Justin interviewed Peter Mork, founder of Capital Partners, about his journey into the principal side of the business and how he has gone about building a successful portfolio of millions of square feet of industrial properties.
Key Takeaways:
- Lenders like brokers and investors to have a deep track record in their product type because lenders know that you have the skills to figure out asset level issues
- Market knowledge mastery is powerful in putting deals together, building investor confidence, and raising capital.
- Institutional capital has have come to secondary markets in search of yield
- Make sure you have the right partners when you are raising capital so that you can ensure an alignment of interests, investment horizon, and strategy.
- Line of credits have a place in starting a portfolio and for ongoing discretionary funds but they must be used strategically and in line with the bank’s wishes.
- Metal multi-tenant industrial projects are acceptable on a one-off basis but have not yet been accepted by the institutional capital community
Here is a 2-minute clip from Industrial Insights Podcast with guest Peter Mork.
Listen to the full episode below and subscribe to the podcast on Apple.
Highlights
- His early deals – 5:09
- A fantastic first deal – 8:16
- Warehouse automation – 10:11
- Cash and cash – 19:36
- The ability to control risk – 22:09
- What to do to win a deal – 23:14
- Taxes will affect us more in 2022 – 25:39
- A platform to evaluate real estate – 27:59
- The best time to sell – 31:12
Episode Resources
- Connect with Peter Mork
- https://www.capitalpartnersmn.com/
- peter@capitalpartnersmn.com
- Connect with Justin Smith
- https://smithcre.com/
- https://www.lee-associates.com/
- jbsmith@leeirvine.com
- https://www.linkedin.com/in/justinbsmith
Justin Smith
Thank you for joining me.
Peter Mork
Yes, you got it.
Justin Smith
I remember you said how did you find me? Who knows that I’m doing these deals up here?
Peter Mork
Exactly. Right.
Justin Smith
You’re on the map.
Peter Mork
Good. All right. Justin found me. I’m on the map.
Justin Smith
Yes. I’m a broker at Lee and Associates and we do brokerage. I was curious did you have a background in brokerage?
Peter Mork
I started at CB Richard Ellis as a data banker. They called it that back in the 80s when CB Richard Ellis was CB commercial Coldwell Banker commercial, owned by Sears. They had a data bank job that was highly coveted. I was fortunate enough to know some people right, so you get things done in the world know some people and I was able to get some interviews and got the job as a summer intern in the data bank. That led to a full-time job as I was a junior in college at the University of Minnesota and I was blessed because the job I was told by my Managing Director at CB Richard Ellis, everyone knows that name by now was the job had to have a college degree to have this full-time data bank job when I was a junior at the University of Minnesota. The managing director was in the same fraternity I was SAE and so he said you know what, let’s just forget the fact that you still have some school left and I ended up doing night school to finish my schoolwork so I could work full time at Coldwell Banker Commercial doing the database which is a great way to get into commercial real estate because you come in through the back door of learning the numbers, your options, vacancy factors, putting all the numbers together for the brokers and through osmosis. You learn all those great.
Justin Smith
Imagine now, when you’re winning assignments. I do in brokerage, when you have a mastery of that, and you can display it, and you can weave all the market data into your story of what’s going on out there and how it applies to the client. It’s huge.
Peter Mork
Even more so being a broker. I started this business because when I was a broker, I formed Capital Partners with two other guys about 20 some years ago, and I remember being in a room with the developer, the end user, and I was the broker and everyone was making a lot of money in this room. They’re all looking at me for all the answers for odd questions about the market and I was telling them the answers, but I’m getting paid the least. When the deal goes south, they’re looking to me the first one to cut my fees, right. I’m like, this is this isn’t right. I’ve got the knowledge, but I don’t have any money and I don’t have any relationships in the debt world. But I’ve got the knowledge and so I think I can find the money and I can find the debt and put deals together myself and that was the impetus to start Capital Partners.
Justin Smith
Tell me about like deal one I got imagine for me, I bought some single families about 10 years ago in Austin, Texas, when I first had some two nickels to rub together. I was just following demographics and small deal size. So, if I had 100 grand where could I plunk 100 grand down and start my journey. I ended up buying a triplex, a three-unit apartment next local and lived in it and rented the rest out. Then a few years ago, I sold it and bought a multi-tenant industrial in Dallas, Texas. So 35,000 feet, 14 tenants go into all the banks having a 1099 income and being out of state and my first industrial deal and trying to get them to believe in me and believe in the deal and all of that. That was after one attempt of can we find the money in the equity and can we syndicate a deal. What I came across was a deal that was too big for my britches, dollars wise, maybe like five or $6 million and so can I swing the bat at my first deal being that size range? That’s been my background anyways of like investing. That is how I found multi-tenant and that’s how I came to know, okay, I dig this asset class and I enjoy that. For me just thinking of building wealth along the way of being a broker. That’s what got me interested in who else is doing this and who’s been successful and reaching out to them. So deal one for you, or deal two, what was one of your early deals in terms of we got no money and we’re going to the banks, and we’re trying to figure out who’s going to be partners and that kind of stuff?
Peter Mork
It’s a good story similar to yours. I was driving around a client on the east side of St. Paul, Minnesota. We were looking for 80,000 square feet and they needed about 20% finish. We looked at these different buildings, but there wasn’t a lot existing. So we started looking at land sites and my client turned to me in the car and said, Peter, you seem to know what you’re doing. I would like to invest in a building as well. Can you go find us a land site and put the deal together? I’ll take 50% of the deal. You take 50% of the deal. I’ll sign a 12-year lease and can you put it together? I’m like, for sure I can, sounding very confident underneath I wasn’t so sure. I found a land site in Hudson, Wisconsin, dirt was cheaper over there. This tenant was a German company that had good credit so it’s bankable credit. I got a 12-year lease out of it. I went to a local bank and I’ll never forget; I was meeting with a lender who I still work with today and had all the spreadsheets and showed them how the numbers work. He said to me Peter, you certainly don’t have deep pockets, like a lot of people that come to me that want to borrow money, but you have the knowledge. He said rather lend to you because when things go bad, I know you can figure out how to fix them if you have a vacancy, problem building, etc. and that is your forte, it’s what you do day in and day out. You can fix that, he goes when I lend the doctors and attorneys that syndicate real estate and buy it and they own it, and when things go bad, they hire people like you and figure it out. That was very interesting to hear that comment from a bank that’s willing to lend me money to put this deal together turned out to be a build a suit of 80,000 square feet, we did a 12-year lease. I renewed him again for five years. They vacated the property, I did another this is just two years ago, I did another 10-year lease in place. We all got paid back our money, probably twice over. I did another 10-year lease with another company, put it on the market sold it, actually expanded the building another 60,000 square feet. So, we are in there for like 240 to 140,000 square foot building sold it to a single tenant buyer who buys all around the country. It was a phenomenal Grand Slam for myself and our investors.
Justin Smith
What a fantastic first deal.
Peter Mork
It was a great first deal. It gave me a lot of confidence that I could go out and duplicate it. That was the start of Capital Partners where we started raising money and doing syndications. At one point, we had 150 investors that followed us, anywhere from $50,000 to $5 million would invest with us. It’s been great so we’ve taken that gone to the next steps. That’s kind of the early beginnings of Capital Partners.
Justin Smith
Someone believed in you. They gave you a shot. I think it’s amazing when you have put the whole plan together, and you’ve got your 100 pages of spreadsheets, and then the banker doesn’t even look at any of them and they appreciate that. Like when you understand what goes into preparing all those and all the assumptions you had to make and all the ways you had to be sure in those assumptions. That’s, huge. Then what’s happening in in your market. I just did a little background in some of my travels as a broker. I’ve done a tenant rep work for a company that’s based out of Minneapolis that has 20 locations across the country. I get to do some tenant rep work in a bunch of different markets. I always appreciate doing a dive into what is going on in the markets. It seems like Amazon’s taking over the world. Third Party logistics are everywhere. Warehouse automation people talk about and you see in the biggest of the big, but I feel like that hasn’t trickled down into like, smaller or medium size users. We’re all building everything we can everywhere. Is that kind of how you’re experiencing it? Or what do you see over that?
Peter Mork
Yes, Minneapolis, Twin Cities is really kind of a second-tier locations. We’re not a port city. We’re not a major hub, we’re what they call a flyover city, quite frankly. With so much money, so much capital out there chasing industrial real estate in the last five years. The returns have become so thin on the coasts, that you see a lot of institutional capital coming to second tier cities, like the Twin Cities. We’ve had the big boys now, Twin cities is on their map and so we’ve got the likes of Link in town, Prologis Duke, and First Industrial. All the players have been here like Liberty Property. So, the markets very tight. They go from, you got a lot of land and then you got a lot of local entrepreneurs, construction companies and developers that build on the land. Then they hold that through maybe one or two generations and then someone like Link comes in, aggregates the portfolio, sells a link and makes a killing. Then you have all these institutional players starting to gobble up the local owner operators. Then they come in and they’re IRR driven and different metrics than occupancy and they’re pushing rates. I mean our vacancy factors are plus or minus 7% overall, which is very strong. Some segments is three or 4%. Rates are going crazy, everyone’s pushing rates. It’s a landlord’s market. The cost of steel is going out the roof. Build to suits are getting very expensive, and it’s good time to be a landlord.
Justin Smith
There’s nothing tougher than doing a tenant rep deal when you’re helping as much as you can but you’re the messenger of such bad news. When you think of, I’m going to try and decrease the amount of pain you’re going to feel is a terrible mess. There’s no nice way, there’s no great way to deliver that message, even if you can help them in a million different ways.
Peter Mork
When it’s one of the tenant’s market, the tenant rep brokers are the first to know it and smell it. They have no problem jamming the landlords for free rent and every other concession possible. It’s nice, quite frankly, to have a little bit of landlord’s market and say, Hey, you know what, go ahead look at the market. Here are renewal rates but yeah, I encourage you to go see what you can do out there. They are most likely to come back as long as you are a good landlord, which we are, we take very good care of our tenants. We pride ourselves on that and take very good care of our properties. I think majority of our tenants renew because we’re good landlords and you need to be a good landlord.
Justin Smith
I would probably think that small bass space rent increases are probably think they’re higher than the average, just by nature of being the smaller spaces. Do you think they are pretty much on trend?
Peter Mork
In Minneapolis compared to other markets?
Justin Smith
Just in Minneapolis.
Peter Mork
We’ve kind of stopped quoting on five and 10 and we kind of do office in a warehouse blended rate. Just because a lot of times what you renew a tenant is higher than the asking rates on your vacancy in your building. So, it’s very hard for these tenants to go relocate and find a better deal. It’s trending up on small Bay and mid Bay stuff. No one is building it. No one’s building that stuff anymore. So, you own it and if it’s good, functional real estate, you’re not going to have new construction compete against it. It’s more existing when the vacancy rates are low. I sometimes just quote a monthly rate, it’s eight grand a month. That’s how they look at it. They don’t look at six and 12, five and 10. They look at what’s the monthly gross?
Justin Smith
Does it fit. Do you think quoting office separate from industrial, I see that in like Seattle and Tacoma? Do you feel like that’s something that’s more the past, present or future? Is that just something that’s legacy? That’s just how it’s been done for a long time.
Peter Mork
Yes, in this market, it’s been done like that forever. It’s not how it’s done in most other markets, and I think it’s going to be in the past. The future is going to be a blended rate. Our institutional partners that come to this market, feel that they don’t understand it, like, why are you quoting, six and 10 or five and five and 12? It’s a thing of the past, but I’m glad for it. I think I was talking to a broker yesterday, he’s like well you’ve got 4000 square feet of existing space, I’ll need 2000, so I only want to pay on 2000. I’m saying, well, that’s not how it works anymore. We’re not going to go demo office space for you just to take 2000 square feet, and I take a hit on the overall blended rate, blended rate is what it is. I don’t care if you use it or not.
Justin Smith
When you think about institutions, they’re now in this market and so you get your cap rate compression. When it comes to capital structure, and just thinking of institutions, I would imagine that’s probably good for you in the sense that there’s more institutional capital partners that you can have on your team, or that you can work with on different acquisitions. Now that you have grown, I would imagine you would go from your one client, who was all equity and all personal or like an individual high net worth to now having institutional partners on everything. Do you ever do deals without them? Are they a part of the capital stack kind of on a go forward basis?
Peter Mork
It’s an interesting question. It’s certainly nice just to have one partner, then 30 limited partners in a portfolio of buildings. When you have one institutional partner, you’re the tail on the dog. That partner is deciding what the debt is going to look like, when they’re going to sell, how we’re going to refinance and when we’re going do distributions. I’m one of those folks that put a lot into equity and all that into it and you like to kind of control those things. I certainly like the opportunity to invest with our wonderful institutional partners because we get mass, we get property management fees, we get leasing fees and we get to invest in the equity side as well. If we perform, we get great waterfalls, etc, but I also like to go out and raise syndications or funds. We’re working on a new fund right now, $50 million fund. We can basically control what we’re going to buy, when we’re going to sell and our investors have been with us three or four times over, and they’re confident in our capabilities. We’re fortunate that capitalism that hard and more to raise, it’s finding the deal, it’s really finding the deal.
Justin Smith
I had a one of these interviews that I had found with a university endowment, and just understanding what they look for in operators. I would think that would be another capital source for you to grow of, I’m not sure if you tapped into the endowment world, or if that’s maybe on the on the horizon.
Peter Mork
We just talked about it actually this morning with our CFO, he mentioned that he’s got some relationships. Certainly, would love to do that. We do some work that with some of our institutional investors that have endowment money that comes to them, and then they put it out to people like us and Co-invest. Twin Cities is a strong market. It’s a relatively smaller market, where we all know each other. Reputations very important. We need more development here. I think we’ll see it.
Justin Smith
Have you worked with our Lee team over there? They’re great and they’re growing, we just added health care. I feel like it’s, it’s been great to have them on the squad and to be able to all work together. It’s been really good.
Peter Mork
Yes, Dwayne Poppy is certainly a wonderful broker and he’s a mayor of one of the cities here in the Twin Cities. He’s a wonderful guy. He’s in our office frequently having beers and catching up. Dwayne. and a lot of great folks over there at Lee & Associates.
Justin Smith
That’s awesome. And then returns. How do you look at returns? It seems like, from what I could tell you have both the value add that I think most people are going for, but then to speak to maybe that first asset that you built, you can buy and hold if you want to, I assume that just depends on you find a deal and then you just think what can we do with this opportunity? Who would we partner with this? Who would be our bank or who would be our equity people? It’s more dependent upon the opportunity that you that you find.
Peter Mork
Returns are getting thinner, before we would do a 10-12% cash on cash. I like cash on cash, I’ve always worked well for cash and cash IRR, a lot of people don’t understand it. It depends how long you hold it. The IRR gets affected cash and cash is a good way to look at it for us. Certainly, all the other metrics per square foot cap rates but all those metrics are controlled by one variable that none of us can control and that’s debt. Debt is so cheap now that it’s really allowing us all to chase the cap rate down the rabbit hole. I think everyone has short memories about the days past when debt was 7, 8, 10, or 12%. If that comes back, which inflation seems to be on the horizon, the 10-year treasuries are going up, and it’s concerning as debt goes up. You don’t want to get caught in the middle of that issue. I think we will look to do is lock in our rates longer term, and get good debt, and if you can get some IO great, but that’s certainly a big variable. Our deals usually give investors up 8 to 10% cash on cash return. If it’s a 9-to-10-year hold, we’re probably at a 2.5 multiple and our limited have no cash call provision. We invest alongside them as a limited as well as a general partner. We make it really easy for the limited to say I’ll invest once in this opportunity. They’re saying we’re going to get a 8 to 10% cash on cash two plus multiple in 10 years, that works and we’ve been able to deliver that time and time again.
Justin Smith
I would think as people look at their portfolio and they factor that is a slice of it. That’s very appealing.
Peter Mork
Compared to the alternative investments that these folks have it is 4 to 6% and I think real estate to us is more risk adverse than investing in the stock market or something else because we can control it with our knowledge and our knowledge of the marketplace. It can keep occupancy up there and have done well.
Justin Smith
I feel like most people, once they figure that out, then they go all in on it because they realize that your ability to mitigate your downside risk. You are in control of it and how bad can it get it? I’m sure it can get bad. Like, when you think of this project I bought in Dallas, I asked what the market looked like during the last recession and they said we were all at 50% occupancy levels. I’m looking at myself just taking a little gut check of like, okay, what’s the debt look like? If I were at 50%, what would that look like? It looked terrible. That seems like that was before a lot of this e-commerce has come in. I feel like that that’s even mitigated more the downside much more. Tell me about interest only when are we doing that? When does that make sense?
Peter Mork
I’ve never been a huge proponent of it because I love to pay down debt. I usually only borrow up to 65% leverage. It’s one of those deals that everyone’s doing it now. To win a deal sometimes you have to plug in a year or two of IO upfront. We’re chasing a deal right now, that the wall on the DL is two years, it’s a single tenant building and the tenant has a lease coming up in two years. So, negotiate a deal with a bank that should this tenant vacate, I get two years of I owe money to backfill the building and if I backfill it sooner, we’ll go back to interest in principal payments. Banks are much easier to deal with negotiate with terms of IO and when you can use it and things like that, then of course, other type of institutional debt.
Justin Smith
I feel like that is fantastic to be able to have that kind of flexibility. I was thinking of it mostly of as cap rates compress, that is another way of making your return. If you’re making that payment last, but you’re going all the while that pay down. Cost segregation, are you in that or are you out of that? What is your take on that as it relates to you? When does that make sense and when doesn’t it?
Peter Mork
It make sense in my mind, for a longer term hold that has a build out of 60% or more in the property because it’s kind of hard to do a cost seg on a warehouse of 10% finish. It works on flex, works in office buildings and we’ve had success with it. It’s great in the beginning. It’s time value of money, you can take the write offs up front, as being a real estate professional. You can take it the year of but it catches up to you, in the end. It catches up to you when you sell the asset as well. Our limited partners for the most part like it, especially if they’re in real estate, then they can take the write offs that year. I like it, especially going into the environment we are now. I think with a higher taxable nature of the powers that are in place. We have a flex building and we just recapped that we’re going to do cost seg in 2021 but we held off and we’re going to do it in 2022 because I think the Biden administration’s tax hikes, and everything are going to affect us more in 2022. We can take more benefit of the cost seg.
Justin Smith
I struggle with that concept, but I do feel like it’s a lever to pull. Even if you didn’t pull it in the past, you’re thinking about pulling it in the future and just thinking of what else do I have to shield to protect to reduce. I would imagine those guys are busy these days or will be busier as time goes by. It’s probably a good time for them.
Peter Mork
No, for sure.
Justin Smith
Then lines of credits, is that something that’s helpful? Do you guys use to help take stuff down or not so much?
Peter Mork
Lines of credit have been very important to us, especially in the beginning stages of our infancy of Capital Partners, because that gave us the ability to take down real estate. Lines of credit are hard to get especially unsecured lines of credit. It takes a while to build that relationship with the banks. The banks are certainly very skeptical of unsecured lines of credit, and even secured lines of credit but you have to have something to securitize it with right. Lines of credit have been important to us. For someone starting out in the business looking to buy the first couple of buildings, they can go get some lines of credit, but you just got to use them the way the bank wants them to be used. You can’t have them be an Evergreen Line where you never pay it down because you’ll never get renewed. They’re an important way for someone who’s not born on third base to get into real estate.
Justin Smith
No doubt about it. Then I feel like technology, we’re in a good period of time where that’s flowing into real estate more and we’re able to take more advantage of it. Are there any that you’re implying that you found helpful or that are your favorites right now? I think of like for capital raising or for investor relations for underwriting or keeping track of opportunities. Are there any you enjoy right now or you think are most helpful?
Peter Mork
We use Argus a lot. That’s been a great platform for us to evaluate real estate. Everyone uses Argus on the institutional level. My business partner, Jason Simic knows that very well, so he’s wonderful in putting that information. We certainly can use Argus. I think that all those tools are great, but they can be manipulated, to look like whatever you want it to look like. So, the end of the day, you got to look at fundamentals of real estate, and it’s important to not cut corners just to buy real estate, and you got to keep to your fundamentals and your core beliefs. I always say I think everyone says this, I’d rather pay more for what I call Broadway and Park Place real estate, then pay get a great deal on an inferior real estate that just doesn’t have the the fundamentals you’re looking for. There’s simple fundamentals, commercial real estate is quite frankly, a simple game, you just need to do the simple things right and understand, I understand what you’re doing, the dock doors, the parking ratio, the clear height, the location, Ingress, egress, etc. It’s not that difficult but you just got to do it right. You can’t screw up early on. You can’t over leverage either. You don’t want to over leverage. I think that’s a big mistake. We’ve seen that in the past, with a couple these downturns. I’ve seen a lot of developers go under. A lot of folks that over leveraged the real estate, pull money out, mezzanine debt, etc, you can get a lot of trouble doing that.
Justin Smith
It seems like maybe 60% to 65% somewhere in there is kind of the wheelhouse these days.
Peter Mork
I think 65 if it’s good real estate, and you got to get the buildings mostly leased up and you got diversity in the credit of the tenant base. If you can get to 70% that only helps. One of my deals about when I started in commercial real estate, I could go buy a building or two and I was competing with local people here. It was more of who you know and working the relationships for getting a deal. Nowadays, you go compete with a portfolio of real estate, you are competing against institutional capital. It’s very difficult to compete against institutional capital. That is all low interest rate and IO money that can be leveraged to that 80% if they want to. They’re buying on balance sheet and putting debt on after. So those are really pushing down cap rates and it’s really squeezing out the local or regional operator who doesn’t have access to that cheap of debt.
Justin Smith
It’s a good deal until they come around and then the game’s over.
Peter Mork
Then you turn around and sell to them right.
Justin Smith
Well, somewhat wrapping up, how do you figure out the time to sell? You imagine loan maturities, lease expirations and redemptions. How do you look at dispositions?
Peter Mork
Well, one thing I look at is what are you going to do with the capital when you sell? You’re going to have to pay the capital gains on it and you pay the tax on it. It’s pretty hard to duplicate the real estate you have. So, I’m a believer in long term hold of real estate. Wealth can be created in real estate, I always say it’s a slow train to wealth but it’s a sure train. If you buy good real estate hold on to it. When is a good time to sell I think it’s a good time to sell if you can do a 1031 with the real estate and put it into something else. You have to set up your ownership structure and more of a tech format, which we’ve been doing. We can individually take our proceeds in 1031, I just did a reverse exchange on one of our assets and worked out great. So first off, I don’t think it’s ever a good time to sell because unless you’re going to retire and you’re in a low-income tax bracket, and Minnesota is a high tax bracket state. So, you can domicile somewhere else and figure that out. I think you really have to look at the tax consequences to sell and then if you can sell and do a 1031, or reverse exchange. Right now, is a good time to sell. That is extremely cheap. There’s a lot of institutional capital out there looking at industrial real estate and only industrial real estate. The office market is a concerning asset class to invest into so as retail so as hospitality. It’s really multifamily and industrial and there’s a lot of money chasing those two asset classes. You can really run up the price of your asset if you get in a feeding frenzy for buyers.
Justin Smith
Lastly, do you feel like the prior generation of owners for these assets. When you think of so many mom and pops own these multi-tenant parks, and then over the years now they’ve started to be aggregated a little bit and institutionalized a little bit. Do you think half of them have gone that route? How far through the inventory do you think we are?
Peter Mork
Well, I think in the Twin Cities, you’re pretty well through the inventory, you’re probably at 70%. We had two major players sell their portfolios in the Twin Cities in the last 18 months, they both sold to Blackstone, you know, aka link. When link comes to town and they have an interest in your asset, no one else should even bother bidding because they want it and they’re going to get it. I think a lot of leasing our market, a lot of mom and pops have sold and now it’s slow. We’re looking at other markets to invest in, quite frankly.
Justin Smith
Where would you go? It’s amazing, I’ve seen some of the Southern California guys that are in this particular space, so many have gone to Vegas. So many have gone to Phoenix, then now they’re in Texas and Texas been blowing up. They start looking where else. They are in Atlanta and in the Carolinas stretching around in the south for yield and looking for deals. It’s always interesting to think of what you do in search of yields. I’m interested to hear how you think of that quest and where you might go next?
Peter Mork
Certainly, we’d love to go to Nashville, Phoenix or Tampa where the weather is nice. You’re not in Minnesota, you’re not freezing. Go visit the assets in February and those wonderful climates but everyone else is going there. I think we look more to the middle markets. I think the Midwest Regional markets where we’re comfortable with, we’ve got some relationships. We’re just in the infancy of looking at those markets, but I think we’d stick close to Wisconsin, Missouri, Iowa, and Illinois. Even there’s the Dakotas, Fargo’s a more ahead area up here in the Twin Cities. We got Rochester at the Mayo Clinic south of us. I don’t think the institutional folks are thinking along those lines, which is great because it’s difficult to compete against them when they when they show up.
Justin Smith
That gets you having to be comfortable with metal buildings, I imagine. Is that a big deal or is it not a big deal?
Peter Mork
Yes, that’s interesting. We were looking at a metal building right now that was kind of our first question, how is this received? It’s received fine because that’s the inventory and those areas they still look institutional capital on the exit, but it can’t be an entire metal skin portfolio. I think if you have 15 to 20 buildings and three or four of them are metal skin with all the right attributes for the building with clear height, parking and office finish being minimal. I think it’s fine. You wouldn’t see in the Twin Cities to get get knocked here. They’re not allowing that product to be built here anymore, but they are in other markets still.
Justin Smith
It does seem like it will increasingly be more accepted. I think your point not on portfolio level or at least not yet or not anytime soon.
Peter Mork
Yeah, totally agree.
Justin Smith
Well, I know you’re busy. So someone’s got a deal for you. How do they reach you?
Peter Mork
Yeah, give me a call at Capital Partners or email Peter@capitalpartnersmn.com. Call me direct at 612-431-3001. I would love to hear from anybody that has an interest in commercial real estate if they just want to ask me a question or to buy a subset of industrial the market or we’d love to hear from you if you’re looking to sell a building or your portfolio in the Midwest.
Justin Smith
Awesome. Thank you, Peter. I’ll catch up with you later.
Peter Mork
All right. Thanks, Justin. Bye.
