Power, Land and Timing with Bill Shopoff

Bill Shopoff 00:23

Great to see you again, Justin. always happy to help where I can.

Bill Shopoff 00:39

Well, we're even being mentioned in the name with the name Prologis, I think we're a we're like a dot to them. but we're important to our business, but probably not that important to the in industrial business as a whole. I think I was just at a at an event where Prologis and Link and LBA were there and I think they have like couple billion square feet or something like that. It's just some ridiculous number. So I don't

Bill Shopoff 01:04

know I don't know what the number was. Actually, I probably don't do it justice, but it's it was a big number. it was a it was like twenty percent of the total industrial market in the country. It was a shockingly

Bill Shopoff 01:14

number. no look we're a niche player in the in the space. I my business I've you know I've been in business almost fifty years now and This company's thirty four years old. and we've done a lot of different things over the years. we're really kinda jacks of all trades. I probably shouldn't add master of none 'cause we

Bill Shopoff 01:33

think we're best

Bill Shopoff 01:35

I think we're masters I think we're masters of many. you know, I learned kind of how to cut my teeth in the RTC era Resolution Trust Corporation where buying defaulted debt and buying stuff all over the country and buying all different product types. So I learned to kinda understand different markets and different product types very early. and so I've been a generalist rather than, you know, somebody who does a specific product type. oh But you know, we saw some opportunities. We you know kind of really this foray of our involvement in the industrial business. We've owned industrial on and off. I own a you know a big industrial manufacturing facility just down the street on Jamboree that's at least to a semiconductor chip plant. So I've

Bill Shopoff 02:20

owned

Bill Shopoff 02:20

that in 2010. So it's not like I'm not in the business, but we went through a kind of mixed entitlement process. We started as residential. Back in like 2007, our residential deals were falling apart on this site. And First Industrial came and made us an offer to buy the land. It turned out not to make, but

Bill Shopoff 02:44

it caused myself and my team to scratch our heads and say, why don't we do industrial here?

Bill Shopoff 02:53

they're pretty smart people. so we spent kind of on and off, spent the next ten years, you know, kind of waiting for the GFC to wind through, and then, you know, as it came alive again, we started entitling the site for an industrial set of buildings. And I think we started out with about two and a half million square feet on the site. We pulled that back to a little about a million eight thirty in two buildings. I tell people I said, you know, we got challenged on our environmental process by Sierra Club and then a local group called C Van. I frequently think I should send them flowers and champagne because their challenge delayed us just long enough to kind of hit the market perfectly. And

Bill Shopoff 03:40

we recapped the land at the end of twenty ten. twenty and we started construction in April of twenty one

Bill Shopoff 03:48

and you know went into a pre-sale Anyway, we delivered the building. Because I remember people telling me, you know, I'd sold too cheap and left a lot of money on the table. And, you know, we'd underwritten rents at fifty cents and rents were already like at 75, 80 cents. And they're like, oh, you know, this is gonna run forever. And I'm like, you know what? we got a good number

Bill Shopoff 04:08

here. and we entered into an early escrow with Brookfield at three hundred and twenty-nine million dollars. And that was a big closing for us. It was three hundred twenty nine million I think, you know, according to Real Estate Alert, I think it was the third largest individual sale that year. So for our firm to be able to be involved in that, pretty big for us and provided us a little capital to weather a little bit of a storm that was coming that we didn't realize. But so we went out and said, well, this is good. let's go find some more sites. And we're already working on a couple. we have our Mesa Verde project that we had acquired. I guess we bought it about five years ago. and we bought it kind of while we were making the deal. at I-10 Gateway, which is the project we sold to Brookfield. and so we kind of knew the direction of the market. We knew the value of industrial land kind of before everybody else figured it out. And brokerage team that was handling the sale called us and said, you know, we we've had some guys looking at, you know, maybe trying to add some industrial to this entitlement. It was entitled for thirty six hundred and fifty homes. Under SB 330 you can't do less housing.

Bill Shopoff 05:20

so we did a smaller footprint of housing and added four point two million square feet of industrial logistics to the site. And we just got that entitled in the last I guess two weeks ago.

Bill Shopoff 05:34

so we've got thirty six hundred and fifty homes and four point two million feet of industrial land or you know land for industrial buildings.

Bill Shopoff 05:43

and You know, we're moving into the, you know, design and plan stage now. So it'll be something that'll hopefully break ground in late twenty seven, assuming there's a sense of a market. So we're feeling like things are recovering in the big box business.

Bill Shopoff 06:26

They're

Bill Shopoff 06:26

all like seven plus,

Bill Shopoff 06:30

right around seven hundred. Calimesa didn't want to allow us to do million footers. we may be able to go back and combine some of the buildings at some point. because even though they have a policy that they don't like million footers. They actually approved an annexation of our I-10 project,

Bill Shopoff 06:47

which we facilitated and to do that they had to amend their rules and allow the million footers. So so maybe we'll be able to be successful with that. But

Bill Shopoff 07:07

I think

Bill Shopoff 07:07

it's

Bill Shopoff 07:08

more

Bill Shopoff 07:23

I think it's psychology. we have a site in Mesa, Arizona that would be perfect for big buildings. and the city since we acquired it, like they just were like, We want small bay, we want manufacturing, we want these and I you know, I said you can want it. You

Bill Shopoff 07:40

can want

Bill Shopoff 07:41

it

Bill Shopoff 07:41

all you

Bill Shopoff 07:41

want. you can want it all you want, but there's two million feet of that product vacant to the south of me. So that's not the product you're gonna get. The product, the buyers, the you know, the users want bigger buildings. we have a project that we're entitling right now in out at the 111 and the ten on land with the Agua Caliente tribe and You know, we'll do a we'll do one building there. We have two smaller buildings, but we have one building that'll be about a million six eighty.

Bill Shopoff 08:15

so it's you know, we're taking a big bet on one building. we can you know, we can demise it if we need to, but we can also do cold storage there and so you know, there's some options there to find, you know, that just that right user. So

Bill Shopoff 08:50

Yeah, I mean the tribe has a lot of pluses. because the rules the rulemaking's different. and your landlord is also your approving body. So that's a plus, but you know, there's a lot of politics in the tribes and you know it's it's a little like family politics, maybe you know, I mean these places run, the well run tribes run like a well run family office. and there's a you know, a certain amount of bureaucracy with that. But you know, I think running for the running with one purpose which is running for the longevity for the future members of the tribe. And I think, you know, for that we're grateful. we have business relationships with I think today we're working with four different tribes and you know, I think it's been good for both sides. we're grateful for our opportunity to come do work with them and bring our skill set and, you know, hopefully tribal members profit from it. So

Bill Shopoff 10:23

I think there'll be more. we have another project in Desert Hot Springs that's a little over a million square foot that we're hoping to break ground on next year. It's been a little bit of a challenging time to put the capital stack together, but we get it together and then it falls apart and we get it together again, but we're persevering.

Bill Shopoff 10:42

we do think there's some users. We've gotten a couple of RFPs recently. So, you know, we're We're hopeful we're in the right place at the right time. We're next door to Amazon. you know, we know there's a good employee base, access is good. You know, look we're looking for the things that you know make these buildings work for these big buildings. you know, shallow bay is a whole different universe. and you know, if I were, you know, buying existing product, that's probably what I would be focused on today.

Bill Shopoff 11:12

is just trying to buy some good quality shallow bay. maybe that somebody's in it at the wrong price because there's a little bit of I don't I wouldn't call it distress, but there's definitely some stress in the market. And you know a I don't know a big run up in the 10-year hasn't helped.

Bill Shopoff 11:30

we lost a land sale to an industrial developer, you know, in the last two weeks that walked part of the deposit because their equity walked when the Treasury moved fifty basis points.

Bill Shopoff 11:41

I think that'll stabilize at some point. Like I don't think we're I don't think we're handed into a low interest rate environment, but as I was talking to somebody the other day and they were like, well, you know, why didn't you anticipate that? And I was like, well, I you know, I didn't forecast a war. it wasn't in my plan last December.

Bill Shopoff 12:01

literally listening to, you know, one of my recordings that I do and I was like, sometimes you say something and you sound really prophetic and sometimes

Bill Shopoff 12:10

you sound like you didn't know what you're talking about.

Bill Shopoff 12:18

Yeah, I you know, look we don't try to prognosticate interest rates. We never have. we rates are probably below the median of my career.

Bill Shopoff 12:31

it's

Bill Shopoff 12:44

Look, I started when you built it at ten and sold it at eight.

Bill Shopoff 12:48

You know. It took me a long time to adapt to building it, you know, the numbers we were building out a few years ago and thinking you were gonna sell, you know I mean look, the apartment business was building in the low fives and selling in the high threes was what

Bill Shopoff 13:04

they were trying to do. I don't know how many people successfully caught that, but they were certainly trying to. you know, I think that we'll find a place. I think it may take another six to eighteen months for the chop to get out of the market. I think the good news is there's you know, unlike some of the tough markets I've been in, the economy as a whole is you know, is mostly working. and so there's spots that aren't but mostly working. And so, you know, look as real estate practitioners, we're just trying to service our clients, service

Bill Shopoff 13:38

the end customer.

Bill Shopoff 13:40

whether they want to buy a building from us, whether they want to lease a building, whether they want to buy some dirt and build their own building. We're just trying to we're trying to marry up, you know, a unique piece of land for a user. And you know, in trying to figure out what the best use of that land is. We we're talking about it the you know, sometimes it's not what it is. you know, a couple years ago we got presented with Amway's manufacturing facility in Buena Park and you know the brokerage team had taken it out to industrial users thinking you know, somebody would knock the building down and build a you know, a modern industrial facility. And the city really wasn't keen on that. and they basically told people, Yeah, we know it's by right, but you know

Bill Shopoff 14:31

Wouldn't suggest you try it. we think it's a residential site. And we recently got two hundred and eighty one units of residential approved on the site. and you know, expect

Bill Shopoff 14:42

two hundred and thirty one townhomes and fifty affordable apartments.

Bill Shopoff 14:49

So so, you know, townhomes kinda starter first move up and then, you know, the apartments will be a tax credit, you know, true capital A affordable.

Bill Shopoff 15:03

you know, big shift from industrial. you know, I think every time you take something out of the market it makes the balance of the market a little healthier. even though that was a user building, it still takes that building out of the count.

Bill Shopoff 15:19

Yeah, I mean it was one of the early manufacturing facilities for Amway. I've not toured the building. I've not been in the building since we bought it. but they're they'll vacate soon and we'll see what see what's left there.

Bill Shopoff 15:38

I

Bill Shopoff 15:38

think

Bill Shopoff 15:45

Yeah.

Bill Shopoff 15:52

Yeah, I think the way the building was configured would you be looking for a needle in a haystack to refill the building.

Bill Shopoff 16:00

it's a little

Bill Shopoff 16:01

bit like

Bill Shopoff 16:01

my

Bill Shopoff 16:10

they're actually leaving the state. They're going to Michigan to consolidate manufacturing at their facilities in Michigan.

Bill Shopoff 16:18

so and we'd gotten wind of that and you know ultimately made a sale lease back deal with them and you know it was a pretty you know, I would call it a relatively frictionless deal. It was a good negotiation. We've done quite a bit of corporate acquisition where we're buying from corporate sellers that have a you know it's time to change the use and you know our site down the road from the our Tower Semiconductor facility on Jamboree where we you know we bought that back in twenty ten and you know we're part way through development there and we're pausing where all while our tenant rides out their tenancy. but they've got a unique use there and We spotted how unique it was and you know, we've been working with them to ultimately get them out of there but maximize income while they're there. So

Bill Shopoff 17:17

You

Bill Shopoff 17:17

know,

Bill Shopoff 17:17

that

Bill Shopoff 17:18

that's probably we think it's the it's one of if not the oldest operating semiconductor chip facility in the country. It was built in the sixties.

Bill Shopoff 17:35

It was a ri well, I mean when it was built if you look at the old pictures, you know, there was nothing around here. It was in the middle of nowhere. and

Bill Shopoff 17:46

Yeah.

Bill Shopoff 17:54

Yeah.

Bill Shopoff 17:57

Yeah. Well I mean people don't you know, if they're not longtime Orange County people they don't realize where the word Jamboree where the road name Jamboree came from. 'Cause you know, it's a Boy Scout Jamboree

Bill Shopoff 18:09

on ranch land.

Bill Shopoff 18:13

Yeah, there you go. A new factoid for you.

Bill Shopoff 18:17

I hope it's true, but I believe it to be.

Bill Shopoff 18:34

You know, we when we see something we think is worthwhile. So I do my end of year reflections, but we do we'll do short pieces throughout the year. And you know, it's it and my team does a great job of helping me they kinda gather a theme and then help me put something together and they've done a great job of helping me keep up with kind of sharing thoughts on the world 'cause you know, we we've got opinions. I don't know that anybody cares about them, but we're gonna share them. Some sometimes they even resonate with one of the politicians who actually wants to do something about it. And so it's good.

Bill Shopoff 19:22

Yeah, like

Bill Shopoff 19:23

we

Bill Shopoff 19:23

try

Bill Shopoff 19:23

to spend

Bill Shopoff 19:23

time sorry to we try to spend time understanding, you know, the industrial market and then also we're pretty active in the residential market as well. And so, you know, we're trying to understand all things housing or you know, a lot's going on with the state, you know, creating some bills to try to make things easier. you know, well they're making things harder in the industrial space with things like AB 98 that you know candidly some of the larger players I think supported that and regret now supporting it. I think that they

Bill Shopoff 19:58

you

Bill Shopoff 19:58

know

Bill Shopoff 20:00

Yeah, I think they thought that was good because it was a barrier to entry, but they forgot that they're still in the development business. And they also forgot that if we create too many barriers to entry, California ceases to be the thing that we want California to be, which is the economic engine for the nation.

Bill Shopoff 21:03

Look, it's an incredible resurgence of aerospace and defense in the Southern California region. you know, you've obviously got you know, some of the old standard companies, but you also got, you know, big time up you know startups, you know they're no longer really startups, but upstarts in Andrew. they're beyond a startup now. I think, you know,

Bill Shopoff 21:23

valued at I don't know, six year plus billion dollars and I saw yesterday they signed a you know new contract with the Navy in the you know the billion to two billion dollar range is my recollection of it. So just saw the headline, I didn't get a chance to read the article. But you know, look it's in It's incredible entrepreneurial talent in and around Orange County. the American dream still exists here.

Bill Shopoff 21:52

you know, whether it's people creating an Andreel and creating a you know really big significant business. Or just entrepreneurs creating an idea and filling a need and you know filling that shallow bay industrial. You know, they need a five or ten thousand, fifteen thousand foot spot for you know their business idea for some shop there, you know, they need to manufacture something, they need to do something. And you know it's always incredible to me how many people do how many different things around here. I had a really unique need. My daughter got married this last summer this in June.

Bill Shopoff 22:28

And I had a very large, I have a methuselah of champagne, and I needed a device to pour it with.

Bill Shopoff 22:35

And I'm scouring the internet trying to find one. And they're either very expensive or non existent. And I finally like find a company in La Habra that will custom make it for me. for a fraction of the cost of what I could buy an existing one for. And

Bill Shopoff 22:55

I literally take the bottle of wine over there. it's a giant bottle.

Bill Shopoff 23:00

and they measure it and they make a device precisely for that bottle. And it's made exactly how I wanted It worked perfectly. You could literally pour this giant bottle of wine with your fingertips or

Bill Shopoff 23:13

bottle of champagne. And so, you know, it's a cool device. and it was manufactured right here in our backyard. And that's

Bill Shopoff 23:19

one of a thousand of those people out here that

Bill Shopoff 23:23

are building businesses, creating value for their employees, and doing things for their families. And it's I just love the entrepreneurial spirit of it. And I think it's one of the things that we we're we we've been fortunate both from delivering space to people and also on the flip side, on the investor side of people that invest in our projects, is we get to meet these entrepreneurs and you know they make these things that you know who knows, you know, who would have thought of that? and

Bill Shopoff 24:04

Somebody

Bill Shopoff 24:05

had

Bill Shopoff 24:05

a

Bill Shopoff 24:05

whole

Bill Shopoff 24:06

product line and over the corner of their website was like, yeah, we can do this. We can custom manufacture this. and I'm

Bill Shopoff 24:11

like, great. How cool is that? so I think that's what makes Orange County in Southern California so unique. you know, look we do a lot of business here in Orange County, but we're also heavily invested in the inland empire. and have been for decades now and you know we think the you know those ecosystems work well together. You know, you got employees out there that come into this in into Orange County and

Bill Shopoff 24:38

vice

Bill Shopoff 24:39

versa. So

Bill Shopoff 24:42

Yeah.

Bill Shopoff 24:45

Look, it's an incredible economic engine that people, you know, they wanna around the country, you know, certain times they wanna poo what we do and our importance to the nation. But you know, the ports of Los Angeles and Long Beach, you know, I think those two ports are larger than the next five or six together. they're pretty important to the GDP of this country. So

Bill Shopoff 25:23

Yeah,

Bill Shopoff 25:23

look you look you've got Defense Aerospace, you know, South Bay here in Orange County. You've got Life Science down in San Diego. you've still got entertainment in the arts is a I mean there's a lot of other businesses, but you still got the entertainment business in LA that's still a big piece of LA. There's tons of other business in LA, but it's still an entertainment hub. maybe not as much manufacturing of entertainment, but certainly still home to much of it. So

Bill Shopoff 26:21

No, it's it there's been challenges. even our I-10, you know, we it took months to get it powered. The building was essentially done and we're waiting around for trans transformers and stuff and you know, in essence you're just, you know, everybody was scrambling for the same pieces.

Bill Shopoff 26:38

it you know, power is power's become an asset class though in my opinion. I mean I will tell you we look at every site and I I'll tell you even at Amway we didn't even think about it. But literally we're in a meeting yesterday and we're thinking, Man, there's a lot of power there. Like maybe we sh maybe we can squeeze something else out of that site to

Bill Shopoff 27:00

take advantage of some of that power. we're involved in the data center space. You know, I I'm looking at it at my site down the street in Newport where Tower Semiconductor is. When Tower leaves in 2030, 2031, you know, there's fifteen megawatts of power there. that power is powered land has significant value.

Bill Shopoff 27:24

You know, and I can I think I can still do my residential development, but possibly do something else. maybe that has a you know some other value in and maybe not on that site,

Bill Shopoff 27:37

but maybe I can export that power nearby.

Bill Shopoff 27:41

because it's critical infrastructure and so you hate to give up an asset

Bill Shopoff 27:46

and that power is an asset today. And but we're also looking Justin at behind the meter solutions,

Bill Shopoff 27:55

creating our own power or augmenting power. you know, we our project over in Mesa powers a power's a bit of a constraint, but the city will support us doing behind the meter.

Bill Shopoff 28:07

so we'll probably add forty to sixty megawatts behind the meter so we can support advanced manufacturing on that site. so we're our firm's gotten very savvy on the power business in the last couple of years and we're you know we have relationships with you know different providers of turbines and other things and you know this those could be, you know, diesel fire generators, but I think, you know, the most efficient in and most environmentally correct, at least of you know, way more correct than a diesel generator,

Bill Shopoff 28:41

is a gas fired, natural gas fired. And in with some catalytic capture of some of the NOx and other things. so we're paying a lot of attention to that. I think we you'll see us announce a couple of pretty significant projects coming up in the you know the next year to eighteen months that will be largely power backed with power that we're gonna create ourselves.

Bill Shopoff 29:05

No.

Bill Shopoff 29:11

Yeah.

Bill Shopoff 29:30

I th I think it's something that we didn't look at maybe two years ago as much as we do today. and today it's very much in our wheelhouse to say that's an asset along with the building, that power generation that you may have. In the case of Tower, you know, I've got a 64 kV that drops into a 12 kV through a substation on the property.

Bill Shopoff 29:56

You know I would say when we bought that was a liability. It's like what the hell do I do with the substation? I gotta get rid of

Bill Shopoff 30:03

it

Bill Shopoff 30:03

someday.

Bill Shopoff 30:05

and now I'm thinking, maybe

Bill Shopoff 30:07

not. maybe that substation stays and I figure out something to do with that power. maybe that attracts a particular user that's interested in that and needs that high power. So I just you know who knows whether we'll do anything there or not. But

Bill Shopoff 30:22

I think it's added something to our due diligence checklist and to our monetization box of how can we maximize value out of every piece of real estate that we own. I think

Bill Shopoff 30:37

you look the one thing we've been good at Is even when we make a lot of money on a deal and we or we lose money, it doesn't matter. we still wanna run through both and figure out how they could be better.

Bill Shopoff 30:50

we hate losing money, but occasionally we do. But even if we make a ton of money, it's like could it have been better? Could we been more efficient? Could we have figured something else out?

Bill Shopoff 31:04

but the other thing we know is sometimes we make a lot of money and it and yes we were doing something, but sometimes you're in the right place at the right time too.

Bill Shopoff 31:14

And it in look if you're not in the batter's box, you don't get to swing at those pitches.

Bill Shopoff 31:21

Yeah.

Bill Shopoff 31:23

but you gotta be in the game. you know, I I like to tell people about some of my near misses over the over my career. And you know, I said, but they're interesting near misses 'cause I was there at the table and had I not had the career I had, I wouldn't have been there. Yeah,

Bill Shopoff 32:05

Yes,

Bill Shopoff 32:06

no.

Bill Shopoff 32:09

We're definitely adopting at different levels. some of us are better than others. I'm you're really starting to use it more and more. I use it to help me, you know, write. I literally used it the other day to help me write and rewrite my presentation for my Mesa Verde project in Calimesa. you know, so ultimately I put it back in my languaging, but I want to make sure that the facts that I want to get, you know, get incorporated. I think it's you know it's definitely got a value in modeling. you know, I'm impressed at the level that I can get pretty good diligence on a site. from AI today. I you know things that I probably know because you and I know it because we intuitively know a lot of these things. But I have two sites that I wanted to do some homework on and did one the other day, Sunday afternoon I was bored and think whatever game I was watching whatever game I was watching wasn't interesting me. And so I started asking about a site that we own, thinking about some alternate uses for it. And you know, in a matter of about fifteen minutes, I had a pretty exhaustive kind of commentary on constraints, opportunities, issues, pro forma values if you could get certain things accomplished. It literally got me to, you know, pro forma land value if we could do X. And here were the problems to go solve for X. And

Bill Shopoff 33:41

I got all that done in, you know. fifteen minutes and I probably wasn't working very hard at it. I mean it wasn't like a

Bill Shopoff 33:47

fifteen

Bill Shopoff 33:50

I was just like kind of went down a rabbit hole and you know then I forward that to one of my guys and said, you know, look, there's something here. let's go look at this.

Bill Shopoff 33:59

so I'm starting to do that query. I think it's the quality of the questions that you ask. So I think if you you know I I stole somebody else's quote, it's certainly not mine, but look I don't think you're losing your job to AI, but I think you will lose your job to somebody who does AI better than you in time.

Bill Shopoff 34:22

I think the entry level analyst positions are gonna be tough because I think a lot of that work can be done automatically. So it's gonna be hard because we're gonna be sh we're gonna find ourselves with a shortage of the next level of analyst if we don't train them from scratch.

Bill Shopoff 34:39

so I think that's gonna be a little bit of a constraint for the industry. but I think we're you know, I think we're trying to be more efficient and I think my idea is that I'll be able to do more with less

Bill Shopoff 34:51

and be able to maybe not hire a person. I'm not gonna fire somebody because I got that efficient, but maybe I can not hire another person.

Bill Shopoff 35:04

Or wait a little while, but maybe I can pay somebody more because they're being more efficient in their job. I know like my investor relations people, they've created their AI agents to respond to canned questions that come in from our investors. And so they've got automated responses that go out. So they're, you know, they're responding in real time to people. And it's no less personal because the person I don't really care who's talking to, they just want the answer. And

Bill Shopoff 35:30

if we're getting them an accurate answer. Then that's good. And

Bill Shopoff 35:34

we're

Bill Shopoff 35:34

being targeted.

Bill Shopoff 35:38

Yeah.

Bill Shopoff 35:41

I got a diligence list the other day for a lender and I looked at my team and they said, Well, it's all in the box. I said, I got that it's all in the box, but why don't we just let AI answer the questionnaire? Because

Bill Shopoff 35:56

AI can read all the documents that are in the box and

Bill Shopoff 35:59

answer the questionnaire.

Bill Shopoff 36:01

Like, yeah, we gotta edit it, we're gonna review it. But like I it probably didn't really answer that questionnaire. Somebody's gonna sit down and spend four or five hours and I think now it can get done in thirty minutes.

Bill Shopoff 36:27

I am I get annoyed about that. It's it doesn't so I'm trying to get to efficiency because I look I I'm in a leadership role, Justin. I I'm not in the doing business as much as I used to be. Like I could still create a spreadsheet, not as good as the spreadsheets that everybody creates here. but largely I can underwrite a deal with a you know, look, I'm old school. I still got this on my desk. I still

Bill Shopoff 36:53

got an HP 12C on my desk. I have it in my phone too, but I still like the and I can underwrite a deal with that and a yellow pad and a pen. And

Bill Shopoff 37:05

you know

Bill Shopoff 37:07

Yeah. tell me whether because if I need three decimal points, it's not my deal. if I'm trying to figure out IRR to three decimal points. I'm not smart enough. it's we're because you could change a variable somewhere in your formula and I can get you whatever IRR you

Bill Shopoff 37:27

So I think that underwriting is still, you know, part science and part art. And then execution is, you know, execution. I mean, look, we can underwrite things really well. It's still gonna come down to us executing our business plans. You know, us, you know, making a lease happen where, you know, it's competitive and you're you've got to figure out how to win that lease over. You know, and I think those are the things that we're still trying to make sure that we're we've got the human element in, that we're being responsive to, you know, when a when an escrow fails, how do we quickly reposition ourselves and you know get back in the saddle and get a deal done. So I think that's what we we're spending a lot of our days at. And you know, I've been at this a long time and I am I'm I I'm still getting intellectual stimulation. I talked to a longtime friend of mine yesterday in Austin and you know, he's a few years older than I am and we were talking about quitting and he was like, Yeah, I'm not quitting, Bill. It's you know, I created a lot of value by making things complicated. And you know, that's our business is a little bit complicated. we don't do one thing. We're not doing just one thing one day. And so I you know and my kids aren't coming into the business, so I'm gonna be here for a while. And I love it. And I love creating places for people to go do business and I love for creating communities where people get to live. And it's a great honor and privilege to do that in a market as dynamic as Orange County. You know, I moved from Texas 25 years ago. And you know, my success has been beyond my wildest dream that I'm, you know, I left a small market for a big market, you know, and became at least a reasonable player in a big market. we're still a small fish in a big pond, but we're not a guppy. So

Bill Shopoff 39:50

Right.

Bill Shopoff 39:58

I think there'll be an opportunity for people to create significant businesses. there was an article eight months ago in The Journal about a guy who created a a healthcare business. He's he' he it's really fairly simple business. he's selling GLP-1s, Ozempic. He basically built it all AI, he and his brother the only employees, they outsourced accounting. and it's a billion dollar a year revenue business with two people.

Bill Shopoff 40:29

Now look, you know, somebody say, well, you know, he was lucky. I don't I mean I think that's it is luck, but it's I call it good fortune meeting up with hard work and determination. like there are plenty of people who work hard and are smart. And have done not as well as me, and there are plenty of people who've done better than me. I just look at myself and say, you know, I'm I have some good fortune. I've had some bad fortune, I've made some bad decisions. I will probably make a bad decision today. hopefully my good decisions that I make today outweigh my bad decisions. you know, I subscribe to a theory that There's only two mistakes you can make in life. Act when you shouldn't act and don't act when you should. And

Bill Shopoff 41:15

and so I try to avoid those two mistakes on a daily basis, but assuredly I'm gonna make at least one of them. I'm gonna make some mistake every day.

Bill Shopoff 41:23

but look the investing business, the real estate business, it's not a business of perfection. It's a business of being slightly better than Your good decisions need to be better than your bad decisions, and there should be way less bad decisions.

Bill Shopoff 41:44

Thanks for including me, Justin. It's always a pleasure and happy to help you out with your career.