The Real Estate Roundtable with IPRG
IPRG Partners and guests discuss various topics on New York City Real Estate and the broader Real Estate Market.
The Real Estate Roundtable with IPRG
The Investors Playbook: Sollevare's Vision with Robbie Ferman and Jake Movsovitz
In this episode of the Real Estate Roundtable, Derek Bestreich and Luke Sproviero sit down with Robbie Furman and Jake Movsevitz of Sollevare Group—a real estate investment firm focused on commercial and residential properties across the NYC metro area. They dive into the duo’s investment philosophy, their all-cash acquisition strategy, insights on rent regulation, and why they’re bullish on Brownstone Brooklyn. Tune in for a deep conversation on building a long-term, value-driven real estate portfolio in today’s market.
Follow Sollevare Group: https://www.linkedin.com/company/sollevaregroup/
Follow IPRG: @iprg_ny
www.IPRG.com
All right. So we're here at the Real Estate Roundtable with IPRG, and today we have some guests. We have Robbie Furman and Jake Mavsevitz. Did I say that, right yeah?
Speaker 2:All right.
Speaker 1:Perfect From Solovare. Did I say that right Always?
Speaker 3:Just some out. So how do you pronounce it, solovare?
Speaker 1:Solovare yeah.
Speaker 2:All right, how did that name come up? Welcome guys. Thank you Real quick.
Speaker 1:Luke Roviero is here. This is Derek Vestrick, so happy to have you guys in Known Robbie, for quite some time and, jake, good meeting you earlier today.
Speaker 3:So got my BWED and um worked at wells fargo doing a like construction lending of an internship but really learned a lot like when I moved to atlanta and I worked in atlanta for a little over a year doing real estate private equity. And then I moved to new york city and worked at blackstone for three years, which which was a phenomenal experience, and we met about two years ago, which we can get into.
Speaker 2:Yeah.
Speaker 3:Sort of how we came to where we are today. But I always wanted to do real estate and so I took some classes on real estate. You did that early on. I know a lot more like just doing it.
Speaker 1:Yeah, so you, early on in college, you wanted to be in real estate, mm-hmm, yeah.
Speaker 2:And how did you get started, Robbie? I obviously know, but I'd like to hear you say it.
Speaker 1:Yeah, I didn't really have much direction coming out of college. My dad was in real estate, but he's more on the residential side, so I wanted to do something a little bit more stimulating and I felt like commercial would be better for that. So I got a job coming out of school as an analyst at jll and then I also got a job at marcus. I felt like the like eat what you kill, meritocracy, more fit, what like my skill set could be, and like I was extremely hungry.
Speaker 1:Something jake and I talk a lot about is that we both didn't necessarily go to target schools, so we have always kind of had a chip on our shoulder a little bit and so yeah, started at marcus and uh was like I'm just gonna outwork everyone and I thought I was could be smarter than everyone and uh and so I was like this will be a good fit from what I think I'll be successful in no, that's great.
Speaker 2:obviously, derek and I and a bunch of guys here started at marcus, so we know exactly what you're talking about and I think, like definitely my feeling when I started, that was a big piece for me. Make as much as you want, no ceiling, obviously. The same similar thing with the college. I wanted to definitely prove stuff and outwork the people in that office.
Speaker 1:Yeah.
Speaker 2:And from what I hear we're still pretty popular over there.
Speaker 1:People discuss us. We're 10 years later. I don't know.
Speaker 2:Yeah, I could imagine, but I don't know all right, yeah, that's great.
Speaker 1:Yeah, marcus, marcus is a good place to start. And then you went over to newmark, um, and then then you left to go start buying buildings and you guys have, uh, you have, you have some money and you've been buying um. So, yeah, I mean, I guess, if maybe you want to talk about, like, your transition from uh out of brokerage, yeah, absolutely. I think a good place to start would be how jake and I got connected and why we thought we were gonna form a great partnership.
Speaker 1:So our best friends went to college together and as we graduated and all moved to New York City, the friend groups kind of merged a little bit and our mutual close friend, chris Howard, was, like you guys are on very similar paths, share similar ambitions. You guys should absolutely get dinner, meet and just see where it takes you. And so jake and I went to some greek restaurant and, uh, we, we kind of hit it off and like, for five years I always knew I wanted to eventually start my own business and do something more on the acquisition side and it was just a matter of like finding the right person who complimented my skillset. But, like, most importantly and the biggest prerequisite for both of us was finding a person who shared similar values to us.
Speaker 3:Yeah, I mean it's funny, like you guys probably get this like you work in real estate, and then somebody that doesn't work in real estate it's like, oh, you should meet so-and-so, and it's like there's totally not what you do in real estate. So when chris connected us, like I knew we had some overlap, but like what you know what I mean, I was like didn't think much of it, but I heard good things about him, like he's a great guy, um, and just like trustworthy, honest, whatever, like all the checkbox items, but I didn't think much of it. And then we sat down like to this point, conveniently tell from like a value standpoint, the way he talked and talks about his girlfriend, the way he talks about his family, like resonated with me. And then the more we talk and like we realize like we have very similar ambitions and view the world pretty similarly, like also in the Target school.
Speaker 3:No, like we also kind of got some stuff out of our system early. We had great times in high school, great times in college, and now we're just pretty, we're very alive. Yeah. Yeah, we don't need to be caught up in the hoopla in New York City. We're very, very focused on what we want to do and what we want to build, and that is our priority.
Speaker 1:What is that? What do you guys want to do? What do you want to build and like, that is our priority. What, what is that what you guys want to do? What?
Speaker 3:you want to build? What do you guys locked in on? Yeah, so I guess, as we continue to meet and continue to like, form our thesis, like we also realize, we have very complementary skill sets and so, as we were building that um, we were building our thesis based on our professional experience and like first and foremost, what we both agree on is like we want to buy stuff that we actually want to own.
Speaker 3:Like we don't get caught up in like phantom exit cap rates or like solving to the highest yield just because it makes sense in a model. Like we want to own stuff that we are proud of owning and like assembling kind of a prime portfolio which is something we both agreed on and had seen sponsors go wrong. Where, like they're buying something, they're reliant on some exit cap rate that might make sense at the time or might have made sense three years ago, but doesn't make sense today's environment, or the entire deal, hinges on that exit. Where, like we wanted to avoid that.
Speaker 3:And then some of the stuff too, that's not always the nicest stuff, like and and you were young, so we haven't lived through many cycles, but like I worked on, I just like had Blackstone. I was in the secondary group, so I got to see what a lot of underlying GPs were up to. And like you see how they bought in 2021 at such inflated values, the deal only made sense at a certain exit cap rate and they over levered and now they're underwater, so, like we wanted to avoid that as well, and then the base on our background, his background in brokerage, my time as being an institutional exit in these markets, like we're super exit focused, like what will be the cleanest exit one day to an institution, and so we kind of worked back from that.
Speaker 1:That's where our huge competitive advantages is, that like I had transacted on 40 plus buildings in these types of neighborhoods and had real practical experience of understanding what does the buyer pool value, and like it's just so much more nuance than slapping an exit cap rate, just as the locations are similar or whatever it is. And then jake, as he mentioned, being the actual exit at an institution and looking at various portfolios in new york city and around the country, like that's how we started to shape our thesis, which we can get into as well, can you?
Speaker 1:dig in a little bit in terms of when you say these locations and these types of asset types, or what the assets are that you think the institutions would like to buy or where you could access. What does that look like? Yeah, it's a really good question. So a building on the same block in New York City one, as you guys know could be worth $2 million, and the same exact building with the same footprint, with the same layouts, could be worth $5 million because of rent stabilization.
Speaker 1:But the key difference also is when you're underwriting those deals, when you're exiting that real estate, the cap rate that you're going to exit at could be widely different as well. So, like you buy a building at $2 million and you can't just say, like the $5 million and the $2 million building, because one was a sub rehab or one has partial rent stabilization or imperfect paperwork, is going to have the same or even a very similar exit cap rate. Like, they can be completely different. And when we think about packaging of our buildings down the line, we're very conscientious of like how are we going to deliver? Like our portfolio or whatever it is, in the most deliverable fashion, for lack of a better way to put it. And yeah, that means like everything that we're buying has to be absolutely pristine.
Speaker 2:It's a good point. We're buying has to be absolutely pristine. It's a good point. I mean. I completely agree with what you said in terms of buying what you want to buy, buying what you want to own. We're seeing that from a broker standpoint. A ton like a ton of funds and raised capital that still own some things prior to, like, call it COVID, they would never own that or buy that today. So I think prices got super inflated in 18, 19, and people were buying in tertiary areas the areas that they probably are not focusing on today and now they're stuck owning it and it's definitely a harder exit. So I think if you could avoid that and just buy I know the areas you're buying in that stuff and just keep it solid, no matter if you think the exit could be higher somewhere else, it's a winning way to do it for sure.
Speaker 3:There are a lot of issues now with that stuff.
Speaker 3:We're hyper-focused on these Brown Sun, brooklyn neighborhood One. That's where we have a competitive advantage. So, like Robbie's background in brokerage, we have a competitive advantage from a sourcing side. You can walk down the street with Robbie, like we did it when early on, as we were thinking about forming Solo Bar A, and that was when I was like like I knew, we knew his stuff. I don't think Gus, he knew his shit, yeah.
Speaker 3:But as we were walking these neighborhoods like he could literally point at a building and be like so-and-so owns it, that retail tenant's paying X, y and Z, like they just renovated the bedrooms and they were getting this. Now they're getting this Like down to like a block by block knowledge. It started raining. He was like, oh, there's two coffee shops up on this corner. We hopped into one, we waited it out. So he just knows every owner in these markets and that allows us to just have a huge advantage when we're sourcing, because the deals we've done today we source truly off market and so you're buying at a more track of entry basis, you're avoiding a broker fee. Um, it just yeah, you know, it's just a better deal on the buy side. And then these neighborhoods also happen to have extremely compelling demographic trends, which we can also get into.
Speaker 1:But I'm going to cut you off for a second. The stuff that we're looking at is not even mostly off-market.
Speaker 2:I would say a lot of it is due to our previous relationships with business.
Speaker 1:A lot of the best deals that we're finding are also broker deals. I'm not just saying this because you guys are brokers. There's a lot of deals that slip through the cracks for various reasons. I always think about the scene from Moneyball where they were sitting in a conference room and I think it was Jonah Hill was like the most important thing when you're looking at how to evaluate putting together the best team is what is someone's on-base percentage?
Speaker 1:And so many people look at things about a player player, which I'm kind of butchering this but uh, depending on runs and stuff right, or like they have some type of defect that automatically someone writes off. And then like we kind of take the same approach when we're looking at buildings and looking at marketed deals. Like sometimes an institutional owner is selling an asset and you're thinking to yourself, why would like a brookfield ever sell this type of assets? There must be something wrong or something that we're not missing. And then if everyone takes that herd mentality and approach to thinking about that deal, then no one's going to buy it and the price is going to slip down, and so like there are a lot of opportunities and stuff like that that we're looking at as well.
Speaker 2:For sure, and you make a point with the brokerage, obviously getting a direct deal depending on, obviously, the price, it could be a very good opportunity. But I think a reason why we get so many deals done, we have a lot of relationships, same thing with you guys, a ton of relationships. So every broker has their own relationships with these long-term owners in these markets. So that's what's going to get hired and obviously the broker that has those relationships probably would have some control. But for sure, 100%.
Speaker 1:Every seller is different. One seller might have to just sell super quickly for whatever various personal reason is happening, happening and like a broker who knows there's a buyer who can actually purchase a building and move quickly, like it's going to get a much better deal than someone who like will only look or like won't look at a broker deal, like I just think that's such a ridiculous mentality. And when I was brokering deals I heard that all the time like I was gonna never buy a deal that you're selling and I was like that's, like that's so crazy as me think it's not every case, obviously, but sometimes people overpay off market.
Speaker 2:You don't have a sense, right? You're like, oh it's a mom and pop and it's off market, no one's seeing it, I'll pay the price. But broker deals have been out there. People look at it. It's like you know it's probably the price could come down a little bit. People don't necessarily want to look at it, necessarily want to look at it. So I think you can buy better deals on market sometimes, obviously it's completely situational.
Speaker 1:A deal that we bought not too long ago was on the market for four and a half million dollars, yeah, and the price just kept dropping. Like we stayed on it and the broker called me. He's like I can deliver this at three and a half million. And we're like, oh my god, like this is a great deal. Yeah, and we negotiated down to three million bucks, so we bought it for three million dollars and then, once we went under contract, everyone called us and was like, will you flip us this building? Like we'll pay you a profit, like hundreds of thousands of dollars to flip us the building. And it was just marketed. Anyone could have bought it at the price forgot about that.
Speaker 2:Yeah, they forgot about it. Time is not good. You're gonna forget and time means everything. Right? You? You talk to the broker at the right time, when sellers are ready to transact, and all those other people forgot Exactly. It's good. It's a good opportunity, yeah.
Speaker 1:But yeah, and I cut you off, but, like, we do want to talk about what our investment thesis is, because we think it's pretty compelling and I think that has led to our ability to raise a lot of money around this. Okay, I would love to hear more about it.
Speaker 3:Yeah, yeah, so historically and in the baby boomer generation, their family's peak spending power was at age 55. That's because they were single income households, that's when the male earned the most money and they were having, on average, two and a half kids. So they needed more space. They didn't need to be as close to work because one parent was working, and so that led to people moving to New Jersey, moving to Long Island, more like real suburban areas.
Speaker 3:Nowadays, millennials are having on average one and a half kids in their dual income earning households, so their max spending power is at age 35 instead of age 55. And since both parents are working, they need to be close for work. They don't want to be in Manhattan, they'd rather be in lower density zoning. And also the schools in the areas that we're buying are phenomenal. And so the perfect middle ground are these brownstone Brooklyn neighborhoods, because very close proximity to Manhattan, where people, where people work, but you also get that suburban feel and it's lowered into the areas and it's just a higher quality of life. And so what we're seeing is a flood of demand in these brown, sunbroken neighborhoods, but there's way more demand than there is supply, particularly in two and three bedroom apartments. That suits the actual needs of these younger families. And also the townhome market, as you guys probably know, has absolutely skyrocketed. You guys have talked about it on your podcast.
Speaker 3:Yeah, yeah, you can't buy a townhome for less than like $6 million in these neighborhoods. And so there's still very affluent young families that want to live in these neighborhoods but like can't afford a $6 million townhome. And so what do they do? They need to rent a two or three bedroom apartment, but there's just no supply, and so part of our thesis is buying buildings with larger floor plates where we can convert the units into two or three bedroom apartments and really meet and alleviate some of the supply demand imbalance.
Speaker 2:Apartments with actual living space. They can material. They drop that.
Speaker 3:Enough for sure and we think it's great tenants too, because their kids will go to the public school. Yeah, they're very sticky and they can kind of age in place in our buildings, whereas a lot of new york city sponsors target, like, the roommate situation because you know you can squeeze four bedrooms, whatever into a floor plan and blow them up, but there's a lot more turnover, correct uh, we just have a sense of, um, like young families moving to brooklyn, like that trend was, like there's a lot more turnover, correct?
Speaker 1:Do you guys have a sense of young families moving to Brooklyn? That trend was there's a lot of young families moving to Brooklyn. 10 years ago I was part of that, so I saw that firsthand. I'm wondering and I'm 42, but I'm wondering for the people that are maybe 10 years younger than me or seven years younger than me that are just starting to get married are they moving to Brooklyn? Are they looking to start families in brooklyn or are they looking to move elsewhere?
Speaker 2:do you guys have a feel for that, yeah, brooklyn is pretty segmented.
Speaker 1:So williamsburg and greenpoint are the guys or the people who are probably like five or six years out of college and are starting are single or like uh, in a relationship and and that's where they're typically moving. But the younger families are moving to these brownstone brooklyn neighborhoods and they want to grow families in these neighborhoods and, as jake said, millennial families are not having as many kids as the baby boomer generation families are, so like they can stick around in these neighborhoods and they don't need more space than what cobble hill brooklyn heights like can supply two to three bedrooms. The issue is there's just no record product out there for that zero type of stuff and so that's like that is our thesis renovated into easier bedrooms, the usher dryers, like we're just supplying the demand, that's out, units that families can live in, units that families can live in and maybe even grow in a little bit.
Speaker 3:Um yeah, they treat the apartments better than, like you know, four single views that were definitely exactly.
Speaker 2:And something interesting sorry, but the kids right. Like I, I live in tribeca. I have a big space and I have two kids but I will say I'm a little nervous. I mean the kids mess things up. I'm like you know I was in an apartment with my, with my friends, we were like treat things very nicely. Every time I turn around there's a marker on the wall. They're writing things and whatever. So, yes, I agree there's kind of a joke, but the kids they do mess up.
Speaker 1:We also talk about this with that, that building in Greenpoint where we're talking about um, if people leave these apartments like say that they got, you say that they got, you know they were told they had to leave or whatever, that the rent got raised. You said they're not staying in New York, like you said yesterday that they're out of here, they're going to move to New Jersey, they're going to move to Westchester.
Speaker 2:Well, it's just the space, right?
Speaker 1:So I guess the point I'm trying to make is these people probably will stay Like they might be hard, the kids might be hard on the apartments, but there's a a lot at the beginning. These people are going to stay for two to five years. They're not going to be turning over every year.
Speaker 2:I have a four-year-old and a two-year-old and we're obviously staying in the city for a little bit of a longer term. I have a big space now and if I could have the kids grow up in there which I'm assuming I can, we'll see after kindergarten, first grade, second grade, third grade I would say but yeah, the space is a hindrance and like a big apartment in New York, like, let's say, 1,800 to 2,000 feet, that's a big apartment. That's not big compared to like outside of Manhattan, right, it's a very small space to live. So, yeah, it's definitely a scary thing.
Speaker 1:So is it safe to say that you guys are not looking in Williamsburg and Greenpoint based on the demographic you just described? Correct, we are not looking there for one of our two strategies. So that was the first strategy that we talked about. Okay, we have another strategy that we are pretty bullish on, more based on the macro economic trends that are happening right now and like where tariffs could be going, we want to buy existing larger buildings, like 420 and A buildings, and there are two main reasons for that. One is, if you think about how tariffs affect real estate, it's going to cause the cost of construction to go way up, so, just on a very high level, existing real estate is going to be worth more money. And then, two, there was a long delay in the 4208 program going to 485X, and so the pipeline of new construction is way down in New York City. So we think we like those supply and demand also trends that are happening towards like buying these newer construction buildings that are trading at big discounts compared to historical norms in New York City.
Speaker 2:That business plan, like I've heard, does that contradict, like the space thing? Because a lot of these new construction buildings, right, like they're cookie cutter, they're built to be efficient, right, every piece of square footage is used and a lot of times the living area in the bedroom is a little smaller. Do you think, like the whole pre-war, that aspect has kind of gone at that point where you have living space? Are you seeing that at all or not really?
Speaker 1:Those buildings don't really exist very much in the Brownstone, brooklyn neighborhoods that we're looking at, and so when we're looking at Greenpoint and Williamsburg, we also obviously love the supply and demand dynamics that are happening there. We would look at those types of buildings just because we think that those yields are trading at much better rates than what they historically have.
Speaker 2:yeah, so that's like a thing for was for greenpoint, yeah, yeah, but not like the brown.
Speaker 3:Some more bear yeah, like we were raising on a deal by deal basis. That would just be like a different bucket of capital. Yeah, it's not like two separate funds that would. We would obviously think about those deals differently. That would be more of a traditional real estate PE business plan as what we're buying now. Sometimes we're even thinking about it as like how can we hold this forever? Like this is our timeless, classic real estate. How can we hold this forever? Whereas for those assets it would be probably a little bit more traditional for a six-year-old period make sense so the?
Speaker 1:so these assets that you described, these two buckets of capital, yeah, these are what you guys would consider to be pristine assets.
Speaker 3:So anything that is statutorily free market we think of as like pristine, but when we talk about the portfolio we want to deliver to an institution, this would be. These would obviously trade differently or be thought about differently by an institution. So like, on the one hand and I would say probably where we're spending most of our time are these timeless uh, walk-up assets in these ground sub neighborhoods. Um, that I'm thinking about as like one portfolio, and then the 420 and A product. I think we'd like to probably do one or two of those a year, once we're really up and running, because it's just a way to deploy more capital. And those deals with the proper riders are also statutory free market, and so that's why they fit our broader thesis of what we want to buy. But it's still two separate strategies.
Speaker 1:What about J51 properties? Would you guys look at those? Yeah, absolutely Okay. Yeah, as long as we kind of got into the weeds on these J51 properties, we were looking at a few of them, right now yeah, yeah. So what are the weeds on those? If it was like a factory, then like we just got some pretty good L&T yeah factories yeah.
Speaker 1:And it was converted to a multifamily, that even without the proper riders, will likely. It seems to be pretty black and white that that will be free market. What if it was an apartment building? If it was like more than five units, it's much more great, and that's probably something we would stay away from, especially because we're very focused on building our brand and our reputation too, and so we don't want to take any risks in that department. How do you guys underwrite? Because obviously 429 and J-51s have tax exemptions and abatements, so the taxes are like artificially low for the time being. How do you guys underwrite the, the tax, increased exposure on that stuff using a discount rate? Jake is the underwriting uh, expert.
Speaker 3:Yeah, we just think about the abatement separately so you just apply a different, in that case, discount rate to the abatement and then you would value the rest of the real estate. How do you normally win on like a cap rate basis? I like it.
Speaker 2:I like it. So I don't know if you guys want to discuss this, but I noticed these last few deals that you bought were all cash. Is that something that you're always going to do on these smaller, like brownstone type deals, call it? Uh, the two over ones, three over ones, the four families, that stuff.
Speaker 1:Yeah, I think it's a huge thing.
Speaker 2:Most people don't do that and I love that. It really makes you flexible and nimble.
Speaker 1:It goes to what our overall business plan is, and absolutely that is what we're going to continue to do.
Speaker 1:It's much more difficult to do on the purchase, but then it makes the rest of the ownership process significantly easier and we also think it's what's best for the real estate overall. So when most people are scrambling to get a deal done or buy real estate, they're doing things that aren't in the best interest of the returns of the building and thus not in the best interest of their investors. And so when we're thinking about it, the buildings that we're buying are either very low yielding deals or they're non-existent yields. So if you're also paying, if you're taking a bridge loan and you're paying 9%, 10%, 11% in interest, that's just coming off, coming out of your own pocket, and so we, luckily, are in a position that we have the capital to deploy to buy these things in cash. We're going to go do the work that we need to do to stabilize the building, get it to as close as possible or beat our underwriting projections, and then refinance everything and boost our cash. On cash returns, you're right.
Speaker 1:We're de-risking the deals obviously as well.
Speaker 3:And if we are getting to the unlevered yields that we think we will, it gives us a lot of flexibility, right?
Speaker 3:If capital markets aren't where we think they're going to be in three years, if we're still getting to an attractive unlevered yield, it's like all right, we can just keep flipping this yield until capital markets are where we want them to be. And then, once we take out a loan and we can get to like the mid-high cash on high teens cash, on cash returns that we think we're going to get to, then we can be very flexible when we exit because it's like all right, capital markets aren't where we want them to be, we aren't reliant on this 5% exit cap rate in year five or else our whole model busts. We can just keep flipping a 20% return on our equity remaining in the deal and wait for capital markets to be where we want them to be and then sell if we want to do so. So it just gives us a lot more flexibility. And, to Rob's point, just do what's best for the real estate and what's best for our investors.
Speaker 1:These are value-add properties as well that you guys are looking for. Right, you're looking to build to a certain yield or would you buy something that's like turnkey and finished product? We're basis buyers Basis, yeah. So you're looking for, like, what a price per foot Because it's statutorily pre-market. That is the first thing that we look at in a deal is what's the price per foot? Because we know how to create enough value in these buildings that, like, if we're buying sub a certain price per foot, we know the building is going to return a good enough yield to purchase it. So, like, that is number one. That is the first thing that we're looking at when we're analyzing a deal let's say it's I.
Speaker 2:I love that business plan. I think buying cash opens you up for a lot. Obviously, people need a lot of people need financing to buy and if you're coming in all cash especially today where financing is very difficult, I think that's even from a broker standpoint that's very attractive for us to want to go to something like that rather than like the whole honor about 90 120 day, like it's not contingent on financing, but you know they're going to go for financing. You know it's going to be a headache. Right and Jeff, from obviously we own buildings as well and from a construction standpoint, doing construction and doing that stuff in cash without having that bridge loan to that hard money loan, it just makes it so much better and you make way better decisions and you don't have some massive gun to your head. So I think that was just described as how it's done.
Speaker 2:If you can obviously you have to have the equity.
Speaker 1:We're very young, so like we understand that there are a lot of things that we don't know. But something that we both have seen is where have people gone wrong in like our shoes before us, and every single time that someone has over leveraged the real estate, and then the markets change and then you're stuck in a bad position. What?
Speaker 2:are the three L's? Well, it's leverage? Ladies, and what else.
Speaker 3:Liquor, ladies, leverage, that's it.
Speaker 2:Three.
Speaker 1:L's. That will kill a man. That'll kill a man. Liquor leverage and ladies, Ladies and liquor, I'm cool with that. I Lakers Leverage and Lakers, Ladies and Lakers, I'm cool with that. I'm doing a catch now Three. L's. We don't do any of those things except for.
Speaker 2:Yeah. I think it's probably a longer quote. I mean it probably is. Yeah, when he takes you out Exactly, takes you out, has the possibility of taking you out, yeah, and all three of you know people that have all three. You know people that have all three.
Speaker 1:Oh man, the leverage, though We've seen it kill people time and time again I mean everyone knows that.
Speaker 2:I mean it's so important. Things change right Like we saw it when I was a broker. When I started being a broker, my dad's a physician. He would tell me he was like you know, luke, be careful. Rates are so low and we all saw what happens when those tick up and it just shows you how the whole commercial market is built up on these rates and they can go up, they can go down, they can do whatever they want and if you're holding a potato at the wrong time, you're done.
Speaker 1:The other thing that's pretty interesting, that we all know too, is everyone tends to think about it like, as interest rates go up, real estate values kind of go down, but I don't know if that's necessarily the case and like something that we're very bullish on in the environment right now too. And another reason why, like buying cash, is such a competitive advantage, yeah, is that it's really about the liquidity in the market. Rates could be as high as they want, but if people have a lot of cash, then it's going to create more competition and it's going to drive prices up, and banks are just not really lending at all right now and they're in a very little liquidity in the market, and so that is part of the reason why cap rates are so elevated in today's environment, why we are so incredibly bullish in buying New York City right now, because you can buy a New York City cap rate at over 6% I'm sure you guys are selling a ton of deals like that, for sure and you can't buy it anywhere else in the country.
Speaker 2:Even we had our jerseys given here today and the cap rates in Hudson County across the river are they've got all the same rent laws, so you can obviously it's different. Right, they don't have the same rent law, it's different. They are selling four caps, five caps.
Speaker 1:I'm from Connecticut.
Speaker 2:You can't buy in. Bridgeport, connecticut, for a six, seven cap it's insane.
Speaker 1:Even without any competitive advantage, we think any real estate that's being bought today is going to be a great investment in the future.
Speaker 3:Awesome. I've worked in every market when I was at Blackstone and before I was at Artemis and New York City just has the best operating fundamentals in the country by far. When rates went up and whatever, we've had the credit crunch et cetera. The operating fundamentals in Austin, phoenix, atlanta they fall off. Rents are down year over year. In these markets Occupancy falls to low 90s high 80s. That just doesn't happen in New York City. Yes, there's a backdrop of rent regulation and the potential for legislation that's unfavorable to real estate in New York City, but there's not the drop-off in rents or the drop-off in occupancy that you can get burned on in some of these cities where there's just been so much liquidity flooding into you don't want someone to just fall in love with the real estate.
Speaker 2:It's like a two over one on court right, someone's going to know how prime it is, they're going to want to own a piece of that. And these other markets are so yield driven. Where interest rates go up or insurance goes up taxes and it's like, oh well, now I'm at a seven cap right, whereas New York there's value protection. People want to be here, they want to own here, they want that prime retail piece on quarter smith.
Speaker 3:It just works. So I lived in Midtown Atlanta for a year after college and like all that stuff, it pops up and it has value for like a year or two and then three of them pop up next to it and that one is now like the old doesn't have it's not, like all the value is like in how new it is and like I don't know. Like yeah, what we're buying is just timeless.
Speaker 1:It doesn't become outdated. All the stuff, all that product that Jake was just talking about just becomes outdated and then it'll form out of the new world on Piedmont Park. The supply constraints are what's really interesting, you know, with the rent regulation laws. Like, obviously that was bad for people that have rent-stabilized units, but for people that have deregulated free market units it's been unbelievable because the amount of demand in rent growth in the free market category of the market has been-.
Speaker 3:No, it's like they're it's been 13% year-over-year rent growth since what? 2019? And then 8% year-over-year if you COVID-adjusted, like for max out rents.
Speaker 1:So like literally in these markets, year over year rent growth is 13% since COVID and that's a little skewed because of COVID.
Speaker 3:Even last year over 8% on max out rents and we underrate 3% or 4% in our model, just to make sure it makes sense.
Speaker 1:But that's a big increase, though, to to put on a tenant. Yeah, you know like, especially when you're someone hand like five, five grand and to put, like you know, an eight percent or ten percent rent rent increase on them like it's a big number oh 100, I wouldn't say.
Speaker 3:We are sitting here saying we want to squeeze our 10s for everything and in our model we're underwriting three to four percent annually. It's just a nice like. You don't see that in other markets. It's like they have the pot for a year and then the next year it cools off, like now. I've heard milwaukee is seeing like insane red growth. But it's just in these markets it's like the southeast and then the midwest and then it oscillates, whereas new york city just keeps humming.
Speaker 2:Yeah, and you guys keep saying town, because I love that. I mean we just sold a billion carol garbons and I think, especially from like an Italian standpoint, it's an old Italian neighborhood, that's just such an incredible place. Which one was, oh, third place, and we were in there. We were taking the winemaker out of the basement that the guy had in there since who knows the 60s, the 70s, whenever it was, and they're like, oh no, leave it, that thing is sick, I'll keep it. And these people just love that.
Speaker 1:Yeah, they always be the 360 court street, like the Curve of Hill.
Speaker 2:Carol Gardens is a. Obviously I love Brooklyn Heights, I love Cobble Hill, but Carroll Gardens has a special thing it's a really sick neighborhood.
Speaker 1:Most people pay for the new thing, but those neighborhoods people pay for the original moldings and all the original details in the buildings and that's just stuff you can't recreate, not a joke For sure, and they have gardens in the front. That makes it really out the front For sure, milling to well-built 100%.
Speaker 2:Yeah, it's brick and I still think there's a lot of. Obviously there's upside in Brooklyn, but Carroll Gardens still has a little bit of ways to go and it's definitely there right Like you walk down court in those areas and there's still some good upside. I think there's some really good value in Carroll Gardens. Cobble Hill is starting to get really hot, obviously Brooklyn Heights.
Speaker 1:What's like the worst location that you got to buy for this business plan Stash, yeah, like stash for a free market, like built for families, Would you go? Like are there neighborhoods kind of on the fringe of that that you'd consider? I wouldn't say any. When you say worse, they're not bad neighborhoods, Like all the neighborhoods that we're looking at are great.
Speaker 1:Like we're super bullish on certain parts of the lawn yeah, we just go over the highway, we just go across the highway into, like Greenwood Heights or Windsor Terrace, or if it was the right deal, but probably not as aggressive. Okay, so you're looking for like primer stuff, yeah.
Speaker 2:And your price per foot stuff, obviously, if you don't want to get into it too much, but I'm assuming like under 700, 600, something like that, right Under 800.
Speaker 1:Okay, and it depends on the location. Like we're looking at a deal actually off market from an old relationship of artists that we just did over 900 bucks a foot but it used to use. We're going to go, and I think, for 900 bucks a foot but it had a cell tower, so that might be a little different ah, the cell tower.
Speaker 2:Cell tower. You sold it off, all right. We heard that you have a solid background in in cell towers.
Speaker 1:Yeah, that was my. Uh, that was my first lot of work when I moved to the city is some summer. Um lease buyouts.
Speaker 2:I told us how you bought your brand sound for your slow sell tower.
Speaker 1:I bought a sell tower in 2009, great financial crisis and it was a good deal on a cash flow to play 10 years and I sold it and it basically allowed me to buy a brownstone. That's awesome.
Speaker 2:Yeah, it was cool.
Speaker 1:Do you sell it? Yeah, so you sell it as part of the acquisition.
Speaker 3:We got to give credit to Jake here because we've just seen so many deals like although we're young, I would say we're old in terms of how much deal volume that we've seen combined, and jake had experience at blackstone cell towers and immediately when we're looking at this deal, he's like there's tremendous value in this and jake can get more into it, but yeah yeah, I mean we closed a portfolio two weeks ago today and one of the buildings has a cell tower on the roof, yeah, and we bought that deal pretty off market, so there wasn't a lot of eyes on the portfolio. But immediately, like I'm sure you know this like if it's leased to the right tenant, there's a near term expiration on the lease. There's oftentimes more value if the lease is below market. And so immediately I was like alright, we could get a pretty good amount of money for this cell tower lease. And so Rob took it to a bunch of cell towers are super misunderstood. They're extremely liquid and they yeah, they are ridiculously liquid.
Speaker 1:They trade for very low cash and people are arbitrage for them right now yes if you have to.
Speaker 3:If you think about it right, like if a apartment was trading let's say let's use new york city there's a prime apartment trading for four and a half percent cap rate and the cell tower is trading for around that, maybe closer to five percent cap rate three years ago. Then you think about relative value today, when the cell tower is still trading for that same cap rate but the apartment and retail product is trading for a lot wider. Then, like, I almost feel like we just sold off the cell tower to it at a really opportune time because you think about relative value.
Speaker 1:You mind asking who bought it, for the quality of the sold to. I think we have been NDAs, so let's just err on the side of caution.
Speaker 3:It's our institutional tower. Yeah. You sold it to me.
Speaker 1:But they're super misunderstood because people assume when you're selling a cell tower, it's T-Mobile, it's T-Mobile, yeah, that your cell tower is T-Mobile, it's T-Mobile, yeah, that you're giving up the rights to your roof. But really you're just giving up the rights to collect the rent and that's it.
Speaker 2:Well, it's usually an easement. Yeah, it's an easement, but the lease already has an easement.
Speaker 1:The lease already is the easement. So we're not giving up more rights?
Speaker 2:No, no additional rights. It's the I guess you have to like. Extend your lease a lot, though you did some things to get more money.
Speaker 1:Well, yeah, I mean it's kind of a long story. Yeah, but I took a specific easement when I bought it, so I just took an easement to the specific rooftop location of the cell tower, but then I realized there's more value in having a general easement, which is the entire rooftop, because that gives you the right to collect rent from any future carriers that go to the roof.
Speaker 1:That's what we did and when I bought it originally. So I bought a 30-year specific easement, or maybe it was a 40-year, but I owned it for long enough that it started to dip below 30 years. And under 30 years I forget the exact term, but it's not considered like if the lease is over 30 years it's considered a real property interest that you can do a 1031 exchange on, got it. But if it goes under 30 years, so my interest was like less, like today I went to 29 years I think. I did not have the real property interest, I couldn't do a 1031 exchange. So I went back to them, I gave them more money and I bought the rest of the roof and I extended to 99 years. And then at that point and I also got an SNDA from the lender, which was HPD on that property which was very hard to get.
Speaker 1:But they want to have S&DAs because I guess if the property is ever sold and whatever the bank gets into like the first lien position and all of a sudden whoever bought the cell tower could be in like a second lien position where, like the bank could say that like that revenue belongs to them. So if you get the bank to acknowledge that the lease has been sold and that the bank is subordinate and not going to disturb that income stream. That that's all really good stuff to have and can make the paper more valuable. So, yeah, that was a good deal for me because I bought it in 2009 when there was no liquidity in the market, with a very motivated seller, and I was able to do the deal when the tower companies I worked at there's two of them they both signed the deal.
Speaker 1:They couldn't close on it and I went to the guy I was very young, I just had a little bit of money that I'd made and I'm like, hey, man, I'm like here's my entire net worth. I'm like I'll give you, you know, most of it. Give me the cell tower. He's like let me think about it. He comes back. He's like, okay. He's like we've got a deal. And so I I signed it up, I closed all cash and there it is and I took the lease and I was.
Speaker 1:I just started working a lot of us at the time and, like I was, I was burning money at the time yeah, my net worth, like being a broker, just going down and down and all of a sudden I had a verizon lease in my pocket that I knew was worth more. It was worth more than I paid for it, um, and I was collecting two thousand bucks a month, which is like half my cost of living at the time. That's awesome, and it was the first time that I actually understood what owning an asset is. And then I the first time I understood, like, cash flow on, like assets and and um, net worth as well, like the cash flow component. So I mean that that deal really changed my life in a lot of ways. And, yeah, then fast forward, and it bought us the house of Brownstone, which I probably could have never have afforded otherwise.
Speaker 2:Well, you got a top of the market price during COVID For the cell tower? Yeah, because they were looking at that, I guess for some reason.
Speaker 1:Then you got a Brownstone for Blowmark, because it was COVID, and's a little bit better.
Speaker 2:yeah, yeah yeah, they gave him like a full price during like a, like a pandemic that's pretty.
Speaker 3:Yeah, no, like I like host quick, I'm not like a cell tower expert, but I did know like right tenant, right location and then like yeah sort of that. The lease was well below market, and so a company that liked the one we sold it to was going to ascribe more value to it because they could just bump it up, and so, yeah, we bought down our basis by like almost a million and a half bucks on the deal.
Speaker 2:Wow, that's insane.
Speaker 3:We're closing it to a very, very favorable basis for the whole portfolio. Yeah, it's not like we sell the cell tower and then get reimbursed money.
Speaker 1:Yeah, it's not like we sell the cell tower and then get reimbursed money, like the cell tower company literally pays for the portion of our purchase price, did you?
Speaker 2:go ahead.
Speaker 1:Simultaneously. Oh, you're simultaneous, so you're into a closing cable. So we have to sell our company. It was a $10.7 million deal. We only had to come up with $9.4 million.
Speaker 3:So they came and closed the cable with you.
Speaker 1:It all closed simultaneously. Yeah, it's great. Yeah, that's the way to do it. Yeah, they're. We always, we always talked about this. We haven't seen it done. What is that right? Well, the simultaneous clothes we're like no it's much easier when you're doing it in cash.
Speaker 2:Yeah, exactly, dealing with the bank, or just so well I'll tell you, like, even like a lot of people that we all know mutually, like a lot of people don't know they, these things are so liquid they don't know.
Speaker 1:Everyone is getting.
Speaker 2:I was doing this in 2005. No, I know. But how many people do we know that own these places with cell towers that are? Just recently you sold a couple for someone right like in the last three years?
Speaker 1:people don't really know like the people we were.
Speaker 2:You're a surprise man.
Speaker 1:Yeah, Dallas didn't subscribe to really any value to the Excel Tower.
Speaker 2:No, yeah, they don't underwrite, they underwrite poorly. Yeah, they underwrite it it's worse than it hurts.
Speaker 3:They can cancel at any time. That deal we bought pretty off market too. Yeah, our risk relationships and so like what we did wasn't like genius.
Speaker 1:It was just there wasn't that many eyes on the deal either, so we were able to yeah, that's a cute. Yeah, and you guys are all cash, you're all cash and clearly different. Do you guys ever go to the, to the owners, and like, hey, like we're all cash, like we'll close in 30 days, like do you use that as a competitive advantage or something?
Speaker 2:to be crazy, not to.
Speaker 1:I've worse yeah, we've seen deals, we're pretty liars, we're pretty scrappy, yeah like I was. I was a broker. Like that's my game. I know how to wine and dine in a cellar and get a good deal done.
Speaker 1:Yeah, nice For sure, and Jake is very naturally talented at that too. We play off each other very well in any of those areas. Four deals that we've done we've wine and dined. So the four deals you've done, right, right, we're talking about like, the statutory free market and you're building these for, like families, but they've also all been mixed use, right? Not all.
Speaker 2:Not all yeah.
Speaker 1:Okay, I mean we've done deals before we started Solibari too. But okay, Well, the ones that I was looking at recently, they all seem like they're mixed use. So I'm wondering, like we haven't talked about the retail component? Yeah, that's a great point, or what do you guys think in terms of that? We had a little bit of an inflection point actually yesterday where we're looking at a deal close by to where we recently bought and 67% of the income comes from the retail. We love the asset.
Speaker 1:And then we're like is this we're actively bidding on the asset and we're like a few hundred grand away from getting the deal. And it's like is this a Solovari asset and does this fit into our overall investment thesis? And we just took a step back for a second. And Jake is like I don't think that this is a perfect fit for our thesis. I think it's very easy to start to shy away from what we have so much conviction over. And so we're like I don't think it is and we don't think it is, so like we're just not going to be aggressive on that, like we want the residential component for the thesis that we say. And the retail we're also very bullish on, just because it services, so much of Ramsun's residential neighborhood corridors and like there's a lot of new product coming up in Gowanus and what we love aspect of it being retail also for diversification purposes. Um, just, we're very focused on the resi.
Speaker 3:Yeah, I mean we're like we are extremely bullish on the retail. So the deal we closed two weeks ago, there's also a retail component on each property, but it's like that retail is ultra prime and BIS and there it is, um, uh, can we say street then? Or where it is in carroll gardens, like it's we also have the straight, but yeah, yeah, it's only getting better, like there's for sure that retail corridor is like, in our opinion, the second best retail ordering all brooklyn outside of. Yeah, I'm willing to speak, and so like we think the retail is a plus, huge plus, when we think about our thesis. It's built around the residential demand that we see flooding into these neighborhoods, which will then also lift the retail.
Speaker 2:It feeds the retail. Do you think there's any discount to resi above retail in that area, like aside from like being on the side street when?
Speaker 1:you say discount, do you mean like the type of rents that we can get?
Speaker 2:Yeah right, I personally would not care and I know the truth because I've seen a million rent rolls that there really isn't that big of a discount at all. But it does surprise me because I personally want to be on a quiet street versus on a retail corridor. But again, I've seen that forever. It's true that I'm wrong.
Speaker 1:When you're buying, probably yes. When you're renting, absolutely not. Especially when we're talking about Court Street.
Speaker 3:Yeah, I will say yes.
Speaker 1:I see right here.
Speaker 3:There it is. That's not like first out in the East Village. It's down at Condon. It's crazy. I mean we're down there at 6, 7 pm. Sometimes it's sub-car.
Speaker 1:We also so many people in our industry also live in those markets that I always pick their brains about. Like, oh, would you buy a condo on like Court Street or would you like? Would you prefer? Like, how much would you discount it? Because it's also new ones, it's just.
Speaker 3:College doesn't have that yeah for sure.
Speaker 1:Yeah, and like most people say, if it's Court Street, no, like there's. Most people say, if it's Court Street, no, there's no difference for me, what about?
Speaker 2:Smith Street.
Speaker 1:I think Smith Street is a little bit different than Court Street is, and that takes a long time of knowing those markets. What about Flatbush Avenue or Vanderbilt? Definitely a difference.
Speaker 2:Vanderbilt maybe a little bit, but Flatbush no way Smith Street.
Speaker 1:This a little bit, but flappers no way Like Smith Street, no way Smith Street this is something interesting that a very large owner in the neighborhood kind of taught me Smith Street is a price point, retail block, and so there's only a certain price point that retailers can pay to run a successful business, whereas Court Street is a price per foot block because there's just a little bit of a difference. But there's more foot traffic and there's just some better retail block. Where is there? There's no price point that retailers can't pay, so they go off price per foot and so it's a huge difference in the retail from block to block.
Speaker 2:Quick question and obviously we saw a lot of this stuff. But are you guys, obviously you're doing renovations, right, but you mentioned the tariff stuff a lot. Are you doing light like? What type of renovations are you willing to do? Are you doing full, full, full guts?
Speaker 3:Full guts, yeah, Full guts.
Speaker 1:Okay, the deal we did in January we were finishing up a full gut renovation Got it so we show you deal with no floors doesn't really matter, okay, doesn't matter to us, we're gutting it in all likelihood what are your what?
Speaker 2:obviously, the construction aspect of owning this up is tough and there's a lot of bs with it, but how, that's something, that's a way easier than what we both initially thought.
Speaker 1:it would be like we don't have that much construction experience. Yeah, um, and I mean very smooth so far. We use our connections to be introduced to the right GCs in the business and, like we really vetted out our GCs, the right team is still there and so we have the right team in place also to scale.
Speaker 3:A big part of what I think we've done well so far and what we are going to continue to do well. And one thing we both realized early on about each other is like we know what we know and then we're also very open to knowing, like admitting where we don't know anything, and so, like construction for me was certainly a weak point, like he had he knew a little bit more. I was at blackstone and, yeah, hardy was before which I I've learned a ton, but you're behind a computer, yeah, and so what we've done with, uh, you know, the renovations and also in a lot of other aspects of our business, is like being extremely careful with who we work with, because we know that we're going to be reliant on that person, because we just have weak points. We're learning and we're learning, and so that's something we've been good at and what we did well with so far with our renovation scope.
Speaker 1:Is like being extremely selective on who we'll work with, but once we find the right team, like just relying on their expertise and then and double checking everything as we go, so like just making sure that the materials that are being sourced are being sourced at the right prices and if we think something's overpriced, we're just double checking every aspect of it. So we're value engineering everything, and I not to compliment ourselves too much, but we're very thoughtful about every single aspect of our business, from like our logo, to how we're doing the construction, to like the tiling that we're picking out, to, obviously, what we're buying.
Speaker 3:No, we don't want like cookie cutter or rental product. We want it to have like, because these neighborhoods we're buying they're such a charm and the buildings we're buying they're all unique and so we want to maintain that with our layouts and our finishes. We don't just want to like cut and paste at each building, like some sponsors have thought we would.
Speaker 1:People would call us crazy. But we hired an interior designer to do a rental.
Speaker 3:Yeah, Because we think it'll paper itself and someone we know. We trust her and she's all right.
Speaker 1:It's big. Yeah, it needs to get new. I mean, we did that with some of our first projects. We did when we first started doing it. It worked just as I thought it was going to be. But yeah, no, it worked.
Speaker 2:It definitely gave some aspects. We isolated that building and I think there were some things in there. The rusty door right, the rusty valve door, was very nice. Yeah, that was good.
Speaker 1:Cast iron door yeah, it was very nice, luckily our interior designer is starting to grow and, like she's in a similar position to us, so she's doing it at a discounted rate also to like grow and get more business, but her name's Morgan Baker and like she's unbelievable All us but her name's Morgan Baker and like yeah, unbelievable all right good.
Speaker 2:Yeah. Sweet, all right cool, great.
Speaker 1:Yeah, I mean, this is good stuff we're right around the corner on an hour here, I think this really yeah um, but no, I thought, I thought this conversation was great. I think we learned a lot. I mean, I could have dug in more, I think, in terms of yeah well, hang on.
Speaker 1:Just wrapping up, all right. Um, I think we could have dug more, maybe on like the Marcus and Newmark stuff, but honestly I don't even think it's relative compared to this conversation. So yeah, all in all, I think it was really good. I'm not sure if there's anything else you guys would like to go over. The only thing that I will say is we touched on this a little bit. How like rent regulation is good for, I guess, people who own free market buildings. But something that isn't really talked about is I think it's extremely exclusionary If you're young and you want to move to New York City. Everyone at some point moved to New York City. Rent regulation allows people to stay in place and never move. And what happens if you're young now and you want to move to New York City? There's no housing stock, for sure. I don't think that's talked enough about in like the political landscape. So now we're exclusionary. Those laws are to anyone who wants to come to new york city and they're vacant a lot of destabilization.
Speaker 2:They're vacant.
Speaker 1:They need something, something crazy, then you know it'd be something that changes, but uh, that's all the same, I'm a.
Speaker 2:Caley part. People are still skeptical. I mean, people are definitely making some bets on the stabilized stuff and trying to get something in the portfolio, but it's got to. There's not a single thing that makes sense about it from any aspect you look at. There's not only things that make sense.
Speaker 1:They don't want people to be pushed out, you know there has to be some form of rent stabilization, but it's just the way the laws are right now are so exclusionary. Yeah, it limits all the supply in New York City and doesn't allow any turnover to happen. No-transcript. What are people that are graduating from college? What are they doing?
Speaker 1:They just can't move in here, they can't move in their own house, they can barely afford it, Like it's just ridiculous that the city doesn't allow there to be more housing constructed and there's just not better walls.
Speaker 2:Yeah, now you have. This is a rabbit hole. No, you have even the regulation on the free market units, which is going to make people not leave those units.
Speaker 1:Good, point they're going to stabilize.
Speaker 2:So now you're getting the double whips.
Speaker 1:How can new people move into New York City? Why is that more fair than saying that someone is more entitled to be here? You?
Speaker 2:flipped the coin a little bit here and I like it.
Speaker 1:That needs to be talked about more. Yeah, it's not very, I agree For sure.
Speaker 3:Good point.
Speaker 1:If you don't go from an affluent family, how can you move to New York City? You actually can't.
Speaker 3:It's a shoulder stick If you don't come from an affluent family and don't get a high paying starting salary job in finance, I don't know how you move here. You kind of can't. It's terrible yeah.
Speaker 2:It was hard enough when I moved to the city in 2012. I can't imagine. I don't know how people are graduating college now, aside from getting a job. They have to get a job, obviously, but the money is the first job.
Speaker 3:There's not enough money in it to like support a new york city lifestyle within the reason and like get an apartment. Yeah, I wasn't that able, so I was fortunate I moved here. I had a good job when I'm here but I wasn't so like I paid my way here. But if I didn't get that job like I don't know, yeah, where I was starting if I had started with that salary and everything, even adjusted to new york city standards, I don't know if I would have been able to like live here.
Speaker 2:I guess I don't know we see it all the time people talk about it when they're looking at apps. I mean, people are spending like 90 of their income on rent and so, and it's probably, it's probably 100 and everything else is going on. Great, it's probably what's going on. Yeah, I mean.
Speaker 1:I moved here without a job, just moved here, wanted to be in the city, wanted to see where my career would go here, and I was able to take that risk. That was in 2005. And you're right, if it was today and I was graduating college from Colorado, would I just move to New York and try my luck and try to figure it out? And I don't know that you're able to at this point. That's really unfortunate and it does have to do with the laws.
Speaker 1:Yeah, and that also impacts, I guess, the pipeline of people that are going to be moving to these neighborhoods and the tenant base for the future as well. I mean, new York's obviously really resilient People are drawn to it, but that's, I guess. What I'm wondering is where are all the young people? Are they coming here? Still, yeah, I think they are A lot of outer borough stuff too, like we kind of discussed, but I don't know.
Speaker 3:Yeah, it's nuts. Yeah, all right guys. Well, this was a pleasure. Yeah, we appreciate you For sure. Thanks so much, grabs on everything you guys have done. Great and good luck with everything going forward. Thank you, yeah, thanks for having us in here. This was awesome.
Speaker 1:All right, cool, very cool.
