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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 (01:49)
All right, welcome to another episode of Dealflow Friday. I'm your host, David Mogavum. And today we got Garrett Van Maanen, principal at Playground Properties and co-host of the best ever real estate conference. Garrett, how you doing?
Gerrit Van Maanen (02:05)
I'm doing great, David. Thanks for having me, man. How are you?
David Moghavem (02:08)
I'm good, I'm good. And Garrett, where are you sitting right now?
Gerrit Van Maanen (02:11)
I am sitting in Des Moines, Iowa. Many people say it's the Miami of the Midwest.
David Moghavem (02:18)
The Miami of the Midwest, I love that. Yes, and I'm sitting in Miami, the Miami of America. exactly. ⁓ Well, it's good to have you. For those of you who don't know Garrett and what he's up to, ⁓ Garrett's principal at Playground Properties. They're a development and investment firm creating opportunities, ownership opportunities through garage condo communities, purpose-built storage spaces for entrepreneurs.
Gerrit Van Maanen (02:20)
Well.
That's right, yeah.
David Moghavem (02:45)
collectors and small business owners. Garrett has a lot of experience in the self storage ownership and operations and that has led him to starting Playground Properties with his partner Ben. Garrett, it's really good to have you. You guys have been really active and really busy. Over 400 million acquisitions, 100 million in self storage development and continuing. that's without even talking about
what you guys have created with the best ever conference, which I'm lucky enough to be invited as a speaker. I'm super excited about that as well. And yeah, it's good to have you.
Gerrit Van Maanen (03:25)
Yeah, thank you, David. And we're thrilled to have you on stage this year at the Best Ever Conference in Salt Lake City this coming February. So I look forward to meeting you in person there. ⁓
David Moghavem (03:35)
it's gonna be
awesome. I'm super excited for that.
Gerrit Van Maanen (03:38)
Yeah. Thanks for that warm intro. And, ⁓ for extra context there, a lot of that previous experience with Ben and myself was at a previous shop, but under playground, we have been very focused on this garage condo investment thesis, very active in developing more and more of these properties. This is a very nascent and kind of niche asset class. I'm excited to kind of spread the love and, ⁓ shed some of the details on, on these things. People see them popping up all over the place.
And once we kind of explain what we do, they say, yeah, I've been thinking about that. Or my friend is getting into that space. And ⁓ it's one that I think we're going to see more and more traction in.
David Moghavem (04:17)
Yeah, it's, I'm really, I'm especially excited about this episode because it is a very niche asset class that most listeners haven't heard about. And I think to, in order to really understand it, they need to understand how you got here. I know you have a lot of experience through Spartan Investment Group, Self Storage, ⁓ Owner and Developer. Talk to me a little bit about briefly your background and then what kind of got you from Self Storage into Garage Condos.
Gerrit Van Maanen (04:44)
Yeah, thanks. So my background, I started in residential real estate when I was 19, I bought a duplex and flipping houses and various things. And I thought, I am going to be a real estate guy. And I graduated with a finance degree and I went to work in corporate finance at IBM. And I quickly was like, this is not what I need to be doing. I need to be in commercial real estate. So I found the team at Spartan investment group, which at the time was essentially the founding team and a couple of other folks. And, uh, they had three self-storage assets.
And they were going to build a storage platform. And I was actually more interested in the team that was working there than I was in self storage as an asset class. And I don't know if that's the right way to approach it or the wrong way, but it was successful for me. And we had a great run. I worked there for five years and I co-founded our construction subsidiary. And then I eventually became our head of development at Spartan investment group doing about a hundred million dollars.
of self-storage development. And Spartan Investment Group grew over that time period from three self-storage assets when I joined to about 70 facilities, national presence, national brand, doing a lot of development, doing all of our own construction, our own management team as well. So it was entirely vertically integrated. And I had a fantastic learning experience. It was definitely drinking from the fire hose throughout that time. But I also found some things.
David Moghavem (06:05)
And by
the way, sorry to cut you off. those five years, was like COVID coming out of COVID. I mean, self-storage really had its Renaissance there. It took off like the rent growth that you saw in multifamily. I was talking to other investors and they're like, well, that's pretty good, but look at the rent growth we're getting in self-storage. It was like, oh man, this is crazy. What was really driving that growth at the time?
Gerrit Van Maanen (06:14)
It did.
Yeah.
I think that there are two big things that you can point at that helped accelerate and mature that asset class at the same time. And one was COVID, which meant people need to have a higher utilization rate in their homes. And in storage, you're just selling extra space, right? It's like an asset light business model for space for the asset, for the consumer. And so they can go buy an extra 100 square feet or 200 square feet for 60 or 70 or a hundred bucks a month, which is a pretty good deal for your average renter. And
David Moghavem (06:59)
Right.
Gerrit Van Maanen (07:00)
People needed all the space that they could get during COVID because they were stuck in their homes or whatever it may be. The Fed was pumping money into the economy as well, which meant that people had extra dollars to spend on that space, to spend on things in general. And the other thing that happened is the asset class really matured and institutionalized. And we saw some really big players get into the space. Blackstone acquired a platform in the self-storage space and a lot of institutions who previously had
no exposure or maybe very little kind of alternative exposure to self storage, started to say, this is an asset class that we are starting to look at as a major food group and get a lot more exposure to. But one of the difficult things in self storage as opposed to some other asset classes is an average transaction might be $3 million or a 10 or $20 million facility is a really big facility in storage. Whereas in multifamily, as you know, David, peanuts. ⁓
David Moghavem (07:52)
Peanuts. Yeah.
Gerrit Van Maanen (07:56)
Buildings can be hundreds of millions, maybe billions of dollars in multifamily or the office space. so building a portfolio was kind of the key driver for a lot of players in self storage at the time. We saw lots of consolidation and portfolio aggregation throughout that time. So you're right. I was there from 2019 to 2024, which was just a book who years for, uh, for self storage and things are really hot 21, 22 and cooled off a little bit there.
at the end as well and started to see things sort of normalize as we saw in a lot of other asset classes.
David Moghavem (08:31)
Yeah, and I would add to that, you you were talking about how it wasn't institutionalized and was just starting to become institutionalized. And there was a lot of players similar to Spartan that were aggregating these type of storage spaces and doing this kind of arbitrage aggregation play where institutional owners just wanted scale in the sector. And so they would pay a premium rather than going through the brain damage of picking off these $1 million, $2 million storage.
spaces, especially in the urban cores. And they would look at groups like Spartan and they would say, okay, let me buy a portfolio off them. You guys probably bought it at, you know, I don't want to just I don't know what the cap rates were at the time. Right. But like six, I don't know, sixes or something. And they're like, let me just buy them at fours because I could get this this scale. There was like a clear arbitrage ⁓ at the time.
Gerrit Van Maanen (09:15)
$50, let's say.
Mm-hmm.
David Moghavem (09:26)
First of all, are you still seeing that type of arbitrage today in the self-storage space?
Gerrit Van Maanen (09:31)
I think folks have wisen up to it pretty aggressively. It's not the mania that it was in 2021. And I think everyone in the asset class would say that. But a lot of folks did realize too, that when you buy any real estate, you're effectively buying a commodity for the most part. But most real estate has a lease in place that locks in the revenue stream of that commodity and storage doesn't necessarily. So while your occupancy can go up 30%,
month to month and your rents can go up 30 % year over year. ⁓ the inverse can also happen and public storage might build a facility in the same town and drive the rents down because they can afford to do it and you can't. so it cuts both ways in that asset class. We did see a lot of overbuilding throughout that time period as well, where folks said, all right, we're going to be developers. We're going to develop more in this space, even though we don't know if this market's tapped or not. And, ⁓ that started to even out a little bit. So it's not the crazy times that it was.
David Moghavem (10:13)
Mm-hmm.
Gerrit Van Maanen (10:28)
People are still looking to roll up portfolios though, because I think it's one of the best ways to get into that space ultimately with the operational challenges of having smaller ticket sizes, smaller footprints, and needing to have a larger presence in a market.
David Moghavem (10:44)
Yeah, high demand followed by a glutted supply sounds very familiar to sounds very familiar to multi. ⁓ Garrett, so you know, you were at Spartan for five years, you guys were drinking out of the fire hose, as you put it, ⁓ with Spartan and the run up in self storage. What take me through kind of what happened next as you got you saw raid hikes, you saw things cool down. ⁓
Gerrit Van Maanen (10:49)
Yeah.
David Moghavem (11:13)
How did you see the self storage change? What were some of the things you learned from that space? And then let's talk a little bit about what you're busy with now, which is garage condos.
Gerrit Van Maanen (11:21)
Yeah. And so that process of the storage market cooling off, that wasn't a reason to get out of it by any means. I'm still in storage. I finished a personal storage, ⁓ just last year. So I still love the self storage game, but there are a couple of things that I noticed throughout that time, which is that your revenue might not be as sticky as we would all like for it to be. You have to be a pretty good operator. Not as not as operationally challenging as multifamily, but you can't just sit these things there and forget about them.
David Moghavem (11:28)
Mm-hmm.
Gerrit Van Maanen (11:50)
Because on average, George facility might have 700 units and you might see a good chunk of that turnover in any given month. And so you're constantly leasing new units, marketing, selling, doing promotions, getting new people in the door, managing the people who are heading out the door as well, doing overlocks, auctions, unit cleanouts, things like that. So it is truly like a retail business as a developer.
No city wants to see you put a storage in a retail location, but I really want to build one in a retail location. And a lot of cities will say the storage is what they call a nuisance use, which is not something that I love hearing when you go in for a pre-app and you say, I want to build a storage here. they say, that's a nuisance use. don't like that in our community. It's Yeah. Storage has built in NIMBYism everywhere you go, because even though people generally do need it, ⁓
David Moghavem (12:20)
Right.
It's like worse than NIMBY-ism, right? Yeah. ⁓
Gerrit Van Maanen (12:44)
Nobody wants to see one going in like across a Walmart or Chick-fil-A or anything like that. ⁓ So that market is getting more and more competitive. There are bigger entrants in that space all the time. the storage market is very well served. There are a lot of really smart players in there, really smart developers who are doing fantastic things across the United States. And I started to say, do I want to compete with these folks? There's a couple of structural things that I don't love about the asset class.
No leases essentially, a high amount of customer service involved. You build 60,000 square feet. You have 600 customers to serve every single day, as opposed to if you build flex or garage condo, you build 60,000 square feet. might have 50 units and you need to sell them. That's a different value proposition, but it's also a different operating model. That really attracted me to that space as well. And as I started to look around, I said, if I could do this, I would change a few things about this business model.
David Moghavem (13:35)
Right.
Gerrit Van Maanen (13:42)
I would build a garage condos. I would sell them so that it's more focused on my ability to select great sites, do strong development than it is my ability to be a strong operator and property manager of a self storage facility in the long term. And also so that once I exit the deal, I've exited it for good as opposed to you may see your operations kind of wax and wane over a multiple year cycle. If you own an asset in the long term.
David Moghavem (14:07)
Right,
so garage condos, you were kind of alluding to, condo for sale product, less management intensive. ⁓ What are some of the other key differences between self storage and garage condos?
Gerrit Van Maanen (14:25)
key differences between storage and garage condos are first and foremost, that the product is a for sale product. It's in the name. You can buy your unit. It is part of a condominium association. People often think condo means something that you live in. That's not true. Condominiums are just a form of conjoined property ownership, essentially. And so each unit is a condo unit and it is for sale. That's the biggest difference between this and traditional self storage, which is for rent. Secondarily,
are that the units are much larger. Our average unit size is about 1,000 square feet, and that's 10 times larger than your average self-storage ⁓ unit size. Also, each unit in our particular kind of prototype comes equipped with water, sewer, power, ⁓ data. So everything that you would need to run a business out of that particular unit, you've got a utility sink in there.
have the ability to install a mezzanine to kind of fit that space out as you need it. And you are the owner of that unit inside the walls of your unit. so people will often see people do, you know, a hundred thousand dollars worth of TI inside of their unit because they spend time in this space or they're fitting it out for their business or to turn it into a man cave or something.
David Moghavem (15:40)
Yeah, and you guys are developing these garage condos. Are you delivering them like right before finishing them so that you can work with some of these potential buyers and see how they want to finish off their garage condos? Or are you prefabbing everything or specing everything in order for them to step right in and it's turnkey?
Gerrit Van Maanen (16:03)
That's a question. So we do all of our units have the same finish quality and we don't do any of that tenant improvement or anything for those folks. We totally leave the options up to them. So if they want to fit out a bathroom or do specialized flooring or build a mezzanine, we've got some recommendations for them, but we are not in the business of managing that level of capex, you know, on the individual unit basis for those individual owners. main primary focus is
We want to turn over a high quality unit that's ready for someone to do what they would like, but it's also completely move in ready for someone who doesn't want to do any improvements to their unit. If you're just going to keep a Lamborghini there, then that unit's ready for you to occupy day one.
David Moghavem (16:49)
Right, so who's a typical buyer for these garage condos? Where do you identify the markets, the locations, the pockets, ⁓ where these are gonna be successful?
Gerrit Van Maanen (17:02)
Good question. Typical buyer for us is someone who is fairly affluent and someone who oftentimes owns a business, even if their business is not going to be ran out of this particular unit. And we're looking for, you know, our buyers are generally male, generally in their fifties or sixties. And a lot of times they are car enthusiasts in some way, or form. So they've got extra toys, motorcycles that they're wrenching on a boat or an RV that they want a place to keep.
And if you just bought a $300,000 RV, you're not going to park it in a cornfield or in some uncovered parking. You might even not want to rent a storage unit for that type of thing. You probably want a place that you feel is very secure, where you can access it very conveniently. And those are the types of folks that we see buy a lot of this product. We also have some business buyers who, you know, maybe you run a pool cleaning company or pressure washing business. You're not really conducting business on site necessarily, but you need that extra space.
need a large garage. And one of the things that we've seen so far is a lot of folks who maybe you bought a one million or $2 million house, but now today after this run up in housing prices is a two or $3 million house. don't necessarily, you're like on principle, I'm not trading up. I want to stay in this house for a while. I'm locked into this low rate, but I do need more space. And I have found that I ran out of space in my garage or
My home is in an HOA community. I can't park a vehicle on the street overnight or anything. can't park my RV in my yard and I'm going to buy extra space.
David Moghavem (18:38)
Yeah, and that makes sense because you're targeting urban areas where with affluent people but have a limited amount of space and so they need a garage condo in order to get extra space in order to you know, house their toys as you said. ⁓ What do you think ⁓ resonates with your buyers that they want to own?
a garage condo versus a typical self storage where they can just rent? Is it maybe because it's something that's higher end that they want to store a longer term? What's really resonating with these end users?
Gerrit Van Maanen (19:16)
Great question. One of the things that I have found is instead of, and you mentioned this on a previous podcast, David, is you want to buy multifamily in places where people are not just renters by choice, but renters by necessity. We want to build in a place where people are buyers by necessity in the sense that if I am a business owner and I do need more space, I don't have an option to go rent it.
David Moghavem (19:31)
Mm-hmm.
Gerrit Van Maanen (19:45)
anywhere and that prompts people that's what urges them to come and buy spend 300 or 400 thousand dollars on a garage condo unit and this space has come at quite a premium but if you're in a market that is very supply constrained where it's hard and difficult you can't build a shop in your backyard you can't build you know in addition to your garage because your lot is very small you are someone who is wealthy enough to believe that this is a store of value
And it is these units are known to appreciate pretty significantly ⁓ after acquisition. And so for a lot of those folks, they say, I'm a buyer of this because there's no other product for me. can't put this, you know, Corvette of mine into self storage. And I also am interested in parking cash in a place that is a store of value for myself. That's a very attractive proposition to a lot of folks.
And so that is the type of markets and the type of purchasers that we're chasing.
David Moghavem (20:47)
I want to kind of shift towards the investor side of it because you you guys are raising outside capital, you run the best effort conference, which is also, you know, quasi capital raising networking type of environment. What are the type of returns you're seeing on
the investment side for your guys' projects? What do you guys target? ⁓ Return profile and
what analyzes a good deal from a bad deal.
Gerrit Van Maanen (21:16)
Good questions. And I'll open up the kimono a little bit on this one because condo development is very different from most other business models in that we won't have a five year hold period. So generally we're looking for a development spread that is, what is our yield per square foot over our basis per square foot? And are we comfortable with that? And can we get that to be 25%, 30 % plus so that the project itself is just profitable?
Then next, can we do that in as short of a time period as possible? So can we get the IRR to our limited partners to be 30 % or 40 % under some realistic expectations? Maintaining very strong contingencies. This is development. Things can go wrong, but as long as you have contingency, you've planned for it in your basis, then that's okay. We can plan for those types of things. And timing-wise, so we're very aggressive in our pre-sales and making sure that we are selling these units
as fast as we can before we even break ground. Our golden project, for instance, is 35 % pre-sold hard contracts deposits in place before we broke ground. We expect it to be 100 % sold by the time we get certificate of occupancy. So how quickly can we deliver these units, get people in post certificate of occupancy is important as well. We always plan for an additional 24 months of sales after CO. It was very likely that we'll have
David Moghavem (22:33)
Yep.
Gerrit Van Maanen (22:40)
remonts of sales following certificate of occupancy at a project like that. ⁓
David Moghavem (22:44)
Yeah,
first of all, sorry, first of all, Golden, Colorado, think that's like a perfect sub market where, know, you're explaining who the buyer is affluent. It's like close to urban of Denver, but they need some extra space. So like, that's a great pocket. And like that kind of clicked for me, like, wow, Golden, Colorado, that's a perfect place to do it. ⁓
Gerrit Van Maanen (23:05)
I forgot that you
guys have a big portfolio in Colorado. yeah, I since you know.
David Moghavem (23:08)
yeah, yeah, we have
a couple of thousand units out there and nothing in Golden, but definitely urban parts of Colorado. And I think there's a lot of residents that have a lot of toys ⁓ or if they want to go out to ski and they need a place to store their items. So that makes that makes a lot of sense.
the second part I want to talk about is you were mentioning how you have yield per square foot over cost per square foot and you were targeting you said 30, 30 % there. So is that like a yield on cost of 30 in that regard? like what's your metric of choice that's showing that this is a good deal?
Gerrit Van Maanen (23:38)
Mm-hmm. Yep.
Good question. So our primary metric for whether or not this is a good deal is the IRR project level IRR that we can dilute. We want that to be as high as we can, but obviously that comes down to speed. And so when we take speed out of the equation, we just look at development spread, which is what is our total sales on this? And if we're total sales are $30 million, then what is our total basis in this project? Is it $24 million? And are we comfortable with that level of spread between those two figures?
David Moghavem (24:00)
Mm-hmm, right.
Right, those like that ROI spread over basis. You're all in basis over what you're gonna sell for. ⁓
Gerrit Van Maanen (24:28)
Yep, exactly.
So it's truly just gross gross profit essentially in the project. And it's very different from when we look at a buy and hold underwrite, because you guys don't really have that type of metric where you just say, ⁓ we're looking at gross profit. ⁓ But when you're building a product and you're selling it, you can look at it a little bit more objectively like that. Then we can still apply an IRR calculation based on how quickly we plan to sell the units, which we want to be very conservative with that assumption. And then you mentioned yield on cost, David, which
David Moghavem (24:39)
Right.
Gerrit Van Maanen (24:57)
We actually look at that as well. We say, if we had to rent every single unit, what yield on cost are we building to instead of selling them? Is that still attractive to us? Are we still building to a seven and a half or an eight yield on cost, getting some development premium in there if we had to rent these? And that goes back to this being really an attractive buyers by necessity type of market. We're saying, okay, if somebody's looking in and they're buying a unit for $300,000,
David Moghavem (25:05)
Yep.
Gerrit Van Maanen (25:27)
but their rent would be $30,000 a year on a comparable unit. It kind of makes sense for them to look at buying something.
David Moghavem (25:34)
Yeah, and I was gonna say there's probably not a lot of comps for Garage Condo. You guys are pioneering in a sense. It's a very niche asset class, but there's probably a lot more comps on the self-storage space. And so when you can kind of use a yield on cost of if you were to have your fallback plan be renting out, and you could at least feel and gauge how this deal is shaking out if.
the sale method either doesn't work or have to to rent it for a little bit. You can at least put a put a finger to the pulse.
Gerrit Van Maanen (26:05)
Exactly. And we, we, we'd spend some time looking a little bit at self-storage rents, but we look a lot at small bay industrial and shallow bay industrial rents. And for instance, across the United States, ⁓ buildings that are smaller than 10,000 square feet is about 36 % of the total industrial supply in the United States, but it's only 4 % of the industrial supply that's under construction right now. And that means all the industrial developers, they're basically not building small buildings. ⁓
David Moghavem (26:13)
Mmm, true. Yep.
Gerrit Van Maanen (26:35)
So if we have to rent this out, that space typically comes at a premium because there are so many businesses out there that'd kill for a 1500 or a 2000 square foot unit and it's impossible for them to find and nobody's building more of them. And so it works both ways. Our business model right now is focused on selling these units and selling them mostly to consumers, a few businesses in there, but does the model work as well if we have to sell this or rent it to businesses? And that is our fallback strategy.
And we want to ensure that we're safe and creating an attractive return in both scenarios.
David Moghavem (27:09)
Yep, that makes sense. You know, as an investor, and we're in the multi space where it's more cashflow driven. And what we're finding is a lot of the investors we're talking about, as we're historically been value add type of owners where there was less cashflow and it was also IRR driven, and it was more back loaded. There was lack of ⁓ cashflow going in. You're seeing that sentiment change within investors where they're looking for
day one yield and cash flow. And I feel like the business model of the garage condo doesn't offer cash flow out the gate. It's more IRR driven. It's more backloaded. How are you guys combating that sentiment in this environment where people and investors and capital allocators are looking for yield?
Gerrit Van Maanen (27:59)
glad you asked this. This is one of my favorite value propositions of this space is like you said, people want cashflow. They don't want it to be too back bloated. But what is most important to them is that they get their money back. I think after some of the things, some of the defaults that we've seen syndications that maybe haven't gone well, people are just saying, I have to put my money to work, but I want to get it back. And whether that's in 18 months or that's in five years or 10 years,
David Moghavem (28:14)
Mm-hmm.
Gerrit Van Maanen (28:29)
I won't, what's most important to me is that it comes back to me. And so a lot of these investors, say, wait a second. You are going to not take my money until this project is fully entitled. You're going to build it for 12 months and you have a lot of pre-sales in place. That makes me feel like I'm going to get my money back. ⁓ that's the real value proposition that we can bring to some limited partners is even though the deal times are a little bit shorter, even though it is largely backloaded, there's high surety that they're getting their money back.
The other thing that's different about the condo business model is every time you sell a unit, it's essentially a reduction in basis, right? Cause one, if you're building for like, let's say you're building for 10 million, you're selling for 15 million. There's this big spread that's been created where if you were building for 10 million and you have $6 million of debt on this, you only have to sell about 35 % of the units to retire 100 % of the debt on the property. So, all right, that's a big reduction in risk.
David Moghavem (29:24)
Right.
Gerrit Van Maanen (29:28)
If you sell another 30 % of the units, you've returned all of the equity, which is a great thing too. If you sell the final 25 % of the units, then you have created a pretty big spread. ⁓ Exactly. ⁓
David Moghavem (29:40)
That's your profit. Right. Right. So you're
de-risking. Sorry. So the 35 % you sell that, that covers your debt. So you're really de-risking the deal before going vertical by selling that. It sounds like 35 % is like the sweet spot. And if you can't sell 35%, you give the deposits back. if you can't meet it or you can at least wait it out until you get there before going vertical. Is that how it works? Yeah.
Gerrit Van Maanen (30:07)
Essentially. Yeah. So every
deal that we do, we've got our own standard for how many hard contracts do we want to have in hand before we break ground? So we're personally guaranteeing this debt. I'm not interested in, ⁓ in having a project where I don't have strong demand and strong pre-sales where the market's pulling this product from me. And so if we can get basically enough pre-sales that would retire the debt, you know, we're, cleared hot to break ground at that point.
means that our investors' equity is going to be very safe position.
David Moghavem (30:40)
So what's your current pipeline looking like right now? I know you have that deal in golden. Where else are you guys developing? What are some target markets or areas that you're focusing on today?
Gerrit Van Maanen (30:52)
We're a hundred percent focused on Colorado right now. And that is for a number of reasons. One, we have deep market expertise in Colorado. We kind of know what we're doing on the development front in Colorado. And while I've developed across the country, it's helpful to have a little bit of, of a local presence for some of these developments too. And so we've got our project in Golden. We just broke ground on that two weeks ago. So that is official under construction. Thank you.
David Moghavem (31:19)
Congrats. ⁓
Gerrit Van Maanen (31:22)
⁓ almost a year's worth of work went into that one, getting into this stage. So we're very, very happy with its progress so far and with the market's response to it. We have a second one in grand Junction, Colorado, which is on the Western slope, a bit of a different market, but one that has changed significantly over the, over the past couple of decades with people looking to move to more kind of outdoorsy environments. And so we've seen some very exciting things happen in that market.
We're excited to bring this project. We'll break ground on that in December. And ⁓ then we're focused on a couple other markets in Colorado, particularly like Denver Southern Metro is very affluent. And then a lot of the Western Metro is of course, extremely supply constrained, very dense and pretty affluent. And so those two parts of the Metro, Littleton, Highlands Ranch, Arvada, Wheat Ridge, those are the types of places where we're looking to bring some more of this product to market.
David Moghavem (32:19)
Yeah, West Side, West Side, Denver, supply constraint close to the mountains, need some extra storage ⁓ for whatever winter activities, summer activities, anything like that. I think it's a great play in Colorado and I could see this ⁓ carrying weight nationally in similar pockets that have some of these outdoor amenities like Denver and Colorado have.
Gerrit Van Maanen (32:45)
Yeah, thanks. And any place, I mean, this, this product type, it's still very nascent. It's not in all the, all markets. Sometimes we go to a state and they look at you like you're trying to build what, ⁓ you know, you'll see Texas has got a lot of high quality garage condo supply. Phoenix has got some decent garage condo supply. And then there are other markets where it just is completely untapped and you really have to prime the market in those places. One of the interesting things we found in Colorado, this asset type kind of originated in the Denver Metro and.
David Moghavem (32:55)
Yeah.
Gerrit Van Maanen (33:15)
So that means a lot of people are familiar with it. Their neighbor maybe owns a unit and that kind of creates this keeping up with the Joneses thing versus if you're the Salt Lake City, there's really none of these in existence. so nobody knows that they don't know. ⁓ Yeah. So there's like a consumer education and like a priming them of the market type of thing that you have to do in some of these places. And you got to plan for that in your marketing.
David Moghavem (33:27)
More of a learning curve, yeah.
Yeah, and with that said, what's like the biggest misconception you would say, whether it's a owner or an investor have about strategies like this and garage condos?
Gerrit Van Maanen (33:50)
I think the biggest misconception and what we've seen on other people's projects that have maybe failed or not performed very well is that if you build it, they will come. And if I just build these units and I post them on correct, see and loop that that they're going to sell out. if I hire my friend who's a realtor, ⁓ they'll get them all sold for me. And that's just not the case. You have to be very intentional about your marketing. You really need to kind of, ⁓ walk the walk and talk the talk with.
these buyers, a lot of them are fairly sophisticated. They own other assets or they say, I'm selling a portfolio of rental properties. I want to buy four or five of these units. And that's someone that knows real estate. They know that there that that there's things that they need to look out for. And also when you're pre-selling, there's a lot of faith and trust that needs to be built with the average buyer to make sure that they feel comfortable putting up a deposit that you are a developer who's going to get their project across the finish line.
Even though that deposits in escrow, it's safe, all these things. ⁓ They still need to know that, Hey, you're going to deliver this on time. And that comes back to having a decent reputation as a developer being trustworthy in general and putting yourself out there in that way too.
David Moghavem (35:02)
I wanted to move forward to talking about the Best Ever Conference and what you and Ben are co-hosting. I know that's a big part in, first of how you met Ben and also how you guys are creating a mission with the conference and networking. Talk to me a little bit about the intention of Best Ever Conference and how that's shaped.
your strategy with playground properties as well.
Gerrit Van Maanen (35:30)
Yeah, this conference is best ever. Fantastic real estate conference. If I can just plug it for a moment. ⁓ Unlike a lot of the other ones where, know, it's very stuffy and ⁓ this is lots of action, super lively. And if you are someone who is trying to make something happen for yourself in commercial real estate, I highly encourage you to come. We try to have a lot of fun. It's very upbeat and the audience there is phenomenal. So Ben and I met, ⁓
This conference actually has been going on for 10 years. So Ben and Joe Fairless from Ashcroft's Capital started this conference 10 years ago and have been running it every single year since, including a virtual year during COVID. So a lot of conferences come and gone in that time. Last year we had 1200 attendees in Salt Lake City. And so it's very well attended, both locally and nationally. And we attribute a lot of that to the fantastic community that has been built around this conference.
David Moghavem (36:12)
Wow.
Gerrit Van Maanen (36:27)
So the conference is geared towards middle market, commercial real estate operators and syndicators. And the conference has grown with a lot of its attendees. So 10 years ago, people who were syndicating and had a $50 million portfolio of multifamily that they had put together today have hundreds of millions of dollars and they have different problems today than they had back then. So seeing groups like Ashcroft Capital, Spartan Investment Group, a number of other groups, Lone Star Capital.
those guys started at the conference. So seeing groups like that, that have been attending for years and have grown and they have different problem sets. And we bring speakers that can speak to, Hey, you used to have this problem back when you had 50 million in assets. Now you're trying to go from 500 million to a billion. You've got a different set of problems. The conference has grown with those problems too. And I think that keeps people coming back.
David Moghavem (37:20)
Yeah, it sounds like attendees, you know, that we went through sounds like a really powerful group of people in the industry and ⁓ Salt Lake City, great city as well. And this stemmed from the podcast, right? The best ever podcast. Yeah.
Gerrit Van Maanen (37:37)
Yes, so it started
with Joe had a daily real estate podcast that he ran for years and years. It still goes on today. ⁓ Yeah.
David Moghavem (37:44)
I was on it. I
think you told me I was a top performer on it. Yes. Maybe, maybe. I didn't say it. I didn't say it. Yeah, that's...
Gerrit Van Maanen (37:48)
Top performer, maybe number one episode ever.
⁓
And so yeah, that podcast has been going on for a really long time. And they said, let's get this group of people together and break bread, share space with one another and learn from each other. And it's not just about syndicating. It's about all things, commercial real estate operations, asset management, acquisitions, capital raising. And truthfully, as an operator, how do you grow your business? How do you think like an investor and how do you wear those different hats too?
When you've got one day where you're operating every single day, the next day, I need to be thinking like Warren Buffett and be the best investor I can be.
David Moghavem (38:30)
I'm extremely excited to attend the conference and looking forward to meeting you in person as well, Garrett, and Ben as well. Really impressive what you guys are doing at Playground Properties. And I guess last question, where can listeners connect with you and get ahold of you if they want to connect with you?
Gerrit Van Maanen (38:49)
Yeah. If you are interested in garage condos, want to just call, talk about anything, uh, commercial real estate investing development. You can find us at a playground dot properties, no.com, just playground dot properties. And, uh, my email is Garrett at playground dot properties. My cell phone number is six four one two nine five two one four six. I always give that out. Nobody ever calls me. So give me a call.
David Moghavem (39:13)
I don't know
you might get some prank calls. have some crazy listeners on here, but Garrett really appreciate it. Thanks again for hopping on and ⁓ Looking forward to meeting you soon
Gerrit Van Maanen (39:17)
Bring it on.
Thank you, David. It's been pleasure.