1 00:00:00,000 --> 00:00:03,920 All right, welcome Marty Shiff of Rooflifters. 2 00:00:03,920 --> 00:00:08,200 It's been since 2019 since we talked last and 3 00:00:08,200 --> 00:00:11,500 it's funny what has changed in 4 00:00:11,500 --> 00:00:14,260 roof lifting and then what's changed in the 5 00:00:14,260 --> 00:00:18,320 industry and now in the economic cycle. 6 00:00:18,320 --> 00:00:22,080 So much has changed, I know in brokerage, even though the 7 00:00:22,080 --> 00:00:26,440 business stays the same to some extent. So I'm excited to reconnect with 8 00:00:26,440 --> 00:00:30,800 you and kind of see what you've been up to and what the state of 9 00:00:30,800 --> 00:00:31,600 the market is. 10 00:00:31,600 --> 00:00:33,980 Excellent. Thanks for the opportunity. 11 00:00:34,020 --> 00:00:37,300 Yeah, so tell us, rooflifting in 12 00:00:37,300 --> 00:00:41,420 general, what is the size of it and what would you say 13 00:00:41,420 --> 00:00:45,380 is the state of it? Like for us I know we have a lot of like trying 14 00:00:45,380 --> 00:00:49,260 to recover from the market, being at a trough for lease rates. 15 00:00:49,260 --> 00:00:52,860 And then interest rates is on everybody's mind. I'm sure you're 16 00:00:52,860 --> 00:00:55,340 going through a lot of that too, because that's all part of the same 17 00:00:55,340 --> 00:00:57,520 decision making process. 18 00:00:57,520 --> 00:01:01,400 Yeah, absolutely. Um I'd say, listen if it's since 19 00:01:01,400 --> 00:01:05,040 2019, so a lot has changed uh, you know 20 00:01:05,040 --> 00:01:09,480 COVID hit 2020 um e -commerce really 21 00:01:09,480 --> 00:01:12,960 took off after that. So, um, that really had an 22 00:01:12,960 --> 00:01:15,560 impact on our business, uh 23 00:01:15,560 --> 00:01:19,840 because we boomed uh, just in terms of inquiries, cause 24 00:01:19,840 --> 00:01:24,080 everyone wanted last mile. So last mile is in the cities. 25 00:01:24,080 --> 00:01:28,340 So, especially the older cities whether it's LA whether it's, you 26 00:01:28,340 --> 00:01:32,200 know, Northern California Jersey, Chicago Boston, and those 27 00:01:32,200 --> 00:01:36,440 older established cities and areas that had a 28 00:01:36,440 --> 00:01:40,760 lot of product you know, at that last mile. And we're all 29 00:01:40,760 --> 00:01:45,080 built many years ago and obviously at the obsolete heights. 30 00:01:45,080 --> 00:01:49,200 So it really took off, you know, for us through COVID. it. 31 00:01:49,200 --> 00:01:52,640 That being said taking off for us really means 32 00:01:52,640 --> 00:01:56,140 a huge amount of additional inquiries, okay? 33 00:01:56,140 --> 00:01:59,200 Cost, timing everything like that. A lot of 34 00:01:59,200 --> 00:02:03,340 things really need to fall in place for them to become 35 00:02:03,340 --> 00:02:07,800 projects, right? So first and foremost, we'll get a call on something and 36 00:02:07,800 --> 00:02:11,840 it's a very quick discussion. This is how 37 00:02:11,840 --> 00:02:14,800 much it's going to cost. This is the range. This is how long it's going 38 00:02:14,800 --> 00:02:18,700 to take. This is how what, how it's going to impact the existing building 39 00:02:18,700 --> 00:02:22,280 operations, et cetera. Is that even close to penciling 40 00:02:22,280 --> 00:02:26,700 or making sense? And at that point it'll be oh yeah, you know, that that'll 41 00:02:26,700 --> 00:02:30,720 work or just no. So it's a pretty, at the end of the day, this 42 00:02:30,720 --> 00:02:35,060 conversation gets pretty quick. Um, but I mean, there's been a big Delta 43 00:02:35,060 --> 00:02:38,540 in rents and values of buildings since 44 00:02:38,540 --> 00:02:42,260 2019 as well okay, as a reflection of how 45 00:02:42,260 --> 00:02:45,300 inexpensive money was, price of buildings going 46 00:02:45,300 --> 00:02:49,360 up, cap rates know, things like that. So, you know 47 00:02:49,360 --> 00:02:53,160 everybody was flying, you know from, you know 48 00:02:53,160 --> 00:02:57,040 probably till 2022, 23. I'm not sure 49 00:02:57,040 --> 00:03:00,180 exactly when, you know, you'll probably have a better handle on that as to 50 00:03:00,180 --> 00:03:02,870 when things really started slowing down a little bit. 51 00:03:02,870 --> 00:03:03,570 In a good and bad way. 52 00:03:04,080 --> 00:03:08,520 For us, it really hasn't stopped, you know and the inquiries 53 00:03:08,520 --> 00:03:12,400 have probably stayed, you know as many as there were, if 54 00:03:12,400 --> 00:03:16,620 not more, because we've also branched out, um 55 00:03:16,620 --> 00:03:20,380 just again, based of, based on cost of 56 00:03:20,380 --> 00:03:24,420 construction of building new versus lifting. So it's not 57 00:03:24,420 --> 00:03:28,760 only industrial, a lot of retail old retail conversions 58 00:03:28,760 --> 00:03:33,120 especially in California, we've done a lot of, um conversions to rock climbing 59 00:03:33,120 --> 00:03:37,040 facilities and and kids' play centers and 60 00:03:37,040 --> 00:03:41,260 all sorts of stuff like that up and down the coast. And then a 61 00:03:41,260 --> 00:03:45,040 lot of self-storage too. So, you know we've gone from industrial to kind 62 00:03:45,040 --> 00:03:48,520 of retail and self-storage. So that's helped with different 63 00:03:48,520 --> 00:03:48,870 types of projects. 64 00:03:48,870 --> 00:03:49,570 I could see that totally. 65 00:03:51,340 --> 00:03:55,020 But again, now we're at a point where money is more expensive. 66 00:03:55,020 --> 00:03:59,480 Some of those initial cap rates that were established a few years ago were 67 00:03:59,480 --> 00:04:03,580 based on a certain value of the purchase and everything else. And some of 68 00:04:03,580 --> 00:04:07,380 those are not making as much sense as they used to. 69 00:04:07,380 --> 00:04:10,880 So, um, so it's, it's for sure challenging time for a 70 00:04:10,880 --> 00:04:14,980 lot of developers and, and, and owners. Um 71 00:04:15,540 --> 00:04:19,880 and, and now especially, so our cost is pretty much stayed the same, know 72 00:04:19,880 --> 00:04:23,780 steel's gone up considerably, you know, just the purchase of it over the last 73 00:04:23,780 --> 00:04:27,300 little while. Uh, but the overall costs, you know, between 74 00:04:27,300 --> 00:04:31,040 lifting the steel work, you know in filling in 75 00:04:31,040 --> 00:04:34,220 the gaps and all that hasn't really changed 76 00:04:34,220 --> 00:04:38,640 that much. What has gone up is the cost of construction. 77 00:04:38,640 --> 00:04:42,500 So the spread between building new, what we 78 00:04:42,500 --> 00:04:46,480 do continues to get farther. The spread 79 00:04:46,480 --> 00:04:49,140 continues to be bigger, which is making lifting 80 00:04:49,140 --> 00:04:51,280 more sets. 81 00:04:52,500 --> 00:04:56,260 That being said the one main 82 00:04:56,260 --> 00:05:00,300 driver of our projects these days is when you lift a 83 00:05:00,300 --> 00:05:04,120 building, um and in California there's different 84 00:05:04,120 --> 00:05:08,300 parameters. Um most of it if once you 85 00:05:08,300 --> 00:05:12,520 if you're within allowable zoning heights, right. And you're not at any, any 86 00:05:12,520 --> 00:05:16,300 gross floor area it usually qual you know, will qualify as a 87 00:05:16,300 --> 00:05:19,700 renovation, which avoids a lot of, you know 88 00:05:19,700 --> 00:05:24,060 site plan, water retention, energy issues, um 89 00:05:24,060 --> 00:05:27,600 setbacks have changed so that you know development 90 00:05:27,600 --> 00:05:31,080 charges so that's really made the lifting you know 91 00:05:31,080 --> 00:05:34,840 that much more uh interesting of an option but 92 00:05:34,840 --> 00:05:38,800 again a lot of things need to fall in place for them to become to 93 00:05:38,800 --> 00:05:40,600 become projects for sure 94 00:05:40,600 --> 00:05:43,120 Yeah, it does remind me of 95 00:05:43,120 --> 00:05:46,880 not only last time we talked but there was 96 00:05:46,880 --> 00:05:49,960 a project you helped coach me through that was 97 00:05:49,960 --> 00:05:53,840 on Randolph Street in commerce. And it was a building that 98 00:05:53,840 --> 00:05:57,220 had half low clear, half high clear, a bunch 99 00:05:57,220 --> 00:06:01,560 of sawtooth docks. And it was a owner user. 100 00:06:01,560 --> 00:06:04,480 And we were just trying to find more value for the space he didn't need. 101 00:06:04,480 --> 00:06:08,900 for him to lease it out and it's amazing the different things that need 102 00:06:08,900 --> 00:06:12,740 to be taken into account so I think it goes way past 103 00:06:12,740 --> 00:06:17,020 what the majority of people think on just like the very surface 104 00:06:17,020 --> 00:06:20,980 level and you talking about height and 105 00:06:20,980 --> 00:06:24,920 renovations in the city like that's a great point of like something 106 00:06:24,920 --> 00:06:29,040 that people don't know and don't recognize so I'm 107 00:06:29,040 --> 00:06:33,380 not sure if you can do a quick refresher on the general process. I certainly 108 00:06:33,380 --> 00:06:37,300 remember from the slab to the 109 00:06:37,300 --> 00:06:41,280 ceiling to the sprinklers and then all the intangibles like the city. 110 00:06:41,280 --> 00:06:44,540 That'd probably be helpful for people that are listening that have a 111 00:06:44,540 --> 00:06:45,960 project in mind. 112 00:06:45,960 --> 00:06:49,240 yeah i guess in what respect from the actual 113 00:06:49,240 --> 00:06:53,460 process of how we do it or just the sequence of of 114 00:06:53,460 --> 00:06:57,220 um you know from initial call to uh determine 115 00:06:57,220 --> 00:07:00,280 yeah I think feasibility is probably more 116 00:07:00,280 --> 00:07:04,720 important than for people to understand than like the process 117 00:07:04,720 --> 00:07:07,220 of the lift itself that's pretty cool 118 00:07:07,460 --> 00:07:11,360 So I'd say yeah, one, one big difference is you know, since we last spoke 119 00:07:11,360 --> 00:07:15,140 is we're pricing a lot of stuff and let's say Inland Empire where buildings 120 00:07:15,140 --> 00:07:19,320 are already 32 feet. We're pricing some large buildings 121 00:07:19,320 --> 00:07:23,760 that are competing with the newer product that are 40 and 42. 122 00:07:23,760 --> 00:07:27,520 So we're pricing some 32 to 123 00:07:27,520 --> 00:07:31,670 40 and 42. 42, some big 700,000 square footers, million square footers. 124 00:07:31,670 --> 00:07:33,420 Yeah, okay, so we're going 32 to 40 or 32 to 42 yeah. 125 00:07:33,420 --> 00:07:37,420 So that's something that never really happened, you know, many years ago. 126 00:07:37,420 --> 00:07:41,440 But in terms of the process so really, well let's take it 127 00:07:41,440 --> 00:07:44,660 from an initial call, right? You have a client that you want to tee 128 00:07:44,660 --> 00:07:48,210 up, you know to Marty someone's inquiring, you know, what would 129 00:07:48,210 --> 00:07:52,300 be the process. So again, we jump on a call, we'd go through, let's call it a 130 00:07:52,300 --> 00:07:55,820 hundred thousand square foot building going from, you know 131 00:07:55,820 --> 00:08:00,300 14 to, you know, 28 or 32. So on something like that, I'd 132 00:08:00,300 --> 00:08:04,740 go through my list of previous projects in that area and I'd 133 00:08:04,740 --> 00:08:08,320 say, okay, on that size, roof lift 134 00:08:08,320 --> 00:08:11,800 steel, know, to actually lift the roof infill all the 135 00:08:11,800 --> 00:08:15,820 new steel, install a new insulated metal panel or you know, any 136 00:08:15,820 --> 00:08:19,480 kind of infill would probably be around the, you know, let's call it a $20 137 00:08:19,480 --> 00:08:23,300 a square foot range. Okay. Then we'd factor 138 00:08:23,300 --> 00:08:27,600 in, okay, is the building sprinklered? Okay. Okay can we take 139 00:08:27,600 --> 00:08:31,200 up the existing sprinkler system or should we budget ESFR 140 00:08:31,200 --> 00:08:35,160 sprinkler system? Okay, another four or five bucks a square foot. 141 00:08:35,160 --> 00:08:39,540 Lighting, HVAC roofing. So on that quick call between me, you, and 142 00:08:39,540 --> 00:08:43,140 a potential client, we can come up with a high level number. 143 00:08:43,140 --> 00:08:46,920 Okay, let's say at 35 bucks whatever that turns out to 144 00:08:46,920 --> 00:08:47,940 be. 145 00:08:48,560 --> 00:08:52,480 Then we, you know, from that point, kind of delve into a 146 00:08:52,480 --> 00:08:55,760 little more into some preliminary engineering making sure there's no 147 00:08:55,760 --> 00:09:00,080 surprises checking slab thickness, because again, you know 148 00:09:00,080 --> 00:09:04,330 you've got to make sure the capacity of the slab works if you're going to 149 00:09:04,330 --> 00:09:08,740 rack at 32 feet versus where it is right now. So these are some things that 150 00:09:08,740 --> 00:09:13,160 we kind of cross off the list. Yeah, right off the bat, make 151 00:09:13,160 --> 00:09:17,220 sure there's no surprises in any of those budget numbers. Then it's the 152 00:09:17,220 --> 00:09:20,920 permit process you know drawings, permit you know construction. 153 00:09:20,920 --> 00:09:24,880 So, you know you'd probably be between drawings and permits 154 00:09:24,880 --> 00:09:29,360 probably five, six months, um depending on the you know, some 155 00:09:29,360 --> 00:09:32,660 cities will get a permanent a week. Sometimes we've been four to 156 00:09:32,660 --> 00:09:36,600 six months, right? So, um, to be safe, I'll 157 00:09:36,600 --> 00:09:40,940 tell a client you know, five six months on the front end and on that 158 00:09:40,940 --> 00:09:44,220 size project about probably five months for the work. 159 00:09:44,220 --> 00:09:48,360 So it's not only the, the the cost that needs to make sense. 160 00:09:48,360 --> 00:09:49,790 It's that, that timing as well. 161 00:09:49,790 --> 00:09:51,190 Taller buildings more product, more weight. Yeah. 162 00:09:51,860 --> 00:09:55,420 Um, and, uh and again, once all those, that's why a lot of things need 163 00:09:55,420 --> 00:09:58,700 to fall in place because it's the cost of timing, all that stuff. And then if 164 00:09:58,700 --> 00:10:02,880 that's still working, then we start, you know kind of really getting into it. 165 00:10:02,880 --> 00:10:06,640 yeah i could totally see how the the difference between 20 and 166 00:10:06,640 --> 00:10:10,520 35 when you get into the oh yeah by virtue of having 167 00:10:10,520 --> 00:10:14,520 a taller roof you now need new lighting or you need to 168 00:10:14,520 --> 00:10:18,580 do your ESFR upgrades and all that kind of stuff that people like uh perhaps 169 00:10:18,580 --> 00:10:21,780 like and maybe ignorantly don't know, but that's 170 00:10:21,780 --> 00:10:25,840 not what the problem is that you're trying to solve, but that's something that 171 00:10:25,840 --> 00:10:28,200 comes along with the solution. 172 00:10:28,560 --> 00:10:32,880 yeah i've become kind of the guy who points out all the negatives 173 00:10:33,180 --> 00:10:36,640 they're going to come into play and if we can tick off the boxes they 174 00:10:36,640 --> 00:10:38,340 they just keep moving 175 00:10:38,340 --> 00:10:39,620 Yeah. 176 00:10:40,520 --> 00:10:44,060 Let's dig into the Inland Empire example you gave because I love that one. 177 00:10:44,060 --> 00:10:46,960 It's a great one that's topical. and for us 178 00:10:46,960 --> 00:10:51,180 here, people are making those types of decisions. It's interesting 179 00:10:51,180 --> 00:10:55,640 to see 40 and 42 foot clear. And then I don't know, maybe 180 00:10:55,640 --> 00:10:59,680 I haven't done a whole lot of million square 181 00:10:59,680 --> 00:11:03,560 footers to know that we got 50 or any taller ceilings. 182 00:11:03,560 --> 00:11:07,080 I think there's probably zoning requirements or limitations that 183 00:11:07,080 --> 00:11:11,420 40 and 42 seems to be the top for the time being and material handling 184 00:11:11,420 --> 00:11:14,140 considerations. But I could definitely see 185 00:11:14,140 --> 00:11:18,060 once you have that new height 186 00:11:18,060 --> 00:11:22,300 then having legacy product is now more a liability or it makes 187 00:11:22,300 --> 00:11:26,040 your valuation like you have to adjust for that. 188 00:11:26,040 --> 00:11:30,440 I certainly know going from like the 32 to 36 like that was 189 00:11:30,440 --> 00:11:33,340 interesting to now look at all new buildings and see taller. 190 00:11:33,340 --> 00:11:37,800 So, yeah, that's wild to imagine people doing that because that seems 191 00:11:37,800 --> 00:11:41,320 like the spread has to be big enough. 192 00:11:41,320 --> 00:11:45,100 Yeah, it's all about that delta between the value 193 00:11:45,100 --> 00:11:48,900 of where it is now at 32 194 00:11:49,160 --> 00:11:53,480 and what a similar new building would be at 40 or 42 and Delta 195 00:11:53,480 --> 00:11:57,460 in the rents. I mean, so our number on a million square feet, you know 196 00:11:57,460 --> 00:12:01,320 is going to be, could be as low as 15 bucks, you know, a square foot. 197 00:12:01,320 --> 00:12:05,020 But are you going to get another, you know in California terms, another 10 198 00:12:05,020 --> 00:12:09,260 15 cents a square foot to justify that. So it really 199 00:12:09,260 --> 00:12:13,140 just, yeah. So, I mean so really just it is a 200 00:12:13,140 --> 00:12:17,420 quick exercise in you know, the numbers at the end of the 201 00:12:17,420 --> 00:12:21,660 day. But some interesting projects that we've done recently is where 202 00:12:21,660 --> 00:12:25,140 you know, it's pretty straightforward to look at a building that's 203 00:12:25,140 --> 00:12:27,780 got the proper you know, size 204 00:12:27,780 --> 00:12:31,090 loading, you know and things like that. 205 00:12:31,090 --> 00:12:35,480 But what's really interesting is when people come to us where 206 00:12:35,480 --> 00:12:39,680 the building works location -wise everything else 207 00:12:39,680 --> 00:12:42,800 but there's not enough of, let's 208 00:12:42,800 --> 00:12:46,900 call it, not enough loading or not enough of 209 00:12:46,900 --> 00:12:50,980 a truck court. So we did one not too long ago up in San Leandro 210 00:12:50,980 --> 00:12:55,030 where location was great. The height was low. 211 00:12:55,030 --> 00:12:56,080 For 15 years or something like that. 212 00:12:56,420 --> 00:13:00,240 And we've been doing this a lot is really cutting off a section of the 213 00:13:00,240 --> 00:13:04,560 building. uh, create new loading, create new loading, uh 214 00:13:04,560 --> 00:13:08,700 you know, that uh, that truck court. Um, so it's 215 00:13:08,700 --> 00:13:11,800 it's really that's really repositioning a building where 216 00:13:11,800 --> 00:13:15,380 so, you know it's, it's really people that are getting creative 217 00:13:15,380 --> 00:13:19,820 uh, that, that this is, this has been really working for. 218 00:13:19,820 --> 00:13:23,340 I love that because that's the developer hat of like, OK, there's 219 00:13:23,340 --> 00:13:26,320 value here we just have to figure out how to unlock it and what does 220 00:13:26,320 --> 00:13:29,360 this one site need to get maximum value 221 00:13:29,360 --> 00:13:32,300 you're also chopping off part of the building so all of a sudden you've 222 00:13:32,300 --> 00:13:36,400 you've owned something that's 200 000 square feet in order for this to 223 00:13:36,400 --> 00:13:39,980 work you got to cut off 20 000 square feet let's say right so you're 224 00:13:39,980 --> 00:13:43,840 so again it it really just comes down to the math 225 00:13:43,840 --> 00:13:47,360 it better be worth it people don't like making their buildings smaller if they 226 00:13:47,360 --> 00:13:47,710 can help it 227 00:13:47,710 --> 00:13:51,840 it better be worth it yeah yeah and again over the across the country people 228 00:13:51,840 --> 00:13:54,620 have overpaid And you know, there's a lot of people that really 229 00:13:54,620 --> 00:13:58,860 overpaid for, not overpaid, but that was the rate in that market 230 00:13:58,860 --> 00:14:03,040 at that time based on cap rates and things like that. Interest rates 231 00:14:03,040 --> 00:14:07,480 have gone up. Demand maybe in some areas has come down. So all those 232 00:14:07,480 --> 00:14:11,240 buildings are not worth, you know as much as they were at 233 00:14:11,240 --> 00:14:15,720 some point. To your point about the manufacturing were some 234 00:14:15,720 --> 00:14:20,100 buildings high some buildings low? So we've been doing a lot of work where 235 00:14:20,100 --> 00:14:24,080 you know, they're they're bringing their manufacturing back into their 236 00:14:24,080 --> 00:14:27,840 specific cities and buildings. So instead of 237 00:14:27,840 --> 00:14:30,920 lifting the whole building is where you know, they're keeping the 238 00:14:30,920 --> 00:14:35,000 manufacturing portion of it low and now we're just lifting a portion of 239 00:14:35,000 --> 00:14:38,540 it for storage. So we're seeing seeing a lot more of that 240 00:14:38,540 --> 00:14:40,180 lately as well. 241 00:14:40,180 --> 00:14:44,320 Yeah, I was going to, I remember you 242 00:14:44,320 --> 00:14:47,210 talking about that, that kind of blew my mind a little bit of 243 00:14:47,210 --> 00:14:48,610 Because you don't have to lift the whole building. 244 00:14:49,200 --> 00:14:53,260 not only like the phasing aspect of like I'm going left to 245 00:14:53,260 --> 00:14:56,960 right or front to back, but also that you can only do a portion and 246 00:14:56,960 --> 00:15:00,620 what that would look like. But I assume for you, it's 247 00:15:00,620 --> 00:15:03,000 that's not that big of a leap of the imagination. 248 00:15:03,000 --> 00:15:06,990 But for manufacturing they don't need it to be 249 00:15:06,990 --> 00:15:10,820 tall everywhere right? If they don't have a mezzanine. Yeah. 250 00:15:11,600 --> 00:15:15,600 I would think with this advanced manufacturing like making a comeback, that's 251 00:15:15,600 --> 00:15:19,560 all sorts of new opportunities. for legacy assets that have a 252 00:15:19,560 --> 00:15:23,880 ton of power and they don't have the ceiling. And now that power is this 253 00:15:23,880 --> 00:15:28,200 big constraint or limiting factor 254 00:15:28,200 --> 00:15:32,080 that people are chasing power around, and now that we have 255 00:15:32,080 --> 00:15:36,000 all these new Class A buildings but a lot of them are absorbing, and cost of 256 00:15:36,000 --> 00:15:39,590 construction is high enough that there is not a whole lot of new 257 00:15:39,590 --> 00:15:42,800 construction right now, that would tell you that in like a 258 00:15:42,800 --> 00:15:46,880 year, two years we've worked through a lot of that supply 259 00:15:46,880 --> 00:15:50,620 before new supply comes online Marty's going to be getting more 260 00:15:50,620 --> 00:15:54,140 phone calls of people chasing buildings with power that don't have the ceiling 261 00:15:54,140 --> 00:15:54,580 height. 262 00:15:54,580 --> 00:15:56,820 we'll take them we'll take them 263 00:15:56,820 --> 00:15:58,140 Yeah. 264 00:16:00,140 --> 00:16:03,600 That is interesting for manufacturing. would think of your book of 265 00:16:03,600 --> 00:16:08,080 business, would you say it's a half users and tenants and 266 00:16:08,080 --> 00:16:11,400 half developers and landlords? Or what would you say the 267 00:16:11,400 --> 00:16:12,680 mix is? 268 00:16:13,240 --> 00:16:17,560 hmm i mean a lot more developers now than they're you 269 00:16:17,560 --> 00:16:21,260 know when the business started you know the business is almost 40 years old 270 00:16:21,260 --> 00:16:25,240 so it was originally owner users because they could justify the 271 00:16:25,240 --> 00:16:29,440 cost and everything else. Now that spread between now 272 00:16:29,440 --> 00:16:32,920 obviously the developers and the big, you know I mean, the 273 00:16:32,920 --> 00:16:37,220 industrial, a lot of, you know your dad, you know, might've had a company 274 00:16:37,220 --> 00:16:41,430 manufactured, you know, sponges or something, you know, it's got out of that 275 00:16:41,430 --> 00:16:45,120 business and still had a 50,000 square foot building somewhere that he just 276 00:16:45,120 --> 00:16:48,320 kept in the family and kept leasing out. So it was a lot, a lot of 277 00:16:48,320 --> 00:16:51,420 opportunities back then for one -off owners. Now, I mean some of the 278 00:16:51,420 --> 00:16:55,760 institutions have really been buying up, you know a lot of 279 00:16:55,760 --> 00:16:58,540 that stuff. So still a lot of owner 280 00:16:58,540 --> 00:17:02,600 users, but a lot more like I mean, now 281 00:17:02,600 --> 00:17:07,100 we're dealing with some of the largest industrial landlords pretty much in the 282 00:17:07,100 --> 00:17:11,160 country, in the world that are really looking at you know, at some of these 283 00:17:11,160 --> 00:17:14,520 buildings because they've also acquired a lot of older 284 00:17:14,520 --> 00:17:18,700 portfolios. so they you know they might have gone after 285 00:17:18,700 --> 00:17:22,020 a few of the key buildings in that portfolio but okay if you're taking 286 00:17:22,020 --> 00:17:25,780 these you know 20 buildings you're gonna have to take a couple of these 287 00:17:25,780 --> 00:17:29,860 other ones you know so uh so they're looking at you know 288 00:17:29,860 --> 00:17:32,800 whereas at one point they were just set on building brand new 289 00:17:32,800 --> 00:17:36,560 big bombers you know now you know it's 290 00:17:36,560 --> 00:17:40,840 something that a lot of the the bigger developers are looking at uh 291 00:17:40,840 --> 00:17:44,410 you know as well um and then a lot of again a lot of the 292 00:17:44,410 --> 00:17:48,420 industrial uh so the the retail clients so a lot of the 293 00:17:48,420 --> 00:17:52,040 big um mall owners and power center owners are 294 00:17:52,040 --> 00:17:55,760 looking at these two for these new kid you 295 00:17:55,760 --> 00:17:58,680 know kid concepts and and things like that to bring people back 296 00:17:58,680 --> 00:18:00,400 into the malls 297 00:18:00,540 --> 00:18:04,300 Yeah, that's not my bailiwick, but I sure have seen him. Tell me more 298 00:18:04,300 --> 00:18:07,660 about him. Like A, retail and then B self- storage is just like 299 00:18:07,660 --> 00:18:08,940 additional levels. 300 00:18:08,940 --> 00:18:13,160 yeah yeah so every every 11 feet or so gets you a 301 00:18:13,160 --> 00:18:17,140 a level of self-storage so they're taking you know so i 302 00:18:17,140 --> 00:18:21,400 know about 100,000 square feet is a sweet spot for self-storage seems to 303 00:18:21,400 --> 00:18:25,580 be so they'll take a 50,000 square foot building and raise it to 22 304 00:18:25,580 --> 00:18:29,560 or 30, you know, 30,000 or so and raise it to 305 00:18:29,560 --> 00:18:33,800 33 to generate that three floors. Um, and then 306 00:18:33,800 --> 00:18:36,780 you know, we just did one uh on, on the entertainment 307 00:18:36,780 --> 00:18:40,440 side, Aliso Viejo. Uh, you know we did a 10,000 square 308 00:18:40,440 --> 00:18:44,300 foot, uh, they raised it for a rock climbing facility. Uh, you know one up in 309 00:18:44,300 --> 00:18:48,400 Santa Barbara, we got one coming up down in and I think 310 00:18:48,400 --> 00:18:52,560 Thousand Oaks. So those are yeah, a lot of that, a lot of those 311 00:18:52,560 --> 00:18:57,020 conversions also. So smaller areas for sure. We've been doing 312 00:18:57,020 --> 00:19:00,860 these 4,000 square foot lifts for some of 313 00:19:00,860 --> 00:19:03,230 the other smaller kids places as well. 314 00:19:03,230 --> 00:19:04,630 Rock climbing's gotten pretty popular. Yeah. 315 00:19:05,080 --> 00:19:08,560 Yeah. I would imagine they all have different constraints too of 316 00:19:08,560 --> 00:19:12,520 like for self storage, you're not so worried about parking, for 317 00:19:12,520 --> 00:19:15,520 example of like employee counts and stuff. 318 00:19:15,520 --> 00:19:19,440 So it's where the more people you can have 319 00:19:19,440 --> 00:19:22,290 rock climbing maybe like the more cars you have parked. So I'm sure 320 00:19:22,290 --> 00:19:24,560 they all have their own nuance to them. 321 00:19:26,060 --> 00:19:28,760 Has there been much change in 322 00:19:28,760 --> 00:19:32,420 the technology? If you just think of like 323 00:19:32,420 --> 00:19:36,140 I haven't seen any robots lifting buildings yet with 324 00:19:36,140 --> 00:19:40,120 AI plumbed into them but I'm sure things have changed a little 325 00:19:40,120 --> 00:19:43,690 bit or not so much you tell me 326 00:19:43,690 --> 00:19:46,560 um art yeah our process is pretty much the 327 00:19:46,560 --> 00:19:50,920 same, you know and the guys are doing this. 328 00:19:50,920 --> 00:19:54,820 It's only my crews that travel the country and doing the lifting. 329 00:19:54,820 --> 00:19:57,640 So some of the other trade work will work 330 00:19:57,640 --> 00:20:00,980 with local GCs or, you know 331 00:20:00,980 --> 00:20:05,360 help owners wrap you know, and help them. So basically we'll help. 332 00:20:05,360 --> 00:20:09,300 We're involved from start to finish, whether we're just doing the lifting or 333 00:20:09,300 --> 00:20:13,100 helping some of the sub trade work as well. And some of 334 00:20:13,100 --> 00:20:17,000 those kind of technologies have gotten better just, you know in terms of 335 00:20:17,000 --> 00:20:20,180 let's say insulated metal panels and things like that have come down in price. 336 00:20:20,180 --> 00:20:24,060 So the technologies have helped with the pricing. But in terms 337 00:20:24,060 --> 00:20:28,160 of our system this is our 338 00:20:28,160 --> 00:20:31,720 second iteration. We used to sleeve our columns and now we have a separate 339 00:20:31,720 --> 00:20:35,340 independent lifting system. Our synchronization 340 00:20:35,340 --> 00:20:39,680 has gotten quicker just with the technology and some laser 341 00:20:39,680 --> 00:20:44,000 monitoring of our lifts. But for the most part, the setup, the 342 00:20:44,000 --> 00:20:47,740 bracing, things like that, I don't really think we can get 343 00:20:47,740 --> 00:20:50,060 much, much better with that. 344 00:20:50,540 --> 00:20:54,960 We're in possession of, you know, we'll do 150,000 square feet, let's say 345 00:20:54,960 --> 00:20:59,420 in one phase. So, you know you've got a building that's 346 00:20:59,420 --> 00:21:03,640 gone from 12 to 40 feet up in the air. 347 00:21:04,780 --> 00:21:08,120 and so the system that we have is very 348 00:21:08,120 --> 00:21:11,520 proven and so we're pretty happy 349 00:21:11,520 --> 00:21:15,600 with that. Again synchronization the monitoring things like that 350 00:21:15,600 --> 00:21:19,840 that technology has but the actual lifting system has pretty much 351 00:21:19,840 --> 00:21:21,300 stayed the same 352 00:21:21,980 --> 00:21:25,600 and it's by far the most cost -effective way to do it. 353 00:21:25,600 --> 00:21:29,840 So we haven't seen a need to really change much. 354 00:21:29,840 --> 00:21:33,660 Yeah, let's hear a war story. What's some of your favorite ones? 355 00:21:33,660 --> 00:21:37,520 I'm sure you've had ones that are a roller coaster where the 356 00:21:37,520 --> 00:21:41,520 hurricane came by or everybody's trying to lift 357 00:21:41,520 --> 00:21:45,740 roofs with their masks on or some version of one like the 358 00:21:45,740 --> 00:21:49,960 challenges you've had or interesting projects you've had. Any stand out? 359 00:21:49,960 --> 00:21:53,500 Yeah, we had one that a hurricane came through, but 80 mile an hour 360 00:21:53,500 --> 00:21:54,660 winds. 361 00:21:55,260 --> 00:21:59,620 So, I mean as part of our roof lift design, we're designing for that 362 00:21:59,620 --> 00:22:02,500 in those areas anyway. You've got to design for hurricanes and 363 00:22:02,500 --> 00:22:06,560 things like that. So, but again very, very challenging and 364 00:22:06,560 --> 00:22:10,800 sleepless night when you know that's happening. But I mean 365 00:22:10,800 --> 00:22:15,000 the lift itself that's the quickest process. 366 00:22:15,000 --> 00:22:18,720 You know, we're lifting, you know five feet a day or so. So if we're 367 00:22:18,720 --> 00:22:22,480 monitoring the weather with some pretty sophisticated like a weather 368 00:22:22,480 --> 00:22:26,140 company that we subscribe to. So we're not going to lift it if we 369 00:22:26,140 --> 00:22:29,960 think that there's any bad weather coming. but we've had some where we've 370 00:22:29,960 --> 00:22:33,200 had 80 kilometer an hour winds coming through. 371 00:22:33,980 --> 00:22:38,440 The good thing about it is is once we lifted, the walls are open. 372 00:22:38,440 --> 00:22:42,200 So the, you know, everything's coming, coming through. So that hasn't 373 00:22:42,200 --> 00:22:45,440 been a huge issue. We had one where it was 374 00:22:45,440 --> 00:22:49,420 a major, they had like three or four feet of snow 375 00:22:49,500 --> 00:22:53,340 dump on the roof, right? Which, and that 376 00:22:53,340 --> 00:22:57,680 was a 700,000 square foot lift we were doing in phases. 377 00:22:57,680 --> 00:22:59,610 Snow's pretty heavy, I would imagine. 378 00:22:59,610 --> 00:23:03,260 so snow is pretty heavy right so i guess we're concerned about you know 379 00:23:03,260 --> 00:23:07,640 all that extra weight so okay and so we're figuring out how 380 00:23:07,640 --> 00:23:11,520 do we shovel off you know all this size and then uh 381 00:23:11,520 --> 00:23:14,820 what landed up happening is someone came up with the idea to bring a 382 00:23:14,820 --> 00:23:19,180 helicopter in so they rented a helicopter for i don't even know 383 00:23:19,180 --> 00:23:23,440 what it was three four grand for and this thing hovered over 384 00:23:23,440 --> 00:23:27,900 the building and you see the snow flying, you know, all around. 385 00:23:27,900 --> 00:23:29,500 So, um 386 00:23:29,920 --> 00:23:34,000 yeah, some, some we've had some pretty crazy crazy stories, uh 387 00:23:34,000 --> 00:23:37,498 you know, over the years. I got my own guys that are standing under 388 00:23:37,498 --> 00:23:41,478 these roofs. So we're, we're pretty cautious and try to avoid any, any 389 00:23:41,478 --> 00:23:43,958 any war stories like that. 390 00:23:43,958 --> 00:23:47,938 Yeah. And in doing feasibility and due diligence, I'm 391 00:23:47,938 --> 00:23:52,008 sure there's surprises, maybe not surprises like things you 392 00:23:52,008 --> 00:23:56,298 haven't, like aren't prepared for, but surprises like different 393 00:23:56,298 --> 00:24:00,518 site characteristics or things that you don't know until you dig in 394 00:24:00,518 --> 00:24:04,858 enough or until you go there in person? Are there other 395 00:24:04,858 --> 00:24:08,778 things that come to mind that you don't really know until you get there? 396 00:24:08,778 --> 00:24:13,138 yeah a lot of things so as these things progress uh 397 00:24:13,138 --> 00:24:16,478 there's a whole initial analysis that we'll do on the buildings 398 00:24:16,478 --> 00:24:20,478 to eliminate you know any surprises so it's uh 399 00:24:20,478 --> 00:24:24,818 you know So soil underneath a you know, under a building 400 00:24:24,818 --> 00:24:28,358 contamination again, sprinklers 401 00:24:28,358 --> 00:24:32,478 a big one. You know, once we install this sure, it's great 402 00:24:32,478 --> 00:24:36,258 to, you know we'll need to install an ESFR sprinkler system but is there 403 00:24:36,258 --> 00:24:40,718 enough pressure from the street? Are we budgeting another 100 grand 404 00:24:40,718 --> 00:24:44,458 for a pump? You know, things like that. So really what people are 405 00:24:44,458 --> 00:24:48,258 committing to is a stage, you know, let's say if we, if we say a lift is going 406 00:24:48,258 --> 00:24:52,018 to be $20 on a hundred thousand square feet, no one's 407 00:24:52,018 --> 00:24:56,358 committing to $2 million to start. It's like, okay let's, let's come 408 00:24:56,358 --> 00:25:00,498 out there. Let's do some core samples. Let's expose a footing, some 409 00:25:00,498 --> 00:25:04,698 foundations. Let's get some contractors involved. So, you know 410 00:25:04,698 --> 00:25:09,118 it's a step process just by the time we've this, you know by the time 411 00:25:09,118 --> 00:25:12,938 everyone's committing, we've really eliminated any of the 412 00:25:12,938 --> 00:25:16,938 surprises. There's only five or six different trades and things 413 00:25:16,938 --> 00:25:20,178 that can come into play with these things. So we eliminate 414 00:25:20,178 --> 00:25:23,678 those surprises as quick as possible. 415 00:25:23,738 --> 00:25:27,278 And would you say slab thickness is the ultimate limiting factor 416 00:25:27,278 --> 00:25:30,958 that keeps like a lid on how high you 417 00:25:30,958 --> 00:25:32,518 generally go? 418 00:25:32,618 --> 00:25:36,358 no because that just would be a line item to to pull out that slab 419 00:25:36,358 --> 00:25:37,958 and replace it 420 00:25:38,318 --> 00:25:41,918 so you can replace them you can top them up like in California we've 421 00:25:41,918 --> 00:25:44,158 done projects where we've just added to the 422 00:25:44,158 --> 00:25:47,938 slab um it's going to affect you know the 423 00:25:47,938 --> 00:25:51,678 the you know the man doors in some areas and the dock doors. 424 00:25:51,678 --> 00:25:55,018 So sometimes we'll pull it back one bay to 425 00:25:55,018 --> 00:25:59,258 create that slope. But yeah, each. So once we 426 00:25:59,258 --> 00:26:03,558 evaluate that that slab is not sufficient for a 427 00:26:03,558 --> 00:26:07,818 40 foot load or level then we'll 428 00:26:07,818 --> 00:26:10,818 evaluate, okay can we just top it up? Is that going to make sense? 429 00:26:10,818 --> 00:26:14,858 Or we've got to factor in X amount of dollars extra in 430 00:26:14,858 --> 00:26:18,328 cost to pull that out and pour a new slab. 431 00:26:18,328 --> 00:26:22,718 But they're just really line items. All of these things are just 432 00:26:22,718 --> 00:26:26,778 line items to see if, you know, and at the bottom, if 433 00:26:26,778 --> 00:26:30,138 the circle, if it all adds up, then they keep moving. 434 00:26:30,178 --> 00:26:34,218 For every problem there is a solution. I love it. 435 00:26:34,218 --> 00:26:35,868 I didn't know you could top up slabs. 436 00:26:35,868 --> 00:26:38,318 Where's the solution? It's just a cost. It's just a number. It's just a 437 00:26:38,318 --> 00:26:40,712 number. That's it, you know? But yeah, the biggest thing that's, that's 438 00:26:40,712 --> 00:26:45,052 happened over the last few years is that real Delta, you know in the rents 439 00:26:45,052 --> 00:26:49,292 like there's some markets where an existing building 440 00:26:49,292 --> 00:26:53,592 was getting you know, $6 a square foot you know, it's 441 00:26:53,592 --> 00:26:57,802 a 14, 16 foot high building. They're putting you know 442 00:26:57,802 --> 00:27:01,912 repositioning this whole building you know, call it, you know 443 00:27:01,912 --> 00:27:05,852 again, call it 30, 40 bucks a square foot. And now the 444 00:27:05,852 --> 00:27:10,212 rents are 15 $16 right? 445 00:27:10,212 --> 00:27:13,932 So you're talking a $10 difference in rents with 446 00:27:13,932 --> 00:27:16,272 a $40 investment right? 447 00:27:16,272 --> 00:27:19,752 So the projects either are no 448 00:27:19,752 --> 00:27:24,032 brainers, right? In terms of the ROI questionable, or they just don't 449 00:27:24,032 --> 00:27:25,312 make sense. 450 00:27:25,652 --> 00:27:29,972 That's funny. Our math right now on like the C plus B minus buildings 451 00:27:29,972 --> 00:27:33,252 that are low clear is like 12 on the annual. 452 00:27:33,252 --> 00:27:37,092 And then this is like parts of L .A. 453 00:27:37,092 --> 00:27:40,952 And then, yeah maybe 22 bucks a foot on 454 00:27:40,952 --> 00:27:43,732 the class A somewhere around there. So that $10 455 00:27:43,732 --> 00:27:47,932 spread is, it's funny because it doesn't make a 456 00:27:47,932 --> 00:27:52,412 B or a C turn immediately into an A. There's other like 457 00:27:52,412 --> 00:27:55,932 site constraints but that's class 458 00:27:55,932 --> 00:27:59,752 A popped so hard. Rents went so high and peaked so much until 459 00:27:59,752 --> 00:28:03,312 that 23 period that even though they've come down a bit, they 460 00:28:03,312 --> 00:28:06,692 haven't come down as much as the Bs have. So I feel like that's 461 00:28:06,692 --> 00:28:10,492 starting to widen a little bit. And now that we're getting a lot of this 462 00:28:10,492 --> 00:28:14,792 Labor Day activity, that's caused A to 463 00:28:14,792 --> 00:28:19,232 maybe hold the line a little bit more with a little more hope that like 464 00:28:19,232 --> 00:28:23,412 the recovery is coming soon enough that you can you can be patient rather 465 00:28:23,412 --> 00:28:24,852 than have to capitulate. 466 00:28:24,852 --> 00:28:29,332 yeah one thing also that's that's changed is the column spacing on 467 00:28:29,332 --> 00:28:32,912 the older buildings versus a newer one So you know, ideal 468 00:28:32,912 --> 00:28:37,152 column spacing is 50 by 50 52 by 50 you know, whatever that number is 469 00:28:37,152 --> 00:28:40,692 right now. So, and a lot of these older buildings have 30 by 470 00:28:40,692 --> 00:28:42,202 30 grids. 471 00:28:42,202 --> 00:28:42,772 Yes. 472 00:28:42,772 --> 00:28:47,152 And we've looked at some Northern California and you know 473 00:28:47,152 --> 00:28:51,452 basically across the country. So we're pricing out now, basically 474 00:28:51,452 --> 00:28:55,452 taking out every second column. So we can convert a building 475 00:28:55,452 --> 00:28:58,712 that's 25 by 25 grid or 30 by 30 476 00:28:58,712 --> 00:29:02,832 to 30 by 60 or even 60 by 60. 477 00:29:02,832 --> 00:29:06,952 So you want to stay in the parameters of that bay, but you can take 478 00:29:06,952 --> 00:29:10,572 out every second column. And again, just you know, however 479 00:29:10,572 --> 00:29:14,832 many columns, it's going to be X amount of dollars per column. Right. 480 00:29:14,832 --> 00:29:17,952 So, uh, and then in a lot of those 481 00:29:17,952 --> 00:29:21,672 cases, um, to take out every second column in a building gets 482 00:29:21,672 --> 00:29:25,652 expensive. What the real push is for at the speed 483 00:29:25,652 --> 00:29:29,492 bays, they want to create a 50 or 60 foot speed bay. 484 00:29:29,492 --> 00:29:32,752 So a lot of those that we're looking at to take out a number of 485 00:29:32,752 --> 00:29:36,692 interior columns ultimately result in just taking them out near 486 00:29:36,692 --> 00:29:40,152 the docks and creating that 50 or 60 foot speed bay. 487 00:29:40,152 --> 00:29:44,532 They worked the racking around the existing columns but at the 488 00:29:44,532 --> 00:29:48,192 ends, we're taking out a lot of those columns to create those speed bays. 489 00:29:48,192 --> 00:29:52,492 and whether they go very narrow aisle or not maybe is a 490 00:29:52,492 --> 00:29:54,022 part of that determination I would imagine 491 00:29:54,022 --> 00:29:57,632 right right so then we'll get their racking guys involved or anyone 492 00:29:57,632 --> 00:30:00,592 that we work with and say okay here's the layout they're looking for trying 493 00:30:00,592 --> 00:30:04,392 to generate this many pallet positions so we'll 494 00:30:04,392 --> 00:30:08,392 take as much work on the front end to you know try and make these 495 00:30:08,392 --> 00:30:12,052 things happen um because again if it's a one 496 00:30:12,052 --> 00:30:15,052 -off owner they're they're in their business they're locked in their 497 00:30:15,052 --> 00:30:18,112 business they don't know you know they don't have their own construction 498 00:30:18,112 --> 00:30:21,632 people that so we we really in order for a lot of these projects to 499 00:30:21,632 --> 00:30:25,732 happen, we really need to take the reins on these things and point out 500 00:30:25,732 --> 00:30:29,332 everything that's going to happen put a number to it, put a timeframe to 501 00:30:29,332 --> 00:30:33,112 it and really just present it. These days we're putting out 502 00:30:33,112 --> 00:30:37,152 proposals with AI renderings of what the building's going to look like. 503 00:30:37,152 --> 00:30:40,362 You know, we spit those out in 20 seconds. Like, you know I used to 504 00:30:40,362 --> 00:30:43,632 pay an architect to do a rendering. Now I can you know, we 505 00:30:43,632 --> 00:30:47,572 can doctor that up and show them what the buildings And those have been 506 00:30:47,572 --> 00:30:49,212 pretty impactful. 507 00:30:50,152 --> 00:30:54,372 So that's, yeah. So that's, we 508 00:30:54,372 --> 00:30:58,112 found we've been doing a lot more of that really a lot of handholding and 509 00:30:58,112 --> 00:31:01,872 walking people through the whole process. 510 00:31:01,872 --> 00:31:06,172 Because it's a daunting thing to think about right? 511 00:31:06,172 --> 00:31:08,722 If you're not you know, not in the business. 512 00:31:08,722 --> 00:31:09,422 So if I thought some... 513 00:31:09,912 --> 00:31:13,652 Yeah, people sometimes that we work with have only gone through 514 00:31:13,652 --> 00:31:17,192 doing a deal two to five times. 515 00:31:17,192 --> 00:31:20,912 So I'm sure roof lifting they've done zero times. 516 00:31:20,912 --> 00:31:24,892 right yeah correct correct yeah yeah 517 00:31:24,892 --> 00:31:29,272 yeah and a major investment 518 00:31:29,272 --> 00:31:32,352 this is a major investment that they've made you know uh 519 00:31:32,352 --> 00:31:36,592 so so they they just want to to get that comfort level 520 00:31:36,592 --> 00:31:40,522 um you know take some time for sure so you're a lot of a lot of hand -holding 521 00:31:40,522 --> 00:31:42,622 and it's a whole new ball of wax that there just is a foreign to them. 522 00:31:42,622 --> 00:31:45,912 If we go back to the taking columns out, so you've got to reinforce 523 00:31:45,912 --> 00:31:49,832 the roof then I would imagine for where those columns were or 524 00:31:49,832 --> 00:31:53,332 what else goes into the that you consider other than actually just 525 00:31:53,332 --> 00:31:55,872 like not not replacing it 526 00:31:55,872 --> 00:32:00,232 Yeah. So you're reinforcing the the two existing columns, the 527 00:32:00,232 --> 00:32:04,392 outside ones because now you're adding that, that half a load 528 00:32:04,392 --> 00:32:08,752 that was, and then, and you're installing either a 50 or 60 foot long 529 00:32:08,752 --> 00:32:12,992 uh, beam or a truss under the existing ones to take that 530 00:32:12,992 --> 00:32:14,452 full span. 531 00:32:15,092 --> 00:32:19,332 Yes. Yes. So in a home remodel, you dread the beam the dreaded beam 532 00:32:19,332 --> 00:32:23,552 that is the cost increase. Here you could have all sorts 533 00:32:23,552 --> 00:32:26,192 of trusses and beams. Yeah, depending on how big the building is. 534 00:32:26,192 --> 00:32:29,752 yeah and now i mean steel's gone up considerably uh 535 00:32:29,752 --> 00:32:33,632 availability of steel has has uh been challenged 536 00:32:33,632 --> 00:32:37,292 although a lot of the big data centers have tied up a lot of the 537 00:32:37,292 --> 00:32:41,452 uh the new steel right so and they're not running some sizes 538 00:32:41,452 --> 00:32:44,532 for, for, for months. So again, if 539 00:32:44,532 --> 00:32:48,992 you can reuse you know, it's it's, I compare it to a few years back 540 00:32:48,992 --> 00:32:53,412 when, uh, all the big e -commerce buildings were being put up and you couldn't 541 00:32:53,412 --> 00:32:57,452 buy joists, right? You couldn't find joists across the country. So that really 542 00:32:57,452 --> 00:33:01,852 helped with the uh, the lifting or the renovating and the same 543 00:33:01,852 --> 00:33:06,272 now with these these uh shortage of all these all the steel 544 00:33:06,272 --> 00:33:10,672 because really all we're all really replacing is mostly just 545 00:33:10,672 --> 00:33:14,772 existing columns or stubbing columns so not 546 00:33:14,772 --> 00:33:17,552 so most of that steel has been much more 547 00:33:17,552 --> 00:33:21,272 available than for some of the new builds 548 00:33:21,752 --> 00:33:26,152 And then you're not in the data center game. That's primarily 549 00:33:26,152 --> 00:33:30,412 new construction and the height doesn't work the same way, I 550 00:33:30,412 --> 00:33:31,192 would imagine. 551 00:33:31,192 --> 00:33:35,332 yeah no we haven't we've looked at some over the years just because they 552 00:33:35,332 --> 00:33:38,832 bought buildings that are that are too low for even just as a data 553 00:33:38,832 --> 00:33:42,452 center kind of office but for the most part i think those are 554 00:33:42,452 --> 00:33:44,412 new those are mostly new 555 00:33:44,412 --> 00:33:47,452 buildings yeah 556 00:33:48,132 --> 00:33:52,372 Cool. I would say that's a good amount of time we spend to 557 00:33:52,372 --> 00:33:56,532 get a good understanding. I don't know if you could leave us with any rules of 558 00:33:56,532 --> 00:34:00,732 thumb or things that stand out to you that 559 00:34:00,732 --> 00:34:04,592 I think of in our business for brokerage. We have a couple mantras 560 00:34:04,592 --> 00:34:08,592 that always hold true. So one mantra might be like 561 00:34:08,592 --> 00:34:12,132 a tenant in 100,000 feet 562 00:34:12,132 --> 00:34:16,332 will never move to another 100,000 footer to 563 00:34:16,332 --> 00:34:20,672 save money on rent. Like people will say that all the time, but 564 00:34:20,672 --> 00:34:24,772 it just holds true that they never do because the cost of moving and the 565 00:34:24,772 --> 00:34:28,842 time, the hassle. Like if you hear that, you already know it's false. 566 00:34:28,842 --> 00:34:30,952 Like the second you hear it or like when 567 00:34:30,952 --> 00:34:35,332 people say my landlords, my I'm 568 00:34:35,332 --> 00:34:38,152 friends with my landlords. If I want to get out of my lease I'll just call 569 00:34:38,152 --> 00:34:42,052 him. He'll let me out. Don't worry about it. And you're like yeah, yeah, I 570 00:34:42,052 --> 00:34:46,152 hear you. But it doesn't actually prove out that way. Do you have 571 00:34:46,152 --> 00:34:47,622 any in your business, I would imagine? 572 00:34:47,622 --> 00:34:52,062 Right. Yeah, okay. Yeah, sure. I mean, we basically state that we're 573 00:34:52,062 --> 00:34:55,272 probably anywhere from quarter to 574 00:34:55,272 --> 00:34:59,152 half the cost and time lifting 575 00:34:59,152 --> 00:35:03,632 a roof versus building new. um and also you can if 576 00:35:03,632 --> 00:35:08,072 you've got two facilities to call it hundred thousand square foot facilities 577 00:35:08,072 --> 00:35:12,492 that are both 16 feet or you know uh tall you can 578 00:35:12,492 --> 00:35:16,352 combine that into one hundred thousand square foot facility that's now 36 579 00:35:16,352 --> 00:35:20,732 or 40 so you're eliminating that um and you can also 580 00:35:20,732 --> 00:35:25,112 um buy a smaller building and double or 581 00:35:25,112 --> 00:35:29,432 triple the cubic so that you're paying less on a per square footage basis 582 00:35:29,432 --> 00:35:33,592 rental basis, but yet, because until now, and I've 583 00:35:33,592 --> 00:35:37,952 been promoting this from day one, I'd like to see lease rates based on 584 00:35:37,952 --> 00:35:41,362 cubic footage not square footage right? 585 00:35:41,362 --> 00:35:42,762 Yes, I remember this. Yes, Marty's axe to bear. 586 00:35:42,762 --> 00:35:47,112 So that's, you know, it's not it's, it's going that way a 587 00:35:47,112 --> 00:35:50,452 little bit, you know, with the uh, the, the difference between 588 00:35:50,452 --> 00:35:53,692 the heights, but not, not exactly per, per cubic 589 00:35:53,692 --> 00:35:57,292 foot, but that does give the opportunity to someone to scale 590 00:35:57,292 --> 00:36:01,652 back by your smaller building um, and raise that and create 591 00:36:01,652 --> 00:36:04,492 the same amount of pallet positions, if not more. 592 00:36:04,652 --> 00:36:08,632 Yeah. Yeah. Why do you think we don't do that? It's just how 593 00:36:08,632 --> 00:36:10,912 it's always been done and changes stuff. 594 00:36:10,912 --> 00:36:14,532 Yeah, it just uh, you know the real estate industry is a big ship to 595 00:36:14,532 --> 00:36:18,872 turn. So, you know and the lifting part is only 596 00:36:18,872 --> 00:36:23,252 a small portion of the square footage costs and everything else. So, um, and 597 00:36:23,252 --> 00:36:27,492 it's only been the last, I don't know, I don't know how many years where 598 00:36:27,492 --> 00:36:31,112 the cubic footage has really started being a, been 599 00:36:31,112 --> 00:36:33,052 a big talking point. 600 00:36:33,052 --> 00:36:36,272 I would say it's never been more important than now. 601 00:36:36,272 --> 00:36:39,352 Yeah. And, and more so it seems. 602 00:36:39,552 --> 00:36:43,292 Yeah, and with e -commerce now they'll put in 603 00:36:43,292 --> 00:36:47,572 mezzanines more oftentimes. I've gone to a couple of sites that are 604 00:36:47,572 --> 00:36:51,852 way over 40 feet that have had three or four levels of mezzanines and all 605 00:36:51,852 --> 00:36:53,792 the conveyance systems. 606 00:36:55,152 --> 00:36:58,432 I've seen those primarily in the Midwest, but it's pretty cool to see some of 607 00:36:58,432 --> 00:37:01,952 those, like what people do to take advantage of that. 608 00:37:01,952 --> 00:37:05,472 it's the automation and that's become pretty pretty 609 00:37:05,472 --> 00:37:09,332 sophisticated it's uh it's pretty impressive to watch we've been 610 00:37:09,332 --> 00:37:13,392 in some warehouses where there's actually they're dark so everything's kind 611 00:37:13,392 --> 00:37:15,342 of robotic and you know there's 612 00:37:15,342 --> 00:37:17,132 You've seen one. You've seen more than one. 613 00:37:17,132 --> 00:37:21,572 yeah well we saw one that was a hundred footer right and this was like 614 00:37:21,572 --> 00:37:25,072 you know there was no one working in the warehouse it's all robots are 615 00:37:25,072 --> 00:37:29,192 programming and it's pulling a box from up here and it's pretty fascinating 616 00:37:29,192 --> 00:37:31,572 the technology that's out there now 617 00:37:31,572 --> 00:37:33,812 What kind of industry was that for? 618 00:37:33,812 --> 00:37:36,492 it's for a coffee company 619 00:37:36,532 --> 00:37:37,482 Okay. Yeah. 620 00:37:37,482 --> 00:37:41,362 yeah like a big chain of a car so they're pulling out a you know i need 621 00:37:41,362 --> 00:37:45,032 a box of this size cups and this size lids and and 622 00:37:45,032 --> 00:37:49,312 you know the trays and things like that so um but pretty 623 00:37:49,312 --> 00:37:49,662 pretty 624 00:37:49,662 --> 00:37:53,612 That are probably knowable, super consistent, only so many that are in 625 00:37:53,612 --> 00:37:54,032 high volume. 626 00:37:54,032 --> 00:37:58,372 exactly exactly yeah but again you're talking uh you know it's 627 00:37:58,372 --> 00:38:02,032 pretty impressive to walk into building that's 80 or 100 feet. 628 00:38:02,692 --> 00:38:06,512 That's insane and look up with a headlamp. 629 00:38:07,732 --> 00:38:09,172 Yeah. 630 00:38:09,412 --> 00:38:13,208 Nice. It's great spending time with you. I love hanging 631 00:38:13,208 --> 00:38:17,188 out and learning more about it and I appreciate your candor and 632 00:38:17,188 --> 00:38:20,328 being open and honest about it. I love that you're in the fight and you 633 00:38:20,328 --> 00:38:23,688 got all these projects going and you know how to be practical 634 00:38:23,688 --> 00:38:27,922 about how to underwrite things and sharing knowledge. Thank you, Marty. 635 00:38:27,922 --> 00:38:28,833 Have a good one.