CRE News Hour 6/28/2019
From the business desk at st broadcast news this is the c. arina news hour. I'm steve lubeck in in this week's edition of the c. r. e. news hour will speak with david allison. His pioneering work on a database called value graphics could change the way developers look at demographics when they're targeting the markets for the real estate projects. We'll hear from jay l. Executive the vice president andrew dickey about the hospitality sector in puerto rico which is more robust than you might have thought and we'll have a conversation with heidi burkhart who founded her are woman owned real estate development and brokerage company in new york when she was just twenty six years old. We'll be back with the top news stories right after these messages. 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 or lots to do this week on the news hour so let's get right with it with our regular roundup of the news and headlines river egede garfield field newly constructed one hundred four unit luxury apartment has come online for sale cushman and wakefield is representing the seller in marketing the property which offers offers the benefits of urban living in a suburban setting brian whitmer of cushman and wakefield is leading up the marketing efforts. It has what investors are looking for such such as the bergen county location that is highly competition constrained. It is new construction and has one of the best amenity packages in in the area. There is also the ability to drive revenue through continued enhancements such as adding amenities river edge was built in two thousand seventeen seventeen is currently ninety eight percent leased it consists of two four story residential buildings over covered parking home. Three sixty five is shaking up the las vegas vegas property management industry with an innovative property management technology. That's intended to improve the landlord tenant arena in a way that's unmatched by the traditional property pretty management model the company bundles a multitude of services for a single fee including management fees repairs maintenance tenant placement and rent loss due to vacancies currencies daniel shock ed the founder and ceo of home three sixty five created the new data and artificial intelligence based model to provide a solution for ongoing issues between traditional property managers property owners and tenants. We are leveraging a lot of <hes> <hes> data science and artificial sola intelligence in order to be able to predict various events for specific property. We aggregate quite a bit of information about a specific property. You like age size location loss time it's mostly renovated other aspects of the property and we are able to crush this data and predict various events that will happen most probably in the future this allows us to <hes> price our service which is all inclusive management <hes> one flat predictable rate which reduces quiet beatle freeze for the property owners makes their investment investment super predictable and hassle-free when unique aspect of the services home three sixty five's guaranteed a cover rent for vacant properties of up to one year and attendant tenant management program to screen in place renters. The company entered the las vegas market in june and it's currently providing services to three hundred properties in the las vegas valley alley following the acquisition of fangio realty in property management. You can get more information at home three sixty five dot c._o. Now let's look at some headlines from the sierra world legal and general formed a partnership with oxford university to develop homes for university staff and students legal in general's future cities business. This will provide up to four billion pounds of funding over the next ten years for a series of projects for the university including the development of new homes for university staff often students and the creation of science and innovation districts with modern workspace and research facilities endurance real estate group d._w._a. Group acquired a twenty twenty eight acre parcel in your county pennsylvania. They're planning to build a three hundred fifty. Two thousand square foot bulk warehouse on the site point be an integrated management consulting digital studio venture investment and real estate firm has completed development work on saint charles health systems new patient tower in bend oregon the tower which opened on may nineteenth includes a twenty four bed intensive care unit and a twenty eight bed progressive care unit and more than twenty thousand square feet of usable space for future future development jim deb leschi will join c._b._r._e. On july fifteenth as global president of project management to leschi was with j. l. l. for seventeen in years most recently as global head of enterprise sales for jails corporate solutions business liberty property trust named sean newman secretary general counsel starting starting july first newman will succeed herman follow who will remain with the company as senior v._p. And senior legal adviser newman is currently liberties senior v._p. And deputy general counsel he joined the company twenty twelve as an associate real estate council before liberty. He was a member of the real estate practice group at the law firm cozinne o'connor h f f is arranged thirteen and a quarter million dollar refinancing for soma sixty nine unit luxury apartment community in somerville new jersey h f f represented the borrower sterling properties group and got the long term fixed rate financing from new york life insurance company. You're listening to the c._r._e. News hour from st broadcast news dot com in in suburbs across north america shopping malls with large outdoor parking lots are being redesigned and revitalized the parking is moved in some cases underground and the land is is re purposed for residential condominium towers and apartment blocks adjacent to an upgraded mall that sometimes completely rebuilt with more stores and more floors main main streets through the complex serve as many town centres with offices restaurants and shops parks and outdoor spaces dot the property making life in these new clusters of mixed use buildings walkable with touch of green. When you add fitness centers medical clinics schools and other amenities people of all ages can live work learn and play without without ever leaving these vertical villages in a new report david allison of vancouver british columbia is identifying the prospect audience for these mixed use what he calls vertical villages the report is called when shopping centers become vertical villages and it looks at the growing trend of shopping centers transforming themselves into a mixed use residential communities to come up with the profile for the kinds of people predisposed to the idea of living in vertical village. David used the one hundred thousand survey value graphics database to extrapolate profiles of people. Most likely to live is remade communities david. Thanks for joining us on the c._r._m. News hour. I'm really glad to be here. Thanks for having me so you talk about the value graphics research that you do as providing breakthrough audience the instan gauge moment talk a little bit about what that means and also. How did you arrive at this. What you call a proprietary predictive behavior database <hes> and then we'll talk a little bit more about shopping centers well. I guess the origin story <hes> is is really very specific to the real estate development industry. I had my own marketing and strategy firm for years and years and years and i'd always written books and tried to find things to talk about that. My clients in the real estate development industry would find interesting and so. I sold my firm about four years ago now and i was getting ready to write my next book. I previous book had been about baby boomers moving out of the suburbs into other single family homes into more <hes> <hes> stock turban environments. We called it the stackable boomer and so i had baby boomers on the brain it was that moment in time when we couldn't do anything except read about millennials. Lenny's this law neal's that o'neill's ruining everything and it seemed to me that these were kind of the same people. The stories are reading. I was reading the millennials what they want what they need what they expect of their lives the same things that the boomers had told me i thought that was route really really curious so i called the research team. I'd worked for my previous books. I said listen. I had this hunch. That age isn't really all that important and can we can we maybe just go out and figure out what what's going going on around this specifically as it relates to real estate developments because we build buildings particularly around age groups this buildings for boomers this one's for first time home buyers this one's for millennials whatever and the data started to come back and it was pretty loud and clear right from the beginning two things first no one wants to live in a building mm full of people the same age and second they would pay as much as fifteen percent more than market value for their condo or apartment then if they don't the nothing they would otherwise as long as they knew one thing that the values of the people in the building matched. There's so became very clear very quickly. That values were incredibly powerful powerful tool more powerful than demographics so we started to do even more research. We got to forty thousand surveys when we started to see that this applied to everything thing in the world beat the b c <hes> it doesn't really matter what <hes> if you understand your audience based on what they value you can be as as much as eight times more impactful in the way you engage with them the way you can influence them in the way you can get them to pay attention to what you'd like attention to networks and beat be as easily as it doesn't to see so how does this apply to shopping centers. <hes> your research is <hes> when shopping centers become vertical villages. I'm and we're now seeing these vertical stacks as you call them a mixed use residential communities that have retail and living space and sometimes even office space. I guess yeah it's a it's a confluence of a whole lot of different things first off. Let's talk about this trend in the real estate industry. You know shopping centres all over north america worker struggling a little bit. They're trying to figure out what how to be relevant in a changing world where online retail is taking a big eating their lunch. <hes> main street is having being a bit of a resurgence and all kinds of things are competing with shopping centers as a way to for people to get the things that they need but when you look at a shopping center just take a step back doc. It's a really great piece of huge land with a large acreage parking surface level parking and then a shopping center in the center so what's happening. We're seeing thing is all over north america. Is people saying themselves. <hes> what if we put a bunch of residential here rebuilt the shopping center take that parking put it underground. Let's add some office office. Let's add some theaters. Let's add some some restaurants. Maybe some apartments and some condos. Let's see if we can build what i'm calling vertical village and use this amazing piece of land in this location in a way that really packs insa density and creates a sense of community an opportunity for a whole lot of the people to live and work and play in the same place so that's happening and we were very curious about who's coming to live at the law <hes> so we went and used our methodology where we we find a group of people who say that the sounds very very interesting to them <hes> we asked him a few quick questions <hes> and then we dive into our benchmark study which is the moment for north america alone is a hundred thousand surveys deep across three hundred eighty different metrics metrics about what people value in want need and expect so this is an amazingly deep rich robust data set and based on those few answers from those few folks folks who said that they're interested in the idea of coming to live at the mall. We were able to break them up into various audiences various profiles now he can help developers and anybody who's interested didn't say no yours who's coming. So why don't you make decisions about how to build and plan and design this place so that you're impacting the values of these folks and you'll be eight times more effective in getting them to pay attention to what you'd like them to do. Whether it's leeson office or buy a condo or rent an apartment so you break the audience he ends down into four profiles. <hes> can you give us a capsule description of each one. Yeah sure there's actually five different categories of people but one group what we call the splinter groups and that whole group is kind of a catch all for all these tiny little groups of everybody who doesn't fit into one of the other big four ones that are that are worth paying attention into so we just kinda discount those guys out of out of the mix because they're just too small to pay attention to but what remains are four very interesting groups. The largest by far is a group that we call the local experience chasers. These folks are super interested in change. They never want to do the same thing twice. There are the people who will rather go to the new restaurant than an old favorite restaurant where they have a favorite boosts and our favorite thing on the menu. Maybe they have a favorite pair of jeans and as soon as that pair of jeans wears out. They're going to try another tiny jeans because maybe it's better than the ones that they've got right now so they're always looking for the next thing because it might be better than the thing. They have right that at the moment so for them. This notion is thirty two percent of the people who wanna come and live at the mall what they're really interested in motivated by this notion of changing experiences experiences so when you're programming them all one of the things you need to be doing to attract this thirty. Two percent of the market is to say it's not going to be the same thing over and over and over over. It's going to be constantly changing. They'll always be something new to keep your interest and keep you excited. They're also very motivated by things like relationships <hes> belonging and and personal growth so educational opportunities for these guys will be huge the opportunity to meet other folks who are also living at the mall and this new vertical haulage. Those are the sorts of things that will get them to do what you'd like them to do. Which cases come live at the mall far more important than the demographic stereotypes that we may have used in the past where we we said to ourselves. We think it's going to be <hes> a mixture of men and women probably skewing towards guys and they're going to have an income of acts and they're going to be this. All all those kinds of things that are irrelevant this group the local experience chasers cuts across all demographic audiences for this particular offering very quickly the the other three groups which aren't as big so. I'm not going to spend as much time talking about them. One of them is called the worker. Hollick investors is about nineteen percent of the market. They're interested in as their name might suggest workaholic investors. They work a lot. They're telling us they work about eighty hours a week and they're super-motivated their values. Values are financial security possessions wealth upward mobility so for them. The whole idea of coming to live here is about status. It's what status who else is going to be living here. We'll be very important to them. <hes> the way this place is portrayed in <hes> in advanced materials where you're trying to get somebody to come and buy a condo or lease space space or get their offices here. This needs to feel like a very upscale place for that nineteen percent of the market. Now i've seen some examples just to dwell on this for two seconds longer where these vertical villages as they're being planned marketed and sold. It's all they're doing is saying. This place is super upscale very staticy. <hes> it's going to be a great place place for you and so they're talking to this group but they're not saying the things that will attract the other groups so they're really limiting themselves to just that nineteen percent of the market weaving onto the other two ones called the creative savers society <hes> these are folks who <hes> sixteen percent of the market by the way these are folks folks who see themselves as really being very very creative. They're motivated their their primary values or things like creativity personal growth also very motivated one of their key personal responsibilities one of their key values personal responsibility which is a a rare value. We don't see a lot of time so these folks really believed leave their <hes> what happens to them in their world and in their day in their life is their own responsibility to look after that <hes> they are saving their money. Honey is a great example. The name of this group creative sabres. They saved their money in order to be more creative. They will do without things in order to fuel. Whatever are there creative. Passion might be so. They're very very focused on their own. Creativity in the last group. Fifteen percent of the market are what we call the city loving environmentalists solicits these folks their core values family personal responsibility. There's that thing again very odd to see it. Come up in two different groups for one kind of product the health and welfare and personal growth so for the <hes> city loving environmentalists one of the little factoid that can tell you about these folks. They believe that <hes> <hes> environmental issues that the planet is facing right now are very much an individual responsibility to fix. They don't think politicians governments or large scale groups going to make any kind of impact whatsoever. It's all about what their day to day. Activities might be <hes> that can help reduce their own carbon footprint at that's how we're going to get ourselves out of this environmental pickle that we seem to be in as far as they're concerned so for them what's interesting about this vertical village concept as they see it as being being a very environmentally friendly way to live <hes> they understand that density is a good thing for the planet and buy lots of being in a very small square footage a squall us small space instead of being sprawled out in single family homes or sharing resources were sharing. <hes> were walking more than we would be using cars. They love the idea of coming to live even one of these kinds of communities because they see it as their way of contributing to what they understand to be an environmental crisis. I think what's most interesting about the research searching the way you break these groups out is how the experience chasers seemed to be the dominant preference the dominant set of values that that people are looking for something new. <hes> did people just live in the suburbs for too long. What what do you think is driving that seeking out the new experience well. It's important to understand these. These values profiles that we extrapolate from the data set just apply to one product or another. There's a large number of people in in the world who that's how they make their decisions about everything all day long. It's not just about this particular thing in fact the what we call in in my book of which is all about value graphics status that we've built the adventure club is one of the top ten most powerful and most aligned archetypes chiefs for graphic profiling that exists out of the hundred thousand surveys that we offer for north america folks who just that's the way they live their lives there. We all know this guy right. I mean he's probably he or she is probably had a series of relationships because some other next relationship might be might be the fun one. They're always out out doing stuff because what they're doing right now. Late nazir's funds. I think they might go do later. <hes> it's just the way they live their lives and the point of our research is that that is a far far more powerful way to target your messages are your product design. Whatever it is you're trying to do to attract an audience if people do understand these value graphic art types and the personal profiles around the people that fit into them you're going to be eight times more effective than if you do what you're doing doing now which is probably figuring out a demographic profile for your target audience and then using demographic stereotypes to try and make your decisions about what are you building. And how are you going to put together. So normally we sit around in a boardroom. We say to each other well gee our target audience eighteen to twenty four year old man with household income of thirty five thousand thousand dollars a year <hes> and so they're gonna like <hes> technology well in fact we find that there are people who technology of all ages all incomes. It's all genders all education levels and people who are afraid of technology of all ages all incomes both genders all education levels that the demographic graphic stereotyping that we're using to build and make decisions about everything in our world is so flawed <hes> that it's just negligible to continue thinking about demographics as a way to motivate an audience so the commercial real estate industry is not known for being on the cutting edge uh of adopting new techniques and new <hes> approaches to dealing with problems that they're comfortable with and they're they tend to be comfortable with dealing with the problem optimal in in much the way that you describe how do you get them to adopt this value graphics approach <hes> and what kind of initial feedback can you heard from them about it well. It's not that difficult once. I can have a a quick moment to chat. I'll give you a couple of quick stats that will show you just how much of a margin of difference talking about here in the commercial real estate world. All kinds of worlds are very interested in facts so first off with those hundred thousand surveys we have in this data set three hundred and eighty different things we've measured values wants needs and expectations. This data has a plus or minus three point five percent margin of error in a ninety five percent level of confidence all of which just means that it's far more rigorous than you'd need for a p._h._d. From harvard so this stuff is is bulletproof so i'm going to pull a couple of quick stats here to tell you how different it is to look at things demographically than it is to look things value graphically so across those is one hundred thousand surveys in three hundred and eighty different metrics that we've measured if we just take baby boomers and isolate them how many real estate projects have baby boomers as their primary a target audience. There's countless. Alyssa seems to be for the last twenty years. That's our favorite target audience. Baby boomers only agree on any of are those three hundred and eighty things fifteen percent of the time sorry thirteen thirteen percent of the time for baby boomers eighty seven percent of the time baby boomers disagree on everything what it means to be alive in emmett so how can you spend money targeting baby boomers when you know you're only getting a thirteen percent rely on every dollar and every hour that you use trying to get into their heads millennials as another example they they're the ones that agree with each other only fifteen percent of the time and we're supposed to change the world for the millennials annuals for pete's sakes. Nothing's good enough for the millennials and the millennials only agree with each other fifteen percent of the time. That's that's really a target audience. That's that's a really terrible terrible. Our ally i've got a buck to spend only get fifteen percent of my audience activated but if we use values as a way to motivate and understand our audiences and tried nine engage with them better we can get those numbers around how often they agree with each other on all those things up in the seventies eighties nineties and that goes across sold the demographic <hes> age groups right all the demographic age-groups gender <hes> we talk about each very specifically because it's an easy one for people to get their heads around most most things start with an age thing but those low numbers like in the low teens they hold true for how much people are similar to each other within gender categories within wealth categories with an education categories. All the demographic labels are the same hardly any agreement any similarity amongst the people in those categories always whatsoever but if you look at those same audiences and say what are their shared values then we see alignment around all these three hundred and eighty different things that we've measured they're up in the seventies eighties nineties so again just to make the silly little comparison if you've got a dollar to spend and you target people demographically without dollar based on the demographics graphics stereotypes were all incredibly familiar with you're going to get a ten eleven twelve thirteen fourteen percent return on investment on that dollar. If you just change the way you looked at your audience audience. You have to buy anything. You don't have to install any kind of new technology. Just change the way you look at the world and suddenly you're gonna get dollars. Returning seventy eighty ninety percent in terms of how much these folks will attentions whatever it is you're trying to get them to do. It seems like it's a better approach because <hes> if if developers already designing a project to meet the needs of these different demographics that they think are interested in that particular are urban experience <hes> using the values approach is gonna just broaden the appeal of the property to different numbers of people. Oh absolutely it's going to broaden the net and it's going to be spending the money in a more responsible way. Let me give you a quick example people as it relates to specifically to real estate. There's this myth out there that somehow young people younger people are more interested in technology and more familiar and happy a using technology and older people. I don't want to say where the cutoff is for. What's young and old but let's say older. People in general somehow are scared of technology gene. Don't know how to use. It and it's not their friend while our data saying that's absolutely false that there's people across both <hes> sets that were just talked about. They're just age based sets who are equally comfortable with technology and people who are very uncomfortable with technology so if you put in some technology analogy and you figure that's limiting yourself to just one age category or another or you remove all the technology because you think that's gonna limit yourself to one category or other you're wrong. Wrong is a slice think of it this way. There's this loaf of bread called your audience and we've been slicing it like we've always sliced that loaf of bread based on age and gender and income i'm and all these other categories demographic labels but instead if we sliced the bread the long way instead of the short way we can find similar groups across all all of those categories that are going to be motivated by those values far more than the demographic stereotypes that we're using with short slices of bread. It makes so much sense it really does. It's kind of a slap yourself from the forehead why those t._v.'s v._8. Moment you sort of saint of well. You know what nobody really acts their age anymore. We run around saying seventy is the new fifty and sixty the new forty. We we understand that. We don't have have to behave the way we used to have to behave at a certain age. There's no social pressure to be married at a certain age anymore. Get promoted a certain age if you if you're a rich sky you don't really behave any differently than if you're a middle class guy but we still use all of those categories to somehow try to understand who were talking to. What's going to motivate them as if they make sense. It's like we lose our minds. When we walk back into the boardroom and all the rules we know about in the real world somehow don't apply when you're in the boardroom because we need to come up with some. I'm kind of description for who has talking to well now in can use values as a way to describe. You're talking to instead of demographic stereotypes that just don't make sense anymore. David allison is the author of when shopping centers become vertical villages and new report based on his proprietary predictive behavior database value graphics. You can get more information. Add value graphics dot com david's latest book. We are all the same age. Now is an inc magazine kazini top leadership book of the year david. Thanks very much for explaining it to us and for joining us on the program. I'm so glad i had an opportunity to chat. Thanks so much. You're listening to the cr news hour. I'm steve labatt. Can the following several crises over the past several years puerto rico's lodging market seems to be poised for a comeback j. L. l. is released a report report. Puerto rico hotel destinations which describes how hotels across the caribbean island have come back online after renewed capital investments economic incentives and strategic efforts of the government of puerto rico and the u._s. Government air capacity to the island will increase in twenty nineteen for the first first time since two thousand sixteen and to meet the demand by twenty twenty about twenty four hundred hotel rooms are going to be reintroduced to the market along with more than eight hundred fifty new rooms currently under development with us as andrew dickey who is an executive vice president with j. l. l. and the author of the report about about some of the things that people are not really aware of in terms of the island's recovery andrew. Thanks for joining us on the news hour of course it here community. We are looking at a comeback in the puerto rican hospitality market. <hes> you have a new report out about it. Tell me what's going on there. What are you finding and what what are the things that people need to know about the hotels yeah so so puerto rico has a market has been you know it's been hit by two main factors on the lodging side. If look over the last two years <hes> i was was eka right major impact in space <hes> obviously a lot of that was media driven win and less actuality of what ended up happening and then the other was obviously hurricane. Maria which was twenty almost twenty year anniversary bursary from their last major hurricane george and <hes> i guess twenty years prior <hes> that being said the lodging market has been i'm extremely stable and it's one of the most stable lodging markets in the united states although there's a lot of stigma but after hurricane and of it's an and obviously i cannot financial and economic position that impact lodging market <hes> or perception of lodging market when in reality is actually performing warming very well you know most people are looking at puerto rico and they're saying devastated by maria infrastructure questionable and maybe not some place that i it would be focusing on right now. What do you say in response to. That kind of perception is is the infrastructure stable enough that it makes sense for people to. I consider going back there again. A hundred percent and and and people have been coming back already <hes> as a february of nineteen the u._s. <hes> federal government should be distributed about eleven point one billion of the fifteen and called fifteen and a half billion allocated for fema <hes> so a bunch of that has has already been deployed from from from that perspective from infrastructure and both type of of <hes> of projects by the end of this year. The total delayed would be around twenty one billion so there's been quite a bit spent already on infrastructure that being said <hes> puerto rico prior was was in infrastructure wise. It was actually very strong <hes> obviously media and things when we there's power grid and some of those issues but from lodging perspective from a guest perspective <hes> nothing here that would <hes> cause any any alarm i guess from from trauma traveller's perspective in your report you talk about some of the advantages that puerto rico has one of which is that it's highly accessible to people wanting to go there and also it has some tax advantages for investors investors from the u._s. and from foreign <hes> foreign locations talk about those sure so yeah it is the most accessible caribbean island <hes> <hes> and so air lifting the logic sector is the most critical poi- point when looking at lodging <hes> so with the most airlifted. It's continued to have strong lift. <hes> it's going to have one of its you know stronger years that has had in the last five years in two thousand nineteen <hes> that being said you also cruise passengers listeners which has been exponential. They've had a great year so we're seeing a lot of rebound on the airline side and and the crew side <hes> in regards to investor that's their appetite in in regards to tax exemptions those types of things. There's a lot going on in puerto rico. One of the biggest disqualified opportunity zones <hes> a majority of the island does qualify and so here's an example of you know in the in the u._s. We have qualified defied zones but in puerto rico. It's it's multi. It's a multiplier on your return. Because what had there's a lot of <hes> tax exemption drills the property tax called nine roughly ninety percent <hes>. There's one hundred percent exemption municipal construction sales tax when you're building project <hes> and then also a lot of your reinvested invested capital which is a big which is a big part of qualified opportunity zones right. You have to put in more than you purchased. <hes> you can get thirty to forty percent tax credit upfront so there is quite a bit from the investor perspective that is not i think is not fully understood. <hes> but investors are becoming more educated on puerto rico as an investment market and we're seeing that in in liquid in the last twenty four months the also right about the extent of the damage from hurricane maria to some of the key hospitality properties in puerto rico when you talk about <hes> how the new properties are <hes> complementing the existing stock <hes> what is going on in terms of hotel development. Is it continuing to grow. Is it going to be bigger than before or do. People need to focus first on restoring during the damage properties yes so as a result of of <hes> maria roughly thirty two hundred hotel rooms were lost. <hes> and i said lost lost not not completely gone but just i in some sort of non operable capacity by twenty twenty ranters debate about twenty four hundred of those rooms to be reintroduced to the market <hes> and and so there. There's two real dynamics here one. If you look at puerto rico over the last twenty years there hasn't hasn't been a lot of supply at it and then we will also likely lose quite rebutted lost quite a bit of supply <hes> from hurricane maria so as a result here's a market <hes> and we're running through this with a lot of the major market the united states supply driven. It's it's one of the biggest impact there's a lodging business and when you're looking at a market that's been performing very well for a long period of time with limited supply and very limited supply coming coming in <hes> it can be very attractive from the investment side so this is where we think we're gonna see start to see liquidity from investors looking in puerto rico as a as a <hes> a very investable market because it doesn't have the supply issues that some of the other markets <hes> had experienced some and again the result of maria as you talk to your clients. What are the points of advice. You're giving them about how they position asian their plans if they're thinking about investing in the hospitality sector or any other sectors in in puerto rico. What are you telling them that. They should be looking for so there. There's there's a stigma that is you know <hes> that the hospitality segment is included in all segments of puerto rico it it could be correlated directly to the economic issues that the the general market and puerto rico generalists having <hes> the reality is eighty nine percent of the visitors to puerto rico are from the mainland u._s. So when you look at the lodging segment <hes> you know. You're basically seeing rooms every night to tenants in theory. Your tenants are almost ninety eight percent or from the u._s. <hes> and that's you know kind of if you look at on the real estate side when you're looking at the credit worthiness of your tenant whether that's in retail office you know tells it changes every night your tenant base but ninety percent of the origin is you is from the mainland u._s. <hes> so i think that's a big selling point is hey from an economic economic perspective. You're not taking local market risk when investing in the lodging side of puerto rico the reality is you're taking mainland <hes> ah you're you're looking at the risk of your tenants which are from the mainland u._s. And that's a big selling point. I think for for investors to understand the lodging space relative to other segments or other industries within puerto rico andrew vicky is an executive vice president with j. l. l. in miami andrew. Thanks for joining us on the sierra news our podcast best perfect stephen appreciate it. We'll post a link to the jail l. report which is called puerto rico hotel destinations report on the show notes page page for this podcast at st broadcast news dot com <music>. We'll be back in a minute you show him. This is rabbi richard address join us for our podcast series from jewish sacred aging titled seekers of meeting will explore some some of the issues and events that impact ourselves our families and our jewish world at large in light of the current revolution in eiji the secrets of meaning podcast airs every friday morning morning at eight a._m. At jewish 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 or expertise to prospective customers. Let the lubec in media companies handle the technical side. We're award winning audio and video producers. We can help you produce reduce podcasts and video programs remotely or in our fully equipped studio in cherry hill visit being the media dot com for more information as has one of the only women brokers and developers in the new york metropolitan region heidi burkhardt the president and founder of affordable housing brokerage firm. I'm dana real estate has become a staple in new york city's affordable housing industry over the course of an eleven year career at dane. She's facilitated. Take the closing of tens of thousands of affordable housing units and generated more than two billion dollars in transactions in two thousand nineteen alone. Heidi's closed fifteen deals. She founded the firm. It just age twenty six. She's become perhaps more well known for her advocacy efforts for affordable housing including raising awareness awareness and educating politicians residents and others about its benefits. She's appeared on local television and talked about affordable housing in forbes the huffington in post crain's city limits and the real deal among other regional and trade publications heidi welcome to the news hour happy to be here so you founded your own brokerage firm in two thousand eight. I think it was why did you set up your own firm and what made you focus on affordable portable housing in the new york metro area s._o. Actually came here in two thousand two twenty in stanford and then i came started in real estate in two thousand and one i was actually another brokerage company for a while and from working from their two thousand three when i turned twenty one to two thousand dozen aid is basically time for those at eastern consolidated and out from that ten years when i actually specialize in horrible housing and then two thousand eight ages from the luck of having great friends and peers in the business mentor is someone like deborah amerongen and adam still in charlie gendron scott jaffe ale pushed. We don't wanna start my own company as better gross for me on the you know i was pretty naive at night at the time being only twenty six so i was lucky to have such strong friends the peers and mentors in the business that something more than me on at twenty six years now i was pretty humbled by then after my first three years of making only five thousand dollars base discovery by i three years each year on so that humbled me pretty south so you know having people than that you could do better undo more that's how i actually start my own company and then from there i stayed with my initiative affordable housing night developed at eastern and just kept on trying to grow that took me a while called understand how to manage people <hes>. That's always something that happy to talk about. There's ups and downs in that regard but you know at this point ten years later based on actions in eleven years. It's you know i finally feel settled works a lot of growth on there's been a lot of ups and downs but you know from now. It's been pretty exponential in regards. It's the growth that we're seeing so it's pretty to see you know how we've grown and just niching affordable housing and we've branch off a little bit from there <hes> but my big thing is you know making sure you start a company and me trying to advocate more. You can actually have it something that does really good for the community and still make money because a lot of people always think you have to be a nonprofit which hats hats off to non profits on from my standpoint. I wouldn't want all that regulation constrains. You restraints you from <hes> you know. Time-wise security costs so happy that you know while nonprofit says i also think there's ways to do good for the community and make money as walls and give back sales does not profits you know once you are established as a for profit company to what was it that made you focus on affordable housing. That seems to be important to to you. You've done a lot of rehabilitation properties in the bronx brooklyn staten island new jersey <hes>. You've worked with section eight housing. Why why is that something that attracted you. The people in our industry where a handshake still honorable on in the housing industry is just a lot of goodhearted hardworking people that are really doing it for the tenants. You know there's agencies are agencies. They're absolutely amazing. <hes> tom individuals and that they work hard as well. You know they don't make as much money as developers. They still have a huge heart garcia what they're doing advocating and undeveloped russia's again. They're doing it for the tendency others money involved but there's a lot of other ways to make money and your reputation affordable housing is everything so if you're not a good person and you're not gonna stay in it. So why is it that is so the old school way of just a handshake means the deals and i think that's what drama <unk> drew me to it especially coming from ohio and having those midwest values you know it's something that on your would have gobbled up not saying that people don't honor handshakes. It's just a little different in doing business here. Versus somewhere like ohio <hes> you know affordable housing felt like home to me and then the other side of it after united's pretty naive again when i started getting affordable housing not really realizing how much it created community on but as i got older you know at thirty seven i sit back and i i see how amazing tenants tenants are with an affordable housing and having a good home is extremely imported so being able to be a part of a transition from property that can't necessarily cash flow to do repairs ars to have developer come into tax credit execution rehab the whole property and maintain affordable housing and preserving the units. You know it's pretty awesome awesome to see you know just the mental state that no attendant has a new home in a new beginning life as there is extremely brilliant people that live in affordable housing and people people always have a stereotype when you talk about it but its exact opposite. You have extremely hard working very family oriented. You know smart beautiful full of people within housing. I think it's one of those things constant wanna. Have it shine on you know again as i talked about four my big thing is trying to show that you can do bid by still have profit make profit by doing community and you know it's one of those things that even just talking to the tenants and working in different ways in different facets. You know <hes> a mentoring kind of stems off everything but long story short the industry is just an amazing industry under under the current administration there have been proposals and some efforts to rollback affordable housing development element programs and things like that and there's been some indication that <hes> housing and urban development hasn't made the best choices in terms of <hes> some places places like puerto rico where hurricane relief was stymied. <hes> what's your take. <hes> has has the situation become more challenging under the current administration or were is it. Is it more <hes> window-dressing i you know i've kind of of the latter because there's always opportunity when you look at things just looking at where the opportunity lies one state is more democratic versus republic <unk> probably gonna be more heavy on tax credit developers being in that market market and a republican state that you have the cash buyers that are very heavy on as date holes <unk> preserving affordable housing grading cash flow rather than a tax credit got us fee based on so there's always opportunities in regards to you know creating oracle housing or rico for instance. I believe the whole country is opportunity zone zone which i think it's hard to get people there you know. I don't think it's the government. I really think <unk> developers. <hes> don't necessarily want to go there because there's so many places contiguous like the the u._s. to go in in all unfortunately so i think that maybe they should be better incentives to get back to puerto rico which definitely i was devastated and i would love to see that we've been trying to sell a property. There live for two years just hard to get people's attention. Keep on joking that we should talk to a rod and j. Lo has maybe they'll take for. The lesser returns that i wish they would reach out to us <hes> but you know that's to me a target someone <hes> investing for going into me add silly but it's just the way it is <hes> and then regards to you know government <unk> they are. They're so creative you know just different ways in different mayors. The different presidential candidates look at different things in regards to housing. I think that now the attention to preserving somebody units in the city in new york city is great same time. I do think that there was too much focus on homeless and low income reason being that we definitely need almost mullen we we also need stepping stones and there's enough middle income housing and the new regulations. I think were horrible. I don't think you can put government control on a business. That's already been established. I think you need to create new housing because i think when you do <unk> existing products now it's going to hurt in regards to repair apparent building systems on the roofs boiler there windows versus what you could build new and it's a better better products so i think the lack of focus on actually giving stepping stones to people that are homeless low income to get to middle and out of affordable housing is what we need to do. You know i think we stump people's those growth when we give them. Homeless comelec world also supposed to go. They make more money. They lose their housing. Why would you wanna make more money. You know for now going from. Let's say six six hundred then all of a sudden. He makes more money. Go to eighteen hundred over two thousand new york city wants to do that so it's one of those things i think we stunt our communities than actually just looking homeless must mowing says if you get people out of low income to middle and you have more units palmisano income to go into you know it's kind of those things that you wanna show a bros not stunning someone gross a few minutes ago you mentioned the <hes> the difference between predominantly democratic states and predominantly republican states in terms of their willingness to offer tax incentive financing or tax breaks for developers <hes>. What other trends are you seeing nationwide as you look at affordable notable housing <hes> what areas are a better position to to deal with affordable housing versus the ones that aren't it's one of those. Is that hard you know when i look nationally when you're looking at more rural areas that affordable housing hurt more because runs don't grow as fast as somewhere like new york city or chicago or l._a. So when you have in urban markets there's more of a need for more there is more growth potential for business structure or affordable housing. When you're looking at rules you don't get that routes rightish more steady in regards to return where you don't get the huge increases of rants for the former housing so it's just a different model when you're looking at cities and states on from a rural urban perspective when you're looking at you know the politics of things. You know it's kind of again. That's why i think it's been an took me a while to understand. How much senate house is very important for you to vote on the event. Just your mayor and your district attorney you know i think people forget that it relieves starts you know within the city and the federal government no is definitely one aspect. I think it's is more important to look at what your city and state do <hes> new jersey under christie definitely was not doing taxpayer deals which released on the <unk> housing growth to a certain degree <hes> not just it's stunning it stunned attacks developers to do huge rehab on properties to you know <hes> the to purchase and acquire you know sometimes those are better for the housing because the whole building is to have a huge renovation. Sometimes that's better for the acid doesn't mean it's the only way there's cash buyers but it's just different <unk> his everything cycles through different cycles in. I don't think any one of them's better to be honest with you. It just really depends the ultimately who the owner is and the agencies work extremely hard to be creative making sure. There's preservation places like you're <hes> because it's it's more more people meeting at the same time again. Everywhere needs everywhere needs more middle. Income families even low income for its part hearted again. I just think we're really missing on the middle income and workforce housing worse than anything but yeah it's hard to say trends there dr politically in that regard tax credits can always bought. I think that there needs to be more corporations such as amazon facebook this book for <hes> you know basic companies within your city that should be investing in tax credits in the formal housing deals which there aren't usually it's the bank's everybody everybody gets mad at the banks are the ones that actually have been the ones that auto tax credits for horrible housing to preserve affordable housing on is there c._r._a. Credits <hes> but you know so it's kind of funny in that regard that the banks are actually the ones ever preserving when everybody got mad at them and preserving housing but i think there needs to be more operations nations <unk> maybe as the city talking more corporations that are big in their area to buy the tax credits. Maybe they just don't know maybe they're not just they're not educated. She didn't in it so i think that's an area that needs to be more looked at republican or democrat republican be great. They attract more corporations more jobs. You know in a different way through tax cuts tax incentives on just i think i think things are blended on a political standpoint right now. Between republican democratic people labor both ways knows maybe they're more fiscally republican socially democrat or vice versa <hes> more educating the different in science is confuse is in when things gets confusing than people just want to shut off and they don't try to understand it is the federal opportunities zone program having any direct impact on decisions that people make about affordable housing or is it just sort of a sideshow sidebar to the typical affordable. Housing people are still trying to understand opportunity zones so i think that's number one issue. It's keeps it's kind of like this weird place. Of what exactly is it. What are the exact incentives that we have <hes> that will result ferment that means that i do see a lot of people that have been more focused in areas. I've never seen them in regards to invest union or getting gene. Some deals like how <hes> in houston or miami that are large developments. I don't think people would have looked at it as residential affordable housing housing developments but now since knows zone and there's a lot of equity that's focused on zones. They're getting a lot of attention now so areas that are miami or houston texas by you know. It's pretty cool to see that people actually want it once. You actually invest there for that reason. I think it's a program that works cetera ground up which i'm actually excited for it because i think that's where we need to build more middle income housing versus having like we hear the regulation program which i think is horrible on again for my reason. You're not gonna be able to renovate the building as they bought it as you're not going to put the money back because they don't there's there's no cash so as they were expecting to due to a back in the building thinks we need create ground up so i'm pretty excited to be apart those two developments on in houston miami for creating more middle income in you we know better housing that it's ground up new housing for tenants and middle income families and workforce housing families <hes> yeah i think it's i think it's some areas sure it's still questionable on by. I think it was actually a good program for slain ending. Its creative agencies to think of something like that. It's great to see that it's constantly progression. On how do we create more housing in areas that needed it so in the holes and the gaps to create diversity in i think again that agencies do a great job and trying to be on the forefront and creatives yeah i had hats off to them in regards to always trying to be progressive. Is the economy gonna stay relatively positive or a relooking for there's some bumps along the way the next couple of years you know i think again without taking any local stance at all so it's not me take any political stance where i said. I'm just being realistic about things. It's trump doesn't get reelected on twenty twenty. I think there'll be a huge huge shakeup <hes> because as anything if there's change there's always a shakeup and it goes to democrat or more progressive whoever's democratic candidate. We don't know quite yet on that will shake corporations completely a stock market will definitely feel that and then stock market is more perception i think at times an actual actually comics per se but if the stock market market starts crashing in some kind of fashion people freak out and i think that would happen if trump gets reelected associating it's not the best situation but in garcia fiscally go or stay strong and the communists strong on people's reassurance that you know they'll still be growth. I think will be be be there on so again. There's pluses and minuses everything pros and cons by a. I think that next year being election years a huge year you know it's kind of it always uses you know we'd had deals that have been shaky every single time when there's a new election. We'll hasn't deals take about nine months to a year and a half to close so if you're in that midst of of an election year definitely gets shaky every single time when you know obama was elected or you know obama-trump on it's always kind of one of those shaky achey periods so again. I think a lot depends on twenty twenty election even within your own commuting in regards to like how will taxes be seen. Will people want to stay within the community to live there. I think the city faces that a lot is you know we have such high taxes. Everybody wants to live outside of new york city which is so frustrating to me and on you know it's such a great city but no one wants to claim in his home because it's too unaffordable versus other places they can live. You know i always joke that if new jersey job thursday taxes are taxes zero that they probably would overflow like influx of people just moving their comically say that because we wanna live here in new york city but we definitely make it unaffordable it. I'm so cristobal wise. I always the opportunity. It's the only way that you can't be as not <unk>. It's kinda whereas the opportunity where you go to grab it on. Where do you go to create it so you know it's it's kind of on the forefront of next year is gonna be definitely <hes> a funkier and just kind of figuring out if it goes this way here's where to do if it goes this way the celebrity do we'll have to check back with you when if and when the cycle changes that's why i thank you so much for that too so anytime that you never need anybody here thank you heidi. Burkhardt is president and founder of affordable notable housing brokerage firm dean real estate. She's based in new york city and that'll wrap things up for this edition of the c._r._a. News hour you can send your comments suggestions and story ideas to steve at st broadcast news dot com or you can leave an audio comment for us using the voicemail icon con 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 join us again for the next episode of the cr news our next friday at eight a._m. Eastern time at st broadcast news dot com or wherever you get your podcasts this this is steve lubeck and we'll see you out there on the net. Take good care <music>.