CRE News Hour 8/9/2019
From the business desk at st broadcast news this is the c. arena news hour. I'm steve lou beckon. It's friday august ninth twenty nineteen in our program. Today we'll take a deep dive into the co working space with two features. We'll hear from tom. Smith co founder of trust a chicago based marketplace for commercial real estate listings including co working locations. We'll chat with danza. Kyw co-founder of israeli based co working company mind space. We'll hear about how developers of a live work play property in green bay are using virtual reality in the design process and we'll speak with author doug marshall was new book is called mastering the art of commercial real estate investing. 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 oh 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 analysts. Take a look at some of the stories that are making news across the sierra markets worldwide thor equities global leader in urban real estate development element leasing and management has launched thor sciences a division specializing in the life sciences sector. The announcement comes on the heels of thors. One hundred fifty two million dollar acquisition of the center of excellence a seven hundred eighty four thousand square foot campus spanning forty eight acres in bridgewater new jersey consisting sting of laboratory research and development and office buildings. The complex features life science companies specializing in pharmaceuticals and health services including anchor tenants. It's nestle health science ashland and m neil pharmaceuticals real term logistics closed on the acquisition of a three hundred eleven thousand square foot high flow through facility in harrisburg pennsylvania. The property was billeted twenty fourteen with extremely rare thirty seven foot clear height. It's located aided in the highly desirable central pennsylvania market with immediate access to i seventy six. I eighty three and i eighty one. The facilities fully leased gore properties. A denver based privately held real estate company added another asset to its growing portfolio companies acquired one hundred fifty five thousand square foot retail hill in service center called orchard plaza. It's located in the heart of the denver tech center at the northwest corner of east orchard road and south yosemite street j. l. arranged forty two and a half million dollars in financing for rivet a mixed use multi housing and retail property in the heart of new jersey city universities university place. He's in jersey city new jersey. The second phase of title town is getting underway. It's a mixed use real estate development in ashwin on wisconsin -sconsin. Just west of green bay's iconic lambeau field developers and designers are using virtual reality technology to build visual renderings of the property that users can walk through with v._r. Headsets and even on smartphones we spoke with craig pride shareholder with k. t. g. y. Architecture and planning and danny glimcher from glimcher capital group about the project danny glimcher you were the <hes> folks who are developing titletown talk a little bit about <hes> what the development is. What's the project will about so we're doing the residential portion of title town <hes> but total time as a whole was was kinda meant to be a an economic development project for for the region on the whole not just the local region <hes> on the packers. There's were looking to give back to the community to some extent and so what they've done is they've put the amenities in place to make it an attractive place to work liberty class flash so as a brain now. There's a regional sports medicine center there. I'm done by balanced house. <hes> lodge colours there which is four diamond hotel that she beautiful hotel. If you haven't stayed with great spy great amenities hotels well you got hinterland brewery and restaurant which the food is manhattan level food at the place <hes> and there's a ton of public amenities as well. They've got you know a a to mean hill where you can actually get some pretty big speed on a sliding down the hill. They've got an ice skating trail. They've got a lot of games and community amenities program classes and things of that nature so it's really kind of transformed the region <hes> they just announced a not too long ago a partnership with titletown titletown tech which is a partnership with microsoft to do a tech incubator there and there's a lot more coming so now we're doing about the hansard multifamily heads and a tonight. He called for sale units there. This is <hes> somewhat off the beaten track track for developments of this kind and it's obviously in a suburb of <hes> green bay in wisconsin but <hes> how do you <hes> how do we sell that to people who may not be looking at wisconsin as as a primary place where they might wanna live well i mean. I don't think it's that you know all the green bay's smaller smaller market for the n._f._l. The concept of sports jason risk-development is really become more commonplace and so i think there's a couple a couple of reasons for that but the primary reason that that sorta sports adjacent development can combat was because people recognize that pure public funding for stadiums and things of that nature wasn't for the public benefit so you were just basically transferring dollars from one portion of the economy to another but there was no creation of anything new whereas sports jason developments happen antef districts which are taxing financing districts and so the delta between the attack that was being collected prior to women in post development you know can be bonded and sold and part of that money can go to develop the real estate where where you're creating jobs and creating industry and and making it more sustainable so as far as why you wanna live there now <hes> your you know the amenities as entitled town for one has transformed what was available for your also kind of at the gateway to door county which is i don't know if you're familiar with reading but it's it's a beautiful foil <hes> part of the country door county in people from all over the country common homes their you know primarily a lot of chicago <hes> in that region will have <unk> homes there by your forty minutes waves in door county you literally right across the street from them but feel there's a lot more industry. They're now and and now you've got a walkable active area where you have a lot to do all within walking distance of where you're gonna live which is something that wasn't really offer before in that market market. I want to turn to craig for a minute and talk a little bit about the technology that was used in the design process. When did you decide that you were going to to use virtual reality tools to design this project. We decided to implement it into our process. As a convenes of getting greater understanding from ownership in the level of detail or how our design was is <hes> to be viewed or portrayed in the decision making process we we were getting further along in the project and beginning to look at details els and so forth and we felt it was necessary to just kind of increase the level of sophistication to the review process <hes> so that's that's why we decided the to implement v._r. And what does that exactly entail when you're designing a development like this would how do you start using v._r. D- you start with sketches that get inputted or how does it work well. In our design process we use three d. modeling to to generate computer images edges of the design and that is a good to a point. It's not often times that we can take the the model to the client or they look at it on the monitor screen and they get the look and feel <hes> it seems to have kind of the next level of sophistication gatien <hes> when you're either looking at it through a v._r. Headset <hes> or or at least just <hes> using the v._r. Apps that they now have for your cell phones so so it becomes incredibly <hes> transportable for the client and they can bring it back up after the meeting is completed on on their cell phone and studied further or show other colleagues and get more feedback and more beneficial feedback to the architect ultimately now <hes> i in past years i know that the the amount of data involved in generating virtual reality meant you needed extremely powerful computer systems and <hes> powerful viewers and sort of almost <hes> an office environment rather than a portable one but you're talking about people actually using their cell phones to look at these renderings. How has it changed with the advances in virtual reality technology. I think it's changed in the advancement in the software especially going to an ipad ipad or a or a cell phone technology system allows you to take it anywhere you go. Whereas the more sophisticated complex kind of full virtual reality <hes> still takes a setup and still take some more robust hardware where <hes> that's where you're you're putting a virtual reality headset and you're in and you're walking through the environment in real time on. It's a little different technology than the one we used for title town. Which was <hes> kind of. I don't want to call it b. r. light but it was the cell phone technology that in the meeting or after the meeting it allowed the <hes> the ownership a a way to look at how their model fits in the environment without having justice evaluate static news any wonder if you could tell us what your reaction was was your perception when k._t. G. y. came to you in indicated. They were going to do this virtual reality approach to designing the project seen it more and more <hes> it's important from developer's perspective because you get a chance to understand you know how everything fits together both from <unk> exterior perspective you know how the different buildings spatially relate to each other but also within the buildings themselves you know you can look at color palettes and materials israel's <unk> fishers finishes all his business but until you loaded it onto the model you can literally walk around a unit. You don't really really have a sense of how it all sides together at least in the past you didn't you. Could you know someone's laptop imagination with virtual reality. You can being apartment before your apartments built. Does this <hes> streamline the process in any way or does it make it more complex because of all the data that has to be loaded to create the virtual environment. I think a lot of that so you know. I don't think it slows it because a lot of the data you're using his data. That would have been available anyways just how that data's processed <hes> so. I don't think it slows does it it. Certainly it speeded in that. You know you can make decisions much more readily you know in that. You'll see something and you say okay that works. That doesn't work where before you didn't have that opportunity. It's also become a great sales tool because people who bought the early units and condo and things like that in the past they had eh kind of leave it to their imagination to to see what it would be that davin idea you can sit there. You can put a rendering bore together but you weren't able to walk through your your particular unit. I want to change that. I wanna change says now you have that opportunity and you can see what it looks like what you're buys craig. What were the challenges launches you faced with. This particular. Project was at <hes> more difficult than others you've done v._r. Or was it a pretty typical approach. Don't know that there were there were no challenges challenges with the v._r. <hes> think the challenge in this particular project is just working through the level of sophistication indication and design and <hes> how the project design was put together with regarding the context that it was being put in <hes> so the the titletown project is a very unique project in that <hes> we're we're building out <hes> portions of the project that have already been completed completed so there is a a center <hes> green space and public space. That's already been completed in our project six sits to the side of that and and so we were trying to use virtual technology to kind of tie those two pieces together to give them a better understanding of how our project would integrate integrate into the existing development notice the virtual reality rendering of this space <hes> just provide did the <hes> the walk around views of it or does it include <hes> the other details that are behind the scenes that would be incorporated in blueprints in traditional architecture church. No it really focuses on the imagery and not the details of the actual construction wall construction. I think the entire project checked. Titletown development is a is a very unique project <hes> from the standpoint that it's being developed by the green bay packers as the football organization but it it is really an entertainment community and we're very excited to be able to provide high end luxury housing as as a component of that <hes> entertainment zone. That's associated with green bay packers craig. Pride is a shareholder with k. t. g. y. Architecture protection planning in chicago and danny glimcher is the founder of glimpsed her capital group in westport connecticut one of the developers of title town near green bay wisconsin awesome. Thanks both of you for joining us to talk about titletown appreciate it. Thank you much pleasure. Thanks for having me. You're you're listening to the c. R. e. news hour from st broadcast news. Dot com small businesses looking for office. Space often turn to co working working companies like we work in seventeen seventy six but now there's another option. Thanks to a chicago based company called trust to your u._s._s. Tom tom smith is the co founder of trusts and trust has just moved into the philadelphia market with a platform that provides information about four hundred it available office space is under ten thousand square feet and twenty co working locations in downtown philadelphia. The expansion follows trust getting a new round of fifteen eighteen million dollars in a to funding trust now has more than three hundred million square feet of available office retail and industrial space available on its platform we spoke with tom smith the co founder of trust and he described to us some of the features of the platform. Tom manages business development finance and data analytics as for the company before starting troisi gained more than twenty years of entrepreneurship experience focused on financial growth in technology he co founded various firms including nah trix sullivan wayne partners and exalt which was acquired by verisign. He joined us by phone from his office in chicago. Tom smith thanks for joining us on on the podcast. Thank you for having we appreciate the time and we're interested in how you differentiate yourself from all of the other folks folks who are approaching this co working space issue all over the market particularly the philadelphia market where there seemed to be an awful lot of players how do you how do you make it work. Well we make it work by focusing on the customer of many people forget about which is the tenant the small business owner looking looking for space and and in a very confusing landscape and being able to take all the market options for them and aggregate them in in one place jason one view whether you know we have over <hes> twenty co working providers the <hes> eight hundred pound gorilla. We work being just one of them. Just in the philadelphia market that we all we have platform and as well as you know hundreds of other traditional leases che's for a perspective business be able to see all the co working and all of the traditional workspace options and in one view in in an apples to apples cost comparison and no one else is doing that <hes> and and the price is is is free so it's <hes> it's a really revolutionary solution airy service that people expect almost in the residential side but it's unheard of on the commercial side. So how do you make it work. <hes> we're we're. It's free for people to use. What's the what's the model. The model is to actually taking a traditional <hes> tenant rep <hes> broker model <hes> which is if you were to if you're a larger business. Are you get the attention of the <hes> commercial real estate brokerage community and those folks are paid by landlords or successful lisa's. We've taken that model and then brought it downstream so <hes> basically democratizing -tising that and allowing people have the same level of access <hes> and and we get we get paid by the landlords just <hes> like the big guys do <hes> and then we're able to then pay for the platform costs and create this wonderful experience for tenants <hes> really piggybacking on the existing pay for performance. That's a landlords are used to it. Just never been attainable for small and medium businesses before now. Are you doing all of the traditional traditional things that would be associated with <hes> finding the space and helping people lease the space or is it just more of a directory to get them introduced to the people who are actually actually listing well. I'm glad you brought that up. Because <hes> that is the that is the key differentiator. We're a full transaction platform so we not only only help match them through the discovery process but also provide all of those <hes> higher level advisory services that <hes> large companies are used to from their from their broker so everything from meeting them for a physical tours <hes> they they desire <hes> advising them on <hes> market pricing and negotiation we do actually all negotiation platform and we help educate them on the market mark and then all the way through lease negotiation and <hes> and consummation so they <hes> could stay on one platform and we're unique in that <hes> we have both the listing and search capabilities as well as sign so search the sign one view you with <hes> a local <hes> expert <hes> guiding them so we have local resources in the market that no no neighborhood by neighborhood and block by block so what are some of the kinds of assignments you're getting what are some of the more interesting requests from people looking for space well we it. It varies quite a bit. We've had <hes> extremely large. Companies are looking for small satellite <hes> location so <hes> what cost just a good example there there used to be very <hes> highly service by their <hes> the brokerage community but <hes> you know some people looking looking to be in control of the transaction and it'd be more efficient and so the cost of wanted to <hes> an office <hes> they founded on trust and we've transacted with them so we never were expecting to a large company like that to be <hes> one of our one of our first customers but <hes> appealed to them on on being in in control and being efficient <hes> re we also got a lot of companies <hes> that <hes> you would think could've maybe <hes> outgrown grown co working so we have a couple of companies that were growing from forty to eighty people they thought for sure that they would be moving to traditional channel space and true trust. We were able to find them. <hes> some co working promotions that actually paid for <hes> half of their years their first cheer so lease which is unheard of so. It's you never know which way it goes you see big companies coming into co worker and then of course the traditional and i'm gonna tribulation out but <hes> being able to identify promotions and <hes> do that as an made it really exciting. There's never a dull day and just so i understand the the the space that you are identifying for people is not just co working slice so what unique it's all office space options. We're primarily focused under ten thousand square feet so that is really the the beauty of this is to be able to compare <hes> a we were right next to a traditional lease and then be able to see what those costs per month comparisons would be in in one view and that yep no one else has a hundred percent price transparency. That's that trust requires of our suppliers our suppliers being the landlords. <hes> better are co working providers that are trying to market their spaces. They're not allowed to put spaces on trust without giving us <hes> pricing disclosure so that we can really educating provide a real service to the customer and start transaction off right. So what kind of advice would you give to <hes> companies larger small that are thinking about using trust to look for space. What are some of the things they should be keeping in mind and looking for. I i think they should give us a try. It <hes> it's free it's <hes> and <hes> i think it would really open their eyes whether they had <hes> you know great service with their traditional broker or learn not <hes> that <hes> they're they're really going to be be pleasantly surprised is that they are able to to to view this availability and then move forward when they want and there's nothing like it so my advice is give it look at doesn't <hes> doesn't cost you anything and <hes>. I think we might surprise you now. Your press release says that your expansion into to the philadelphia market involves more than four hundred spaces and twenty co working locations. What does that mean yeah so. There's <hes> so a the spaces we're focused on under ten thousand feet just in the really kinda urban core of philadelphia <hes> we have and that numbers there's increase but we have over four hundred options for people to compare and then within each co working center we say there's twenty twenty locations each that have you could have <hes> hundreds of of options within each one <hes> in terms of the size of spaces one person office twenty person office office kind of person and so that those twenty co working for fighters trim. You know represent. Probably you know <hes> <hes> you know over towel heads of <hes> actual <hes> spaces so you know you have a couple between them and the traditional space is <hes> you know a couple of thousand options just in the urban core of philadelphia and <hes> we're real excited that represents well over eighty percent of what's available in philadelphia <hes> <hes> right out of the gate so you're getting a full market view and we're increasing number every day and you seem to have some plans to move into the phillies suburbs in the near future. Where do you think you'll be going. I in the suburbs too soon to tell it's too soon to tell but that's <hes> i it's well underway and there's some there's a lot of excitement by landlords that <hes> in the suburbs that are looking for new ways to market their spaces and kinda capture <hes> <hes> <hes> the you know the philly market <hes> in a new way so we're we're. We're thinking we're going to be in the suburbs sooner than than we thought so you know probably within a within a month or two anything. I didn't ask you about the <hes> platform tom that <hes> you think is worth mentioning. It makes <hes> looking for office office space excited. I've eat it <hes> <hes> it. It's interesting to see even if you're not looking for space for example what what the <hes> <hes> your options things. Are you know across the street or within your own building and things that you just don't have visibility on <hes>. Even if you're not ready to get in the market i encourage people to the come to trust and we'd be shocked at how much rich information there is and you may decide to make a move one way or the other before you. You thought because you're you're agitated so <hes> we we you don't have to be ready to leash right away to <hes> to come onto trust and <hes> and let us show you what's going on tom. Smith is a co founder of chicago based trust which provides a technology based platform for businesses looking for smaller office space and retail and industrial space as well tom. Thanks for joining us today. Thank you really appreciate it. You're listening to the c._r._m. News hour i'm steve labatt <music> mind spaces and israeli co working company with locations across israel europe and starting in the u._s. in san francisco and washington d._c. And it offers co working spaces that attempt to infuse local elements it's into office design underscoring its commitment to collaboration and open space while retaining a cosmopolitan atmosphere in its offices around the world dan's aci. Hi is co founder and c._e._o. Of mine space he established the company in twenty fourteen with co-founder yotam. I'll roy before mine. Spacey founded g system. Solar solar solutions is solar energy company which was later acquired dan. Thanks for joining us on the c._e._o. Renews our thanks for having me so tell us a little bit about mind space. It's a co working company. It's a global boutique kind of approach. What is it that differentiates mind space from some of the other co working spaces that people are familiar with yeah so my spacey's a global brand. We operate in seven countries. We started in tel aviv israel and we now operate in germany poland romania media u._k. The netherlands the u._s. <hes> what makes us not is the fact that <hes> we pay close attention to detail into the co working spaces that we create for members it starts with the selection of location we always go in prime sees prime locations and try to aim for unique the buildings <hes> in terms of design design will make you feel comfortable will make you feel at home we take inspiration from the local scene of the city from local artists and local <hes> furnishes that we source <hes> in those cities <hes> we play what should be what is always a larger team on the ground and you would normally find the other co working spaces and all of that just to provide an excellent customer experience the answer the boutique experience or members so you're in some of the major cities of europe and i noticed here in <hes> three cities within israel. What are some of the typical goal users of your co working space working on are they all. I mean the the typical <hes> what people think of co working spaces as being for us is tech tech startup companies. Is that generally your experience or are there other kinds of companies using your space. That's an interesting point because an interesting observation because that was what's the situation it off until like three years ago so when we first started five years ago we we aim than we had usually startup companies freelancers sir. You know we still have those groups of companies but what we're seeing that happening over the past two or three years is that enterprises and logic companies are moving into into co working spaces getting what we call is an office service so we have now at mine space over forty percent of our members. Will we call what we define. As enterprise company we have companies like microsoft barclays and many other great brands in our in our facilities and this is part of the movement that you're seeing in the co working arena right now larger companies moved again realizing that they get a lot of benefits from being part of a co working space and it's actually becoming an alternative solution and the tone of the real estate so those you know traditional lisa's. Is it your sense that these companies large companies are are going to be permanent residents in co working space whether it's yours or somebody else's hopefully yours of course <hes> or are they using this as a temporary measure to gauge whether or not to commit to their own office space in a in a particular market. I think what's interesting. In in today's world is that companies most companies today are in fact incapable of planning ahead you know as in the past <hes> <hes> and therefore you know the traditional lease model for seven or ten or fifteen years is no longer relevant or no longer efficient too many of the companies his <hes> that we're seeing and those companies you know they use mine space. <hes> locations not always swing space. Yes show we have those companies companies coming in for a defined period of time at deal they would have you know their h two ready or until they will decide whether they need their own space or not but i believe you that co working or flexible workspace solutions are becoming a permanent solution for for companies as part of their real estate strategy now. It's not not always <hes> you know it doesn't mean that they will place all of their employees at a co working space but you know it could be some of the teams maybe the regional offices assist for which they need more flexibility that they will go for a flexible solution but i i truly believe it's becoming a permanent solution to the real estate strategy. What kind of a reaction do you get from the landlords of the buildings where you want want to put in a co working. Space landlords are happy to rent out space to anyone who wants to rent it out. I guess but <hes> the co working is maybe in their minds looks less permanent than booking a microsoft or a company like that into a ten year lease. Do you get any pushback. All land votes today. <hes> you know the more advanced once realized that co working or flexible workspace <hes> you know becomes became an assessing to their building became almost as an amenity to their buildings. We have seen landlords telling us approaching us saying about they had potential tenants wanting to take space in the buildings but insisting that the building will have some flexible workspace in it so if they're a team aim grows they can you know outgrow their lease a by using a flexible workspace the little chef so that's one the second thing is. I believe that landlords understand dan that if there's a quality operator in the building it brings in new energy you live in the building which makes the building at the end of the day more attracted combined space today is fitted by many landlords in in markets in which we operate as an anchor tenant that attracts other tenants as well <hes> to the building <hes> and what we're seeing more than that is landlords who realize this phenomena realized that flexible solutions are going i to become a growing segment in this market as time goes by <hes> are looking to partner up with co working operators such as mine space in the full aw of a management agreement <hes> and in the form of activation off additional spaces within their own building so i i can tell you that mind space right now <hes> had arcnord by now with various landlords across the world basically <hes> to create workspace ace flexible workspace solutions in in in in in the buildings of landlords in a partnership in which we don't just quit taxable workspaces but we also operate other amenities in the building for the building and the rest of the talents and that seems to be happening with a number of the <hes> co working spaces being built in the u._s. That some of the new office construction here <hes> is being designed with co working as part of the model for for the for the floor plan as the buildings go up <hes>. Tell me a little bit about the community because i know that in co working spaces one of the things people will regard as being an important amenity as the community space the <hes> the cross fertilization and collaboration that can take place even by accident as people meet each other in the common areas yeah. I think you know if you wanna labeled out for a second. I think the community is part of a bigger girl. Hospitalised approach that some of the operators such as mine space are taking <hes> in how they manage their spaces so effectively what we're saying saying is that we realize and companies realized that in order to attract and retain the best talent that there is the market <hes> companies need you to provide a better work experience for their employees and now realizing that you know there is a bunch of things that you can do to make it happen so you can provide the next customer experience ban on every touch point with your customers and one of them is community so we do a lot of things to create that community stance dance and to bring on more features and more activities to our members which is something that we intend on bringing to the rest of the buildings i as a partner the landlord but effectively what it means is that we create workshops we bring contents we create you know constantly events that are happening within our space as trying to connect people to partner up and work with each other so almost an endless amount of activities that are conducted within the spaces they says and are managed by by mind space and by the minds face team so one of the things i always wonder about. How did you get started in this. You didn't just eh one day decide. You wanted to build co working space you. You must have had some sense of <hes> that there was a need for this. How did it come about yeah. <hes> the i've worked for various companies in the past i was an investment banker. I had started my own company company <hes> ten years ago in the solar energy business. I think that you know the the one thing that i came across. All the time is that i want to work in a space in a place that you know creates a better work environment. I mean we spend most of our days in our offices and mind space was a unique opportunity to take that and to try to change that while understanding that there's something happening in the market there is a big change that is happening in the commercial should read estate market nowadays and we can be a part of it and we can make an impact and take advantage of it so you know it's it's <hes> the co working in the city has a solid business model model. If you do things right than you can have a profitable company and a and a healthy business actually changing people's lives and making you know and had created better work environment opera companies and employees so i'm going to show my <hes> east coast u._s. Bias here and <hes> make a note that of all of the office cities that you have listed on your website. The two that i see not yet listed are <hes> philadelphia. New york are you. Do you have any plans to expand spend their. You're in washington d._c. Any plans to come further north yeah. We definitely have plans to continue our growth in the u._s. <hes> <hes> and and philadelphia and new york are definitely on our radar and <hes> happy to update you know as we have made some progress in in those markets and others. Is there anything you can say about. <hes> why you chose the particular cities you chosen europe because they're you know to some some extent there the the obvious ones like london and berlin <hes> but you also have you try and bucharest on the list and i'm just interested in how those get chosen yeah so were company at a high growth mode which means <hes> you know we build a scalable operation that enables us today to go out and launch almost any market that we view as attractive market and it's always a matter of privatization whether you want to be and whether the resources that you have to do that <hes> i can tell you that <hes> <hes> in the netherlands since you mentioned ultra but in the netherlands for instance since we have made an acquisition of a local company which had location in amsterdam notre <hes> and in bucharest because it's a growing market with a lot of talent and <hes> a lot of enterprise companies are moving into bucharest which is being extremely developed and we view that as an attractive market <hes> so you know every the market has its own dynamics and it's own reasons. It's not always the same reason for every market <hes> but at the end of the day <hes> we've had had a good opportunity in those markets that we found a suitable for what we offer. Are there <hes> we talked about the u._s. Are there any other markets that you're looking at moving into that you can talk about well look into continue expanding in europe and continue our extending footprint in the u._s. market so at the right right now the focus is on u._s. Europe and continue growing in his dan zika is co founder and c._e._o. Of mind space a global global boutique co working provider he spoke to us from his office in tel aviv and you can get more information about the different locations of mind space by visiting mind space dot m. e. Dan thanks for taking the time to talk to us about it. Thank you very much steve. It's been a pleasure will be back in a minute. Sean on this is rabbi richard address join us for our podcast series from jewish sacred aging entitled seekers of meeting will explore some of the issues in events that impact packed ourselves our families and our jewish world at large in light of the current revolution in eighty the secrets of meaning podcast airs every friday morning at eight a._m. At jewish wish sacred aging dot com 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 perspective customers. Let the luebeck in media companies handle the technical side. We're award winning audio and video producers. We can help you produce podcasts and video programs tmz remotely or in our fully equipped studio in cherry hill visit being the media dot com for more information <music> doug. Marshall is a seasoned commercial real estate professional for more than thirty five years. He's worked at mastering the art of commercial real estate investing while securing the best financing possible for his commercial real estate clients during the last decade he's also invested in rental properties throughout at the portland oregon area where he lives doug holds an m._b._a. From the university of oregon and in nineteen ninety nine he received the designation which many people consider better to be the p._h._d. Of commercial real estate in two thousand three he founded marshall commercial funding a commercial mortgage brokerage firm located in his town portland oregon. He's the author of a new book. It's called mastering the art of commercial real estate investing how to successfully build wealth and grow passive passive income from your rental properties and he joins us to channel about the book which is published by morgan james publishing doug. Your book is called mastering the art of commercial real estate state investing. What made you decide that <hes> there needed to be a book about <hes> how to invest in commercial real estate. Well steve. Thank you for having me on your you're. You're podcast. I greatly greatly appreciate the opportunity to speak with you today and to answer your question i started blogging blogging about twelve years ago and started talking on various topics that i thought were important to the real estate community and and two or three oriented ago decided that maybe it would be best to put together those blog posts into a book in so that's how i got started so one of the things you do in the book is to try to point out to people ways to build wealth and grow the passive income from rental properties. <hes> what is it about that <hes> that strategy that made you decide to let people in on the secret well first of all. I don't think it would be fair to say that there are secrets to my anything in my book. It's it's basically commonsense. Principles at all investors can benefit from and i believe the the real success success in investing in commercial real estate is the that it happens to be the best source of passive income that you can invest in today and passive income is what we really need in order to achieve financial freedom so tell us a little bit about the <hes> the tips. Is that your <hes> giving people. What are the five most important lessons may be. You've learned over the course of your career well. I would say you know the the best way of of of of going through that process is that is that <hes> <hes> there really are many things that i've learned over the years from my <hes> my clients i am a commercial mortgage broker <unk> by profession and i have noticed that they <hes> <hes> that my highly successful real estate investors do certain things the same way over and over again and <hes> <hes> i think the the <hes> the have first of all very simple approach to with the numbers they don't go through <hes> <hes> a convoluted way of of figuring out whether they they wanna purchase a rental property so they have a fairly simple approach and <hes> that in itself is a great step up in the right direction so when you're advising people of the kinds of <hes> commercial property's they should be considering for individual investment. What are the sectors that you like the best and <hes> talk a little bit about how they generate the passive income. You're talking about in the book. Well personally the way i i like to invest in in apartments but you can invest in any type of income producing property that <hes> that you find of interest to you but the vantage of going with apartments is that you have <hes> a higher probability of of keeping a an apartment occupied the high vacancy. If you have twenty or thirty or more unit soon to be concerned as much about vacancies consume one or two people happened to move out <hes> are there other kinds of properties that people can look at <hes> in your mind at that that makes sense for individual investors call absolutely i think office retail industrial are are are excellent the property times as well. One of the things you talk about in the book is that <hes> people end up being afraid to pull the trigger on on actually buying the property. What do you think is the reason that that happens. The primary reason his fear steve and there's really two types of fear that that people aw i have a problem when one is the fear of failure and the other one's the fear of the unknown fair failures all about it's all about having a mindset of you win or you lose and reality what we need to to to create as a a mindset of winter you learn and everything that we do we either make the right decision and we can kind of do the happy dance be thankful that we did our we learn what not to do so that the next time we can we can <hes> have a better outcome and i think that if we could change our mindset from you you win or you lose goes to you win or you learn. It makes a big difference. The other aspect is <hes> on the side of you. You have that fear of the unknown and a lot of times people can get over that fear of the unknown by asking five questions before they purchased their first rental property so i'm glad you you mentioned that because i wanted to ask you about the five steps you you talk about five basic decisions that people should be prepared to make yes. The first one's a really simple one in that. Is you want to be an active or a passive investor and an active investor is someone that makes all the decisions about the property the end the investors. Let somebody else make all those decisions but if you wanna be a passing investor then on really you're you really only have one the question that you need to answer. And who do you want to have. Is your real estate sponsor or maybe a better way of putting it as a who. Do you wanna trust with your money and if you wanna be a <hes> an active investor then you have three other questions that you need to answer in the first one is <hes> <hes> who do you you want any real estate advisory team you know who do you want helping you to going forward making a good wise decisions for you. Who's counseling you and then who who will be <hes> an and then <hes> secondly how the property be financed then thirdly how it be managed and if you answer those three questions the the fear of the unknown significantly reduced because you've just answered three very critical questions about your future rental property so those are the five five questions and it begins with whether you want to be an actor for a pass investor when you look at the real estate market today the commercial real estate market <hes> and everyone that i talked to seems to be very optimistic about how things are going to go the rest of the year <hes> and over the next maybe eighteen months or more <hes> what's your sense about the economic outlook and what are the things that you keep an eye on <hes> that potentially potentially could be red flags for the economy and for decision making well. I think that we have to figure out where we are in the real estate cycle at this particular point in time. I can't speak for the entire country but in the pacific northwest we are are real estate market probably ably picked a couple of years ago and now we're kind of on the downward cycle. It's still a good market. Don't get me wrong but it wasn't as good as it was. Two or three years ago or we saw double digit increases in in an iran's and we saw very very very low vacancy and everyone was <hes> who who was in in the real estate market that timeless doing exceptionally well and now things have changed. There's been new products on the market. <hes> vacancies are up a a bit and <hes> we're seeing a moderation rants and because of that <hes> we've peaked in the marketplace and and going forward. I'm i'm still buying rental properties. I bought a fact of actually purchased two this year but it becomes much more difficult today to be able to find and <hes> those properties than it was <hes> several years ago and so you have to be more cautious from that standpoint you you work primarily in the field of commercial funding. I guess and <hes> people do make mistakes when it comes to financing investments what are some of the common and mistakes that you see and what are the tips that you give people to avoid those mistakes well many times. I see people going back to their existing lender. Which is nothing wrong with that except that they should. I be checking out what other lenders can offer. I mean the chances of that same lender. After having the best rates and terms in the market are pretty are pretty <hes> <hes> <hes> unlikely and other big mistake is that a lot of people that kind of aren't the first stages of buying a rental property many times will use their residential mortgage broker her and a residential mortgage broker is clueless when it comes to financing commercial realistic and they need to define a qualified <hes> commercial mortgage broker that can help them out <hes> <hes> thirdly they try to finance the property without using a commercial mortgage broker and sometimes as penny wise pound foolish. They really really need to <hes> use that the experience of the mortgage broker because he he knows the lenders out there in the marketplace that are financing properties piece that <hes> that are similar to the one that <hes> this these people are are investing and so they need to use his services a really huge mistake though steve is. I've seen it where you gotta lender on board. They're excited about your property. They'd like to finance finance it and n. A. and the the borrower slowly dribbles the information into the lender or worse yet they might start arguing with the lender about the necessary necessity acidy of providing that documentation and <hes> you now. That's just a death now. You don't wanna do that that you never want to violate the golden rule of lending which is you has. The gold makes the roles and you have to be a pretty pretty. Well educated to keep an eye on these things <hes>. How'd you manage that that process if you're not a commercial real estate professional but just an investor who knows a bit about it well. I think it's all about doc putting together a real estate advisory team that can help you <hes> you need to have somebody that <hes> is a a real estate broker on your team that can provide you could council you need somebody probably on the property management side. You definitely need somebody who has a <hes> has the the lending running experience that can provide you good competent <hes> council and then you also <hes> you just need to have somebody that can goes through the property with you so that they can help you with identifying any deferred maintenance on that property at the time of purchase so that you know going in just how much money you probably going to need to do the the capital permits that are necessary so those are some of the the <hes> mistakes people make in the financing side. What are some of the pitfalls. They face <hes> managing the property well. I've noticed over the years is that the biggest mistake is really is. It's not managing your your your apartment apartment manager or your manager of your property if you have when you have an onsite manager you get what you inspect not let you expect and that's probably the the the number one thing thing that i see that happened. <hes> with most people there they <hes> do not <hes> oversee the the management of their property and other. They're one is for example. You might find a manager of a property who does not takes way too long to get a unit market ready and in a tight rental market like we have pretty much these days for every day. It takes to get ready for occupancy that it it takes money out of the pocket of the owner so i've seen more vacant units have stayed dirty and unreasonable for several weeks just because the onsite staff is not focused on getting that unit ready in in a timely fashion and i would also say that the other mistake that <hes> owners can make than regular basis is not a paying their employees as well. A good employ is worth his weight in gold and i really mean that <hes> it's very very true i <hes> in a previous life was a manager of about seminar units in atlanta nashville and <hes> thing that i learned most steve was that <hes> her that the the young son heroes of of <hes> of real estate are the the onsite property managers they can make or break you we talked about the property types that <hes> and you say it's pretty much across the board <hes> that people can be looking at different property types in the commercial marshall space. What about geographies. Do you have any particular geographies that you prefer over one over the other or <hes> can people find good values investing in pretty much any geography. I think the ch- that's a really important question from the standpoint that you you can find a good deal anywhere but i would i would highly recommend or caution your reader your listeners to <hes> to invest locally so i live in the pacific northwest. I try to keep my <hes>. When i purchase a property. I try to keep it within a couple of hours of where i live so i can go and dry by the property i get the opportunities to invest in other parts of the country country of arezzo in california and a few other places over the years and i've i've always said no because i need to have the ability ability to. I don't know the markets as well over there and i need the ability to actually go buy it and and and see how it how it looks from time to time time. I believe that you know what i've seen. Over the year. Steve is i'll come to a property to that's being purchased and <hes> have for my job today and the the buyers looking to finance this particular property and i looked to see i traveled to that property and i see that it's in horrible condition and i find out later that that property is owned by out of state owner and that can happen easily if <hes> if you don't have the ability to dry on regular basis because you're making way i too much your your your your your asset to somebody that may or may not be looking out for your best interest so it's important in my opinion to <hes> to invest within a short distance from where you live doug marshalls see i._m. Is the founder of marshall funding funding in portland oregon. He's the author of mastering the art of commercial real estate investing how to successfully build wealth and grow passive income from immu- rental properties gets published by morgan james publishing doug. I appreciate you taking the time and we wish good luck with the book and i'm sure we'll talk to you again at at some point. Well thank you very much. <hes> steve for having me on your show pen. 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 you can leave an audio comment for us using the voicemail smell icon on the homepage at st broadcast news dot com 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 sierra news our next friday at eight a._m. Eastern time at st broadcast news dot com or wherever you get your podcasts. This is steve lebron. We'll see you out there on the net. Take good care <music>.