Perry Solem

Land: $500k for 2.2 acres Logo drawn by a guy who was living in a van: $500 Construction contract: $4.7mn (way more than expected) for 76k gross sf Building, leasing up (mostly), then selling this thing and seeing the current owner get $169 for a 10x10: priceless

@contractorkeith I'm crying uncontrollably too ... from laughter

Pulitzer Prize winning journalist cries uncontrollably at ai slop image. People should really learn to simply not believe anything you see online anymore, especially without any sources linked, at least if you are a Pulitzer Prize Winning Journalist? Maybe I am expecting too much today. I’m starting to understand why people who code hate people, time to do some myself… of both.

@REDevManager if i could set every deal up so that holding forever was an option, i totally would for sure right now would prefer to underwrite more things "hold for several years" than in the past. definitely true in storage for example.

@PerrySolem Do you think you’ll start changing your model going forward and try and hold longer instead of merchant build?

this 51k sf deal is now 81% occupied by unit count / 90% by sq ft first time I've built a new facility and taken it this far occupancy-wise. very happy. (have usually sold earlier on)

@kenashley @rofarrell12 as an atlanta native i did get a little excited by the atlanta spot

@PerrySolem @rofarrell12 Perry! Getting a little excited here 🙂 Don't shoot the messenger. Please. 😅

Where is your city on the list?

@rofarrell12 @kenashley nice honda trail bike btw!! used to have one myself, sold a year or two ago

@kenashley The tertiaries are all secondaries now.

@REDevManager @FinanceFriction f that. build in public. Whatever you sent me I'll be posting it here

@PerrySolem @FinanceFriction Sent you a dm

couple friends of mine are buying sub-$10m value add deals this means small banks for debt small banks want a recourse guarantor they have one. he charges half the promote. these guys are not stupid. they're relatively connected. have done a bunch of deals. great reputation. I'm sure a slew of know-it-alls will reply to this with magic answers, but my point is, people have no idea how badly diluted some operators are. they like what they do, but they'd be the first to warn you, there are much easier ways to make money in this world.

@LPInvestor it's a great asset and that WAS the plan then housing slowed ➡️ lease up slowed ➡️ learned how scary the impact of possible new supply is ➡️"we would sell for only X million, fuck it" now leasing is ripping and we're like "should we... #neversell ??" human nature. so dumb.

@PerrySolem Watch out, next thing you'll be doing is shopping for perm life-co debt and tweeting about the step up in basis for your kids, and dodging broker calls.... 👀

@FinanceFriction they still want a rich guy on the hook and many of them don't/won't ever do what you described

@PerrySolem What about a reducing guarantee as stabilization occurs and counter with a lower promote? Small banks can adjust quickly on these.

off the top of my head somewhere in the 70s in the past, ideally proving some level of decent rents/momentum being achieved in core markets you can sell much earlier, even in today's difficult mkt. but it's all about proving that trajectory/rents/etc. at this deal we are filling up at much cheaper rents than I'd like (same everywhere), so selling isn't even a great option now, but I'm still thrilled.

@PerrySolem At what level of occupancy do you usually sell and kind of discount do you take relative to a fully stabilized sale?

@REDevManager @FinanceFriction interesting ok so... there's a warm body there? is it the ceo of the dev co?

@PerrySolem @FinanceFriction Only on bad boys and environmental

@JulianScurci i believe it. blows my mind how many years these big ones take. you'd have to love it to do it.

@PerrySolem That gates rubber factory deal is iconic. Believe it also got sideways on timing during GFC and needed to be recapped.

random company of the day i stumbled across "Since 1990, Cherokee [Investment Partners] has invested in more than 550 environmentally contaminated, or brownfield, real estate assets across the United States, Canada and Europe. ... with a total of five investment funds since 1996, with aggregate commitments exceeding $2 billion. Additionally, Cherokee has managed or invested in over 70 venture companies in environmental remediation, renewable energy, waste-to-energy, energy management and other fields." largest brownfield investor in the world, out of Raleigh NC, founded by a couple former Bain guys. pension money/institutional. Projects range from the $1b Gates Rubber Factory deal which seems like it sat forever and maybe didn't make them much money ... to "cleanup and redevelopment of a portfolio of 68 gas station pads, with extensive petroleum hydrocarbon contamination" i suspect they have performed better on those smaller deals than, say, the 1300-acre Meadowlands project that was said to require HUNDREDS OF MILLIONS in remediation.

@FinanceFriction @REDevManager not a lot of personal guaranties occurring among billion-dollar loans

@REDevManager @PerrySolem Is the LP’s recourse at the entity or individual level?

@av_dcre @PatCarino LBREP

Sooooo what do we think the new name of AvalonBay / Equity will be after they merge? ABE Residential? Avalon Equity ? Equity Bay?

@SunbeltStrips SWFL FTW baby. i love this.

Costco paying $55M for 55 acres in Fort Myers at ~$1M/acre tells you everything you need to know about where institutional retail still sees long term value. Retailers are no longer just following rooftops. They’re pre-buying future trade areas before the next wave of density arrives.

@anotherbearcap @ADeermount "A Guide to Quiet Quitting for New Dads"

@anotherbearcap @ADeermount hiatus?

@capmktroy there is some stuff in there that is blatantly miscategorized throwing it in the trash. it's good to spend money on books but it's also good to know when to move on from one, even if unfinished

@PerrySolem This book is $300, Perry!

@Stu_V15 @HamptonPrezcott the silent E after midtown 😆 believe it or not I'll be meeting this fine young man (Hampton Prescott) for lunch next week where we will exchange books, overlooking pdk

@HamptonPrezcott @PerrySolem bat signal

“Hi Andre this is John. I just got back from Maine to hear that you labeled my Midtowne as ‘unsafe.’ Now some may play patty cake with ya, friend, but I’m here to tell you…”

@jwf_3 @rhunterh this is brilliant. what a delight.

@PerrySolem @rhunterh They are based in Raleigh. Great folks and have solved a lot of site headaches. You left out the part that he'd incorporate the contaminated soils into the manufacturing of bricks at the brick company he owned, which at one time was the largest brick manufacturer in the US.