender so <hes> whatever whatever whatever the customer needs you know we will put together your creative capital solution for it but <hes> our goto product type you know for the last <hes> are twenty years in the space has been the multifamily sector whether it's ground up or you know transitional white <hes> whether it's <hes> adaptive adaptive reuse and urban downtowns throughout the country where the lineal live work and play multifamily is <hes> most most desired asset class for us and therefore the most aggressive in that in that space but we finance pretty much anything. Are you seeing more of a an interest in the mixed use the retail and <hes> multifamily space together in those live work play kind of arrangements well yeah. That's <hes> that would be mixed concept. That's <hes> you know we understand so multifamily upstairs retail on on the basement. <hes> possibly some some office within that were <hes> your flex plays with office and you know some loading docks this that <hes> yes so we see a lot of next to use your assets in in our pipeline. Everybody also seems to be pretty excited about the opportunity zone program. Are you doing any work in that sector. We were certainly open to. We're <hes> your way. We've seen deals and opportunities zones <hes> if if a deal if a deal makes sense we'll we'll do it but we we have not yet done anything an opportunity zone but that's that's certainly <hes> helping the world world with <hes> with supply. Ill as you look out over the economic environment for the next say twelve to eighteen months. What what are the things that you keep your eye on as indicators of which way the economy is turning or the markets are turning yes so we are. We're a mish lender. <hes> you know we keep keep look on the macro aspects of the market and in your interest rate <hes> changes you know we <hes> we had <hes> some upward movement in interest rates and then some easing in a fairly recently <hes> but <hes> we we're. We think that you know supply-and-demand are fairly balanced. <hes> multifamily sector sector has <hes> a little little more supply than <hes> than we've seen in the past but all in all we think that the macro pro-market is pretty healthy and that <hes> you know we're we're still aggressively. He's putting money out out in <hes> eager to grow and there's ample opportunity in the economy's expanding job we are experiencing job growth and <hes> wage wage growth. You know it's very healthy sometime in the economy. You know that being said you know what <hes> what's what's news is usually what old and history repeats itself and we're. We're would probably going on the thirty ninth fortieth. <hes> you know week of expansion has been a long expansion. You're in our in our economy for since <hes> since we've we've been tracking it so you gotta be wary that <hes> you know where your father along in the cycle and you've got to be careful with the <hes> the deals that you do leverage levels and it will all the same things that <hes> your credit wise is organization should be looking at or their tax policy or legislative issues that you would like to see addressed that that haven't been yet or or do you think things are are moving in the correct direction when it comes to the regulatory environment well dodd-frank bill. Oh has been you know being being worked on right now. So that's a that's opening up. <hes> were you know lessening regulation and that's that's good for the overall industry you know i think that <hes> as a niche lender is some regulation and on the banks which is not a bad thing for us personally <hes> an organization for private private lender like she does <hes> but you know we're we're. We're capitalist. The less regulation and you know i think under the current administration you know the <hes> that's being worked on and i think that's all you know good you know good for our business and and the economy at large we talked about the different sectors of real estate. Are there any particular geographic via graphic regions that you prefer over another or you pretty much agnostic about that as well well. We're a national platform steve and <hes> we'll anna relationship lender so we've had <hes> sponsors that we've done deals with in new york and then they go to florida than houston taxes taxes and then oakland real story so we're <hes> we're active coast to coast <hes> in twenty six days but our folks we do have a focus and that's <hes> that's multifamily <hes> relied. We really liked taxes. Yeah we like <hes> florida particularly south florida. We've done on probably thirty thirty five separate transactions in georgia and we're doing a ground up construction and <hes> right at right outside of atlanta. Georgia were very active in the carolinas. We like north south carolina and <hes> then you know other niche parking like kansas city missouri. We <hes> we we saw <hes> you know. Five six years ago that <hes> there was a lot of <hes> investment in infrastructure picture and jobs and <hes> you know google fiber's was there one of the <hes> one of the first <hes> marks that <hes> that google went to oh and you know we did our first deal adaptive reuse deal. We changed <hes> you know an office building into aaa class multifamily family and over the last five and a half years we've probably done you know twenty five separate deals in kansas city missouri so we get in into a market <hes> <hes> do deals that <hes> others you know can't do or don't know how to do we don't want to do and then <hes> we produce tremendous goodwill in that market we do multiple deals in market so is one of the one of those markets that <hes> the approves out that there is there. Is there anything specific about these markets that make you like them more more than others as it is. It just brought economic growth in those markets. What's driving the interest both <hes> economic growth <hes>. It's yeah it's job growth. It's usually technology. Transportation is a big thing so you know in kansas city they put ari'el line which connected the suburbs to <hes> the urban core brought a lot of <hes> lot of population to urban urban side of things <hes> also you know they're they're a nisha plays in different markets where different lenders don't want to be there and it takes you know a supply of capital out of the market and we'll go in and strategically lend on something that <hes> you know makes economic non-acceptance for us so we <hes> you know it's a multitude things and and really on a case by case basis is how we look at our investment and dan paul mirror is the founder and c._e._o. Of u._c. funds in boston dan we appreciate your taking the time to join us on the c. r. e. news hour. Why border thank you steve. <music> <music> <music> <music> <music> <music> is rent control right for chicago illinois governor. Jay pritzker campaigned on repealing the statewide ban on it and end chicago's new mayor may be a supporter but she hasn't made a commitment lori lightfoot acknowledged rising rents are a challenge facing chicagoans rent controls a national issue as well at the end of february oregon became the first state in the country to enact statewide rent control capping annual increases increases at seven percent plus inflation for nonexempt units in a new report from marcus miller chap more than thirty years of research on cities cities like new york los angeles and san francisco seems to demonstrate that rent controls not the answer to the affordable housing crisis playing out in cities across the u._s. u._s. According to the report rent control has led to reduce availability of rental housing as buildings are converted to condominiums or other uses that are not subject object to rent control regulations steep rental increases in uncontrolled units impeded development that further constrains the housing supply and limited options for households most in need such as young families. The report says affordable housing is really a supply and demand problem and there are solutions needed to address how that can be fixed. John's seabreeze the national director of multifamily at marcus and mila chap john. Thanks for joining us today to talk about <hes> rent and control in chicago which seems to have become an issue. Thank you very much for having me appreciate it. What are the issues. You're obviously concerned a number. The people are concerned about the possibility that regulation and rent control might become a thing in chicago. What is the concerned that people have about it and what are some of the alternatives that people think might work better <hes> very good question yeah legitimate question and this is not just chicago issue. This is a this is this is a topic discussion. That's taking place and a lot of major cities around the country and we definitely have a problem but there is definitely an issue for workforce housing for middle income housing so <hes> <hes> the question is what do we do to solve it. How do we how do we right the ship so to speak and our feeling is that yes there is an issue issue. This is something where we need to address but rent control is is not the right solution and looking at it from a little bit of a macro perspective. What has happened is dad. During this economic cycle job growth has been really primary economic driver and following job growth north has been household growth so just the number of households and the number of households being created every year for the last several arrears has outpaced the number of new dwelling units being being built and delivered the marketplace new new dwelling units being <hes> <hes> multifamily rentals as well as single family homes so what we find ourselves in the situation where <hes> workforce housing using or that that kind of middle income middle income family that is living in an apartment the demand for that. Let's call it b. and c. Great apartments the demand has has continued to increase and the supply is somewhat stagnant bagged because it's it's almost impossible to build a brand new classy. <hes> you know you build say as as it ages it goes through the cycle so so what is what we are faced with is an issue that <hes> just through through economics through supply and demand the demand demand has far outpaced. The supply in that workforce housing mode did the problem with implementing rent control is there's a there's. There's a couple of different things that happened. First of all the cities that have rent control and have had rent control <hes> in the united states are really the cities that end up with the highest rents inch as well so there's there's a little bit of a disconnect there what most economists feel is that reconfigure will will help a select number of people but in the long run what what the net result is is that the amount of new construction <hes> is is going to suffer and then new construction is is that supply that's going to be able to satisfy the demand and <hes> in as as a result it ends up with that lack of supply coming to market you end up perpetuating or even making the issue that you're trying to solve you. You're actually making that issue worse so our approach is is you know yes. We have a problem. There's some education that needs to take place with citizens. Since throughout the state of illinois is as well as i think a lot of the the the politicians <hes> and it's something that we need to come up with a solution but but rent-controlled from everything that we've seen does not appear to be the right way to go so in a lot of the cities in the urban core environments. We're seeing a renewed interest. In developing the live work play model the the millennials want to move into a nicer urban setting and they want nice <hes> upscale l. apartments and things like that and how does the <hes> gentrification of the poor neighborhoods <hes> how so how do you prevent that from pushing people out because of the rising price of the rentals. It's an excellent question and it's a it is a <hes>. I don't know that anybody's come up with a solution. <hes> you know the the t- to some extent people feel that gentrification of a neighborhood is is. It's a bad thing that it it. It's it's bad to see that happening. You know i i don't know what what is worse worse for that to happen or for for no new investment come come into the market right so <hes> that ends up being a little bit of the struggle but the so what happens is investors and not i even you know the millennials that are looking for the live work play you can just be it can be it can be a husband wife with two kids that are both working and trying to raise as the kids get the soccer practice and you know and be home for dinner kind of thing <hes>. It's just workforce housing. Is that middle income housing but there you're you're absolutely absolutely right in this economic cycle. The amount of there's there's been an enormous resurgence in the urban core <hes> so a lot out of jobs have been developed in the urban core. A lot of suburban employers have moved their their <hes> offices or a portion of their employee base back to that urban core and as a result a lot of people are living back in the urban core so as that has happened in court then the a a subsequent rings going out from that urban core have continued to improve and see new investment and a lot of times. It's it's a <hes> <hes> you know in chicago. It's the <hes> investor in he owns properties. Maybe owns in edgewater ravens win and a few years ago he decided to buy property near logan square and and <hes> you know at a at twenty or thirty unit apartment building and and he looked at it and thought you you know what i can i can i can put money into this and i can improve it and and great a better place to live well that works works out well for the investor and <hes> because they're the works out well for the neighborhood because they're they're improving the neighborhood good but you're right. Gentrification is going through that process and improving the property but then the questions where those tenants go because now you raise the rent and and and not all of those tents are going to be able to stay in that property because if you <hes> if you buy that property in and spend you know if you spend fifteen thousand dollars a unit in improvements and put a new kitchens and baths there needs to be at increased rent in order to pay for that so oh that's a very difficult situation and that's something that we have to figure out a way through it but the problem is that if we just go to you know that investor so that that man or woman who like i said they were they were only properties in you know maybe ravens would and and and they'd be sensitive to go into logan logan square and they bought the building and they started doing improvements in and if if now the government comes in and says well we will we will tell tell you how much you can charge for rent and we will tell you how much you can increase your rent every year. If that's the case then historically historically rent control leaves very little extra for maintaining and improving in capital improvements to the property and that ends up being a they struggle as well one of the things that's been proposed in new jersey and i don't know if you know ralph zuckerberg from somerset development he's been an advocate of this is <hes> <hes> tradeoff for increased density in developments in return for setting aside some percentage of the units as the affordable housing rather than market rate housing. Does that make any sense in the chicago market absolutely so one of the things that i'm not. I'm not going to be able to speak on this exactly. Actually in chicago is up as national director over our multifamily platform. I i knew a little bit about a lot of different cities but i don't always know all the details but <hes> one of the things that that has happened and this is really over the past say twenty years is municipalities and <hes> in cities not only chicago but others have have looked at at multifamily and said in in rentals that said well. We're we're not sure if we really want apartments built under neighborhoods. What we're gonna do is we're going to <hes>. We're going to limit the amount of density that can go. Oh on a on a per acre or you know per square foot calculation <hes> we are going to increase the building setback. We are going to restrict the size of the floor plates and we are going to <hes> mandate. What kind of construction materials can be used not construction materials from a structural joie standpoint the construction materials from the standpoint and and in that will make sure that anything that is built in our neighborhood is is is very is very nice. There's that was done with with good intent. The problem is they've now created restrictions whereby the only thing you you can build is a very very high in property right because land costs are so high end and <hes> materials caused by mike quite a bit labor pasta or extremely high so what would that proposition is proposal saying in and that is a it. It's a very good approach is probably one of the best approaches which is relaxed some of these building requirements and allow me to increase my floor plates allow allow me to go higher than x. number of stories that is that is mandated. Let me put as a far greater number of units on this piece of land and then in return. I can set aside. Maybe ten percent of them for <hes>. You know four people earning. Let's say within you know eighty two hundred ten percent of a._m. I which area media an area median income so you determine what that area median income is and then you say okay we will we will set aside you know maybe maybe just just creating a number maybe ten percent of those units for people making in less than a hundred and fifty percents one hundred thirty percent or one hundred percent of a._m. I in that will help out some of that <hes> <hes> <hes> some of that workforce housing pressure now the other side of it is it's easy to look dan go. Hey let's just go. Forty percent of the units have to be that the problem is at that yeah point. You're not generating enough rent to cover the construction low right so that's a that ends up being a little bit of a balanced but i do think that ed allowing developers to increase the number of units. They're putting on a parcel as well as <hes> possibly relaxing some of the other other restrictions that have been put on them in return for certain number of units or <hes> you know may maybe it's a certain number of units his pledges a tax credit over fiber's five or seven or ten year period those into dose of the kind of negotiations that are really gonna need to take place it what it what do you think it is. That's driving this renewed interest in something like rent control in in an era when it seemed like the developers his and the local government officials were sort of finding a meeting of the minds about intelligent planning and what a lot of people call smart growth. What do you think is taking them back to this. <hes> sort of arbitrary approach. It's it's simply supply and demand once again. I mean nobody was talking about rent control role in two thousand seven and two thousand and eight because everybody was running out buying a single family homes and apartment owners were struggling with ten and fifteen percent vacancy rates right so there was no you know back to the supply demand discussion <hes> there was a bit of an imbalance in the supply demand but it's because we had way more supply than demand and during those years owners of apartment buildings just they you know they had to figure it out they had to hang on they had had <hes> they they you know they had to lower the rents to meet the market and they had to try to figure out what it was gonna take to <hes> to keep from losing their buildings back to the bank and a lot of them lost that battle a lot of a lot of foreclosures during that time because the the the dynamics the supply and demand curve ended up a little bit out of whack well now the pendulum has swung all the way back to the other direction and <hes> <hes> the the demand as far outstrips the supply and during this economic cycle the existence or the creation in of single family starter homes which in in past cycles as the cycle expanded people would move out of workforce. There's housing and become first time homebuyers and that simply doesn't work in today's economy because of in large part because a lot of the regulations and and <hes> guidelines that have been put in place after <hes> after the the last recession <hes> you know he's got a lot of stuff within dodd-frank. Frank makes it very difficult as well and they're so so people are staying in apartments for a longer period of time now. That's i mentioned the regular regulatory side. That's one part of it. The other part of it is is a is a social aspect of it. <hes> people are are less. You know previously previous generations it. Was you know you you you have become a homeowner. You have to become a homeowner as quickly as possible and and then you stay in that home for as long as you can't will. Today's generations move around a lot more and they're much more mobile and they may live in chicago for a couple of years in d._c. For a a couple of years in l._a. For a couple of years and then and and two generations ago that was a that would be an astonishing <hes> a movement from around around the country whereas today it's very commonplace so as a result the thought of selling a hub of buying a home and you know making that long term commitment event is not quite as perot problems so it's it's a societal as well as economic aspect of it but with that being said the net result is people are staying an apartment for much longer period of time and that demand just continues to increase in supply stagnant so getting a sense that the <hes> the powers that be are receptive to the arguments that <hes> rent control might not be a good idea. What what kind of feedback are you getting. <hes> debbie who's president of national multifamily housing counselor which is a a trade organization with <hes> that is a very good voice and leader in the multifamily industry. He you know he made a comment that that if you are in favor of rent control your elevator pitch can be done in one four and if you're against rent control you you know it's a little more of a complex since issue you need one hundred and forty storey building to give your elevator pitch <hes> i i think that at first glance if you walk up and down the street and ask people on the sidewalk <hes> do you believe rents are too high and should we implement control. It's very easy to say well yeah. That sounds like a good idea. The problem is that that if you sit down and explain to them the negative consequences control and what are some things long-term that can really happen to a city and to a community into a neighborhood. Most people look at that and say you know what that's you're you're right. That's not a good idea and <hes>. I believe that there are a lot of politicians who are <hes> you know. Maybe they don't have a real estate background. Maybe this is a little bit new to them and it's very easy to go to them and say you know the rents are too high and they say we outright control sounds like a good idea even at that point even if they're looking at them saying you know i'm not so sure controls the best way to go. That's good but we have to work together to come up with solutions right there. A problem does exist we can't we can't put our head in the sand and say that the problem doesn't exist so my hope is that <hes> is that the those in power in the city of chicago are able to understand that the the there there are other alternatives to solving the problem that will work far better with less negative ramifications then rick control. What are the next milestones in the process. I believe another. I'm gonna get these dates correct <hes> but i believe there are a so as a right now <hes> right now there is a a <hes> there is a law in place that states the state of illinois is not not allowed to have rent control and so what has to happen is first of all that long needs to be repealed and and then the question is where do you go from there. What how do you how do you then go forward with some form of rent control <hes> and ah what people need to understand is controls means something a little bit different in every single city rent control in new york is quite a bit different than rent control in san francisco cisco so <hes> in different than rent control in toronto so understanding <hes> in right now. We don't know control means in in in in chicago where in illinois because right now. We're just talking about it. It's almost like a theoretical discussions really really starts with the the question of let's repeal the law so that we can talk about having rent control. That is correct yeah. Let's repeal the law so we can discuss it a little bit further so there's a there's a few dates that are coming up and my hope is that <hes> my hope is that that we're able to explain to people in chicago the like i said the negative consequences of this and dan enough politicians in springfield <hes> look at it say listen. We you know we need to do something but we don't want to. We don't want to enact wreck. There are better solutions to john c._b. Is the national director of multifamily at marcus and military up john. Thanks very much for taking the time. This has been great absolutely absolutely appreciate it very much. Thanks for having you're listening to this cr newshour. I'm steve lubeck s._r._s. Best real estate partners has opened a new office in detroit and they've assigned three new people michael carter and frank rogers as first vice presidents and joseph simmons and associate. They're part of the national net lease group at s._r._s. and we spoke with michael carter about the state of net lease in the the detroit area michael carter. Thanks for joining us on the program today. Thank you for having me so you are now <hes> situated in detroit and you're focusing on net at least what are some of the unique characteristics and benefits of <hes> net lease properties in the detroit area yeah so we <hes> we were brought on by the u._s. Team at the end of two thousand eighteen and <hes> we're eager and excited to get rolling and <hes> you know we were brought on by matt moussavi pat luther from the newport beach team <hes> an effort to begin to grow and help grow. They're mid a midwest presence and <hes> franken. I specialize in net leased investment sales majority single and multi tenant retail retail and <hes> both of us have been in the industry for six or seven years and were previously with a boutique firm here in detroit <hes> <hes> so we've kinda built our careers around i got let loose industry here and throughout the midwest and even coast to coast but again an effort <hes> it mainly to begin do lawson to the s._r._s. Presence here in the midwest michigan is probably off the radar of with a lotta people other than those who are situated in the midwest. What are some of the things that you're seeing in the net leased market so we you know we see a lot. We're seeing a lot of new developments <hes> and in some of the treasury market surrounding some of the bigger cities here in the midwest and we've seen a lot of the capital from wetherby in california and or the east coast <hes> were kept rates tend to be more compressed than here in the midwest <hes> so we're seeing a lot of money that's being being drawn to these markets and that's where some of the developers that we work with <hes> we've seen a lot of success being able to represent them in drawing that capital into the mid west <hes> go out of exchange buyers and that's where the that's the rest platform <hes> in kind of how we're building that is <hes> being able to represent that with the database that's been built over years <hes> especially with the california platform some of the things we're seeing in the east coast markets at least <hes> it seems to be a shift <hes> of investor appetite away from the traditional banks and convenience stores. There's two medical office. Are you. Seeing something similar in the mid west or is it <hes>. Is it different pretty accurate. <hes> you know over the past couple four years. We've definitely <hes> had a lot of success with <hes> particularly. Some of the dialysis units urgent cares dials is being davita. Ada percents <hes> again some of the urgent care in e. R. practices where you know a lot of a lot of investors still fairly quote unquote amazon don proof <hes> and it's kind of become a good vehicle for them to get away from some of those traditional single tenant at least another trend. We're seeing in the east is is <hes> families that perhaps have owned <hes> more management intensive properties like apartment buildings or garden apartment complexes <hes> as we get to the second third or fourth generation of that family they're deciding to rotate out and get into something that doesn't require as much hands on the management by them are using those kinds of investors coming into the market yeah absolutely <hes> i would say that so a lot of the for example we'll just the multifamily <hes> passed on and those investments trading at. Can you know we're still seeing that with. You know there was earlier this her at the end of last year there was kind of an concern of where interest rates were going and you know the ten year treasury got up to the over three percent mark for the first first time and you know a long time and <hes> there was a lot of uncertainty there and then you know recently over the past couple of months you know we've seen a dip down to the two and a half percent mark and it's kind of been hovering there and then now with recent news saying that it's probably going to stick around here and we shouldn't expect any other fed interest rate hikes hikes <hes> you know they'll still be trading those multifamily deals at all-time will cap rates and when they're looking to exchange into something that isn't management intensive and they can pass it on to their heirs. <hes> you know that's our again. Our our midwest market had become a solid vehicle for them to look into up and i got kinda. Put it in a trust. <hes> you know so they're areas. Don't have to worry about dealing with <hes> that management concept the type of asset. Are there any particular characteristics. You're encouraging people to look for in a net lease properties in the mid west. <hes> yes we are. I would say you know there was a handful years. <hes> you know when when cameras were compressed to the all time all time lows where a lot of people were just looking the tenant and the lease and just buying the deal they weren't really looking at the underlying real estate and what that intrinsic value is going to transpire to and then you know in a handful years they looked to the bench. Get out of it and you know they're either potentially at a loss or you know. They're they're deal is is hard to sell and so you know we're we're. We're trying to advise our clients really on the front end to take an extra. Look at where the where the property is and should something happen to the tenant in the future you know what can you do with that piece of real estate. Who can you potentially put in there and dan you know there's never the magic eight ball but <hes> you know being cognizant of that on the front end bearing art any concerns as you look out over the economy over the next say twelve to eighteen months again with with where race brad than the uncertainty there <hes> you know we've kind of seen some news i was just globally that i think is potentially helped our industry and it's kind of <hes>. I think it's made the fed kind of second guessed the raid in <hes> the rate hikes that they were had planned to and now that they've essentially rescinded and again. I think that that's been a really really solid point for our entire industry. <hes> you know going forward especially for the rest of two thousand nineteen. <hes> you know again to keep those rates where they're at and keep buyers <hes> appetites hungry michael carter. Thanks for taking the time to talk to us. Today shaded very much thank you michael is a first vice president in the detroit office of s._r._s. Real estate partners. I will be back in a minute sean. This is rabbi richard address join us for our podcast series from jewish sacred aging entitled seekers <music> of meeting will explore some issues and events that impact ourselves our families in our jewish world at large in light of the current revolution in eiji. The secrets of meaning podcast hud guest airs every friday morning at eight a._m. At jewish sacred aging dot com <music> today. You can't wait for the media to cover your company. You have to be the media. Take advantage of the power of audio and video. It's the best way to showcase your expertise to prospective customers. Let the lou beckon. Media companies handle the technical side. We're award winning audio and video producers producers. We can help you produce podcasts and video programs remotely or in our fully equipped studio in cherry hill visit being the media dot com for for more information street. Sense is a bethesda maryland firm that says it creates brands is people love and places people love to be powered by in-depth insight zand an interdisciplinary approach. The teams at st sense are experts at creating creating transforming and driving consumer demand to brands and places in an unusual twist. The agency has a joint venture with c. B. r. e. group the world's largest commercial real estate services and investment firm julie chase a twenty five year veteran of media relations and corporate reputation management and has just joined street sense as its managing director for public relations julie. Thanks for joining us on the podcast today. Thank you for having me so oh. You've joined street sense. <hes> you're managing director public relations for them. How did that come about. And where did you come to them. From well street sense lance has been a growing entity growing in many different directions over <hes> you know more than the last decade and some of my colleagues in the creative world have come over here specifically krista lewke with the lewke plus they acquired her for about two years ago and prior to that i had chase communications and during that time chris and i would cross paths very frequently <hes> because we both have an expertise in representing commercial official real estate and some residential real estate that would be kind of more or less through mixed use projects <hes> and we would try to share <hes> some of our creative services for those clients because i had such a super strengthen the p._r. World and she had the super strength in the advertising world <hes> so we would work on some projects together together and then once she did go ahead and merged into street sense <hes> she knew that i was making some changes as well <hes> because 'cause i had sold my firm to another firm and then when i came back out of that she knew <hes> i again having sold chase communications then i started to chase p._r. She said you know mr the first time so. Let's get together this time. Come on over to street sense and start having conversations the keeps things. I'm always always a little bit tentative a little uncertain when you're selling organizations and moving in and out of them how does that work and how has that sort of been <hes> i as a feature of your career so for well i mean i think we all know the the best kind of <hes> success you can have is by having very good solid relationships with your clients and as i say very frequently when i'm either talking to a prospective new client or just sort of reminiscent with an existing resisting either my friends become my client or my client become friends so these relationships are very tight and i have clients now that i've had for up to twenty two a years now if you talked to developers sometimes they don't have a sense of the importance of having a community presence or or or some kind of a public image. What do you tell them to educate them. About the importance of public relations in the commercial real estate space. I think the actually more of them do know that now than not <hes> because they've seen colleagues of there's really get smeared if they try to bulldoze themselves so <hes> no pun intended into a new community without having the having done the research and analysis and knowing the sentiment of the community and you can do that quite easily through sheriffs and other community <hes> gatherings <hes> i know many of my clients now go through you know dozens dozens and dozens of community meetings to literally go anywhere from one on one conversations to small setting the large settings to engage that that community and sort of bring them into the komo because the last thing you wanna do is have a community who doesn't know what you're doing and it's that kind of fear of the unknown. That's that's worse. I the nimby really <hes> and you know other major projects. I've known of sometimes even five hundred different community meetings to get there and it's not only assures the community but it actually very good education for the developer who may not have known you know all the nuances of what could be developed so that brings to mind the recent experience at <hes> amazon had with <hes> the abortive effort to locate one of its h q two facilities in queens new york where how do you explain their lack of connection to that community and their inability to to ah explained to the residents of the the value the importance of of what they were trying to do. I think they really dropped the ball there. <hes> i think that that there was an opportunity and i think the politics at play there was focusing too much on some of the the <hes> existing residents in the community who thought it was going to be resulting in terrible traffic. <hes> you know this is the terrible rebel word. We never used gentrification <hes> that it was going to choke off the history of the area and that there was gonna be no good outcome or promise and i think that that's very wrong so i know here. I'm in the washington d._c. Area and when <hes> crystal city now referred to as national landing was selected elected as the site <hes>. I think that was something where yes some people who are local. Were a bit fearful of it. But what we're doing is is accessing the number of great universities that are in the area. We have a lot of technology in place. You know this is whereas a._l._l. Got started many many years ago and now we have school systems that are expanding so that we can actually educate more youths to go into these fields fields and i think some of the other concern over overbuilding and density is false because most of the project is really renovating existing structures sure to a higher and better use and on top of that when people worry about traffic congestion <hes> my thinking is so much of the world is going to you other modes of transportation whether it's your uber maybe a taxi scooter <hes> having a lot of opportunities to have residences nearby to the offices so also walkability and then of course public transportation so now street sense has this joint ain't venture with c._b._r._e. One of the large commercial real estate firms. How did that come about if you're familiar with it. I know you're you're new to the firm but <hes> what what is that relationship going to lead to and how does it work well. I mean you're right. I'm still learning a lot <hes> as i've been over here for. Are you know all of a month now but i think the in the beginning street sense started with a retail brokerage and <hes> as they've they've grown they've. They got further away from that so c._b._r._e. Recognize it. That was there so in our relationship a c._d. I._r._a. has acquired fifty percent of us. The retail brokerage has gone directly over c._b._r._e. Which is directly in their wheelhouse and then we focused more on everything all of the <hes> tools and skills that we have to support a c._b._r._e. Clients so of course we bring in clients you know from anywhere but c._b._r._e. Also has a pipe on a client that they can just would surely refer over to us knowing very well what our skill sets are <hes> so an intern we can also so refer some of our clients back over to the r. e. based on their needs but you know now we have everything from interior architecture to place making branding advertising -tising public relations research analysis. We can provide almost anything as an adjunct to what c._b._r._e. Would like to do to support report their clients and offer that services you're working with clients <hes> in addition to real estate in retail healthcare and consumer goods <hes> what is it that you're telling selling those clients about the importance of public relations and how to choose a public relations counselor or agency effectively well well. I guess in very top line. I often say to my clients. You know if you want to engage with me. Fifty percent of what i'm doing is getting you into the media and fifty percent of in what you're doing with me is keeping out of the media so again it goes back. It goes back to finally calibrating what your messages and who you wanna reach. <hes> you know obviously i do some crisis work as well and that has to be very careful. We want to stop a lot of the bad information particularly incorrect information we want to tone it down and we wanna protect all those people who are in the midst of some sort of issue until we can suss out you know what what all the facts are <hes> so you know more than anything i think that there is a a strong need for a thoughtful and strategic <hes> outreach to the media and to the communities sometimes it's community relations that's more on an internal <hes> mode communicating and then there's the external but the overall <hes> strategy is to make sure that you are telling people people exactly what you're doing making sure it's accurate and just <hes> you know as we be overused word these days but you know you can't get away from it. Just being transparent sounds parent so you're a pillar of the community is a there's a widespread perception that public relations is about spinning and about hiding things from the public well. I think there's good guys and bad guys in any industry and certainly there are people who <hes> bend the truth or as we know oh and all the headlines they read sometimes the truth. Just is not being stated. It's just <hes> absolutely <hes> irrationally place <hes> but i would say that you know if there is a good reason to share your story <hes> there in the real estate estate world more than anything what you're trying to do. Is you know bring in tenants bringing residents bringing retailers help people understand where to go. What's new. What's what's happening and <hes> there's not a lot of spin really in my world <hes> but i do think that in other aspects of <hes> media outreach there can be and that's where you know the the the audience just has to make your own decision. Julie chases the managing director of public relations for street street sense and experience focused strategy and design collective to join us from their office in bethesda maryland julie. Thanks for being with us. Thank you and that'll wrap things up for this edition of the c. r. e. news hour you can send your comments suggestions story ideas to steve at st broadcast news dot com where you can leave an audio comment for us using the voicemail icon on the homepage at st broadcast news dot com. Tom and we tape this program. In studio. A at st broadcast news in cherry hill new jersey join us again for the next episode of the c. r. e. news our next friday eh eight a._m. Eastern time at st broadcast news dot com or wherever you get your podcasts. This is steve beckon. We'll see you out there on the net. Take a good kid.