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Welcome to Constructing the Carolinas, a show where we explore the growth of our communities, cities, and counties across North Carolina and figure out what's on the horizon. This podcast is brought to you by Barnhill, which has been Constructing the Carolinas since 1949.
00:00:04 - Valerie Bono
Welcome to constructing the Carolinas, a show where we explore the growth of our communities, cities, and counties across North Carolina, and figure out what's on the horizon. We are brought to you by Barnhill, which has been constructing the Carolinas since 1949. I'm your host, Valerie Bono, director of business development. Today we welcome Bryan Kane, founder and managing partner at SLI Capital, a Raleigh based real estate investment and development firm. You may have seen SLI in the news recently, as they recently acquired controlling interest in green space self storage in a deal with Madison Capital. SLI is also developing a 1200 unit development by Dix park, plus East End Market, a new restaurant and residential hub by five points in a deal with Atlas Capital. So they've been pretty busy. You might also recognize the name Kane, as Bryan is the son of commercial real estate titan John Kane. But Bryan has carved his own path leading up to founding SLI Capital. He worked for a couple of commercial real estate investment firms, and he realized that he wanted to do things a little differently.
00:01:12 - Bryan Kane
It needs to be more fun, and it had become very process oriented for the right reason, but there was too much process for me. And I think one of the things that we do, we focus on SLI is trying to not be. You have to have process for the right reasons, but it can't get in the way of deals because being quick and being nimble oftentimes helps you win deals. And so that probably was maybe the biggest frustration point for me that led me to go do it. I knew I knew how to do it. I'd been doing it there fairly successfully for a while, and so it was really just a, hey, this needs to be more fun again.
00:01:57 - Valerie
Yeah, no, I love that. Life's too short. You got to have fun, right? Can you talk a little bit more about your investment strategy?
00:02:04 - Bryan
Yeah. In starting SLI, one of the things we wanted to do was have duration, flexibility, because the world I came from was very kind of institutional, closed end funds. And that works for lots of reasons, but the times that it doesn't work are usually because you don't have enough time, right. You either ran out of time to invest money or you ran out of time to harvest. And both of those are. Usually have bad outcomes. And so. But if you did a deal and you had several more years, oftentimes you're okay. And so as a result, we set ourselves up to not have that kind of restriction on our fund structure, which is more difficult capital to raise because it doesn't fit many of the institutions. But we just felt like it was worth it to have that kind of flexibility to go down a less institutional capital path while still kind of implementing all the institutional approaches that are important.
00:03:09 - Valerie
So Sli capital, you've been in business for a while now. What would you say are some of the biggest accomplishments that you've seen since you've been there?
00:03:18 - Bryan
Just being able to do deals that are of the scale of some of the ones that we've done? I think it's harder to do those than it looks sometimes just the capital involved and the scale of putting those together, I think it's been fun to do, but I think there's not that many of those deals that get done in a market like Raleigh. And so to be able to put some of those together I think is probably, probably the most interesting thing that we've accomplished, at least thus far.
00:03:50 - Valerie
Any favorite deals that stand out?
00:03:52 - Bryan
Not especially. I mean, I think East End market's going to end up being a really neat part of town once we build it all out. You know, certainly Gordon and the Jamestown guys have done a lot of cool stuff next door, too. So I think that that whole neighborhood is going to turn into a kind of a neat place that you see it frequently or that kind of theme frequently in lots of cities where we've compared it a lot to west midtown Atlanta or south. And Charlotte and Raleigh doesn't really have a neighborhood like that. Downtown Durham has a lot of those elements to it, but we don't. So I think that'll be neat to see what that neighborhood turns into.
00:04:34 - Valerie
Yeah, absolutely. I just actually went on the Raleigh chambers inner city visit and we went to Atlanta and we toured one of Jamestown's projects down there. You know, those adaptive reuse spaces are incredible and they're just. I don't know, there's just new sense of energy that you feel when you walk through those. And we're seeing it happen right here locally.
00:04:54 - Bryan
There's a reason you can't build them anymore.
00:04:56 - Valerie
That's right.
00:04:57 - Bryan
It's just very, very expensive and difficult to build the way that they did. And so, you know, being able to repurpose those and reinvent them, it just has a feel that is really difficult to replicate.
00:05:08 - Valerie
Absolutely.
00:05:08 - Bryan
Yeah.
00:05:08 - Valerie
Barnhelp is obviously very gracious and excited to be a part of East End market. You know, that first phase. And it's a really cool spot. So if people haven't checked it out, I would definitely encourage, go look, go grab a cider, right? Walk around, check out the co working space over there. It's really nice. Well, cool. So, pivoting a little bit. Let's talk about market focus and investment criteria. When you're looking at investing and you're looking at different markets, what are some of the indicators that you're looking at?
00:05:41 - Bryan
Yeah, I mean, I think we kind of do top down and bottom up. So we first look at kind of a macro. What's the data that's compelling or not compelling to be in a particular market? And we, like a lot of people, think the data is compelling. In the sunbelt, we think it's less volatile and higher growth, which is a good combo. And most of our, outside of our storage business, most of our emphasis is really in the southeast. So it's only on five markets, and it's got to be places that you know really well. Right. So if you don't know them, in addition to all the data, if you don't know, you know, you can look at the kind of mathematical data, but you also have to understand, you know, where's it moving and where do people want to be and why do they want to be there? What makes little pockets of each market compelling? Because I think it's much more specific than just a submarket. It may be a fifth of a submarket. That's really interesting. And the rest of it's less good. So I think we're pretty granular in our approach to why certain places are interesting and others may not be sure.
00:06:58 - Valerie
Are you looking primarily in Raleigh or Durham? And like other metros, Charlotte.
00:07:04 - Bryan
So we have done more deals in the triangle than anywhere else, which I'd say, fortunately through Covid, when nobody was running around doing deals the way they were previously, or going to dinners and doing all the things that lead to deals. It's nice to have a market as good as this one, data. And opportunity wise, that was the one we were in. So that probably was more luck than anything else. But the data here is one of the better situations in the US, and there's less competition here from an operational perspective than there are in some of the peer markets. I think that lends itself to being a better risk adjusted opportunity. We also have a deal going in Nashville, and we're actively looking, always kind of there. Charlotte, Atlanta and Charleston. And then the storage business is totally different. That's kind of all over the country.
00:08:07 - Valerie
Sure. So when you're looking at the investment criteria, you're looking at all this data which you just shared, you're looking at different areas like Charleston or Atlanta. Are there certain types of projects specifically you're thinking is it always adaptive reuse or what's the key driver of the type of project that you want to invest in in a certain market?
00:08:29 - Bryan
I think purely from an investment perspective, we think about what is the target return for that type of an investment. So if it's core plus is eleven to 13, if we think we can do 13 plus, then we should be doing that because we're going to beating the index, if you will, in that space. So that's generally how we think about it. We want to do better than what the risk profile feels like. The market is there, but we're also certainly paying attention to things we think we're good at because if you're doing things that you're good at and you're doing that, then you've got less risk involved because it's something that you know how to do well. So I think historically a lot of what we've done has been kind of these big complicated mixed use deals where you're, you know, some of the parts, right. And you're kind of figuring out different things that go together in some complimentary fashion that allows you to make it a more compelling investment by doing them that way. And usually parking is the thing where you actually can mathematically identify like, hey, how did we do this in a way that was interesting and like multi and office are the best two to go together. But obviously office is not the top of anybody's thesis at the moment, but those are the one. Those are places where I think you can look at and say, all right, well we have the skillset that allows us to do these things together and put them into one project and that results in x dollars and cost savings, which is not dilutive to the quality.
00:10:07 - Valerie
Sure. What are some of the other good things that you think we're good at in this market?
00:10:14 - Bryan
I think this market has a lot of opportunity because hospitality, for example, we don't do much of it, but hospitality, we're short of it in the triangle, right. There's not a lot of quality hospitality here, which I hope a lot of hotel guys will show up and do that because it's not our sweet spot. But I think that's probably the biggest hole in my mind. I think we'll continue to. We don't have as much high rise multifamily product probably as some of the peer markets do, but our incomes are as higher. Higher. So that would suggest that we probably have some untapped demand there. But at the current moment, the yield on cost profile of those type one deals is not doesn't pencil so to be seen. But I think those are probably places where there's a bit of a hole in the market.
00:11:10 - Valerie
What are our biggest strengths, would you say?
00:11:13 - Bryan
The durability of the economy here is a pretty notable strength. I think even if you look back at the GFC, I think we only had one year of negative job growth and then we were back to pre GFC levels or pre loss levels within 18 months after that. So that sort of stability combined with continued growth, pretty fantastic. And there were not many other markets that were in that I would say are in that situation. So having that combined with the kind of high growth types of economy that are here, you have great healthcare, you have great tech, obviously life science is a great tailwind. So I think all those are going to continue to be good growth items.
00:12:07 - Valerie
Sure. Yeah. We repeatedly hear a lot of businesses that are looking to come to this market. They also tout the education. Right. We have so many great universities and community colleges right here that could help foster that talent pool and then hopefully have the talent stay in this market and enter our jobs rather than going to other mentors. But yeah, I agree there's a lot of positive, but certainly some opportunities where we could really rise, which I'm optimistic for sure. All right, so looking at the capital market trends, what are the current trends that you're seeing? I know you said you're a data guy, you're looking at a lot of information. Tell us what trends you're seeing right now.
00:12:52 - Bryan
I mean, certainly rates are unfortunately where they are and I think that's really the kind of leading issue that's preventing deals from getting done right. I mean, people generally don't like doing deals with negative leverage. And today, given where rates are and given the, I guess, lack of available debt capital, that's a pretty big impediment. So I don't know that it is as easily resolved as it should potentially be. I mean, I think politically there's a lot of influence there. That's not great if you have tremendous government spending, that's an inflationary thing and we don't seem to have the political will to pull back there. And I think housing being such a key input in the inflation calculation. I think we, with high interest rates, obviously the cost on a home is higher. Rental rates have dropped a bit in a lot of places over the last twelve months, but that's going to change pretty quickly once this current wave of deliveries occurs and is absorbed and there's nothing behind it. So I think it's a bit of a tough position, because I don't think the only solution is new supply, and I don't think we're going to get new supply without rates going down. So the inflation side of that, I think, is very difficult to solve without a supply answer. And I think we're potentially in a place where we're unwilling to create that answer.
00:14:37 - Valerie
Sure. With where we are right now, do you think the trend, are there any trends that will focus more on smaller quick hit projects?
00:14:46 - Bryan
Smaller deals are much easier to do. I think as you look at large transactions, they're at a virtual standstill. I think even the capital that's willing to dip their toe in the water today is much more happy to do a small deal than to take a big concentrated bet just because there's significant uncertainty with rates and where they'll be. So, yeah, I mean, I think, and that's one of the reasons why we're spending a lot of time on our storage business, because those deals are small and the yields are higher.
00:15:24 - Valerie
Well, let's get to that. So I was going to ask you about that at the end, but since you brought it up, let's talk about the announcement. And we're talking about Madison Capital and SlI Capital announced the deal to purchase controlling interest in green space self storage company. So tell us a little bit more about the green space self storage company.
00:15:44 - Bryan
Yeah, so green space is a neat, really neat business. So David Ladue and Rick Stockton created it a handful of years ago and really had the incredible idea of building self storage out of stacked shipping containers, which they were familiar with using to construct things from a prior life. They were able to patent that methodology. And the net result is that they can build facilities that look almost exactly the same as you drive up to them as a consumer. But they can build them dollar 15 to dollar 25, a gross foot cheaper, and they can build them, call it three to six months faster. Mathematically, that's super accretive from an investment perspective. I mean, on a five year hold, all else equal kind of. Our analysis suggests that's somewhere in the 400 to 700 basis points of IRR premium without taking really additional risk. And maybe there's less risk because it's such a modular assembly that is, there's less to worry about from a constructability perspective. So, really interesting kind of business that even while housing volume is down, which obviously is a key driver of storage, we can still make deals. Pencil to acceptable IRRs, which to us, for developments, kind of 20 plus. Even with the depleted rates over the last twelve months or so and so. And that's all attributable to the cost savings and the time savings. So I think that is a testament to the great idea those guys had and obviously we're just glad to be, to have found them and to be part of it. And then the Madison guys, Ryan Hanks and I have known each other for a long time, done deals together for many years, and they have a substantial storage platform called Go Store it. That's one of their businesses. And so I called Ryan when we put this together and said, hey, I'd love for you to look at this with us because you're a pro at it and we're learning it as fast as we can learn it, but we'd love to have your expertise on the team. And thankfully he agreed with our thesis and ended up coming along and doing it with us.
00:18:11 - Valerie
That's really neat. How did you learn about green space?
00:18:16 - Bryan
We met them through a longtime friend of mine in the industry that had been on the principal side and now is doing some advisory work. And he, you know, he called and said, hey, you really got to look at this. You're going to be excited about it. And I said, you realize we haven't really done a lot of storage, right? And he said, yeah, but you're going to figure this out. And so we, he was right. And he was, we were just lucky. We were one of the people he called about it. So.
00:18:45 - Valerie
Sure. So if listeners are tuning in and they're curious and intrigued about this, where can they find out more? Is there a website they could go to?
00:18:53 - Bryan
Greenspace has a website and we're, you know, because that there's this patented methodology. We actually sell licenses for folks to use that method as well. And we're happy to provide, you know, reach out through the website and we can send information on how it works. But because the savings are so substantial, you know, it's definitely still accretive for people to pay for a license and construct using this method as compared to traditional.
00:19:22 - Valerie
Sure. Well, very cool. That's a neat endeavor that I don't think a lot of people are expecting to hear about on this call. So that's pretty neat.
00:19:30 - Bryan
Very different than what we've done historically.
00:19:33 - Valerie
Well, cool. So actually that's a good segue to my next question. So economic shifts, right? There's certainly been economic shifts that have changed the way investors invest in this market and that's one example. But are there any other changes in behavior and how folks are investing today that you've seen or others that you're experiencing.
00:19:56 - Bryan
I mean, certainly over the last twelve or 18 months, there's been a lot of people trying to put out preferred equity. I don't know how many takers there have been of that, but there's certainly been a lot of people that would like to offer it. I think now maybe the biggest difference that I've seen of late is that maybe even just through the pandemic, I think the core capital that historically had spent virtually every dollar in the gateway cities really started pushing into the high growth secondary markets, which all the data that we have assembled over the years suggest are better bets and less volatile. And in many cases that translates to more core. But historically, those guys wouldn't invest in places like Raleigh, probably because they thought it was too small, but also because the check sizes were smaller and deals have now grown to a size where the check sizes are less of a problem. So it's really more market data. And so there's a lot more of that capital that will invest here than probably there ever has been.
00:21:05 - Valerie
Sure. So you mentioned the gateway cities, and that's historically perhaps where most of the capital was going. Right. What are you seeing as far as international capital? Are you seeing a lot more on that front as well?
00:21:20 - Bryan
There's certainly more of it here. There's always been plenty of it around through the big advisors, the really large fund managers that have a bunch of different investors from all over the globe that are LP's and their funds have always had guys from everywhere. And so there has been indirect exposure to markets like Raleigh through those vehicles for a long time. But I think more and more we'll have conversations with investors from all over the place that are interested in kind of being more directly allocated to a market like Raleigh, which is necessary to continue to do deals that are larger scale.
00:22:01 - Valerie
Sure. Would you agree? So in this market, the saying, what is it? Rising tides lift all boats. So is it good?
00:22:09 - Bryan
I think generally over time, that's probably a true thing here. I think it, I mean, maybe right now, falling tide drops, drops a lot of boats, but I think in general, yeah, kind of through cycles, if you smooth it out, you know, that regression trend line is pretty good.
00:22:30 - Valerie
Sure. So you talked about mitigating risk quite a bit in today's market, right. We've talked about the current state of capital markets. How are you mitigating risk? How are you staying ahead of it?
00:22:45 - Bryan
Yeah, I mean, I think you've got to have duration on your side and you have to have modest, low or no leverage. And when you're using leverage, you gotta have good relationships with the banks because, you know, they're. They're not putting a ton of money out, and, you know, you need to be on their list of people that they want to do business with. So I, you know, you just gotta continue to kind of build those relationships and treat them. Treat them the right way, hope they'll do the same in return, so. But, yeah, I mean, I think in general, though, it's. You got to be defensive in your underwriting. You can't underwrite a bunch of growth. And some of the stuff that probably people that had bought things at really low cap rates, second half of the pandemic, some of those probably don't look so hot right now. I think those guys are either putting in more equity or they're having a hard time refinancing. So I think, fortunately, we didn't. We generally are averse to buying things at those sorts of cap rates. Those are not compelling yields to me, really, in any environment. So I think we were fortunate just that we didn't do that, but it's just disciplined underwriting.
00:24:06 - Valerie
Sure. So we've talked about the local market quite a bit, and we've talked about some of the surrounding markets. Are there any untapped markets or any trends that you're seeing of markets that we need to be looking out for? Right. If you've got your crystal ball and you're like, okay, five years from now, ten years, what markets should people be paying attention to?
00:24:31 - Bryan
I think certainly there's more and more places that are growing rapidly, right. We had a ton of migration patterns that were adjusted or increased or enhanced or, however you want to think about it through the pandemic, that we're all, for all sorts of reasons, but the southeast and the sunbelt in general has been a huge benefactor of that. I think a lot of those cities, though, they're filling in pretty rapidly. Right? I mean, you look at how you look at, you know, Austin as an example. Austin's like a tier one big city now, and quality of life's probably not what it once was there. So I think, you know, there are other places that have been probably really successful from that. Like Huntsville, maybe. Huntsville is still a small place, but it has great jobs data and probably a whole lot better cost of living and other stats that somewhere like Austin can't boast any longer. But I think probably the other thing that's really interesting that people think about if they own a home in these places, but they don't think about from an investment perspective unless they spend their day. And it's just the insurance costs. And so that, like Florida, I mean, it's prohibitively troubling to do any sort of deal in a lot of parts of Florida because the insurance cost is so high. So it's, you know, we've talked about it on storage as an example. And I think that the insurance premiums are probably four times what they would be here to do the same deal in Florida or in many parts of Florida. And that's like minimum. So, I mean, some folks on multifamily, for example, I mean, they're, I mean, you're seeing a lot of people look at things like captives or, you know, other creative insurance structures just because they're trying to layer it in a way that allows for the cost to make some sense. And, you know, at the end of the day, you know, it can't rise at the rates it continues to rise at, probably similar to healthcare and education for it to be there to be a real answer that works. So I think to me, that's going to have a bigger influence on the way those things happen and where the flows of funds are that's going to, or things just can get really expensive in those places. You already see it in Florida, right? I mean, South Florida is as expensive as it's ever been and it's probably not going down.
00:27:01 - Valerie
Sure. Absolutely. No, that's certainly the case. I mean, you see it all over the news. The magic question I want to ask you about is AI. You hear about AI everywhere, right? You hear about AI and banking. We're starting to hear about it in construction. How are you seeing AI enter the real estate market?
00:27:23 - Bryan
It's probably slow in real estate, just like it is. Like lots of things are in real estate. There's kind of an inherently relational transaction situation in real estate that probably makes it difficult to overwhelm it with that sort of technology. But I think there are definitely places where it's going to be helpful. Right. I mean, I think certainly engineering and city planning and some of those kinds of things, I think, are benefited from speeding up some of those processes that can be tedious now. I mean, we've gotten, I think, to do a deal today from start to finish to get all your approvals is it's a long process. It's much, much longer than it used to be, and that's prohibitively expensive. So we've, you know, we're in a political climate where people want stuff to be more available to everybody but the policies that we have make it where it's more expensive and it's slower, and so it's actually reversionary. You're basically saying, look, only the biggest guys and gals with the, with the biggest balance sheets can do this. And, you know, I think it's probably the opposite of the intended effect, but it's what it is. So, you know, I'm hopeful that maybe there's a way that, that speeds up because, you know, maybe there's some sort of review process that can be done that way, which would the turn timing on reviews of plans is weeks. And AI should, in theory, be able to speed that up pretty dramatically. But then you're back to, well, what if you're doing something that's slightly off the norm, but you have a good reason for doing it? You still need that human interaction to figure out whether or not that's the right thing to do.
00:29:13 - Valerie
Sure. I heard something recently that was fascinating. You mentioned human interaction, and we're talking about AI. I was actually with your colleague or partner at the UNC real estate conference, and they were talking about the aging population and how senior housing is the future. And they also said that as far as AI goes with senior living, they're forecasting that at some point there may even be artificial intelligence in the units so that seniors, when they're alone, a lot of them have dementia and they're lonely, they'll be able to, AI will be implemented so that you could have loved ones having a, you know, a fake conversation with you. Right. It'll imitate what loved ones could converse with you. And I thought that was fascinating. So it's kind of outside of the box. But you mentioned human interaction. I couldn't help but think about that. I'm curious from a, you know, AI from, I guess, implementing it so that your end users could use it. Right. I guess AI, beyond processes and efficiencies, could there be any AI incorporated that way?
00:30:24 - Bryan
Yeah, I'm sure there is. Right. I mean, I think one of the things that we have talked about definitely in the storage business is how do we automate the process, right. Because when you go to look at a storage unit, it's a lot less needy than other types of real estate tours you might do. Right. It's like, okay, was this the size I want? It's location I want, okay, yay or nay. And so I think things like that create an opportunity for a lot more fast automation than there used to be. And maybe that evolves into something where you can do that in multifamily or in other places. If you could do that in a multifamily environment, it would be dramatically accretive to the operating costs. Right. And so that would help the yield situation quite a lot. I'd say your average kind of infill multifamily deal operating costs are on the payroll side alone are probably at least 1500 a unit today. So that's a pretty meaningful piece of the operating expenses.
00:31:31 - Valerie
So let's pivot a little bit and focus on investment strategies and risk management. We've talked about risk a little bit, but can you identify and assess opportunities for strategic long term investment, particularly in markets like the Southeast?
00:31:48 - Bryan
Yeah, I mean, I think right now, I mean, there are definitely a lot of people thinking about like, well, can I buy great assets below replacement cost? And I think that's the case. But you may still have negative leverage. I think that's the place where that's a real question. What sort of yield can you buy those at? Are you willing to take that negative leverage or can you somehow manufacture not doing that or buy it unlevered and lever later? I think you can certainly buy a basis that you're going to feel good about. But, you know, there's always that layer of risk of where is, where's the capital markets going and how is that going to impact values.
00:32:33 - Valerie
Okay, so on a lot of your recent deals, they've involved partners. How does SLI consider partners or look at partners when you're looking at the next deal?
00:32:44 - Bryan
Yeah, I think it depends on the situation. So, like storage, for example. You know, we wanted that operating expertise that go store has. And Ryan and I obviously had a lot of longstanding relationship. That meant we trusted each other and knew how each other operated, which is critical for good partnerships. I think we typically are strategic about it. I think there's also scenarios where people bring you good deals and they need capital and you can solve that piece of the equation. So, like East End phase one, that's what we did with Atlas start, and they've been great partners there. And then oftentimes on the large development deals, we do that for bandwidth purposes, because to do a project like Dick's, you need tons of people spending a lot of time on it every day. And the Mac team is our partner there and they're set up to do that. And we don't have the overhead in house to do more than one or two of those at a time. We like doing lots of things at the same time, so it makes a lot of sense to partner with folks in situations like that where we can share the kind of GP position with somebody like that, that can bring more of that horsepower to the execution side. And we spend more of our time on that one, putting it together on the front end and kind of visioning what it should be and helping round out the capital. And those guys have been great partners there as well.
00:34:20 - Valerie
Sure. So could you paint that picture a little bit for us? How does that look? Are you calling them, or is it a group that, you know, they're actively looking to make investments? What does that look like?
00:34:32 - Bryan
You know, it totally depends. I mean, I think in that one, Jonathan Goldberg at Mack and I had known each other for a number of years, and really, it just, you know, always said, look, if we find the right deal, we should do it together. And, you know, when we found that deal and started working on it, you know, it just felt like a good fit for them. And so, you know, he and I pretty quickly kind of got on the same page and figured out how we could make sense of it together. But, yeah, I mean, a lot of it's just kind of knowing who's good at what and what their appetite is for certain types of transactions, you know? And so we've. We've kind of had. We've had a whole bunch of different partnerships with different people, but for reasons that are almost always like, hey, they're really good at this, and they add value to this equation, and it'd be good to have them on the team.
00:35:22 - Valerie
All right, so we've talked a little bit about East End market, and so for those of us listeners that are in the triangle that haven't had the opportunity to go there, can you elaborate on what's there and what they can expect to see both today if they physically visit the space and walk around? But then also what's on the horizon, what's coming up.
00:35:42 - Bryan
Sure. So the existing adaptive reuse component that Barnhill did with us is a mix of loft, office, and food and beverage, for the most part. And so the loft office, obviously, is pretty self explanatory, but the food and beverage side is most of the way there. We've got east and Bistro, which is a great kind of french chop house that Giorgio's hospitality has done. They're also opening a gourmet market that should be open this month. And then there's sidery as well. East Bauer. So those are the kind of three concepts that'll be open or eminently open, and then there's some more to come out front. But as we look kind of beyond that, we'll build a number of apartments there and potentially some office, depending on the environment there going forward, but certainly some more retail on the ground floor of all those things. And lots of housing.
00:36:43 - Valerie
Will it be housing to purchase, like condos, or will they be more for rent?
00:36:48 - Bryan
It'll be for rent.
00:36:49 - Valerie
Okay, great. You mentioned Dick's working with the Mac group. Can you elaborate on what that looks like as well?
00:36:56 - Bryan
Yes. So at Dick's, we've got 220 story multifamily buildings under construction. Those will deliver next year. And then we're planning a second phase there where us and Mac have bought the land and looking at some more multifamily and likely some hospitality there as well. And I think in conjunction with what Kane's doing across the street, I think that should end up being a really interesting front door to Dick's park, which obviously is continuing to turn into a great destination. So that one, we're excited about continuing to really build something from very little that was there and hopefully make it be a great complimentary front door to the park.
00:37:44 - Valerie
Absolutely. It's going to be the gateway to all of that. You've got downtown south, the gate to downtown Dix park. I'm just really excited for all of that development. And if we listen to this podcast ten years from now, we're going to say, wow, if only we knew then what we know now.
00:38:04 - Bryan
I think the momentum there is going to be pretty rapid. When you look at Raleigh and the infill parts of Raleigh, there's only really one way downtown can grow, and it's towards 40 north. You've got established neighborhoods and railroads and infrastructure that's not going to go anywhere. And similarly east and west. So I think south is the obvious growth corridor. And frankly, it's where all the infrastructure is, right? So it's practical as well. So I think we'll see a whole lot more growth that direction.
00:38:44 - Valerie
So we're coming up on time. But I do want to ask you a few more rapid fire questions. What do you foresee as the biggest challenge and opportunities for real estate investment this year? And coming up, I think it's just.
00:38:59 - Bryan
The disjointed capital markets. I mean, I think there's a meaningful bid ask spread in anything that comes to the market, and there's less capital chasing deals than there typically is. So usually in those times there is opportunity. You just gotta find it. It's certainly a difficult time to do deals, but I think a lot of them could be good ones.
00:39:20 - Valerie
I agree 100%. So I've got one more question. This is a big one. This podcast is called constructing the Carolinas. If there is any one project that you would love to see be built in North Carolina, and it could be anything, what would that project be?
00:39:37 - Bryan
I think it'd be great to see Raleigh get a major league baseball team.
00:39:42 - Valerie
I agree wholeheartedly. I couldn't have said it better. Do you think it's going to happen?
00:39:50 - Bryan
You know, I'm not sure. I'd bet against Tom Dundon. He's good at figuring it out.
00:39:57 - Valerie
I agree. I think that would be incredible. Will Sli invest?
00:40:04 - Bryan
I don't know. We'll have to. Have to see what that looks like.
00:40:07 - Valerie
Naming rights to the stadium.
00:40:10 - Bryan
No, I mean, you know, we're historically kind of more quiet about the way we invested stuff, so that's probably not for us, but somebody. There's plenty of big opportunities for people like Sass or other big names around town that should have their name on a stadium. Be great.
00:40:28 - Valerie
Yeah, no, it'd be great. I think that would be a game changer, and it would fit great. Right? Downtown south, maybe by PNC arena. There's a lot of whispers of where that might happen, but I think that would be incredible. Who do you pull for?
00:40:41 - Bryan
Who's your team in baseball? I'm not a huge baseball guy. You know, I generally, I went to Ole Miss. I like the Rebs, but that's about it.
00:40:54 - Valerie
Well, this has been a lot of fun. I really appreciate you sitting down with us and talking all things capital market. Thank you.
00:41:01 - Bryan
Thanks for having me.
00:41:07 - Valerie
All right. Thank you so much. Thanks so much to Bryan Kane. If you're in the Raleigh area, be sure to stay updated on what's happening at East End market by visiting eastendraley.com. and for more on greenspace self storage, visit greenspaceself dash storage.com. thank you for listening or watching constructing the Carolinas. We'll be back again soon with a new episode, so be sure to press the follow button on your favorite podcast app or on YouTube and check out what Barnhood doing to construct the Carolinas. You can find us@bournhillcontracting.com and you can follow us on LinkedIn as well. This podcast is edited and produced by Earfluence. I'm Valerie Bono, and as we construct the Carolinas and as we build this podcast, I encourage you to keep building and growing as well. See you next time.