Gar Herring

@ChrisRamsey60 It's like golf, but with more brain damage and frustration.

The game of real estate is one of the most addictive there is. The best part about it, it never ends. We can play this game until we’re 90 years old.

@DMAC_19 @DDrolapas Correct - Small rentals make no economic sense year 1-3 or 5. Buyers have to long-term hold for massive value and rent inflation.

@DDrolapas Lot of money around there. Things don’t trade based on returns.

Prime Newport Beach, CA Triplex will run you 3.5M Gross rents -$164K Measly 21 times gross.

@robbiehendricks So interesting how post-Covid MF is following the post-GFC retail trend - The A properties get better and institutional capital, the C-D stuff dies or goes to slumlords. The B stuff rides the razor's edge.

Buzz from most of the brokers I’m talking to right now is that 60s to 90s vintage multifamily is distinctly out of favor. Investors are scarred from paying 5 caps for old stuff (as they should be), as well as the operations of such assets. As a result, I’m seeing solid, well-located properties starting to actually trade at decent cap rates. Dare I say…close to penciling. Beginning to think that as this commercial maturity wall plays out we will see some good opportunities pop up. Ready to mobilize.

@N8RealEstate Does not sound like medical use would work there. Maybe an quasi office use like a realtor or insurance agent? But get a really good quote on cost to convert to resi before proceeding.

@RetailDevDude That’s what I thought

I have a mixed use property - Duplex - Small commercial space - Garage I've been having trouble with the commercial space, it was hard to lease. Then I got a smoke shop in there and they did not last a year and closed down Thinking about just converting it to a residential space, bad move?

@realEstateTrent Ok, everyone be honest - how much cap rate compression to you put into your exit cap?

What gets commercial real estate investors in the most trouble is the belief that prices only go up

@fortworthchris Always interesting those that don't understand the difficulty of developing. It's like the difference between buying a car vs designing and manufacturing a car.

The skills to buy existing real estate are completely different from those needed to develop real estate. Go watch a contentious city council meeting and it becomes clear the best developers are like sudo politicians.

@joeytee_ It's hard to accept that some buildings have negative value - the cost of demo to get it back to dirt.

Just submitted an offer on a commercial deal- old Kmart in Illinois. It was accepted. Which is great, bad news is I have no clue what to do with it. Someone buy this from me.

@realEstateTrent Hate the tweets of "Anything else other than cranking deals means you are weak and lazy..."

Ok I’ll bite: Been focused on my niche for 24 years. 31 consecutive successful exists in a row since 2007. Average check in our current fund is $572k. Over 70% of the capital of the current fund is from previous investors. And yes. I love to post.

@jandreini1 I am surprised at how buyers do not do this for the competing properties as well. And look at quality / condition of cars in the parking lot, how customers are dressed, etc. Who is the customer and who is not?

Tenant interviews are the most important part of any CRE acquisition, yet the majority of buyer's don't do this. For corporate users, speak with a manager - one guy told my client sales were terrible and he was quitting - someone else bought the property because they didn't do this. When acquiring a strip center, you are buying a small nuanced community - there tends to be an unofficial "mayor" and quarrels amonst the tenants / landlord the broker and seller would never reveal. Basic questions include: -Tell me about your business - start the relationships before you close - you need to have a mole per se. -How are sales? -What are some things you would like to see done here? Tenants are extremely fearful of new landlords and will pause capital improvements or undermine a new landlord if they don't give out the right vibes. The best ice breaker is to remind them that their contracts are secure and you are prepared to spend money to improve signage, paint, etc. Completely disarms them. On the other extreme, a landlord bought a strip center did no interviews and sent letters raising rents - the tenants colluded and all ignored the letters for over a year. Having interviewed hundreds of tenants and strip center villages, the things you will discover would shock you. Happy to provide further insight this into acquisitions folks are making - AMA.

@jandreini1 Many tenants will bitch and complain regardless on conditions, but if you interview tenants consistently and back-it up with data, you can tell which tenants are honest vs not.

@SinaiLawFirm Fees are meant to cover costs and should not be directly linked to experience or quality. You want to know that the GP is not getting rich off the fees, while also not starving him to death.

If I invest with a syndicator/GP without a proven track record, does that generally mean their fees are lower? If their fees are about the same as the GPs with a track record, why would anyone invest with someone like that?

@ElonGerberg I also shared my booth with John Crossman and The Villages this year. Shoulda stopped by!

@RetailDevDude That's the beauty of having a booth.

Last post about ICSC Vegas... I Made some incredible connections and caught an awesome keynote from Coach K, but here is my honest takeaway as an active sales broker: I dropped $1,200 on a badge and spent maybe 2 hours total on the showroom floor. Honestly? The only reason I even walked inside was pure guilt for buying the ticket. If I hadn’t paid for it, I wouldn’t have stepped foot in there. The reality of this show? The floor is just a formality. Not a single one of my high-value meetings happened inside. They were either pre-set outside the convention doors or happened organically right at the parties. The real ROI came from the happy hours, the hotel bar, dinners, the pool parties, and the sportsbook. That’s where barriers come down, real relationships are built, and actual deals get done. Moving forward, I’m skipping the ticket, saving the cash, and investing that energy directly into the fringe networking. Follow the action, not the badge

@ElonGerberg Yes. My client was meeting with the investment sales teams of JLL, CBRE, NewMark, M&M, etc. from the different markets they are targeting to discuss deal criteria.

@RetailDevDude Even as a non-leasing agent?

@Keith_Wasserman Wow - worse than the GFC of 2009? Must be much different than retail. Shopping centers have not been this healthy since 2006. Really hard to believe the relatively minor increase in interest rates is worse than the global financial meltdown we had.

Real estate GP’s, this has been a vicious cycle. I spoke to one of the largest real estate owners in Los Angeles the other day. I asked him which cycle was tougher… 2009 or this current one. By far this one he said. 2009 bounced back faster. This one is definitely deeper and longer. I’ve had two industry friends take their own lives during this current cycle who were magnificent developers and even better people/mentors). We definitely have our own internal struggles in the Gelt portfolio. That being said, those that make it through unscathed (maybe with some deep battle scars) and continue to play defense with existing assets and not forget offense acquiring assets when the liquidity has exited the building will be handsomely rewarded in the long run. Definitely more fun when there were no fires and everything was going up and to the right. But these times are the times to double down on transparency with investors, double down on new acquisitions, and work hard on preserving investor capital. Brutal time to find good deals and then put them together. Investors might not be happy now, but if you make it out unscathed and preserve capital you will be greatly lauded in the long run. Wanted to share the below message we received from a long term LP that makes us want to dig in and continue our track record of never having a capital call or losing a single dollar of principal for investors over 17 years.

@robbiehendricks Plane time is my most focused, efficient work time.

Welp, I guess I’ll say it: I pay for 1st class when I fly for work. I’m tall. Coach kills me. I feel cramped and really can’t get much done. Instead, I can get in 2-3 hours of good work up front. It’s productive with no distractions. Worth the $200-300 extra for me.

@realEstateTrent Yes, but is it because that’s where the LP money is? Really difficult to raise money on lots of different micro bets.

Most GPs are just making macro bets

@TiredBambooLaw I live in the OC and if Margot Robbie wanted to date me but lived in LA I wouldn’t do it. Literally easier to get on an airplane to date someone.

LA peeps I need a ruling. My friend just went on a date last night in Culver City. She's from South Bay. He lives in Koreatown. That's a long distance relationship, is it not.

Thoughts on business related license plates- cool, funny, or cheesy? I once considered the plates “Big Mallz”. Yes, with a Z.