Michael Levy on Real Estate Finance

billion dollars in investments across twenty one local markets. If you're interested in everything from apartment buildings, industrial space, warehouses, what's going on in the world of office space, how to invest in retail? Right, you would imagine retail is a disaster, but it turns out certain types of retail is doing really well while other types are lagging. The same is true in office buildings. I think you will

find this to be a fascinating conversation. I know I did, and so, with no further ado, my conversation with Crow Holdings Michael Levy. I'm Barry Hults. You're listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Michael Leviy. He is the CEO of Crow Holdings and oversees all of their business activities. Crow runs about thirty billion dollars in assets, investing in commercial real estate. They have been around for more than seventy years and

operate in over twenty local markets in the United States. Previously, Michael was Morgan Stanley's Chief operating officer for investment management and a member of the firm's management committee. Comes to us with bachelor's from n y U Stern School of Business and a j d from Brooklyn Law School. Michael Levie, Welcome to Bloomberg. Thanks Barry. It's great to be here. It sounds like you are very much a New York kid, with U, n y U and Brooklyn on on that resume.

I am. My grandparents settled from Russian into Brooklyn and the nineteenteens, and my dad grew up there, and uh, when we were little kids, moved this out to Long Island, and and I was raised in Port Washington, and I went to n y U. Was the best college I got into, and one thing led to another, and I spent most of my life here. So so let's talk a little bit about your professional career. You started in real estate investment banking. Was this mostly M and A

deals or refinancing or transactional what? What was that like? Sure? Um, I came out of law school in n and uh in Wall Street was recapitalizing the real estate industry, and so I got dropped into the real estate group because there was a lot of transact and flow and it was equity offerings at that time, primarily I p O

s and secondary offerings. There was some M and A activity that took place, but it was a wave of activity, and as a young guy looking for opportunity, there was a new deal a week, and so we worked really really hard. But you get your chops early on by working really really hard. So it was a great time. Was there a prior interest in real estate or did you just kind of stumble into whatever it was hot

at the moment? Absolutely not. I UM. When I was going to law school, I went at night and I worked during the day for the lawyers, and uh, most of the lawyers I worked for said, you don't want to do this, you know, you want to work on the business side. Those guys have more fun and they make more money. So UH, I talked my way into a job and investment banking. I went into training and uh they placed me where they saw fit and dropped me into the real estate group and well well as

a recovering attorney myself. I could tell you those guys were telling you that there's there's less tedium and more fun on the business side because every deal, every transaction, there is a framework that you learn, but each one is specific and unique to those circumstances. Yeah, it was. It was great fun. I loved and respect the law incredibly, but it turned out to be a great decision. Uh, I can't can't agree with you. So, so how did

you end up at Morgan Stanley for almost two decades. Well, I started out at Prudential Securities and that's where I worked while I went to law school, and they gave me a chance in the business. Um, I had an opportunity a couple of years in to work for Solomon Brothers, and UH. At the time, you know, I knew that there was a pecking order and investment banking and Prue was great, UH and great people I worked for, but I knew that Solomon was to step up, and so

I took the opportunity with Solomon Brothers. Well, very quickly Solomon Brothers got gobbled up by Smith Barney, and very quickly Smith Barney got gobbled up by City Bank, and uh. I remember going into the headquarters and uh they were selling me checking accounts. As I was walking into the office one day, I said, I'm not quite sure this is what I was hoping for. So uh, I was lucky enough at the time to have an opportunity to

move to Morgan Stanley, and I took it. So Sally ends up at City Prudential is now PIJAM, which is a giant, giant operation worldwide. UM, and Morgan Stanley is still one of the biggest investment banks in the world. You were at one time chief operating officer of their global Investment Management division. I'm assuming that is real estate focused.

That was not. That was the investment management division. The first half of my career at Morgan Stanley was real estate investment banking, and the second half of my career transitioned into real estate investing, which transitioned into alternatives, which transitioned into investment management more broadly. So, so you were at Morgan Stanley. If I'm doing the math in my head,

right two thousand and eight throughout the crisis. So I have to assume you eventually became an expert at restructuring and all the fund that took place after the Great Financial Crisis. Yeah, I I would describe it a little as the in the in the land of the Blind,

the one eyed man is king. It was late two thousand seven, and uh, the markets hadn't yet entirely cracked um, and I had an assignment as an investment banker to work for one of the country's largest pension funds who was on the leading edge of bankruptcies and restructurings in the real estate portfolio. And so I had a lot of advisory work. And then once more once Morgan Stanley is a firm in the winter of two thousand eight

hit the wall. Like many financial institutions, real estate was a leading edge of that wall, and so I had a chance to work with the firm on restructuring its real estate holdings in the real estate business. That two thousand and eight experience, How did it impact you and what sort of lessons did you take from it going forward? The most formative period of my career, without a doubt, and I think most people you learn more from the difficulties than you do from the success. UM. It was

a reminder of our inability to see the future. UM first point. But within the core business of finance and real estate, the first lesson was leverage. You know, it's leverage that will kill you, and it will leverage. It's

leverage that will take you down. UM. There were other things that I learned the people I had worked with and the groups I had worked for, both as an adviser as well as Morgan Stanley sought tremendous growth in the early two thousand's growth without necessarily all of the guard rails, the systems and the processes, and to manage that unparalleled growth, and so between high levels of leverage as well as growth for growth sakes without all of

the constraints around that growth, those two things together kind of result in catastrophic events which occurred in two thousand eight and two thousand nine. You know, if you're investing your own capital with no leverage, the worst that happens is the market gets cut in half and it's painful. But if you're using leverage, you get margin holes and

you could be pretty easily wiped out. As we saw time and again in oh eight or nine, right and beyond sure, And that's where it comes to alignment and the people that work you know, if if if they have nothing but upside and they're not participating in the downside,

then the use of leverage. And so, whether you're an employee of a large firm or you're managing a fund or whatever position that you're in, being fully aligned with investors is a great guard rail with respect to these questions of the use of leverage, which which leads me to the next obvious questions. So, how did you end up at Crow Holdings from? Was it directly from Morgan Stanley?

It was? It was again. I was working from real estate into alternatives into investment management broadly um and my career was going well and I was doing interesting work. But in two thousand and fourteen I met this really interesting guy named Harlan Crow who was the patriarch of the family and the son of the founder of the company, and he was looking for someone to succeed him to run the business. And I found him to be a fascinating individual and a and a very kind, benevolent, interesting

human being. And we talked off and on for about two years. And then in the summer of two thousand sixteen, my wife and I went to spend some time with Harlan and his family in the business. And we were flying back from Dallas, Texas to New York and my wife looks at me and she says, you need to go do this, and uh, she knew what I knew, which was it. It pulled at my heart. You know, when you work at a firm like Morgan Stanley, or you work on Wall Street, in any given year, there's

always someone knocking on your door. There's always an opportunity. And I had always analyzed these opportunities. You know, I made this much money, or I had this much authority, or what would this title mean? And this was the first time in my life that none of that mattered. All that mattered was my heart pulled at me and said, I want to work with these people. You want to work do this work with these folks focusing on this topic. Correct,

That's that's really that's really interesting. Since then, in the past day, cade you become very active within the commercial real estate industry. You're a member of the Real Estate Round Table, You're part of the policy Advisory Board at the Fisher Center for Real Estate and Number and Economics at Berkeley, which is not in Texas, California. You're on the advisory board at the Institute for Real Estate Operating Companies. Tell us a little bit about all of this extracurricular activity,

which I'm sure is intimately connected to your day job. Sure, you know, the real estate industry is as large and as vast as it is, like many industries, is kind of small, and these various organizations are opportunities both to network as you get older. They're friends of yours. There it's an opportunity for old homecoming to see people, and it's an opportunity to learn to compare notes. And sometimes it's an opportunity to give back, depending upon the mission

or objectives of the institution. But most of the time, it's ability to gather with peers in the in the industry. It's hawk about what's going on. Some of them are are very confidential forums, off the record forums where people can speak their minds, where you're not going to read

about it in the press. And so you learn as you get older, you find out most of the time that you're not necessarily learning new things, you're confirming what you what you either like to believe or what you thought you believed, and that confirmation is sometimes helpful that perhaps I'm not crazy with respect to these ideas. Really very interesting. It's funny you say real estate is a

small um community. Someone described New York City as vast and frenetic, as it is as just a series of small industry villages all staffed on top of each other. And you know, you know most of the people in your business, even if there are thousands of people, you know your peers at your level. I'm not surprised to hear you say that about commercial real estate. It's true in every industry, absolutely. So let's talk a little bit about Crow Holdings. It looks like a pretty fascinating place.

Tell us about that history and the patriarch who uh made such a compelling case that you had to switch jobs. Yeah, well, well, thank you, Barry In. There was a young man who built a speculative industrial building in Dallas, Texas, and his name was Trammel Crow and Uh. Trammel went on in the nineteen fifties and sixties to become the largest real estate developer in the United States. And Trammel had a great optimism, great insight, great great foresight. But he also

had a way of doing business. He didn't have the means when he started out to employ people. He partnered with people. He had an ability to work with many of the local banks and regional banks to get loans to build real estate. And he partnered with young people all throughout the country and said, look, I'll go into business with you all on a handshake, will split the ups fifty fifty, and I'll help you get started by

helping get them financing for these projects. And so, with that trust and with that love that he had for people, he went on to build partnerships all throughout the United States, and that way of doing business was different than others. He also took an approach that and I used the word speculative, meaning he built the building in the hopes that someone would lease it. He didn't build the building with a lease in hand. He built the building and

then it got leased. Now, now this might be my post Warward two hindsight bias, but I would imagine the forties, fifties, sixties was a great time to be real estate developer in the United States. It was a great time to be a real estate developer, and there was tremendous growth throughout the United States. There was also another dynamic that the banks at that time would would lend sometimes more

than a hundred percent of the cost to build a building. Well, you gotta decorate, you have other things you have to do once the building is up. A hundred and ten a h loan to value that seems kind of aggressive these days. These days, that's not available. But in those days that was available. And so why the excess? What was the above the cost of construction? There they are the soft cost, there's the financing cost along the way, and as you said, there's engineering and other costs that

come in. And so you I don't I don't know if would have been the norm, but certainly for for discussion purposes, you're borrowing a dent of the cost to build a building, and so you don't need to come out of pocket with any equity. Now, we just talked about leverage a minute ago. When times are good and times are growing, you know that works out well. And as you pointed out, in the nineteen fifties and nineteen sixties in America, those were tremendous times for growth and

opportunity and so the company. So, so let's talk a little bit about about the crow family members. You were the first person outside of the family to become a leader of the firm. What made them decide to not stay with the family that they've done for seventy years, And what sort of channe leunges does running what's essentially

a giant family office create for you. Well, Trammel ran the business until the very late nineteen eighties, and we had a terrible time for real estate in the late eighties, and his son Harlan took over in the late nineteen eighties, and uh in two thousand fourteen, Harlan began to think about his succession and made a decision that he wanted to go outside of the company and specifically to bring in someone who had more capital markets experience, someone ultimately

like me, not me in particular, but someone who didn't come up the ropes from the real estate side, who came up the ropes from the capital market side of things, to augment the great skills and capabilities in the company. Now, it's not self evident that on a piece of paper, this New York guy trained on Wall Street went to Brooklyn Law School would be a great fit with a Dallas based family owned company called Crow Holdings. But it was a right fit and we share very common values.

And I find Dallas to be a really fun city. Is that where you're you're working out of where you had correct? So we're headquartered in Dallas, Texas. We have about twenty one offices around the country and other cities, but we are a Dallas based, Dallas headquartered, Dallas cultured company. At our at our core, and at our roots, which means big everything right, nothing has done small, nothing is you know, nothing is tentative. What I love about Texas

is when they do something, it's big. Texas think big and Dallas sizes think big. Yeah, no, no doubt about that. So so let's get specific about Crow focuses on multifamily units, office industrial. I would imagine multi family is doing great. Industrial is doing even better. In office not so much? Correct? Um? We uh. We both have a real estate development company and a real estate investment management company, and there are two different businesses with what's the split into arms of

activity and assets is it's about half, really, it's about half. So, so half of Crow's work is actually building developing new assets. The other half is investing in existing assets exactly. Exactly and UM but both businesses have a high degree of overlap in terms of their strategies. So as a real estate developer, we have built more apartments in the United States than any other firm. Really correct, that's a that's an enormous uh undertaking. And the US is still dramatically

underbuilt when it comes to apartments. Yes, it is, both both in cities and suburbia. We have a big problem in America. We don't produce enough housing, particularly for working class people. And UH, it's a great opportunity from a development and an investment perspective, but it's getting harder and harder to build. And it's an area we have a lot of expertise in. And then and then you guys were very early into UM industrial facilities, warehouses, logistic sort

of facilities in the early days of e commerce. Tell us a little bit about that. Well, two things. One, we still own the first industrial building the Trammel built in and it's on Coal Street in Dallas, Texas. And my youngest son is named Cole. So I like incidents or I think it's good. Um. Look, you could see the e commerce trends coming from a mile away. It started in the mid nineties, but it became very clear

a decade ago that this trend was accelerating. You say that, and yet not everybody piled into warehouses, logistic facilities, et cetera. Certainly in two thousand to two thousand eleven they did, and today it clearly is the most favored asset class um. But nonetheless, when you're looking at secular trends, that secular trends seemed to us to be very clear, and so we amplified our industrial development activities and today we're one of the largest developers of industrial real estate in the

United States. Right, And your structure is you're not to read You're you're more or less a private family office. How does that operate? Sure, so you're not publicly traded, right, We are not publicly traded UM and we have no outside shareholders in the company it is. It is owned by the Crow family. UM. Our real estate development business

engages with investors in three ways. We either pursue one off development projects in a joint venture with an investor, or we have a programmatic relationship with an institutional investor where we'll develop many properties over time, or we'll have a com mingled fund with a group of investors also developing properties over time. Are those one off for specific types or specific geographies? Because in my head, I imagine there are endowments that want exposure real estate. There are

other large institutions that want real estate exposure. Are they participants in all of crow or is it one off? It's always a defined strategy. It's always a defined strategy, usually demarcated by geograph, fick objectives, or other property size, property configuration objectives. But there is a strategy within industrial. We use the word industrial, that can mean a lot of things. Are a lot of different things to different people.

Our real estate investment company invest in real estate across the United States primarily and co mingled funds, occasionally in joint ventures with investors, but primarily and co mingled funds. So so let's talk about that investment process a little bit. What are you looking at? Is it you mentioned geography? Isn't any of the specific sectors? Is evaluation? How do you make the decision? This development, building, whatever is a

go And we're gonna pass on that one. Sure well, stepping back, Barry, we've learned over the years that it's very, very difficult to predict the economic cycles, the capital market cycles, and trying to hang your hat on that as an investment strategy is often hollow. And so we're pursuing secular trends and they're in decades long, decades long, and there are several things that to us seem fairly self evident.

One of them I highlighted, which was e commerce. And if you believe that e commerce will continue to gain share, then you know that's a positive for industrial and that's a negative for retail. You're also looking at demographics, the

age of people. You know, things about young people, things about the trailing ends of the millennials are the leading edge of the Gen Z. Young people rent, they don't buy, and so we have the largest group of young people in history going through in their mid twenties now going through the U S demographic chain and so being long

the apartment sector or the multi family sector. And the third main trend that we're looking at is Americans are moving to the southeast and the southwest, the moving a lower tax, better weather, and just generally where there's a little cheaper standard of living and and as well as just overall quality of life. And this is not just COVID.

You know, we've seen the impact of COVID, but long before COVID, it became very clear people are leaving the Midwest and the northeast and the west and they're moving into the southeast and the southwest. And so that defines not everything we do, but that drives a lot of our decision making within multi family. So now to take the next layer down, we're pursuing two areas within multi family.

One would be Class A beautiful new properties that professionals are renting because they want experiences in life to rent and not own, as well as everything from student loans to other costs are making rentals more attractive to them. But the area we've been particularly focused on is workforce housing. First responders, firefighters, teachers, cops are having a very very difficult time finding places to live, and so we've been

very focused on building new supply. There's a lot of arguments about rent control or about owning older properties and making sure that the rents don't don't go up through agreements, but the solution is not taking older properties and holding them there. The solution is new supply. And as the largest developer of apartments in the United States over the past forty years. We view it as both our obligation as well as an opportunity, and so we've been very

focused on workforce housing. So, so you you mentioned as an obligation, there's a quote of yours that sticks out in my mind. You said, I don't sit around with Harlan and talk about profitability and returns. We talk about doing the right thing. Explain what that means in the context of developing rental apartments. Sure, Um, two things. One at the company level, at the Crow Holdings level, in particular, because we're not public, we don't have any outside shareholders.

We don't run the business according to an earning subjective. We run the business according to creating opportunity for the people that work here in an aligned way so that they can grow in their careers and they can create opportunity and will participate in that opportunity with them. So as it relates to the company and doing the right thing, it's treating the people that work for us the right way so that they love their work and then they're

they'll love their clients and they'll love their opportunity. How many people work for Crow, how many people a little over five people who work for Crow, and how many of the original family members are still active in the firm. There there are no family members active in the firm. So so essentially Crow is more or less operating like a family office on behalf of I don't know what's to call at the estate, the foundation on behalf the family?

Um it is it is our ethos And the moment look, the moment that your company brings an outside shareholders, the moment that your company becomes public, things change. The whole dynamic changes. You now have a different master. Correct, we don't have that, and so we don't have those outside forces dry hiving us with respect to how we behave,

what we do, how we act. All right, So let me push back on that, sure, because I've worked with a number of family offices, I've worked with a number of billionaires, and what always comes up, there's always some M B A sending to his left or are left saying, well, what's the internal raid return for this? What sort of quarterly profits can we expect? What is return on investment and um yield that we should see by putting this capital at risk? So I need and i'd like to

distinguish that's at craw Holdings. At the company level now almost all not all, but almost all of the real estate investment activity and the real estate development activity. We are in partnership with institutional investors and individual investors in a fiduciary capacity, so that's going to come up. So we are very focused on delivering the investment performance at

every level in what we do. And in that area, we again and we are focused on whatever the return metrics are, whether it's I, R R or multiple and our track record stands for itself over time, and we have delivered for investors over time, which is why they continue to do business with us. But as it rolls up to Crow Holdings, that is not what drives us. Do I report on our financial results, of course I do do. I try my best to anticipate what we

may do in the next year. But and we may talk about this later, but your ability to guess the future with respect to how it all rolls up to the to the corporate entity. The other thing I learned in my prior life when I was working on Wall Street is that hunt for the elusive earnings this quarter can also drive very short term behavior on behalf of the institution. That can have a profound impact on the people that work there and really break the trust between

the company and the people that work there. No doubt, the hunt for alpha can be destructive if it runs amok. And and as we've seen we talked about O eight oh nine, it very often does run a monk. So so you're hinting at something, but I I and I don't want to ask you to talk out of school, so to speak. But when you report back to the family and say, here's what we did, here's what next year looks like. What are they telling you your marching orders are? Are they like, go make us more money

or we're really concerned about this? What can we do here? I do present. We have an advisory board and uh Harlan as chairman of the advisory board, and Harlan's engaged in the business with me, and so I'm keeping them regularly apprised with respect to the strategy for the business and the financial results for the business. The primary objective, if Harlan sat here today, the primary objective we're solving for is culture. Culture isn't violent, and that goes back

to at Crow Holdings. Our culture and the culture is based upon creating opportunity for the people that work here. And if we do that well, then the other elements of our business, our customers being happy with our work, the financial results that follow that will come true. And that's been going on a crow for seventy five years and that works for us. So how do you, as an outsider and CEO, maintain and further the culture at

the firm? Well, I maintain it by pursuing that in that I'm not trying to bring my own objective in terms of this specific financial result this year. I'm continued to focus on how do I continue to one be thoughtful with respect to strategies. I mentioned these secular trends. There's obviously sub strategies underneath that. So hopefully we're smart and we develop strategies that make sense in light of

where the world is heading. The second thing is I work very hard to make sure that the compensation structures with our people are aligned so that if we do well, they do well. And I would the last thing I would comment on this. We have now lived through the Great Resignation. I talked to my friends at businesses all over America who talked to me about how difficulticult it is to attract talent, how many keep them and keep them. We have not experienced the great resignation. It has not

happened at our company and our firm. So whether we're doing things right in someone's eyes, are wrong in someone's eyes, what I can say is the very talented people who work here have decided, amongst the opportunities that are available to them in the marketplace, Crow is the best opportunity for them and their families. So so it sounds like you are creating or maintaining the sort of culture that works for both the firm and the employees. I am maintaining.

I came to Crow and had the privilege that my first year, I didn't have the title of CEO, I

didn't have anybody reporting to me. I had a chance with Harlan to get to know the organization, to get to know the people, to get to know the culture, to build trust and build relationships, and learned and understood what made this venerable institution in real estate so successful, what made the alumni network that came out of Crow have such good will and good feelings towards our firm, And it was these elements of culture and the hallmarks of our firm, and so I simply said, don't screw

this up. So so that first year did you just shadow Harlan and kind of get a feel for everything that was going on. Part part of it was shadowing, Part of it was independently spending time across the organization. I grew up in real estate finance. Our companies a real estate company that came to America through building real estate and then developed over time the capital markets and financial expertise. I had never built a building in my life. I had never leased a building in my life. I

had never managed the building in my life. And so I spent that first year in the field at our offices, talking to the people who do those things and learning so that when the time came the following year that the responsibilities became mine, I had good, good judgment and better judge. How how steep was that learning curve that sounds like you're throwing yourself into a related but entirely different field than you were experiencing. Yeah, it was a

learning curve. Being around real estate finance for twenty five years beforehand, I had interacted with and finance, then spend time with real estate developers, so I didn't have to learn new industry jargon or lingo or market participants. But sitting sitting on Wall Street, the perception is that you add value by your financial I'll use the word engineering, or your financial acumen. The reality is the people who add value are the people who actually build these buildings,

who manage these buildings. Quite interesting. My extra special guest today is Michael Levy. He is the chief executive officer of Crow Holdings, a seventy five year old residential and commercial real estate developer. The largest developer of apartments in the United States, the firm manages over thirty billion dollars in assets across twenty one local markets. Previously, he was

chief operating Officer for investment management at Morgan Stanley. So, so let's talk a little bit about commercial real estate investing. When I was looking at your website, there are a whole run of different, for lack of a better words, subsidiaries. There's Crow Holdings, Capital, Crow Holdings Office, Trammel, Crow Residential, Crow Industrial Signature Properties. Tell us a little bit about these different divisions of what they all do. Sure, well,

first of all, I'm sorry about the brand confusion. Um, not at all. The simplest way to understand us is we have a real estate development company called Crow Holdings Development, and underneath that we have sub brands Crow Holdings Industrial, Crow Holdings Office, Travel, Crew, Residential, and then we have a separate real estate investment company that we call Crow Holdings Capital and Signature Properties. How does that fit into that?

Those are properties that that we own without investment partners, and those are properties that Trammel Crow back in the day or Harlan Crow in more recent years, has developed and the family has held onto these properties for decades. In many cas the Crown Jewels, so to speak, there are some terrific properties. Um. And they're in primarily, not entirely, Dallas, Texas, which is says, you know, the fastest growing metropolis in

the country. So is that true. I did not know that the nominal population coming to Dallas, and I think it's changing during COVID in any given year. But there's somewhere in the neighbor of a hundred and ten hundred and twenty thousand people moving to Dallas each year. Now. So we we saw Miami, we saw Tampa, we saw Dallas, we saw Austin. There has been a ton of growth in the South, South and southeast. Um, when does that

top out? When does that start to slow down? Well, I think you're you're at some level you're having now. The COVID induced movement out of California and New York and Chicago is slowing down a bit. I know in New York and folks from Florida are moving back right now. But the mega trends are very clear. The mega trend is it's not slowing down. And this has been decades in the MASCA. This this goes way back. Um. Alright, So so let's talk a little bit about some of

those signature properties. Sure Crow HQ and the main campus is the old Parkland Campus, which the pictures look like a college campus. It looks astonishing. Do you actually work there? What?

What is the old camp? Old Parkland Campus? So old Parkland Parkland Hospital was built in nineteen thirteen, this beautiful red brick building that became derelict in the nineteen sixties and nineteen seventies, and in two thousand and five, I believe Harlan acquired the site tore down most of the buildings except for the main beautiful hospital and built eleven new buildings around it, and it's now an office campus

in in Dallas, Texas. It's part museum. The theme of the campus is the American experiment, the foundations of freedom and democracy. And there's tremendous manuscripts and art and and and statues exemplifying everything from the group starting with the Greeks, going all the way through entitlement and the founding fathers and and Abraham Lincoln. And it's a beautiful physical campus.

Is this other businesses and organizations or just grow? Yeah, So we occupy about fifteen percent of the space and and virtually all of the tendency at the campus are other principal investors, other family offices, foundations, private equity firms, hedge funds, and so. So it's a little financial center right there in the middle of Dallas. Yes, exactly. And what is the Dallas Market Center. Tell us a little bit about this property. In the nineteen fifties, this was

a building and they will come. Trammel had the view at if I build a permanent building, these trade shows that go all throughout the United States, if I can, if I can house them there permanently, Retailers will come and visit the uh, the exhibitors, and so the Dallas Market Center is a five million square foot property that houses for various industries, permanent and temporary exhibitions, and we hold trade shows where literally hundreds of thousands of individuals

per year from thousands and thousands of retailers come to Dallas, Texas to intermediate and mingle and spend time and examine and explore new goods for their stores. What other signature properties really stand out, because because the list is is not short at all, no um. One of the largest hotels in the United States, not the largest, but one of the largest is the Anatole Hotel in Dallas, Texas. It's proxibly sevred rooms and six hundred thousand square feet

of meeting space. And so you know, and then there's land holdings in Dallas and industrial buildings, and there are other properties in in Brussels. We own one of the Brussels in Brussels. We own another trade center in Brussels, the Trammel, built I believe in the nineties seventies, and

we own that today. What other overseas properties do you guys that that's the main overseas propert there are a couple other smaller ones, but the signature properties are again properties that Trammel or Harland developed, and uh, they are both. There's there's an emotional aspect to some of them, but they're primarily good financial investments that compound over many years. So we we talked earlier about you were early to

eat commerce and and logistics and warehousing. I read the other day Amazon said they're looking to get out of millions of square feet of industrial space. Perhaps they might have gotten a little too enthusiastic and overpurchased. Um, how do you see the industrial side of things? Is that just one company that acquired hundreds of building is and

maybe overdid it. What what does that space look like? Yeah, sure, well there's no Several months ago Amazon had communicated that they had they were going to slow down their industrial expansion phase and they were going to sublease something in the neighborhood a thirty million square feet, and the markets on those days they announced it were concerned and the

stocks pulled back on the industrial real estate companies. But the United States has eighteen billion square feet of industrial real estate, and even though Amazon has been a major player and one of the largest market participants. It's overall market share is very small for the industry at large. Now, Barry, I did expect when I sat here in January and February March and we all saw the capital markets cracking,

I did expect. I'd imagine the CEOs all over the country are going to start examining their usage of industrial real estate and maybe leasing is going to soften. I wasn't sure, but you you just had to think that the market would cause that to occur. Well, sitting here as of this morning, leasing velocity and industrial across the United States has been as strong as it's ever been, and there's no softening in demand that we've seen. I know we're all anticipating a recession and we can talk

about all those things. Good good. Demand for goods has not slown down at all. Consumer spending is a record highs and the e commerce continues its penetration. So so let's let's talk about e commerce and the retail space. My friend Jonathan Miller, who is an appraiser and a real estate analysts, said, it's not that retail is overbuilt, it's that it's underdemolished. I love that line. What do you think about about the retails. Sure, well, there's retail

and there's retail. And what I mean by that, there's retail that's focused on selling goods, whether it's your malls or your power centers, and these have for years been under a duress, and that duress is continuing. But there's other retail where their tendency is food and service. And so during COVID, for example, grocery anchor shopping centers did

particularly well. Now some of the tenants adjacent to the shopping center, who may sell goods slowly over time, are being disintermediated by the Internet, and over long periods of time that tendency is being reduced or mitigated. But food and service, and so think about in the neighborhoods in

which you live in. Sure, you're going to have a little strip center that's going to have a Starbucks on one end, and it's going to have a subway on the other end, and it's gonna have a cupcake store and a Verizon wireless store, s a t tutoring, some taekwondo ballet. It's all services. It's not the usual retail, which kind of makes me look around at the big box stores, the home depots, the targets, the lows, the ones where you're not ordering plywood online, you have to

physically go and get that. So is that how we're going to see this separate? Is that how this? I think it's it's not how we're going to see that's how it is separating. But I would I would lay around another element to the discussion, which is and then

there is the capital markets. There is fund flows, and institutional investors and individual investors have been very focused on industrial, multi family and not focused on retail with a big army retail, whether it's food and service or whether it's goods oriented, and so there there are opportunities and the food and service retail space because the underlying property fundamentals are strong and the fund flows are diminished, leading to

less competition for that asset class. So that that's how we look at and I look at retail real estate today. So so people are painting with way too broad to brush. You really have to focus on this group is doing well and has a future, and this group maybe not so much. I think I think we often paint with very very broad brushes. But real estate is and there

are broad brushes. That makes sense, But Ultimately you need to peel the onion back further and it is a local business, and you need to look at markets and sub markets and the corner of you know, vine and maple, and you know, look at these property configurations and it makes a ton of sense. So Crow recently announced that they appointed Don Brooks as head of sustainability. Tell us a little bit about how sustainability affects both development and

investing for commercial Realistic Absolutely well. First of all, there there is no doubt that investors all around the world are more and more focused on the carbon footprint of their investors, and so the starting point of the discussion is an ability to communicate accurately and effectively what in fact is the carbon footprint of your investment activity, because they want to know. There are some investors who are specifically focused on I want to invest in properties specifically

geared towards minimizing their impact. Where we are as a company today is, first of all, we need to make sure that our investors understand the carbon footprint of the properties that they're investing in and we're developing in. We're also by our own accord as well as all of the various local requirements increasingly as every year goes by, the properties are becoming more efficient in a myriad of ways.

I'll give you one example. We are building in Frisco, Texas, which is in the Dallas market, a mass timber building. What that means is instead of using office building, instead of using steel, there's now technology that allows you to build very tall buildings out of compressed and laminated wood. It's a much better carbon footprint. The impact of of of trees growing versus the impact of producing steel has

a profound impact. And so many companies have told their shareholders and society at large that we're going to achieve a carbon net neutral impact by such and such date. One of the ways they can impact that is by the real estate that they occupy. And so whether it's communicating how in fact your portfolio is doing, or whether it's pursuing a specific um building approach to help the investor meet their objectives, those are all areas of sustainability

for us. Really quite quite interesting. Um, it's hard to imagine that you could do any decent sized skyscraper with compressed wood instead of steel. But it's hard to believe, and I don't have the data off the top of my head. But city by city and building codes are city by city. But you can now build properties ten and fifteen stories tall, and in some markets even taller given the strength and durability of the technology underlying the

mass temper. I'm really curious what the composite carbon materials are when you see the pencil thin you know, super skyscrapers in New York City on on Central Park South and fifty seventh Street over there that are told in anything around them and a tiny, you know, base footprint, I think, but for that materials, they could not have done that in traditional steel and alone. It's it's hard

to believe they're not going to topple over right. They look like they're just they're just gonna snap in the breeze, but uh not. Apparently it's lighter and stronger than steel. Hard to argue with that. Let's talk a little bit about how real estate is doing. Obviously it's done very well over the past decade, given what's going on with inflation and the Federal Reserve. What are you seeing in the real estate market today? Yeah, Well, the real estate

is an asset class is generally leveraged. Now not everybody is leveraging real estate, but generally it's leveraged. Most real estate investors are using some amount of debt to acquire their properties. The most core or stable investors might use twenty percent leverage, the most opportunistic might use seventy five

or eighty percent leverage. But simply put, the cost of debt is going up and the attractiveness and availability of that is going down, and those two things are having an impact on overall asset prices, and they're having an impact on overall transaction activity, which has been declining. So you, guys are a very very long term investor. You don't have shareholders barking at you for quarterly results. Does this create an opportunity for you, Well, there's always an opportunity

in the marketplace. Does this create a unique opportunity for a firm like yours, I'm not sure it's a unique opportunity in the marketplace. The marketplace today is still hunting for that bid ask spread, and the marketplace as well, and and and crow as well is looking for what new opportunities are becoming available. We're all waiting for anticipating some amount of distress for example, that hasn't yet really

developed in the marketplace at the margin. If you were in the real estate debt business a year ago and you accepted a certain return or a certain yield, well, today those returns and yields are better. But guess what, so is every other fixed income instrument out there, And so the marketplace for real estate investors has not the monstrably changed on that point a year ago. This would be a global phenomenon as well as a US phenomenon.

The vast majority of investors, when you said what are your most favorite asset classes, would have said industrial and multi family. What are your least favorite asset classes? They probably would have said something like retailent office. If you pose those questions to them today, you would get that

same comment. Office has probably fallen further because of the impact of COVID in the way that we're using office space, and it's really the most interesting area of real estate now with respected discussion the uncertainty about how companies will use office real estate into the future. So so we've already discussed retail in great detail, let's focus a little

bit on office. Obviously, remote work work from home probably here to stay as much as as Jamie Diamond and others are jumping up and down saying get back to the office. Um, unless you're a giant multinational corporation, most companies seem to be going some form of hybrid. So a what does this mean to offices around the country be what does it mean especially in urban centers. My office is on Brian Park in Midtown. You know, it's

a beautiful day today. When I head back to my office, I'm sure they're gonna it's gonna be busy in that part of the city. But I would guess Midtown is probably of what it was. What what are you seeing and what are the opportunities? Yeah, well, look there is no doubt and and I'll make a number up to prove a point. Let's say before COVID, the average office worker was in the office four point one days a week.

By making that number up, but that sounds about But there's no doubt that not only today, but in three years from now, it's not going to be four point one days per week. Maybe it's three point three days a week, maybe it's three points six days a week, but fundamentally there's less demand. The second point is we are much more in the world of have and have nots with respect office space really meaning office needs to be more attractive for your people to want to go

to than working out of their bedroom. And therefore, who wants to work in in an eight or nine foot ceiling, fluorescent light, no air, you know, no common space, no

collaborative space. And so you have the best office buildings, the nicest office buildings, like your office building here, So just for people who haven't been here, Bloomberg is built around a courtyard, so there's light north southeast west, the all the elevators you have to enter through the sixth floor, which is filled with collaborative meaning spaces on five and four, and all the food, coffee, everything is on six. Like they were way ahead of their time when they designed

this building. And I'm sure they they also want more people in the office. They're probably running they wanted over How difficult is that going to be to achieve? It's at some level it'll it'll be difficult. It's difficult for people today. I think hybrid work. I wouldn't use remote work, but hybrid work is is here to stay. But fundamentally, imagine that this office building was nine ft ceilings, fluorescent lights, no air, whatever that is what it used to be

fifteen years ago. I remember that building, and I understand why they built this sure, and and last point on this, and then we'll go to the spaces, these big urban environments where your commute is bad. My commuting to New York used to be an hour and a half each week, each day, it's fifteen hours a week. If I was still commuting between my home and New York City, there's no way I'd be coming in five days a week. And so fundamentally, I think the urban environments with long

commutes are more impacted than the suburban environments. And then on top of that, imagine and let's say Manhattan on Sixth Avenue, the old nineteen sixties white brick buildings right are older buildings. There's gonna be a tremendous cost to retro fit and upgrade these buildings, some of which will make no economic sense. So there is a really fascinating and I want to just keep harping on Bloomberg, but there's there are three articles I sent you this morning

that I wanted to go over. One was Wall Street Journal, one was New York Times, and one was Bloomberg. The Bloomberg pieces really fascinating because it's interactive. New York City's empty offices reveal a globally global property issue, and they exactly what you're talking about. These older buildings, not from the thirties or forties, but from the seventies and eighties, that don't have the modern amenities, don't have the higher ceilings, don't have all this light coming in. How do you

how do you bring those buildings up to speed? Well, I think it's gonna be a very long, slow grind, and some of them depending upon the zoning. I saw a month or two ago that silver Stein Properties in Downtown Manhattan was taking an old office building and converting it to apartments, and I think you'll see some of that. So so let me interrupt you. Right there post nine eleven. I have a vivid recollection of that whole downtown space around the Merrill Lynch Winter Garden and the towers or

where the towers were, an enormous conversion to residential. And now what was once like a semi office like mini Downtown is almost residential. It's mostly residential. What do we do with something like Hudson Yards that was just built right before the pandemic? Can you really convert that much office space to residential. Well, Hudson Yards is a beautiful, modern respect that's exactly the kind of place people want to to work at. And ultimately but is half empty

or or worse. Yeah, I don't, I don't know specifically. Well, New York is taking it on the chin more than most cities as a result of COVID because of the transportation networks and the trains and and so I think New York City is a bit unique across the United States entirely. But it will be a very long grind.

You talk about downtown Manhattan that was twenty two years ago, right twenty one years ago, and so this is a matter of decades, the fundamental transition, and so there will be a lot of pain to be experienced over a very long period of time as the leases roll over that we're in place and you're not able to release the space at similar rents for an increase, you know, or an amount of capital you're going to need to spend to renovate the property. There will be properties that

are handed back to the lenders. There will be new capital sources who come in. Some of them will get redeveloped to apartment buildings. Some of them will get scraped and torn down, and some of them will be um uh made nicer and attractive to the office tenant. Going forward, it will be a combination of all these forces at work. All right, New York Times today, factory jobs or boom like it's the nine seventies. US manufacturing is experiencing a

rebound as companies they had thousands of workers. That's industrial. What do you see as as new factories going up? That is terrific. There. Look, there are three forces driving demand for industrial real estate. We talked about e commerce. The second is this on shoring trend. Hundreds of thousands of jobs are coming back to the United Many. It's that huge. That article doesn't highlight. I don't believe all the data, but there are jobs coming back to the

United States. And when those factories are built, there's gonna be part suppliers and you're gonna need to store inventory, and that's a big driver with respect to industrial real estate. And the last driver is the transition from just in time inventory to just in case inventory. So you go from a very fragile system to a much more robust system. Correct. And then the last article that caught my eye Wall Street Journal. The US is running short of land for housing.

Land use restrictions, lack of infrastructure, nimby have all made it harder for developers to find sites to build homes and apartments. Without a doubt, it is out of land. Every single year that goes by. It's becoming more and more difficult to build housing for Americans. Whether it's the availability of land as we become a denser society, or whether it's the local nimbism and the entitlement process to build new buildings. That's why we have a housing crisis

in America. So you and I both grew up in Long Islands. I have family in Chicago and their view for Thanksgiving, and I, as a Long Island New York kid, was always surprised driving around suburban Chicago where there's a couple of houses here, and then there's a small office building here, and then there's a big apartment building here, and it seemed like there were none of the land use restrictions that we have in Long Island. Now there have been more and more apartment buildings going up, but

they're pretty few and far between. How do you change those restrictions to allow Greater down City. Well, this is the this is the challenge we have. There's no doubt that single family homeowners and do not want apartment buildings built in their communities all across the United States and uh land entitlement and the ability to build is a local issue. The states and the federal government are not driving the decisions with respect to what's get built in

on main street in your village. It's your local community and the city council and the city planning people live in those same local communities, and so the system is not developed to deal with providing housing for the working class in America. Now, whether the states are going to be willing to step in. When Governor Newsom and California a few years ago was elected, he had some big plans for the state to come in and to tell the municipalities what to do. That didn't quite happen. I'm

not aware of any other state I know. The city of Minneapolis has put some regulations in place. You know, there's regulations both in the state of Offornia and in Minneapolis to allow for UH dwelling units on single family properties, so it's no longer single family z owning. So you can convert your garage into an apartment, you know, for

someone to live there. That's not the answer. The answer is to allow density in transit oriented places where people where the jobs are or where people can get to their jobs. But this is a very difficult challenge, and it's a large apartment developer. It's very difficult to have any confidence in America today that we're gonna solve this problem. And it's a real challenge for the working class, in the lower class in this country. So you and I both uh grew up on the island. You were in

Port Washington. I live in Locust Valley. We're both on the northern shore of Long Island. The two towns in between us one is Sea Cliff, which it used to be a summer community, but right on the water across across Hampstead Harbor from them is Glen Cove. And Glen Cove had these wonderful plans to build um low income housing on the water, create these high rise apartment buildings. Twenty five years of litigation, and eventually what they end

up building is this huge run of luxury condos. They go for a million dollars each in Glen Cove, which is not Brookville or SAMs Point or any of the you know better known Shishi neighborhoods. It was the only way they were able to get it through. People in seacliffs still screamed for years and it's ruining our view. I'm sorry, but if you want the few, you have to go buy that property and leave it undeveloped. They're allowed to build and and that's exactly what happened. You're

saying this is a door to door ground war. There's no easy way to fix this at the present time. Clearly the state could step in and and take control over these decisions, but elected officials want to get reelected. And if you want to shore fire away in your local community to not get reelected, go pursue policies that the single family home owners don't support. So let's talk a little bit about single family homes, which I know

you don't build and and don't necessarily own. Um. All the data I'm looking at is uh time on the market is longer, Bidding wars have more or less gone away, People getting over asked have been cut in half. Uh So, clearly mark downs are happening on single family homes. Doesn't mean it's gonna be like the financial crisis with stuff fell thirt but not. Wouldn't be surprising to see single family homes, especially in the hotter areas, soften a little bit.

What does this mean for you when you're looking to do a commercial deal put up an apartment building. How does residential single family homes affect multi family? Well, the the irony of it is, those factors which are driving down home sales are helpful with respect to rental properties because if you're not gonna buy a home a place to live, and at some point you're gonna want to leave your parents basement, and at some point you're gonna need a place to live, and you're going to rent.

Now you're going to rent an apartment or you're going to rent a home. But these forces are positive with respect to the underlying demand for rental housing in America. And the past five years we've noticed UM household formations have increased, which means more and more people are living together, getting married, which eventually means a house, a baby, or what have you. Um. How much more residential housing does the United States need, especially the denser multi family How

many units can we build before we overbuild? Well? UM, depending upon whose data you're looking at, it's somewhere between two and seven million units of housing that we're under housed in America. I mean, look at the homelessness that's taking place in our major cities. This solution for that is supply. The solution for all of this is supply.

And so Americans remember two thousand and five, six seven when we had the subprime crisis and all these houses were built, and arguably we were over housed at that point in time, but then we were chronically undersupplied in the decade plus and that deficit has grown year over year over year, and so there's millions of houses or apartments or housing units that we need to create again for the working class and for the less affluent in America.

But it's very difficult. In the same exact places that we need this, it's the most difficult to build it. I'll give you one example and then then the numbers are fictitious, but they'll be illustrative. We build a lot in Houston, Texas, which arguably is one of the easier markets in the United States to build in, and we can build an apartment building for let's say, a hundred

and fifty thousand dollars per unit. If we go to build that same exact physical building in southern California, that will cost four hundred and fifty thou Half of that might be land and labor, but half of that is related to the regulatory fabric requiring us to undertake certain building design and construct to meet the local requirements, such as like capturing all the rainwater, and you need to capture all of the rainwater your property and funnel it

into a water filtration system type of right, Well, they do have a massive water shortage. I understand. I'm just saying, what are we solving for in America? Are we trying to produce housing for the less affluent in the working class or are we not? If we are, let's get serious about it. Huh. So what other states are especially easy, like Texas or difficult like California to add additional residential units.

I think the most difficult is the West coast of the United States, whether it's you know, parts of Oregon or Washington or California, these cities, these urban California, you know, But I always think of um like, uh, Oregon is sort of like a libertarian wilderness. First of all, it's not a it's not a rural issue. This is in the dense, you know cities. But nonetheless, it goes back to this point of yes, we wanted for the people

live here, but not in my backyard. Or if our developer, you're gonna build that, but we're gonna require you to give fifty of the units at this rent, You're gonna have to build a park, You're gonna have to pay certain fees, and they put on you elements that make it development perspective and capital This isn't the real estate developers point. The real estate developer is responding to the capital markets and investors investing in real estate are seeking

a certain return profile. What about the Midwest. I know there's been a little bit of a renaissance in cities like Pittsburgh, Um, Cleveland, Milwaukee, they all are. Detroit even is starting to recover from where it was. How do you put up new units, especially in a place like Detroit that what is half the population is left of the best there? Yeah, I know it's um Farmland is recovering,

retaking parts of the city. Look, this issue is most pronounced in the big cities where people want to live and so When you go to some of the smaller cities or the Midwest cities which aren't experienced in the type of population growth, these difficulties are not nearly as much of a challenge. And and and so those cities are doing relatively okay. Nowhere is perfect. There's homelessness everywhere,

there's challenges for young people everywhere. There's challenges for teachers and hospital workers and cops and firefighters all over America. But it's most pronounced in your high cost of living markets, whether it's the New York metro area, whether it's the

southern California area, Northern California, Seattle. It's cheaper and easier, all things being equal, to develop in the southeast and the Southwest, and so the problems are less pronounced as well as you'll have from a entitlement p fact of more pro business um entitlement policies in place that allow for the development of real estate for these needs really

really intriguing. My last question before I get to my favorites are is it safe to say you're pretty optimistic about real estate development in the United States going forward, despite the challenges that it faces. I think these fundamental demand trends and industrial real estate are here for the foreseeable future. I think America is under house, particularly with respect to the working class and attainable housing that we need.

I think that office buildings again, going back to the modern, open light, collaborative space, I think there's a demand for that that will grow in time. And there are other areas of real estate that we're going to continue to need to increase the overall supply in America, And there are other areas of real estate or other markets where we're not going to And so like all topics, there's a broad brush to paint and then there's smaller paint

strokes within that canvas. The devil is always in the details. All right, Let's jump to our favorite questions we ask all of our guests, starting with what kept you entertained during the lockdown? What did you watch or listen to either on Netflix or Amazon Prime or podcast or whatever. Well, um, I think, like a lot of parents of of of older kids, that March April May period was just brilliant because every night I sat on the couch with my three kids and we binge watched The West Wing with

Mark Chene, which is just fabulous. To watch that again, and a show called Royal Pains, which was about a doctor out in uh the east end of Long Island, and uh that was really just a terrific family time for us. Really interesting. Tell us a little bit about your early mentors who helped to shape your career. I have always been lucky and blessed through my job to have someone seen or to me, wiser to me along the way that would look out for me and I

would look out for them. And so from my first job as a legal assistant, there was this great lawyer and a marty hunger, you know, all the way through most of my career at Morgan Stanley. But something happened at forty years old. I was working at Morgan Stanley and a guy, a terrific guy who's a mentor to mind, went up and quit. And he walks into my office and says, hey, you know, uh, last day here, you know, still call me kid. I'm at forty He said, listen,

I just want you to know I'm going over. I'm going to do this. And I was so deflated and that I sat at my desk and realized, Okay, maybe you're just old enough now and you're just gonna have to figure this all out for yourself. But the truth of the matter is, even today I work with the senior partners at at my firm or terrific people. I learned so much from them, and I whether it's Harlan or a couple of the senior guys, I I consider

them mentors as well. Today. The guy who quit and left you deflated, Yeah, he very much though, mentored you, showing you there's life outside of a giant organization. And you eventually followed in his footsteps. Absolutely, and he's a terrific guy and I love him dearly. So let's talk about some of your favorite books. And what are you reading right now? When you pose a question, immediately comes to mind. I RAN's Outlas Shrugged. There's no book that's

ever had such an impact in my life. And I read that when I was a young man in college. I read it in college. I had to fight my way through that book. There's a speech in the middle that's like eighty pages long. It just goes on. I think the book is over a thousand pages. It just shaped the way that I thought about the world, and it was and it affected me in very profound ways. Really like no other book. There was another book I read, By the way, you're not the first person to refuse

that example. A lot of people say that that was a formative experience for them. There was a book I read. You know, I think there's all professionals we read books on leadership and management. And in two thousand and five I read a book, The Radical Leap, which was a leadership book read written by this terrific guy named Steve Farber. And The Radical Leap was love, energy, audacity, and proof um. And it was just a great, easy read and it stuck with me. Basically, you know, love in business is

fundamentally the source of of of being successful. And that was also by coincidence how Trammel Crow viewed our business in our industry, that love was the most important factor in terms of success. The books I've been reading a more more philosophy and history recently. So I wrote this, read this great book called The Cave and the Light, which is about Plato and Aristotle. There's this terrific thinker named Jordan Peterson who written several books, and I'm reading

a book called Beyond Order right now. Occasionally I read fiction, um, but not that often. I used to read a ton of fiction, and I just never get to it these days. If I'm on vacation, I'll bring a couple of fiction and a couple of nonfiction books and see what what gets the time. Um, what sort of advice would you give to a recent college grad who is interested in a career in real estate investing development? What would you tell them? Well, look, I think some of the basics.

First of all, you know, if if you want to be successful in these worlds of investment, broadly speaking, you're gonna have to work really hard, and you're gonna have to make sacrifices with respect to your life. And are you prepared to do that? And and and that's the first thing. The second thing, with respect to young people looking to go in an industry, my my first argument to them is go geographically where the epicenter of that industry is. And so, if you want to be in fashion,

you want to be in New York. If you want to be in music, you're gonna want to be in Nashville or New York or in l A. And so if you want to be in finance or investing, these cities like New York still remain the epicenter of this, and so go where there are lots of people in the industry doing what it is that you want to do. Now, the nice thing about real estate development and even real estate investing is it's highly fragmented and all over doing any states you can, you can do it anywhere. Um

really really interesting. And our final question, what do you know about the world of real estate investing in development today that you wish you knew thirty years ago? This one's easy. I remember in training, sitting and training and listen to Ralph Alcimpora, Oh technical strategies. Great guy, and he sat up in front of all of us, young smiling faces and showed us these charts predicting the future. And I hung on his every word, and I could

have sworn that Ralph could predict the future. And then I went and worked in these firms and listened to the brightest people talk about the future, predicting the future with respect to the capital markets, the stock market, the GDP growth. And finally, at some point along the way, I realized that none of these people, irrespective of their models, know anything about the future. And so we sit here today worried about the future. We feel it's a time

of tremendous uncertainty with the future. You know what, a maximum point of uncertainty was what everybody felt certain December because nobody anticipated that COVID would come. And so the thing I know now that I didn't know that is how do you run your business when you know you don't know? And those of us who spend time trying to think that we know what the future is going to hold with respect to these cyclical activities, fundamentally are setting ourselves up to either just be lucky or just

wrong a lot of the time. Really totally fascinating, um, really really interesting. Michael, Thank you for being so generous with your time. We have been speaking with Michael Leavy. He is chief executive officer of Crow Holdings, a commercial real estate developer and investor. If you enjoy this conversation, we'll be sure and check any of our previous four hundred such discussions we've had over the past eight years. You can find that at I Tunes, Spotify, YouTube, wherever

you feed your podcast fixed. We love your comments, feedback, end suggestions. You can write to us at m IB podcast at Bloomberg dot net. Sign up from my Daily reading list at Ridholts dot com, follow me on Twitter at rid Halts. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Sebastian Escobar is my audio engineer, Paris Wald is my producer, Attica val Bron is our project manager. Sean Russo is my head of research. I'm Barry Ridholts.

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