Subscribe
Share
Share
Embed
Every Friday, join us as we dive into the latest in real estate multifamily with David Moghavem, Head of East Coast Acquisitions at Trion Properties. David invites top experts who know the ins, outs, and trends shaping the real estate multifamily market across the nation!
Whether you’re a seasoned investor or just curious about where the next big opportunity might be, Deal Flow Friday brings you the weekly inside scoop on what’s hot, what’s not, and what to watch for in today’s ever-evolving real estate scene.
David Moghavem (00:17)
All right, welcome to another episode of Dealful Friday. I'm your host David Mogavum. Today we got Jack Stone, Managing Director at Greysteel in the Texas market and also co-host of the CRE Daily and the Cap Pod. Jack, it's good to have you on, man.
Jack Stone (00:35)
David, I'm a huge fan. ⁓ Thanks for the invite. This is great.
David Moghavem (00:38)
Likewise.
It was fun. It was fun running into you at a best ever conference. And it was actually funny because I didn't realize you were a co-host of the NoCatPod until maybe like an hour into our conversation. I'm like, dude, I listen to the pod all the time.
Jack Stone (00:56)
So funny, yeah,
it's it's it's that you probably run in this into this as well But you know, it's people listen to it, right? So it's it happens a lot with me too. It's like ⁓ that's you So I'm I get it
David Moghavem (01:05)
Exactly.
We're
both on video, like we both have video form, but not everyone looks at the video when they're listening to the pod. And then you meet someone and then maybe they recognize your voice or you get deeper in the conversation. You're like, holy shit, I listen to you every week. I listen to you every other week.
Jack Stone (01:16)
Sure.
Correct.
Yeah.
Yeah,
yeah, which is the most flattering ⁓ compliment you can get, right? ⁓ Super, super cool to hear that.
David Moghavem (01:36)
Yeah.
Yeah, and then I actually, I mean, maybe I'm just the idiot, but I didn't really realize that CRE Daily and NoCap were connected. And I was like, subscribe to CRE Daily. And then I was listening to NoCap and I'm like, oh, this is the same entity, which your co-hosting co-
Jack Stone (01:48)
Yes.
So my question
for you is, did you start with NoCap or did you start with CRU Daily?
David Moghavem (02:02)
I started with CRE Daily, I probably perused it a bit. You get the spam of emails and you're busy and you're not always have the time to check CRE Daily. But then, no cap, I have a designated podcast listening time when I'm in the morning working out or running or in the car.
Jack Stone (02:21)
Yeah.
So I don't know how people
do that. I hear a lot of people who listen to their podcasts when they work out. And like the last thing that will motivate me when I'm working out is listening to people talk about real estate, but I'm jealous. Yeah. Yeah. I'm, I'm, I'm good. ⁓ but, yeah, it's, I, think if you can multitask that way, what a great way to, ⁓ to kill two birds with one stone.
David Moghavem (02:35)
Haha!
You're telling me talking about value-add multifamily is not going to get you pumped?
I think the idea of just being super productive that you're also working out while getting this wealth of knowledge is, that's my take on it of why I listen to pause while working out. But I definitely agree. You're probably, your workout is probably not as intense if you're listening to just us spewing out market data than listening to some really sick playlist that's just going to get you high. Yeah. Yeah. You need a beat. Yeah. Yeah. Well,
Jack Stone (02:59)
Totally. Yeah.
Yeah.
Whatever, beat, some beat. I like a beat, yeah, yeah.
David Moghavem (03:23)
Jack, good to have you on. mean, something a little bit different that we do here is we want to get into the weeds. We want to talk about what you're seeing in the market and you cover the Texas market. You live in Fort Worth, right? In Dallas? Okay. Talk to us a little bit about, first of all, why Texas? I'm sure you get that a lot as a broker and pitching your product and ⁓
Jack Stone (03:39)
Dallas.
Sure.
David Moghavem (03:52)
the time in the market we're in right now and why you think it's a good time to invest in the taxes market in general.
Jack Stone (03:56)
man, we
could talk all day on this topic, right? ⁓ But I'll give you some quick background on myself and then I'll talk to you about kind of the market and what we're seeing out there. But I help run our DFW based multifamily sales team. We have 10 full-time multifamily investment sales advisors to cover really.
Most of DFW and most of the state except for central Texas, which is covered by our office in Austin. We have a little over 15 offices across the country and Greysteel's headquarters is based out of Washington, DC. So outside of Washington, DC, which we have a pretty big presence in just throughout that whole mid Atlantic region, I would say Dallas is our second largest office. ⁓
Our niche in bread and butter has traditionally been that middle market space, mostly private capital, although at any given day, we probably have one or two more institutional or semi-institutional deals we're working on. And we have a capital markets team as well in house that will place not just debt, also equity that's been growing nicely as well. So hopefully that gives you a little bit more background.
on us and I come from a legal background. I grew up in Dallas, went to University Texas for college, went back to University of Texas for law school. I practiced for four grueling years at a big law firm, a national firm in their Dallas office. Wasn't for me, I didn't like it. I remember one day working on a case for a real estate client of ours and he was a broker.
doing phenomenally well. He was also putting deals together on the side and I saw how much money he was making and I saw his quality of life and he would come in in a t-shirt and jeans and I'd be wearing a suit working till 10 p.m. every night and I'm saying, wow, this guy does better than the partners I work for does and he doesn't hate his life. And so that was kind of the beginning for me to somehow get out of
law and get into real estate. I loved the multifamily fundamentals back then. I still do. Everyone I knew that was in real estate at that point was telling me, got to get into multi. And this was during sort of the Amazon effects, know, craziness with retail where no one wanted to touch retail. Of course, that's changed a lot ⁓ recently and shows you the resilience of retail, but everyone was saying multifamily, multifamily, multifamily.
David Moghavem (06:35)
Right.
Jack Stone (06:45)
And so now it's been eight years and here we are. Yeah.
David Moghavem (06:49)
Do you have any regrets with not sticking into law and coming into it?
Jack Stone (06:54)
⁓ yeah, I mean,
listen, it's funny. ⁓ I, you know, some people, you know, we just had on the president of Harbor group on our podcasts. and. You know, I didn't realize he also was a former attorney and that's how he came over to Harbor group. and he had a very politically correct response when it came to that type of question.
I'll be honest, I definitely regret it. think that, I think for the time and money you spend, right, and a degree where you could be using that time elsewhere and saving that money, it just becomes a cost benefit analysis and kind of, you what's worth it. I graduated law school in 2012, meaning I went to law school from 2009.
David Moghavem (07:25)
Yeah.
Right.
Jack Stone (07:51)
to 2012, what was probably the best period of time in our lifetimes to get into real estate? Right after 2000, yeah, that's it. And so it would have been nice not to have to deal with student loans that go right into the business. But people like Richard would say,
David Moghavem (08:01)
Right that window, exactly. Exactly.
Jack Stone (08:17)
hey, it's going to benefit you in the long term, you're going to think more critically, and you're going to be a better, you're going to be better at whatever, whatever it is you do. The interesting thing about brokerage and investment sales, and you know this, because you talk to brokers all the time in your business, is I think it's the ultimate equalizer. I think you can be a broker and whether that's leasing or investment sales or capital markets, and you don't even really need
high school education. It doesn't matter. What matters is it's the hustle and it's the relationships that you create during your, you know, during your path. And so I think one thing for me that I had to realize very early on is, know, don't let ego get involved at all. And it's a constant fight by the way, especially in this business, because there are so many egos and there's so many, there's so many down points followed by a high point followed by a million more down points. But
David Moghavem (08:50)
It's so true.
Jack Stone (09:16)
Just because you have some fancy degree doesn't mean you're better than anyone.
David Moghavem (09:22)
No, the most successful brokers don't even know real estate. so it goes back to hard work. It's really like it goes down to hard work and grit, which and thinking, it still requires thinking out of the box, which I think you do a good job of as well. And broadening and networking, as you said, comes down to the relationships.
Jack Stone (09:30)
That's funny. Yeah.
It's
huge and you got to stay in front of people. ⁓ People aren't just going to always think of you. You have to stay in front of them. Hence why I think people look at other avenues of keeping their names out there, like speaking of podcasts, right? Whatever you can do to just stay in front of folks because we're in the attention getting age and everyone has only so much bandwidth.
David Moghavem (10:12)
Yeah, yeah, exactly. Just staying top of mind is kind of so. Yeah, exactly. ⁓ Jack, so I guess I want to go back into the market. You know, we actually own a deal in Dallas. It took us years to break into the market. It's it's such a different market than some of the other states we own in, where you have a ton of.
Jack Stone (10:16)
Right, right. So they say.
David Moghavem (10:40)
inventory already there. have a ton of, you have a huge amount of eighties vintage and nineties vintage. think the construction boom in Dallas was eighties. I think the most amount of ⁓ inventory of per vintage of every decade was 1980s. And as a class B, C owner, that's like our bread and butter. Typical value add, take some eighties, renovate, get the NOY up, maximize.
Jack Stone (10:59)
It was.
David Moghavem (11:10)
value and flip in three to five years. What we found is there's also so many players that are chasing that type of product and big and small. And so I kind of want to talk to you from based on what you're seeing in the market. We could start with Dallas and then go into broader Texas about the class B and C space with all the supply that came in and the dynamic that I was just describing. Do you think it is a good time to buy?
class B and C and and why make I guess make your case.
Jack Stone (11:42)
Sure. Yeah. Well, ⁓ great setup. ⁓ We're at a really weird time because then this is no, I don't want to repeat ourselves too much. think most of your listeners kind of understand the dynamics, but in case they don't, there has been a tremendous amount of supply coming online throughout really all the core Texas markets. know, COVID just really accelerated growth.
and money was cheap. We had a lot of in-migration, you know, in Texas, a lot of people moving from California and elsewhere, and it was a good time to build, so we thought. The problem was everybody wanted to build. So we hit this sort of inflection point where there's too much supply coming online to support demand, and therefore,
You got a bunch of new multifamily properties all throughout the state, particularly in Dallas. Austin's the worst, um, where you can't get anyone to sign a lease without offering them two to three months concessions and dropping your rents. you know, tenants are smart. They'll play sort of the, the, the game. go one year here and get a concession. go another year here, get another concession. And so.
Right now in the class A space, there can be some deals because there's so many properties that are struggling. And you see buyers who want to be in that DFW market in particular, and they see this sort of below replacement costs narrative, meaning they can buy a class A deal at below the cost it would cost to build.
And ideally, hold onto it for another two to three years as it barely creates enough cash flow to cover its carrying costs and debt to then be cash flow positive. And so they're all sort of hoping on this night and shining armor of ⁓ rents starting to stabilize, occupancy stabilizing.
and more migration, more in-migration and just absorption, right? And I think it's not, think we will get there. The question is how fast will we get there? And so depending on your capital, right? If you have patient capital that believes in the narrative that in DFW, you're going to hit four or 5 % rent growth in two or three years, then you might be, you you might look, be looked at as a
as a genius. But it's certainly a risk and we don't all exactly know where we're going to be in two to three years. And immigration has slowed a little bit in Texas, but it's still one of the fastest growing markets in the country. Still amazing fundamentals. I think it's a great place to be long term and I think you'll always have some liquidity. In other words, you'll always be able to find buyers that will want to be in markets like DFW.
⁓ So that's the class A product. Everybody's chasing it. The class B and the class C product, like you asked in your actual question, which I digressed on for 30 minutes, ⁓ that is a different story. And it's a different story because much fewer people want to touch it. And you've probably seen this as well. But we've seen this sort of flight to quality. ⁓
David Moghavem (15:27)
Mm-hmm.
Jack Stone (15:34)
seems to start out in the 1970s, 80s, Class B, Class C space. And ultimately, as they have some success, they move on up to the Class A space, whether they get some more, you know, cheaper cost of capital, partnering with institutions, ⁓ you know, kind of prove your worth and so forth. ⁓ But because it's much harder to find buyers for that Class B and Class C product,
⁓ I think there's some really good opportunities and there's reasons why there aren't as many buyers for that, right? It's the, the, just the, you know, sheer amount of new supply that's come online, creating opportunities to buy these new deals. Like I had already covered. It's also just the cost of operations is class B and class C properties. As you know, I've gotten increasingly expensive to operate things break down.
David Moghavem (16:26)
Mm-hmm.
Jack Stone (16:34)
You're running something that has to just nonstop be worked on over and over again. And so it can create this problem where, you you might not actually be cash funneling because you're putting back all your money into just keeping the deal afloat. And so right now what we're seeing is we're seeing a lot of these syndicators who bought these class B and class C properties in 2022, 2023 at the height of the market, they overpaid.
They over levered because they overpaid and over levered. They had to use floating rate debt. Not a great time to have any sort of floaters out there as everyone knows. And they're in trouble. And because they're in trouble, there's some blood in the water. And so I think there's some really attractive buys and resets where, you know, a group bought a deal in 2022 for 125 a door. You can probably find that same deal for 80 a door in certain markets, right?
Just a total reset, sometimes even already stabilized so you can put agency debt on it. ⁓ Sometimes the lender ⁓ takes it over once you assume the debt. Oftentimes, I'm getting into too many nuances here, but oftentimes I think it's still too much debt. We're seeing deals out there where ⁓ it's REO and the debt.
David Moghavem (17:54)
Mm-hmm.
Jack Stone (18:01)
The pitch is, hey, you can buy this with very little down, know, 5 % down. This is yours, right? But it's still more often than not won't pencil because there's still too much debt, which just goes to show you how inflated these prices were to begin with, right? If even after all that equity is wiped and you have a clean capital stack of just debt that's left over, it still doesn't pencil.
David Moghavem (18:06)
Yes, yes.
Jack Stone (18:30)
without the lender taking a loss of some sort.
David Moghavem (18:34)
The way I see it to your last point is the too much debt, you need to have runway to grow out of it and you have to believe in that growth ⁓ to at least give you a shot. And one of the things I'm starting to see in some of our markets and I've seen it a few times in Dallas is lenders starting to work with borrowers in a way that borrowers now have a little bit of leverage saying, hey, you want me to buy this with little down?
You're my partner now. And as a partner, we need to come up with a cap stack that works for both of us so that our interests are aligned. So that could mean more runway. It could mean a crude interest where it's like, Hey, this hundred LTV. Yeah, we'll put a million dollars in interest reserves. But if that million dollars gets run out and we don't hit our business plan, I'm not trying to be in the same position as the previous owner. And so let's work together. Let's accrue the interest.
Jack Stone (19:29)
Yeah, right.
David Moghavem (19:32)
Let's give the property a little more runway. I can't be in this for two years and expect to flip out. I don't want to be in the same position as your previous borrower. So I am seeing a little bit more of that today than I've seen in the past three plus years when rates started to hike. I don't know, what's your take? you been seeing lenders kind of working with borrowers in that regard?
Jack Stone (19:55)
Yeah, of course. mean, you know, lenders don't typically want to be managing properties. so, ⁓ so yeah, I'm seeing a lot of that. I mean, there's a lot of deals where we've been BOVing for the last three years, where they've, they've been in default for the entire three years. And the, you know, and lenders don't want to take it back. ⁓
David Moghavem (20:17)
Right.
Jack Stone (20:22)
So we're in this sort of weird space and what I think we're all hopeful on is that we see a little bit of a, you know, a little bit of pressure taken off of us with race. And as you and I are speaking today, it doesn't really look like that. But, you know, there's so many things going on out there, but we're kind of in this weird, funky place where things have kind of stopped.
or slowed, but then they can pick back up very quick. And I've seen this happen before where like one month just slowed down tremendously. And then the next month we're back to it. I mean, there's, there is a lot of.
David Moghavem (21:05)
What do
you think causes that?
Jack Stone (21:07)
I think it's psychological. Everyone's, this is at the end of the day, it's psychological. mean, investors get a little spooked, investors get a little spooked, harder for sponsors to raise any capital, harder for sponsors to raise any capital, harder for them to get any deals done, right? So I think the institutions have, they're gonna be doing deals, it's the private space that I think is just a little bit more illiquid.
David Moghavem (21:11)
Mm-hmm.
Right. ⁓ Going back to some of the...
Jack Stone (21:35)
By way, David,
this brings up the whole class B, class C ⁓ issue, which we were talking about. I think the opportunities really lie in your class B and C workforce housing that are over, 20 million. And I'm saying that just kind of a random number, but the point I'm trying to get across is your typical private capital multifamily syndication group.
David Moghavem (21:53)
Mm-hmm.
Jack Stone (22:04)
that was able to raise that capital in 2022 and 2023, they either lost those contacts because they've already lost a lot of equity and they're not getting those investors back anytime soon, or it's just harder to raise money. and so I think if you are a group that's very well capitalized, I think you can go in and you can find those deals at
very attractive bases with very good going and yield. It just has to do with having enough conviction from your capital partners to do so.
David Moghavem (22:43)
Yeah, I love the idea in any market of playing in that sub institutional space. And that doesn't mean go down to $5 million deals because those are still probably getting bit up and has a lot of mom and pop competition. ⁓ but, and, but what I'm saying is that equity check that's hard for syndicators to syndicate today. And maybe they were able to syndicate that when money was flowing out of everyone's ears, but.
Jack Stone (22:49)
Mm-hmm.
That's right.
David Moghavem (23:13)
Today, you're getting extra yield and low basis strictly because there's not capital chasing that. It's due to lack of capital flow for that space. Once you start going institutional, you're playing with the big boys and they're compressing cap rates even in Dallas today for some of that newer vintage sub five, Despite concession market, despite the flow of supply,
Jack Stone (23:31)
Sub five, yeah.
Right.
David Moghavem (23:41)
they're still trading strictly because they're patient and wanting to buy below replacement costs. And that thesis you laid out perfectly. ⁓ But with all the capital chasing that flight to quality, there is a clear disconnect and disconnecting capital chasing the mid-market or sub-institutional class B and C space. So I do agree with you from an overarching theme that that's a great space to play in right now where you could get some good yield.
Jack Stone (24:09)
Yeah, totally. You have to buy it right. You have to buy it at the right basis. think buyers are a little bit more disciplined today than they were. So they're not going in. mean, it's very hard to find buyers who are buying into the, ⁓ you know, what was once just the pitch with every single deal. Hey, come in, put in vinyl floors, push your rents by 200 bucks, you know, something like that. It's now these sort of like value add pitches aren't quite as
⁓ compelling, it's more so, ⁓ going in and, know, maybe trimming your loss to lease and stabilizing the deal a little bit more and really focusing on operations.
David Moghavem (24:52)
Yeah, and I think to that point, most of these people trying to buy those class BC deals, they're probably looking for day one yield of some sort, like cash flow today. And then the older deals, they probably have some deferred. And so your cap rate going in might be much different than your day one yield going in because you have to still do the plumbing work, the roof work, everything like that. Are you seeing?
Jack Stone (25:01)
Yeah, that's right. That's right.
Yeah.
Yeah.
David Moghavem (25:21)
pricing ⁓ in Dallas for class BC product getting to a point where net of deferred, net of gain to lease, net of all these mark to market that's moving NOI down, it's still a good deal from a cashflow basis. Are we at that point yet?
Jack Stone (25:41)
Yeah, you know, it's interesting. I mean, it's like define good deal. Yeah, I think we're at a point where these deals pencil in terms of having positive cash flow. You know, are you getting eight or nine cash on cash year one? Usually not. You know, it is still pretty competitive market and you definitely still see buyers bidding up the pricing. But
You certainly have a spread of positive leverage that you certainly never had for years before now.
David Moghavem (26:20)
That's a good point. And maybe eight or nine cash on cash isn't what you need to get exactly. That would be like a home run, but.
Jack Stone (26:27)
I mean, it's interesting.
see some groups that are targeting 6 % cash on cash, very IRR driven, right? On their exit or some sort of capital event or refi. ⁓ I tend to think that's a little riskier. think everyone wants cash flow. Cash is king now more than ever. I ⁓ would rather
If it were me, I'd rather have a big chunk of that IRR come from cashflow ⁓ just to be safe. But it all just depends on what's your exit pricing. And I think the cool thing about some of the class B and C deals out there right now is you can underwrite this at an exit price five, seven years from now that might still be under
what it sold for in 2022. So you think about that, right? A property sells for $20 million in 2022. You buy it for, you know...
17 million in 2026 and in 2031 it's at
barely 20 million again. mean, these are some of the real scenarios where this is kind what we're seeing. mean, that to me is a very compelling argument. Doesn't always pencil still, which is kind of the wild thing is there's always more to it. But yeah.
David Moghavem (27:59)
Right.
I guess in
Dallas, Dallas had such a run up. ⁓ Yeah, and you saw it on some of these boom and bust pockets of other sub markets and markets. you, you know, we're talking super theoretical at this point, but do you think it's gonna take three years or five years or seven years to kind of get back to those peak price per units? Because as you said, you're exiting to get to that return, you're exiting still below that peak pricing. like,
Just finger in the air. How long do you think it would take to get back to that? Not from a cap rate perspective, just like price per pound.
Jack Stone (28:49)
⁓
I really don't know. I so much of that's going to hinge on the absorption that we kind of started off talking about. I how fast do these units fill up that have come online? Now, there's been a huge cliff of new construction, so not much hitting the market. And there are still waves and waves of people moving to, you
these metros. So I don't know, you know, I mean, if you look at it's obviously very pocket specific. So we always make these generalizations, but I mean, I, you know, I think, you know, give us, give us maybe three years before we're kind of back into a movement and groove in place, ⁓ where you're starting to see some strong rent growth again. That's my take just based on what I'm kind of seeing in the market right now, cause I still see very flat trade outs. again,
very pocket specific. And if you go to a place like San Antonio, they got hit big time. big time. ⁓ I still see negative trade outs. Every deal I've seen down there, but yeah. And that's another market. You know, we talk about DFW, a very great resilient market has the new y'all street, you know, has all these, all these great.
factors that makes it kind of a sexy market to invest in. Then you see San Antonio, which was almost sort of treated like a Dallas in 2022. And it's not, it's a very workforce market. Yeah, yeah, there's, it's always overflow. mean, it's, you know, Dallas got really hot. Austin got really hot overflowed to Houston overflowed to San Antonio overflowed to Tyler overflowed to El Paso.
David Moghavem (30:26)
Right. Because everyone was anticipating the rank growth.
Jack Stone (30:44)
overflowed across the state and then into other tertiary markets. think San Antonio got just in particular just very hit. mean, so many new deals have been built in San Antonio that probably never should have been built in San Antonio.
David Moghavem (31:02)
What do you think is experiencing the most pain right now out of the metros between San Antonio, Austin, Dallas, and Houston? Yeah.
Jack Stone (31:08)
Austin, Austin, yeah, yeah. I think it's Austin. think it would
be a toss up between Austin and San Antonio. I think the vibe I'm getting on the street is that San Antonio's bottomed out. The vibe I'm getting on the street is that Austin, we have no clue when it's bottoming out. So there's great opportunities. Again, it's kind of taking that contrarian approach. Buy low, sell high. You can buy low now. mean, you can find deals where,
David Moghavem (31:35)
Yeah.
Jack Stone (31:37)
You know, they're very attractive bases at, you know, in Austin and around Austin, but you still have rent growth that is very negligible, if anything. And you kind of, again, it comes back to if someone was to come to me and say, Hey, Jack, I have X amount of money. I'm very patient. Just preserve it. And in the long term.
create some durable cashflow for me. There's some great opportunities in markets like San Antonio and Austin.
Yeah, it's hard to find.
David Moghavem (32:17)
Hard to find. I was actually, I was pulling some costar like cumulative rent growth in the next three years and Austin and San Antonio still slightly negative while Dallas and Houston slightly positive. And I think what that translates to is exactly that. Maybe Austin, San Antonio still have a little bit of ways to go, whether as Dallas and Houston, know, Dallas is a massive MSA, Dallas, Fort Worth. And so despite the...
Jack Stone (32:31)
that's great.
David Moghavem (32:47)
call it, I don't know, you probably know the numbers better, but like 30,000 units coming online or 15,000 to 30,000 coming online a year, that's only a small percentage of the total inventory. Whereas some of these Austin's and even San Antonio, it's so small that when you got builders building, it really hits a dent into that MSA's supply pipeline.
Jack Stone (32:52)
Mm-hmm, yeah.
Yeah.
Yeah.
Yep. And Austin population growth slowed a ton and a lot of people have left as well. So it's still a great market. I think it's post COVID sort of the tides coming back, coming back in a little bit. think, I think you had just this overflow of your California type, you know, tech grows moving to
David Moghavem (33:16)
Why do you think that is?
Mm-hmm.
Jack Stone (33:37)
Austin and you know, I think it's very what I've read and I'm not I'm no expert here. But what I've read is it's very hard to ⁓ copy the talent pool that you have in Silicon Valley or in New York and you can do whatever you want to do. But DFW is still not going to compete with that. Austin's still not going to compete with that and so forth. So I think that's kind of part of it. The company's kind of pulling back and
David Moghavem (33:54)
Mm-hmm.
Jack Stone (34:07)
I also think that, you know, I think it was a fun thing for a lot of people to do. They kind of, did it and they moved to Austin. It was fun. Unfortunately, a lot of them that are now trying to sell their homes are selling them at a loss. You know, it's pretty crazy to see, but I'm making some generalizations here. I'm sure there's a lot of a lot of more smarter people out there who could give you some better reasons than me.
David Moghavem (34:22)
Mm-hmm.
Yeah.
Yeah. There hasn't been like a cheesy term for like the bounce back, the COVID bounce back of people moving back. But I think it's real and we haven't heard the cheesy term yet, unless I haven't heard of it yet, but there's gotta be like a term of just people coming back to where they're coming from because of life, because of just the timing, maybe ⁓ financially they need to come back home for whatever reason. So there's,
Jack Stone (34:43)
Yeah.
Totally. Yeah.
Right.
David Moghavem (35:03)
You're feeling that for sure. Anecdotally, even I'm moving back home and ⁓ I'm seeing it in other markets. Yeah, I'm one of those. I'm one of those. I don't know what the term is for me right now, but I'm one of those data points.
Jack Stone (35:09)
Yeah, you're doing it.
Yeah, totally, totally. Of course, you might have, ⁓ I forget who it is who's running for mayor, but maybe LA goes a whole other way here soon.
David Moghavem (35:31)
I know it's, it's a, you could go either really, really socialist or kind of more of the same. So, ⁓ we'll see. We'll see. ⁓ Jack, I wanted to talk to you a little bit more about CRE daily and, and you being part of that and the no cap pod and talking to all these professionals, interviewing them, getting their insights. Has that changed or shifted the way you've looked at deals and real estate and
maybe share a few things that you've kind of learned through that process.
Jack Stone (36:02)
Sure, yeah,
that's a great question. I've had an opportunity, well, I'll take a step back. mean, know, CRE Daily has over 75,000 subscribers. I co-host their podcast. Podcast took off 18 months ago. I think we're now one of the, I won't throw out numbers, but we're one of the big ones.
David Moghavem (36:25)
You're up there. Yeah.
Jack Stone (36:28)
And we have had on some tremendous guests. mean, just to give some examples we've had on the president of NMHC, we've had on the chairman and CEO of Boston Properties. We've had on the CEO of Trimont. We've had on the president of Harbor Group, we've had on, I mean, the list really goes on and on and on of kind of very high level C-suite folks, of real estate for Brookfield. And it's been awesome.
It's been awesome because, you know, my day to day is multifamily sales in Texas. ⁓ and not only that, mostly class B and C multifamily sales. I think when you start to talk to these people and be in the room with these people who come from different backgrounds, different, ⁓ areas within real estate at their level, you start to learn about things and pick up on little things that you wouldn't
otherwise. And I think it has helped me put the big picture together a little bit more. In other words, when I'm looking at multifamily and comparing the yield that you can get on multi in Texas right now compared to what I see some, you know, grocery anchored retail strip centers are getting, I mean, we just had on the head of Kimco, which is the largest grocery grocery anchored retail read in the country. ⁓ These are just things I didn't think about.
Self storage we had on the owner of the largest privately owned self storage company in the in the world. ⁓ If you're in New York ever, also own Manhattan Mini Storage. It's called Storage Mart, it's the umbrella company. ⁓ So, ⁓ backed by Stan Kronke. Very interesting. You you start to pick up all these little tidbits. So I think it has been cool for me because it has added another layer of
David Moghavem (38:15)
Hmm.
Jack Stone (38:24)
knowledge to have a better base when it comes to understanding my own industry. And it makes it much more fun, if that makes sense. mean, and it really does.
David Moghavem (38:35)
It does. It's a new lens where if you are just in sales in Texas for Class B and C, you look at where values were and where values are now and you're saying, why isn't anyone buying? But there's more to it. There's Exactly.
Jack Stone (38:42)
Mm-hmm.
Right. Well, they're not buying because they can get this in retail
right now. It's all connected ⁓ a little bit in one way or the other. So yeah, it's fun. I think it's good to get outside of your bubble and it definitely gives you more perspective on the market as a whole.
David Moghavem (39:01)
gives you more perspective.
These deals end of the day are investment vehicles or investment widgets that buyers are buying as a way to make money or preserve capital or something that's beyond multifamily itself. ⁓ There's succession plans, there's tax advantages. And so they're looking at multifamily class BNC in Texas the same way they're looking at any other investment opportunity. And I think
Jack Stone (39:26)
Mm-hmm.
Totally.
David Moghavem (39:40)
The fact that you're going on and talking to these great individuals who are successful in other parts of real estate ⁓ and looking and creating their own widgets and other markets and other strategies, it gives you perspective of, right, is Class BC Multi in Texas? Should it be priced here? And if not, where should it be priced relative to what else is out there?
Jack Stone (40:07)
Absolutely, yeah, very well said.
David Moghavem (40:11)
So, Jack, it was great having you on. Thanks again for hopping on. I appreciate your insight. Yeah. Yeah.
Jack Stone (40:17)
I had fun. I would do this anytime with you. And
congratulations on what you're building here. I see it all over the place. I've heard great things. So keep it up.
David Moghavem (40:29)
Thanks, thanks. Yeah, we like to just kind of talk shop. Maybe we're not the smartest people in the room, but we're in the weeds and we're seeing data days and.
Jack Stone (40:37)
Yeah, well,
well, we're definitely not the smartest people in the room, but I you are you are not not not. Yeah, no, it's it's it's been fun. And as always, you and I will stay in touch. But yeah, thanks for having me on. All right.
David Moghavem (40:41)
Yeah, exactly. No, no. Definitely, definitely not.
Awesome. Thanks, Jack.