Welcome to episode 27 of Offshoot. My guest today is Bill Vanderstraaten President and founder of Chief Partners, LP a Dallas-based family office focus on investing LP equity into commercial real estate. As part of the Trever Rees-Jones holdings, Chief Partners team of only 6 professionals typically invests $5MM to $15MM into a myriad of commercial real estate assets classes. They currently manage about $1.2B which falls into 80 assets with 30 GP operating partners. Since their 2007 inception they have built over 8MM square feet of commercial space.
Bill’s got a mountain of experience and expertise plus a warm and approachable demeanor that has no doubt served him well. Before investing on behalf of this billionaire family, he worked with foreign capital, a national REIT, and a private equity firm; this is very clearly not his first rodeo. He runs a small team that packs a mighty punch and makes what’s got to be a challenging role sound like a walk in the park.
Listen in as we cover topics that include:
The notion that you are the collection of relationships and deals that you do.
Why holding too long is a common mistake in that family office investors make.
How family offices differ from other opportunity funds.
How culture and integrity are central to Chief’s underwriting of potential operating partners. They appreciate folks who may have sleepless nights when things get off track.
Where flexibility shows up as a competitive advantage for family office equity.
The merit of providing your potential investor an earnest assessment of risk.
Why Bill sees Chief as something other than commodity capital.
The respect that Beil has for the plight of the GP operating partner.
The value of curiosity in leveling up your skills and understanding.
Why people may remain at the heart of the real estate business due to the high degree of trust that’s required to make investments.
What a high idle brings to your career.
And finally, how a sailing analogy applies to the challenge of being an entrepreneur.
Transcript
[00:49] Kevin Choquette: Welcome everyone to episode 27 of Offshoot. My guest today is Bill van der Stratten, President and Founder of Chief Partners lp, a Dallas based family office office focused on investing LP Equity into commercial real estate.
[01:02] As part of the Trevor Rees Jones Holdings Chief Partners team of only six professionals typically invests five to $15 million into a myriad of commercial real estate asset classes. They currently manage about 1.2 billion, which falls into 80 assets with 30 GP operating partners.
[01:21] Since their 2007 inception, they’ve built over 8 million square feet of commercial real estate space. Bill’s got a mountain of experience and expertise, plus a warm and approachable demeanor that has no doubt served him well.
[01:34] Before investing on behalf of this billionaire family, he worked with a foreign capital developer, a national REIT and a private equity firm. This is very clearly not his first rodeo.
[01:45] He runs a small team that packs a mighty punch and makes what’s got to be a challenging role sound like walking the park.
[01:52] Listen in as we cover topics that include the notion that you are a collection of the relationships and deals that you do, why holding too long is a common mistake that family office investors make, how family offices differ from other opportunity funds, how culture and integrity are essential to Chief’s underwriting of potential operating partners.
[02:16] They appreciate folks who may have sleepless nights when things get off track.
[02:21] Where flexibility shows up is a competitive advantage for the family office equity the merit of providing your potential investor an earnest assessment of risk why Bill sees Chief as something other than a commodity capital provider,
[02:37] the respect that Bill has for the plight of the GP operating partner,
[02:41] the value of curiosity in leveling up your skills and understanding why people remain at the heart of the real estate business due to the high degree of trust that’s required to make investments,
[02:52] what a high idol quote unquote brings to your career and finally, how a sailing analogy applies to the challenges of being an entrepreneur. I hope you enjoy the podcast.
[03:10] All right, Bill, thank you for taking the time to join me on the podcast. I appreciate it.
[03:14] Bill Vanderstraaten: Yeah, no, no problem. Enjoy it.
[03:16] Kevin Choquette: Thank you A little bit of tech trouble, but we got there.
[03:19] Bill Vanderstraaten: Exactly.
[03:20] Kevin Choquette: Look, to get us started, maybe just could you give a bit of a background on Chief Partners lp, what your organization does, kind of who you guys.
[03:29] Bill Vanderstraaten: Are happy to do that? Chief partners is a family office. So we, we invest on behalf of the Rees Jones family and just commercial real estate, income producing properties. So there are other parts of the family office that do other things.
[03:47] But we have a team here that’s focused just on, on real estate.
[03:53] Our, our M.O. is teaming with operating partners mostly I’d say about half of which are in Texas, half of which are spread out across the country in different markets. And we focus on, on value add investments.
[04:09] And I guess by that I mean anything that, that we’re either creating from scratch or,
[04:15] or that we are repositioning or fixing or in some way adding value that would result in returns, you know, greater than just stabilized, you know, income type returns. And we’re in, you know, quite a few different product types.
[04:32] What we would think of as the four major food groups, you know, office, industrial, retail, multifamily.
[04:39] But beyond that we’ve done, done some land, we’ve done medical, office, self storage,
[04:45] data center, you name it. There’s a few things we don’t do. But, but you know we’re, we’re always on the search for, for some sort of value add opportunity.
[04:56] Kevin Choquette: And, and you guys,
[04:58] is that all like internal capital or is the you know, family office monikers.
[05:06] Lot of different manners and I think there could be like multi family offices or single family office. Are you guys accepting external capital as part of the, the capital that’s going into the marketplace or is it all internal funds?
[05:19] Bill Vanderstraaten: We, we don’t accept outside capital as part of our investment dollars but we team with, with other groups pretty often. I’d say probably 80% of the time we have groups that are in that LP position with us and our partner will take on the general partner position and probably co invest as well.
[05:45] So we think of those as teammates and sometimes they’ll bring us into a deal, sometimes we’ll bring them into a deal,
[05:51] sometimes they’re partners that the partner had already before they contact us.
[05:57] Kevin Choquette: Okay. They’re co investing with you guys typically as LPs, correct? That’s correct, yep. Okay. And development it sounds like is fair game.
[06:06] Bill Vanderstraaten: Yeah, we do quite a bit. I’d say you know, the, you know, the more than half of what we do is, is from scratch, ground up development.
[06:16] Kevin Choquette: Okay. And look, you and I have known each other for a while, but what is your role within the organization and what’s the, what’s the team look like?
[06:25] Bill Vanderstraaten: Yeah, I was a founding partner, so we’ve been in existence for about 18 years now, which is, I can’t even believe that. And it’s hard to even say, but so fairly long time.
[06:38] And there are, I have two partners that are part of the decision making investment team. Ryan Bischoff, Liesel Riccardelli,
[06:51] and then there’s a total of six of us. So we,
[06:55] we’re all with different roles but trying to identify,
[07:01] invest,
[07:02] help operate and eventually sell these various investments and.
[07:09] Kevin Choquette: Duration for you guys. Are you kind of like a more traditional capital allocator fund with a three to five and maybe seven year horizon at the outside.
[07:21] Bill Vanderstraaten: We, we have about, you know, we, we organize ourselves to compare deal to deal on a five year hold.
[07:29] So, you know, that’s never exactly the case. Obviously it’s, it’s always a little bit less or a little bit more than that. But just to know that we’re disciplined about how we look at our investment criteria.
[07:42] We think of it as a five year hold.
[07:44] And you know, that comes from a few different things. One of, one of them is just family offices in general tend to make the mistake of falling in love with their real estate and they, they own it, you know, for way longer than they should.
[07:59] And so we view everything as, as a, you know, because it’s value add, you know, add the value, go ahead and harvest and move to the next deal. On occasion we see something that either goes better than we thought while we owned it,
[08:14] maybe the tenant credit’s better or the neighborhood improved, or there’s something that makes us feel like the investment is a little bit more protected against cycles. And if we see something like that, we might choose to own it long term,
[08:30] assuming the partner agrees and we can work all that out. But it’s a big advantage, as you know, in this market to, to not have, you know, an absolute, you know, deadline on the exit.
[08:43] We can kind of confer with our partners and team up on, on when, when’s the right time to sell.
[08:49] Kevin Choquette: I just, a couple podcasts back, I was talking to a gentleman that runs a nav,
[08:54] a baby version of like Blackstone’s B reit. And what they do is mark to market the equity and then try to use that return on equity as opposed to return on cash as like the metric for how the investment’s doing, which would portray what you’re just saying that you’re maybe not earning on the equity.
[09:16] What you could, if you went ahead and liquidated and moved it over to another asset. Do you guys, do you guys do anything like that or is it more.
[09:24] Bill Vanderstraaten: It’S more intuitive than that, probably for us. But that’s a great, that’d be a great way to do it because that’s really what you’re, that’s really what you’re saying when you choose not to sell, which is that you can’t find a better place for not only your original investment, but,
[09:41] you know, but whatever you’ve earned along the way. And I, there’s times when it’s just time to, to harvest and redeploy. And in addition to that, the operating partners that we team with have a, generally speaking, we have a traditional promote structure and,
[09:59] you know, they’d like a payday as well. So that’s usually part of the decision as well.
[10:04] Kevin Choquette: Yeah, for sure.
[10:06] So it’s worth saying this is like week two of January 2025.
[10:12] What opportunities,
[10:14] challenges are you guys seeing as we roll into 2025 as either an allocator looking for new deals or existing portfolio asset management stuff and getting things to stabilization?
[10:27] Bill Vanderstraaten: Yeah, well, there’s challenges in both of those. I think. We’re, we’re, we’re experiencing what everybody’s having to deal with right now, which is borrowing costs, you know, significantly higher than most of us thought we’d be dealing with a couple years ago.
[10:42] So on the, on the investment side, obviously that squeezes returns for everybody and makes, you know, some things that would have looked great two years ago, you know, not look very good.
[10:55] And I guess our philosophy is if, if yield on cost is,
[11:03] you know, below our cost of borrowing,
[11:06] then that’s generally not what we’re excited about. So that describes almost everything that, that people are wanting to, or thinking about building right now. You’ve got, you know, say, you know, specifically say multifamily,
[11:21] you know, maybe yield on cost of six and they’re borrowing at seven and a half.
[11:27] There’s ways to make that successful. But, but you have increased your, your risk profile, you know, pretty dramatically by doing that. So those are not interesting to us. We, consequently, we’ve moved into more.
[11:41] At least lately, we’ve moved into more. What you think of as a alternative bucket, which would include, you know, self storage and manufactured housing and data center.
[11:55] Data center is not intuitively a space that you’d think a family office would, would be active in because of the size of, of those deals. But, you know, we have a couple of partners that we team with that we’re in the, we’re LPs inside their GP and that gets the check size to something that we can,
[12:12] we can accommodate and, and we like being in that space, you know, for sure. At least for now.
[12:19] Kevin Choquette: What is the check size you guys like to be putting out?
[12:22] Bill Vanderstraaten: Probably should have mentioned that, but yeah, we’re, you know, our size is generally 5 to 15 million on a per, per investment.
[12:32] We have multiple deals that are, that are more than, than 15,
[12:37] multiple deals that are less than 5. But, but I’d say that’s our, our sweet spot is that, that band that, that keeps us in a smaller deal size, especially these days with, you know, construction cost being what they are.
[12:51] But we do bring in, like I mentioned before, co, you know, co pilots and other families or other partners that, that can help round that out if the need is, you know, is bigger than that.
[13:01] And we still like, like the deal. That’s one of the reasons we’ve,
[13:06] we have made our average investment that size is because it keeps us below institutional.
[13:15] Our normal, I’d say our ideal investment would be something that we invest in that’s not institutional. And while we and our partner owns it, we make it institutional for that exit.
[13:30] Kevin Choquette: What’s that look like for you guys? I understand, I think what you mean. But if you take an asset that’s, let’s just say sub institutional or not yet institutional and transition it to an institutional exit or bring it to that institutional market, what kinds of things happen that transformation’s taking place.
[13:51] Bill Vanderstraaten: Yeah. So I mean the development part of that is it’s kind of obvious. If you’re just creating it from scratch, then just complete it. Yeah. You’re hoping that you’re making it an institutional product by the time you’re finished and that obviously that’s, that’s the majority of, of the value add activity we,
[14:13] we see on occasion and we bring, we have partners that bring us ideas and I would say maybe repositioning a, an older warehouse into some sort of combination retail, creative office.
[14:25] We’ve done several of those that, that the market seems to like and that’s, you know, that’s the example of a repositioned, you know, deal that, that then becomes, you know, interesting not because it was an old warehouse, but because you’ve, you’ve created it, you’ve made it something.
[14:46] Kevin Choquette: Different, adaptive reuse and yeah, good enough revenue profile that they’ll take it down.
[14:50] Bill Vanderstraaten: Yeah, it’s a faster way to say that.
[14:52] Kevin Choquette: Yeah, well, it’s all good. And then data centers, I’m Curious about that. You’re saying that those investments are large and so you’re in with the gp.
[15:02] At least I think that’s what you said. How do you guys think about that market? I mean, I’ve heard there’s,
[15:08] I don’t know that, I don’t know that market, so I’ll confess. But Maybe there’s like 1300 data centers and I don’t know how many are being created in the 2024, 2025 time period, but it sounds like a lot of capital is going into that space, mostly supporting the AI sort of wave here.
[15:28] Bill Vanderstraaten: Yeah, I think there’s two ways to think about it. One is probably everything that, you know that’s under construction right now would have otherwise been needed anyway just because the cloud is expanding as rapidly as it is.
[15:41] But then you put AI on top of that and it’s sort of an exponential demand picture.
[15:50] Now when you’ve been around long enough to see a few cycles, when everybody starts talking about something that has an insatiable demand, you know, you should, you.
[15:57] Kevin Choquette: Know, watch out, pump the brakes maybe.
[16:00] Bill Vanderstraaten: Yeah, exactly. So that’s my natural reaction to, you know, to where we are right now. But I would say it’s, it’s probably premature to pump the brakes, but it’s, it’s, you know, something to keep an eye on.
[16:14] And in the way we just describe it as, what we’re watching out for is, you know, there, there will be, you know, technology is pretty amazing and it’s,
[16:24] you know, there will be changes in the data world that make, you know, make these, this equipment smaller, make it cooler to operate than it is currently,
[16:33] less power intensive and all those things will change the demand for space and the data market. We don’t see that happening in the short term, but you know, it will eventually happen.
[16:46] And so you just want to be careful that you’re not caught with a 1500 dollars foot data center, you know, and nobody that wants it.
[16:54] Kevin Choquette: Yeah, and I honestly don’t know how that business works. When, when you build a data center and you bring all the cooling and power to the space and put all the racks in, are you just sort of leasing space or for like whoever wants X number of racks or do you lease the whole space or how does it.
[17:14] I don’t.
[17:14] Bill Vanderstraaten: You would describe to me as I’m an old, you know, old office hack. So somebody in the data world finally described it to me in a way I can understand, which is you, you have data centers that are basically build a suits for specific users and so you’re, you’re finished.
[17:30] It’s a discussion and a, and a negotiation between you and the user as to how, how much the landlord is going to complete and how much the tenant prefers to complete.
[17:39] But it’s basically the same conversation you’d have with a office building. Build a suit and you get down to the tenant improvement allowance and, you know, how much is the landlord and how much of the tenant.
[17:51] The other end of the spectrum would be almost like an executive suite where you’re building the shell and you’re creating,
[18:00] you know, for lack of better to describe it, you know, cages. And various tenants will come in and, and take down, you know,
[18:08] pieces of the building and snap into, you know, the, the infrastructure that you have provided, you know, for them. So it’s pretty dangerous to have me describing a data center business.
[18:21] Kevin Choquette: But, but the exit is, you know, is it a blackrock, is a Blackstone, is it an institutional buyer that’s like, hey, we like this portfolio allocation. And whether you’ve done the executive suite model or it’s built to suit for Amazon with a bit of customization, and they take it down.
[18:39] Like, I just, I’m curious. I don’t know much about that market.
[18:42] Bill Vanderstraaten: No, you, you’ve got numerous data center funds that have been created, as well as what I think the institutional guys would call infrastructure funds that can take on data as well as the other things that they do.
[18:56] So there’s quite a few buyers for this product at this point. A lot of the, you know, obviously, particularly on the build a suit side of this,
[19:05] you’ve got great credit. So that’s driving cap rates down to pretty attractive numbers. Now, I would say one of the things that we think will change over time with data is that you’ll see the, the yield on cost, you know, start to compress as more and more, you know,
[19:21] more and more people are getting into the creation of data centers.
[19:25] It’ll, you know, like it always does. You know, everybody shifts to a certain sector and it, it takes all the fun out of it.
[19:32] Yeah, it’s probably what will happen here at some point.
[19:35] Kevin Choquette: That, that number you threw out 1500 bucks a square foot. I know we’re just talking, but is that, are they that expensive?
[19:41] Bill Vanderstraaten: They are sometimes way more than that, sometimes less, depending on, you know, what the customer needs are and kind of how much of it you’re finishing versus the tenant.
[19:50] Kevin Choquette: And are the debt capital markets pretty savvy on this product at this point? Meaning you can get 50, 60% leverage and maybe get it on repo, there.
[20:01] Bill Vanderstraaten: Are sources for, for the debt. I’d say that, you know, some of them are traditional, some of them are maybe more, you know, debt fund type sources. But you know, everybody’s learning together along the way and it’s, it’s, you know,
[20:17] all the capital sources are kind of feeling their way around to make sure they’re not, you know, they’re not in the danger zone.
[20:23] Kevin Choquette: That sounds kind of fun.
[20:25] Bill Vanderstraaten: It’s fun. It’s challenging. I don’t, you know, it’ll remains to be seen how long a group like, like Chief can participate in,
[20:34] in data center just because of the challenges from the number of zeros involved.
[20:41] We’ll do it as long as we can. We’ve got some great partners that we’ve teamed with that we like a lot.
[20:46] Kevin Choquette: And I think you said self storage, which I understand, and then manufactured housing. Is that B2R or did you, was it manufactured housing? The third class?
[20:54] Bill Vanderstraaten: Yeah, manufactured housing is one of the alternative product types that we’ve gotten somewhat involved in. Again driven mostly by a partner that is, that we feel like is great at it.
[21:06] We, you know, we’re a little different. We have, and I can expand on this a little bit, but the family has a foundation that is pretty active in making sure that that housing is as cheap and affordable as it can be.
[21:22] And so one of the things we want to avoid doing on the real estate side is, is something that, you know, counters that, you know, that mission. So we’re, we’re not, you know, a buyer of existing manufactured housing with a business plan to, you know, to, to, to jack up,
[21:37] you know, rental rates on, on people who can least afford it. And our business plan has been on manufactured housing to create new communities.
[21:48] So we’re, you know, we think we’re adding to the housing stock and that, that’s helpful still. You know, obviously our, our goal here at Chief is, you know, to, to make money for the, for the family and for our partners.
[22:02] So that’s, you know, that’s job number one. But it’s, it’s a nice, you know, auxiliary benefit to, to be adding to, to that product type.
[22:12] And those are, you know, those take a while to get infrastructure in place. That’s the biggest challenge in that product type is, is getting, you know, basically, you know, self standing storm sewer,
[22:28] you know, power, you know, you name it. All the infrastructures in place get, getting the road structure within the development finished and once you get that all done, they actually go relatively quickly.
[22:41] Kevin Choquette: This manufactured housing is like modular. You Know, bringing the. Bring in the units, bolt them together. Or is this,
[22:49] you know, you’ve built the infrastructure and you bring in units on trailers. Right. It’s UCC building code versus HUD building code.
[22:58] Bill Vanderstraaten: Yeah. I mean, the. The baseline business plan would be we create the pads and the customer buys their modular house and brings it to the site and, you know, plugs it in.
[23:10] Okay. The other scenario that we see on occasion is,
[23:15] and most. I think most communities do this, where you. You might create, say, 10% of your total maximum developable site and, and bring in, you know, houses so that for those that are needing a place, you know, tomorrow you’ve got a few houses ready to go,
[23:34] and, and you capture. And you capture your customer, you know, because of the, the ease of. Of just stepping right in.
[23:42] But they, you know, they would then buy the house and they. They build value for themselves in the, in the equity of the home and they’re leasing the land side.
[23:51] Kevin Choquette: Okay, cool. I like that business. Yeah.
[23:54] This, like, we’ll come back to sort of investment allocations and risk, but I have this perspective that as a country, we’re kind of blowing it with housing. And it’s like, if you own a house, you might feel good because it’s worth more than it was when you bought it.
[24:15] But I fly a fair bit. I suspect you do, too. And this is a really, really big country with a ton of open space, and somehow the body politic has made it.
[24:26] It’s less so. I think in the fine state of Texas. I happen to live in California, where getting a permit is like requiring an act of Congress. But, you know, we’re grossly undersupplied.
[24:37] Rents keep going up. It’s getting to where fewer and fewer people can buy homes. And I think it’s really making a, like, generational tension and also sort of divestiture of, like,
[24:53] an investment in the American dream.
[24:57] I think it’s just a huge error. Like, we have so much land and we have so much resource, and it’s not the case that houses should always be worth more.
[25:06] And I think there’s this thing that people think that’s great, the house you bought is worth 30 or 40 or 50 or 60% more. But, you know, people need homes.
[25:16] Like, we’re. We’re doing job creation, we’re having children, and we’re somehow putting a lid on housing. And I’m just curious how that aligns with you.
[25:26] Bill Vanderstraaten: There’s a lot of conflicting forces at work there that you could kind of make the case probably either Way one of the positives about, you know, land, the home values increasing over time has, has been what we see in the senior housing space,
[25:44] which is, you know, sometimes there’s people that, that in their career without a lot of assets to their name but for the equity in their house. That’s right, but that’s, that’s enough for them if they sell their house to, you know, to, to allow them to live comfortably, you know,
[26:01] in a, in a elderly situation.
[26:04] And I, I worry about, you know, what might happen going forward as more and more people, you know, either are renting homes without building equity in their house or you know, if you, if you create, you know, an abundance of housing, then you don’t have that, you don’t have that appreciation in those houses and,
[26:24] and they may end their careers without assets that help, you know, pay for their long term care. So you can, you can kind of paint the picture either way, I think.
[26:36] But I think generally I agree with you and that, you know, there’s,
[26:42] there’s a number of things I think we can do to make the creation of housing, you know, easier and a lot of markets that are the most hungry,
[26:51] where the municipal governments are asking for more housing at the same time, you know, on the other side of the office, they’re creating an almost insurmountable number of barriers to create it.
[27:03] Kevin Choquette: That’s right.
[27:04] Bill Vanderstraaten: That’s right. It’s a real, it’s a real, you know, issue.
[27:09] Kevin Choquette: Well, but even setting aside the appreciation aspects, which I agree with you,
[27:14] I don’t have to look far to see folks who have a lot of equity on their balance sheet due to their primary residence. But the 30 year fixed rate mortgage is a freaking godsend.
[27:29] Like, okay, I bought this place eight years ago, I put 20% down. At the time this mortgage seemed unbelievably unbearable. Right. It’s like a real reach. You fast forward eight years, you’re like just, I got the best deal on the planet.
[27:46] And the, and the renters and obviously anything beyond eight years, it’s just going to look better. And the renters that entire time are dealing with, you know, pick your climate.
[27:55] But 2 to 6 to more percent, you know, rent escalation and that as a matter of public policy, it’s like, hey, if somebody can come up with a enough scratch for a down payment and, and could otherwise have access to federal debt, that’s non recourse and fixed for 30 years,
[28:15] I just, I don’t know, that’s kind of a personal thing.
[28:17] Bill Vanderstraaten: I, I feel like no I, I agree with you. You know,
[28:21] a huge percentage of the American population really needs a forced savings plan, and that’s exactly what that is. Yeah.
[28:28] Kevin Choquette: And a fixed payment for however long they choose to live in their home.
[28:32] Bill Vanderstraaten: Yeah.
[28:33] Kevin Choquette: Yeah.
[28:34] Bill Vanderstraaten: Well, totally agree. Cool.
[28:35] Kevin Choquette: Well, let so go. Let’s go back to investment. And I know you guys are expert at this because I have brought I don’t know how many deal over the years and have always received a respectful and fairly expedient no, thank you.
[28:47] I don’t think we have.
[28:49] Yeah, no men taken. I don’t think we have yet to put one on the board with you guys. But what, what do you think it takes to be,
[28:56] you know, effective, if not amongst the best in this world of having guys like me and probably, you know, not the brokerage world, but principles bringing you opportunities of every size, shape and color and, and being able to se wheat from chaff and then also like managing and mitigating risk once you’ve decided to make an investment.
[29:20] Like, where’s the art in that? Easy layup. Right? That’s easy. Hey, we’re going to bring you hundreds of deals a year. You’re going to pick the good ones and not get blown up.
[29:31] Bill Vanderstraaten: Yeah, to a certain extent it’s almost.
[29:35] We see a lot of deals as you know, and we’re happy to do that. That’s our job.
[29:41] But then when you think back at how many you see, when you do miss on one, you, you’re like, how, how is that possible? We looked at 300 and picked one we still missed.
[29:52] Kevin Choquette: Right, right.
[29:54] Bill Vanderstraaten: That fortunately has not happened very often. I’d say if you think about, you know, if your question is kind of like, what’s the magic of deciding what you do and what you don’t do?
[30:03] Kevin Choquette: What makes you the best at it?
[30:05] Bill Vanderstraaten: Yeah, well, I don’t think we’re the best. We think we’re pretty good at it. But the reason we’re pretty good at it is our, our partners are really good at it.
[30:16] And we’ve done, I think, a pretty good job of figuring out, you know, operating partner wise, you know, who we want to team with.
[30:25] The culture, I guess, of those partners is really important to us.
[30:31] And I would say it’s been described to me as, let’s say a deal doesn’t go as well as you’d hoped.
[30:38] There’s some partners out there who would say,
[30:41] hey, I’m out of my promote and I didn’t invest that much in that deal. I made my fees on it and good luck, guys. And we’re going to go to the next deal and kind of leave you high and dry.
[30:51] And there’s other partners that would not even think about any of their own, you know,
[30:59] metrics and just say, you know, hey, our partner trusted us and invested a lot of money in our, in our deal and we’re going to make sure that they at least get it back and hopefully make, you know, healthy return as well.
[31:13] So the staying up at, wait, you know, saying up awake at night kind of partner that’s worried about, you know, their responsibility to make the deal work. Right, that’s, that’s who we love, you know, aligning with.
[31:26] And I’d say beyond that,
[31:29] you know, to ensure all of that, I think alignment is probably the word that I would use and we use it around here, you know, ad nauseam, probably, which is as long as you’ve got a great partner who really knows what they’re doing and then they’re invested in real dollars in your deal and they’re experts in their geography and their product type,
[31:49] then you’ve probably got a pretty good recipe for a successful real estate investment because everybody’s, you know, incentivized in the exact same way.
[32:01] So the more, the more you can, you know, align yourself with your operating partner and also the market,
[32:09] then the better you’ll end up being.
[32:12] Kevin Choquette: So there’s a lot there. So,
[32:17] you know, the, the expertise and the geography, geographic,
[32:22] you know, sort of knowledge.
[32:25] This is a long standing multifamily developer in Dallas. Okay, I can check those boxes.
[32:31] The integrity or the character or the culture, as you said prior to having a partnership with them, it might be a little bit like hiring an employee,
[32:42] they say, in the right things. But how do you, how do you try to get, you know, be behind the, the curtain in the wizard of Oz to say like, okay, are these guys, are they who they say they are?
[32:53] Are they actually going to know the line here or, or like that seems challenging.
[32:59] Bill Vanderstraaten: Well, when I, you know, when I advise young people about their, you know, career as they’re getting into this business, one of the things I try to remind them about is you are really just an aggregation of every relationship and every deal that you do going forward.
[33:16] And it’s not that difficult to make a few phone calls and find out what you need to find out about just about anybody.
[33:25] And I’d say there’s always a network that you can access to find out how your partner has behaved in the past in good times and in bad times,
[33:40] and also just, you know, their Expertise, I mean that’s,
[33:44] you know, usually if you’re in a high growth market,
[33:48] unless you get a really unusual headwind,
[33:52] if you have an expertise in your sector then,
[33:58] and you’re aligned in the way the deal is structured and, and how everybody’s invested, you’re, you’re probably going to, you know, create a pretty nice real estate investment.
[34:08] Kevin Choquette: So yeah, I dig it. Do a little background check, a little diligence.
[34:13] Bill Vanderstraaten: Yeah, it’s just it, it really is very,
[34:16] you know, it’s really just a few phone calls and it’s a, it’s a, not a lot of secrets in our industry really. There’s, it just takes almost just a minimal amount of, of due diligence.
[34:29] Kevin Choquette: So on alignment, you know, from my perspective is kind of a few core components to that meaningful co invest. Meaningful could vary depending upon the net worth and liquidity of the sponsor or GP fees and sort of how those fees are paid upfront or deferred and how those fees are proportioned relative to the co invest and then sort of how the promote or the sort of asymmetrical upside of the profits is allocated to the developer.
[35:03] How do, how do you guys like what.
[35:06] Are there any particular aspects of creating alignment with your GPS or your operating partners that you find are kind of non negotiable? Like how do you make sure that you’re shooting for the same Apple?
[35:19] Bill Vanderstraaten: Yeah, I would say we try not to be overly rigid. One of the reasons you might get the call for a great deal over another equity source might be, you know, some, you know, sort of demonstrating some flexibility.
[35:32] But from an alignment standpoint,
[35:35] obviously the more you can make it where everybody wins together or everybody loses together, but there’s not, you know, to use your word, an asymmetrical outcome where the partner did great but the part, you know, the equity partner didn’t or vice versa.
[35:53] So I would say an example of, of something that some of our partners have experienced that probably guide them to us might be, you know, if they’re teamed with a private equity fund that’s got a, you know, absolute must,
[36:08] must sell by, you know, date because of a fund. Yeah. Being, you know, finished. Yeah. Needing to be done and you see the equity sort of insisting on an exit before the real estate really wants to exit.
[36:24] Whether it’s a big lease that hasn’t turned yet or some other aspect and the operating partner gets hurt because of something that’s totally out of their control.
[36:35] Even though they did their job, created a great asset, leased it well, did everything they were supposed to do. But then the equity sells fast because a partner upstream, you know, once a payday,
[36:47] the flip side of that would be, you know, the operating partner that doesn’t have much invested in, in a deal out of their own pocket,
[36:57] makes a lot of money on the fees and has won already whether it, it does well for the equity or not. So you know, you can, you can kind of create either scenario.
[37:08] So the ideal,
[37:10] you know, position for us is, is a partner that, that’s right with us. Right. We, we all do well together or we all don’t and you know, just play it out that way.
[37:23] Yeah.
[37:23] Kevin Choquette: When obviously win win, the more co.
[37:26] Bill Vanderstraaten: Investment, the better, you know, the more, the more fees that are success oriented versus non success oriented, the better. You know, things like that.
[37:35] Kevin Choquette: Yep.
[37:36] I kind of want to just talk about the family office thing because I think in the commercial real estate space and also private equity and VC and guys seeking capital for all myriad of adventures,
[37:53] this sort of unicorn out there is like, ah, you just got to get in front of a family office and you happen to be in one. So I know you’re going to have a different viewpoint of this.
[38:03] I wonder.
[38:05] Yeah, I mean there’s a lot of different ways I could sort of try to tease this out. But like, what’s it mean for you guys to be a family office versus any other capital allocator?
[38:14] Bill Vanderstraaten: It’s great. I’d say it’s more relational. That’s kind of what you would expect I think in a family office, you know, connection.
[38:22] It’s, there’s a little, probably a little bit more of a need for, you know, culture fit.
[38:29] The thing that we always want to make sure of is that the goals of the operating partner and our goals are the same. And by that I mean, we talked about a little bit already, but the timing of exits and things like that, those seem to be the areas that create the most tension between operating partners and investment partners.
[38:53] And family offices in general have more flexibility than other sources.
[39:00] But they’re also,
[39:02] they’re probably as different in their interaction with partners as there are family offices. So you have family offices that. And most of them probably fall in this category, which is there’s a allocator that invests not just in real estate, but a number of other aspects.
[39:23] And sometimes they’re drawn more to funds because they don’t want to deal by deal kind of real estate.
[39:32] And occasionally you get one that’s large and we’re small in the world of equity providers, but large in the world of family offices.
[39:41] And so we are a little bit more like a private equity fund that’s just got one investor instead of 50.
[39:52] By that, I mean we have a real specific target as far as size and geography and product type and all of that. And the thing we don’t have is this pooled attitude about,
[40:06] okay, We’ve got these 30 properties in this fund that are all going to impact each other.
[40:13] And here, I mean, at chief, we really look at every deal individually.
[40:19] Kevin Choquette: Well, and the big difference I see,
[40:24] you know, and this is where I think there’s a misunderstanding of family offices, especially in this, like the patina around, like we just need to find a family office.
[40:35] A lot of family offices don’t have somebody like you who, or, and, or your team who has expertise in the domain and actually picks up the phone and I’m sure not all the calls.
[40:50] Right, but, but like you’ll, you’ll triage deals to like you’ve got a mandate. Right. And what I think happens where I think there’s a big misunderstanding is a lot of folks think all I’ve got to do is get to a family office.
[41:05] Well, a family office may have mandates that are gigantic, in which case your $5 million deal is irrelevant, or they might just have 99% of their money with UBS and it’s in a managed portfolio and they don’t really do anything with it.
[41:23] It’s rare in my perspective within commercial real estate to find a family office that has an operator on the front end who’s actually going to do the work of separating wheat from chaff.
[41:38] Like it’s very rare.
[41:40] Bill Vanderstraaten: I agree. I think, I think it is unusual.
[41:43] It’s because of size. If you think about, you know, billion dollars is a lot of money. But if, let’s say a family office has a billion to invest and you know, you, you would generally expect an allocation to real estate, know, in the 15% to 20% range,
[42:01] you know, 150 million is a lot of money, but it’s not enough to support,
[42:07] you know, a, a group of people that is own that’s only out there looking for real estate. They’ll do, you know, nine or ten deals and then, then they’re done.
[42:17] Kevin Choquette: That’s right.
[42:18] Bill Vanderstraaten: So it’s usually the size of, of the family office that, that creates the ability to have a team specific to real estate versus not.
[42:27] And if you don’t have a team specific to real estate, the family office generally is a vehicle to invest in funds because that’s how they can get a diversified position within commercial real estate.
[42:40] And they have to pick maybe five funds and hope that some of them actually do cycle through according to the way the sponsors say they’re going to, which generally never happens.
[42:50] Kevin Choquette: Right? That’s right. But they’ll make their fees.
[42:53] Bill Vanderstraaten: They’ll make their fees. It’ll take three or four years longer than they said.
[42:58] And that’s, that’s. By the way, that’s just human nature. Right. We all, we all expect things to happen faster than they really, really do. I’ve got plenty of properties on our portfolio that, you know, that I wish we had been able to move through faster.
[43:11] But we all think that’s going to happen at the beginning and it just doesn’t. So.
[43:16] And that the problem with, you know, funds is they’re super illiquid and, and the way we’re structured and I think other large family offices are structured is pretty ideal, which is you can cycle through nine or 10 deals in a year because they’re individual deals.
[43:31] And it’s not, you know, it’s, they’re not all stuck together and requiring a, you know, big exit, you know, seven years from now.
[43:39] Kevin Choquette: Right. You don’t have to redeem that last asset to liquidate the fund to get your promote.
[43:44] Bill Vanderstraaten: Correct.
[43:45] Kevin Choquette: Yeah. So having seen, you know,
[43:49] let’s just say countless deals and, or sponsors and understanding that you guys aren’t taking external capital,
[43:59] what are the do’s and don’ts? Like what, what’s the you you’ve sort of articulated like, hey, geographic expertise, domain expertise, a cultural match,
[44:10] which is to say like integrity and good character. So putting those aside just in terms of how to approach you guys actually get through,
[44:23] give you an easy on ramp into, you know, like, what’s the right way to do it? What’s the wrong way to do it? Because you are one of the unicorns that’s actually allocating into commercial real estate from a family office.
[44:36] Bill Vanderstraaten: Yeah, no, I’d say we love teaming with partners who have an appreciation for the same thing that we have an appreciation for.
[44:44] And so we love them to have, you know, an acknowledgment of the risk involved. And yes, there are certain risks that you can accept easily and there’s certain risks that you are, you know, radioactive that you avoid at all cost.
[44:58] And there’s also, besides, you know, the risk kind of denote like the no go zone. Right. And then there’s, there’s the opportunity and you know, the opportunity creates what gets people excited about a deal.
[45:10] And that’s for us, very, very Often it’s basis oriented and this market is a great example of a market that’s,
[45:20] you know, rewarding people that paid attention to basis, you know, a while back when it didn’t really matter as much.
[45:29] Because what saves you in scenarios like this when interest rates go up, go wacky,
[45:35] by the way, they’re historically still low. Everybody forgets that, that they once upon a time used to be this low.
[45:42] The issue was that they got hot, you know, they got this level, you know, very quickly from a very, very low level that we all, you know, sort of experienced for eight years.
[45:52] And, and so it hypnotizes the market into thinking that’s forever. And, and, and people who then started not paying attention to basis because money was free are now, you know, struggling, you know, mightily with, with that because it just pushes everything up to the, up to the limit.
[46:12] So we’re very orient, they’re very focused on basis across all the product types that we’re, that we’re in. It’s one of the reasons we spend a lot of time in the development,
[46:22] you know, world so that you know, hey, you’re, you’re at replacement cost or you know, maybe hopefully if you’re looking for, for deals to buy you, you are below replacement costs but trying to, to pay attention to that just so that when you’re putting debt on that and, and you’re evolving,
[46:42] you know, going through the value add process for that particular investment, you don’t look up one day and find yourself, you know, at well above comparable, you know, basis because you didn’t start low enough.
[46:56] That’s nothing new by the way. I think, you know, there’s a, there’s, you know, most of the investment world, you know, is pretty focused on, on basis but you just want your partner to be operating partner to be as, as psycho about it, you know, as we are.
[47:10] Kevin Choquette: Right. But so identifying the risk, identifying the opportunity, having a mind to, to basis.
[47:16] Any other like stylistic things like,
[47:21] I don’t know, like how you’ve seen people do it horribly wrong in approaching you and, and soliciting your interest or, and capital.
[47:27] Bill Vanderstraaten: You know,
[47:29] this hasn’t happened very often, but I would say there’s been a few partners that you know, view the capital stack as kind of a, you know, the equity partner is really just an expensive part of the stack.
[47:39] You’ve got, you got the lower expensive part of the stack which is, you know, primary debt. Maybe you have a pref equity or mez position and then you have your equity partner and that’s the most expensive part.
[47:52] And we, we view our partners as that, you know, an actual partner where we all roll our sleeves up together.
[47:59] And some of our partners don’t want to hear from us that often,
[48:04] but most of them do. And, and the reason, you know, they do is they realize that we see we’re in an unusual position where we see, you know, we’re, we’re operating at any given moment 80 different, you know, investments.
[48:18] Not, you know, not all of them. In fact, usually it’s only a few of them in each product type. But, but we do see other things coming and going within the industry, probably even within their geography.
[48:29] We have some banking relationships that, that we can bring to bear.
[48:34] We, you know, we have, you know, insurance. You know, there’s things that we bring to the table, I think that, that are beneficial to the deal, both us and, but both for us and for them.
[48:46] And if they view us as just, you know, another, you know, part of the cap stack to shop, you know, there’s, there’s always going to be, you know, an element in the JV that you can better with somebody else.
[49:00] And so if we’re, you know,
[49:04] competitive, you know, we’re fine being competing, you know, as equity partners on a great deal.
[49:10] But I think there’s a certain point at which,
[49:14] you know, there should be value in the relationship that is maybe worth a little bit more than the last dime on the table.
[49:21] And that goes two ways, right, that, that should be for us as, as well as a, as an equity partner. And I think a lot of partners look at it that way because there’s equity partners that, that view it very transactionally versus relationship is the only way we can,
[49:39] you know, operate or I guess, you know, oversee 80 different investments with six people is to make sure that we have multiple deals, you know, with the same partners. And so that creates a little bit of need for loyalty, you know, both ways.
[49:58] Kevin Choquette: Yeah,
[49:59] it makes perfect sense to me and I think you guys have it right. I mean the, the I’ll say bank debt, but debt in general, the bottom part of the capital stack.
[50:09] Even there, I think there are meaningful distinctions between lender A, B and C based on some of the things you’re talking about in terms of character, how they’re financed, how they behave,
[50:23] but that is way more commodity. The equity side. I’ve always said equity is trying to make, raising equity is like trying to make a match like a marriage and raising debts, like getting somebody to go on a date,
[50:39] it’s much harder. But I think all of those intangibles are really meaningful. And I think that it makes total.
[50:47] Bill Vanderstraaten: Sense to view it that way because look at what a primary lender makes on. They should be in a no risk position.
[50:55] Kevin Choquette: That’s right.
[50:56] Bill Vanderstraaten: Do you blame them?
[50:57] Kevin Choquette: No, I don’t blame them at all.
[50:59] Bill Vanderstraaten: Like 250 basis points, spread that over, you know,
[51:05] over their borrowing costs. I mean it’s, they, you know, they don’t make that much money to take risk. So you know, they should be in that, in that position. And, and that is a little bit more of a commodity, you know, scenario.
[51:20] And now, you know, I shouldn’t say it that way. The bankers in the audience will cringe, you know, when you say that. But because there’s, like you said, there’s a lot of ways you can have great banking relationships and others that aren’t great.
[51:34] But when you’re in the first loss position, like we are typically with our partner,
[51:41] there’s just a lot more to lose.
[51:44] And therefore you got to make sure you’re getting paid for the risk that you’re taking.
[51:48] And again, that’s where that alignment comes in.
[51:51] Kevin Choquette: Yeah.
[51:53] Let’s shift over to team mentioned. It’s a good segue. Six people. So scale, like how does chief partners LP think about scale? Obviously with the kind of resources that are available,
[52:07] you could have a lot more than six people on staff and maybe not use external consultants and run this thing differently. What is it that has you staying laying in Maine?
[52:20] Bill Vanderstraaten: Yeah,
[52:21] you know, probably experience and you know, you been around the block, maybe been in the operating partner shoes, I guess. And, and one of the things that you,
[52:33] I really like about our structure is we don’t have to know, you know, as much about each of these property types and all these, all this different geography and what’s, what’s exciting and what’s not exciting because our partners, you know, know that.
[52:51] So and they operate the property, you know, day in, day out. They show the space, they lease it, they, you know, they’re cranking the numbers, they’re doing all of that.
[52:59] So it’s, it’s, it is quite a bit easier to be, you know, an LP partner on that many deals with a few number of people because I don’t want to say we’re managing our partners because they definitely manage themselves,
[53:12] but, but we’re overseeing, I guess, or looking at 80 different investments. But we have about 25 or 30 different partners at any given time.
[53:24] So we have many, many of our properties handled by the same group and that becomes super efficient and that helps us from needing to be 100 different. If we were trying to operate all these properties ourselves and, and let’s say we were allergic to paying a promote and had to invest the dollars ourselves and operate the deals ourselves,
[53:52] that would create the need for many, many more people,
[53:56] but also a lot less flexibility. You still can’t know data center in Atlanta and multifamily in Portland and office buildings in Boston, and you just can’t know it all. So we’re able to spread out the investment portfolio across a lot of different exciting areas without having to have 100 people.
[54:22] Kevin Choquette: Have you ever been larger.
[54:27] Bill Vanderstraaten: Chief partners has not. We’ve been super consistent from day one.
[54:34] And I think that’s one of the things that we have had a discipline about, which is, hey,
[54:40] if we get to the point where we feel like we just got to add a lot of, a lot more people, then we probably should sell some properties.
[54:47] We just don’t want to. The source of the family office investment dollars is oil and gas family. They have done a lot of exploration that requires a lot of people.
[55:01] I don’t think the family wanted to look up and see,
[55:04] in addition to a couple hundred people in the oil and gas department, you know, a couple hundred people in the real estate.
[55:09] Kevin Choquette: Right, right. That’s supposed to be taking 10 to 15% of the allocation.
[55:13] Bill Vanderstraaten: Yeah, exactly.
[55:14] Kevin Choquette: Yeah. Or getting an allocation of 10, 15.
[55:19] What about the, like, finding the talent? How do you get the A players that you need? And I don’t know what kind of.
[55:25] Bill Vanderstraaten: Yeah, our team has been really consistent and, and I think that’s because we take the alignment part of the discussion that we just had internally as well.
[55:36] So all of us are,
[55:38] you know, benefit or don’t benefit from the success of our investments. And so it’s, it’s a great truth serum if you, if you want to make sure you get,
[55:51] you get everybody’s opinion and knowledge about, you know, a potential investment, you know, just, just put them in the deal and they will, they will tell you what they think.
[56:04] So.
[56:05] And you know, as a manager, you, you want to hear that because the last thing we want to do is make mistakes. I mean, we can recover from a deal where we got our money back but didn’t make much more.
[56:17] Very hard to recover from zeros in our business. And so we’ve only had a very limited number of those. And that’s, I think, because our team does a really good job of vetting and, and the three partners,
[56:32] you know, have to agree. So if there’s, you Know, generally we do. I mean, it’s been, it’s really, really rare to, to have an outlier scenario. But. But there’s plenty of occasions where somebody feels a little more excited than the other two and, you know, just kind of dies off.
[56:50] Kevin Choquette: But is there any risk of getting those kind of group thing, group think, excuse me, going where maybe it sounds like you guys have been along on the ride together for a bit.
[57:01] I don’t know. Does it ever happen where I’ll say Brian is kind of like bullish on it and everybody follows behind him? Or do you find that even over time you are quite principled in advocating your respective positions?
[57:14] Bill Vanderstraaten: Yeah, I think everybody’s pretty disciplined.
[57:18] I’d say if somebody gets, you know, is, is really excited about a deal and expresses it that way, then, then you, you might pause, you know, say, let’s say Brian hate, you know, loved a deal and I just didn’t like it.
[57:31] You know, that would make me take another look at it. And, you know, we respect each other’s opinions even when we disagree.
[57:39] And like I said, it just isn’t. I mean, it just doesn’t happen that often.
[57:44] And I, I think it’s because of all the things we’ve talked about already about,
[57:48] you know, the box that we’re trying to fit into.
[57:52] You know, 95% of the opportunities that we see are just immediately not, you know, not applicable. Yeah.
[58:01] Kevin Choquette: Yeah.
[58:02] Bill Vanderstraaten: So it’s, you know, we’re discussing and thinking through a pretty limited number of opportunities and many of which come to us from existing operating partners. And that’s always an easier conversation because we have a certain trust level.
[58:16] We’ve, you know, we’ve made great, you know, great investments with, with any number of. I’d say there’s 10 core partners that we have that, that we have, you know, a 2x,
[58:28] you know, return average over, you know, 15 or 20 deals. That’s. That builds up a lot of confidence.
[58:35] Kevin Choquette: Yeah, absolutely.
[58:37] And it makes their job easier. Right? They, they know, they’ve. Well, I don’t, I don’t know. I can imagine that you have LP partners who know, or, excuse me, GP partners who know that they can just call you and say, hey, can we do this one like the last one?
[58:51] And yeah, it’s a short negotiation and you go do another deal. Yeah.
[58:54] Bill Vanderstraaten: JV comes off the shelf. Sometimes even loan docs come off the shelf. And it’s that, that makes, you know, everything, you know, saying on their side a lot more too. There’s not as much, you know, friction deal Friction for them.
[59:10] And we found like I’ll use. Lincoln is one of our kind of preferred operating partners. I’ll use them as an example.
[59:17] You know, they, they sometimes like big splashy deals, which they’re great at, but also they have certain, you know, offices that have really done great. A great job at just sort of bread and butter, smallish,
[59:33] smallish deals. And, and so we, we get the call, you know, for the, the bite size, you know, repositioned, you know, light industrial deal in Boston.
[59:45] And you know, they’ll call when they have a high rise, you know, multi use, you know, deal. They can call Goldman.
[59:51] Kevin Choquette: So for a new construction. Megadeal.
[59:53] Bill Vanderstraaten: Yeah, right.
[59:54] Kevin Choquette: Yeah, that’s perfect.
[59:55] Bill Vanderstraaten: Yeah. So we just sort of fill a spot for some of these, some of these operating partners that, you know, that, you know, that really helps them, you know, pay for the, you know, for that office.
[01:00:06] If they can do three or four deals with us a year that, that are just kind of bite sized.
[01:00:12] Kevin Choquette: I like it. Thanks, Bill, for all that. Let’s shift over to the, the personal side here.
[01:00:19] I wonder. Like, I don’t. There’s two questions I’ll start with. How did you get here? Like, you’re, you have really unique opportunity and being a part of a family office and, you know, doing everything you just explained.
[01:00:33] But what brings you here? How did you, how did you end up in this role for chief partners?
[01:00:37] Bill Vanderstraaten: Yeah, I’d say well, the, the prior to chief was with a group called Thackeray Partners, which was founded trying to think how long ago.
[01:00:51] Founded a while back by Tony, Donna and Mary Hager.
[01:00:55] Tony and Mary came out of Crow holdings and had. Had been integral in the, in the, you know, sort of the day one Crow holdings, you know, team.
[01:01:07] And they got to a point where I think they wanted to, you know, to kind of be more, more bite sized and kind of not. Not in as large an organization.
[01:01:15] Tony and I were fraternity brothers at SMU and, and I had a background in office and he thought I’d be a good ad into Fund one for Thackeray.
[01:01:28] So it was the three of us plus Chris Cosby who, who was the retail expert who came out of cbre.
[01:01:35] So the four of us launched Thackeray together.
[01:01:39] Tony, Maria owned the company and we created Fund one at Thackeray, which was great.
[01:01:46] We,
[01:01:48] the company was fantastic. The timing, you know, we, we started that Fund One, you know, pretty much right, you know, right into the teeth of the Great Recession. Yeah, Great recession.
[01:02:00] Yeah.
[01:02:01] Kevin Choquette: Sounds fun.
[01:02:01] Bill Vanderstraaten: 2007, 2008.
[01:02:04] I think it’s 2005 when we started so invested for a couple of years, and then lots of wobbly wheels all over the nation.
[01:02:14] And to our credit, and particularly Tony and Mary, they. They returned all equity in that first fund, which was unheard of, and in that period of time, and they’ve gone on to raise another six or seven funds.
[01:02:29] But three years into Thackeray, I had a friend that had been an attorney with Trevor Reese Jones, who’s kind of the benefactor or the main equity partner,
[01:02:46] and he connected us and. And Trevor had. Had sold a couple of gas fields and done really well and. And wanted to deploy some. Some capital into real estate and wanted, you know, somebody to.
[01:03:00] To, you know, kind of help lead that charge. And that. That just felt like a great opportunity for me. As much as I love Thackeray, it’s a great team. In fact, my son works there today,
[01:03:14] so think the world of them and their team and their investment acumen. A lot of what. A lot of our philosophies about risk and deal size and all that come from that period of my career.
[01:03:30] So we kick this off, I would say one of the things that we laugh about sometimes is I was pretty sure we’d have to revisit, you know,
[01:03:40] how we structured this day one and kind of, you know, unbelievably, it’s been the exact same, you know, from from the very beginning as far as kind of how. How it works internally and, And.
[01:03:53] And then kind of our investment goals and. And structure and, you know, the business plan that was created, you know, way back when we started is. Is pretty much the plan that we executed.
[01:04:04] And it’s. And it’s. Hasn’t varied in 18 years, which.
[01:04:08] Kevin Choquette: That’s impressive.
[01:04:09] Bill Vanderstraaten: There’s been. I. I’d put it more in the luck category.
[01:04:13] Kevin Choquette: Well, that’s a long run of luck. You guys had to go to Vegas.
[01:04:16] Bill Vanderstraaten: Yeah, yeah, maybe so.
[01:04:18] Yeah, it’s been a lot of, you know, been a couple of big cycles in that. That time period. But.
[01:04:23] But again, because our partners have been so consistent in. In how they, you know, interact with us,
[01:04:30] we’ve been able to kind of achieve the family’s goals, you know, along the way,
[01:04:35] in good times and bad.
[01:04:38] Kevin Choquette: This is, like, very related question, but different.
[01:04:42] You come across, obviously, as a very capable gentleman, and I can imagine there are a whole host of things that you could do that are not commercial real estate. Why do you spend your days and your years and your career in commercial real estate?
[01:05:02] Bill Vanderstraaten: Yeah, I guess that probably rolls all the Way back to the very beginning of my career I was,
[01:05:09] when I was growing up, my next door neighbor was a home builder. And so my parents thought it was, would be a good idea for me to be employed.
[01:05:22] And so they asked my next door neighbor if I, you know, if I could jump in and just be basically cleanup on, on site, on construction sites.
[01:05:32] And you know, so you’re basically cleaning up jetboard and, you know, wood and trash and stuff like that. But along the way, just curious about how all this happened. I would always be peppering the superintendent about,
[01:05:45] you know, how this happened and why you did it this way and all that. And, and I remember the guy, you know, from the very beginning, he’s like, you ask a lot of questions.
[01:05:56] I think it’s his way of saying, stop bugging me.
[01:06:01] I ended, ended up going to SMU after high school and you know, there were classes. You know, sometimes it’s not what you pick, it’s sometimes what picks you. And it was, you know, looking back, kind of humorous.
[01:06:16] But I, I really hated accounting.
[01:06:19] I liked finance and I liked real estate and a lot of other, you know, areas kind of just didn’t excite me. And so it was almost by default I ended up doing the real estate side, which was at that time SMU had quite a few real estate courses.
[01:06:37] And it was kind of early 80s,
[01:06:40] huge exploding commercial real estate market locally.
[01:06:45] So the market was absorbing a ton of graduates into the industry,
[01:06:52] which changed pretty rapidly. So, you know, by the end of the 80s it was just kind of falling off a cliff due to a number of factors. Mostly, you know, the, just the overbuilding that was occurring for, you know, for a lot of people who are doing things for tax reasons.
[01:07:06] And the Fed changed the tax code and at the same time oil went down and the banks went down and it was just kind of a trifecta, especially in the south and especially in Texas, honestly.
[01:07:17] Kevin Choquette: Yep.
[01:07:18] Bill Vanderstraaten: So that, that ended up being, you know, long stretch of, of tough, you know, tough times. But you learn a lot, you know, when, when the market’s down, you learn more.
[01:07:27] In fact, when the market is, is fighting you.
[01:07:31] When I got out of school, I worked for a group called, at that time was SPG International. It’s since has become a group called Harwood International.
[01:07:41] There they were funded a Swiss family that was very active in, in Geneva came over and kind of planted a flag in, in Dallas and have subsequently done quite a, quite a few, you know, really exciting projects.
[01:07:56] And I work, worked with them for about a dozen years. But but after the first five or six, you know, there was a long stretch of, you know, three or four where,
[01:08:06] you know, you’re really just basically trying to make your grocery money in whatever way you could. It was brokerage, it was tenant representation, leasing, investment, sales, you know, just anything.
[01:08:18] And what was interesting about that is you learned, you know, I learned a lot about a different. A lot of different sectors just out of necessity.
[01:08:27] And then the reit, The REIT world kind of started cropping up in the early 90s and. But by mid. The mid-90s,
[01:08:38] there was a group called CAR America, which was one of the.
[01:08:44] Bill Sanders kind of created a family of REITs at that time,
[01:08:49] and Carr was the office REIT of the Sanders family of REITs. Prologis is still the flagship REIT that he helped create back then.
[01:09:02] And so they needed somebody in Dallas that. That covered a lot of different sectors because they needed somebody who did investment sales to. To buy buildings, but they also wanted to develop, which I’d been able to do at Harwood.
[01:09:17] And for those that. That are familiar with Dallas, the area just west of the Crescent in Uptown is the Harwood district. And I was involved in the first three of those buildings.
[01:09:28] I laugh with people that, you know, they’re on number 12, so. Or 13, so I’m not. I wasn’t all that integral to the.
[01:09:36] To that happening, but it was involved in the first few.
[01:09:40] And so, yeah,
[01:09:45] was able to jump in and be, you know, both investment, you know, oriented for CAR through a public reap,
[01:09:56] and then did a lot of development with them as well.
[01:10:00] So those are really the four stops. It was at Harwood International,
[01:10:06] their capital source,
[01:10:08] then areit, which obviously was public capital source, then Thackeray, which was private equity,
[01:10:16] and Chief, which is family office. So I’ve had four stops in my career and four different sources of capital, which has been really interesting just to see how all of those different entities operate, what their goals are, what they consider success or not.
[01:10:37] Kevin Choquette: Do you have a favorite? Not that you would be disparaging any of the other three, but do you have one?
[01:10:43] Bill Vanderstraaten: I’ve been the longest at chief.
[01:10:45] Kevin Choquette: All right, there you go. There’s the answer.
[01:10:47] Bill Vanderstraaten: And that has definitely been my favorite, just because I’ve sort of probably had more to do with. With creating, you know, creating the team and the kind of the whole philosophy here.
[01:11:00] And it’s like. So, you know, the,
[01:11:03] the.
[01:11:06] The phrase that that was used early in the creation of Chief was you’re going to have a lot of rope. You can create A noose or a hammock. It’s up to you.
[01:11:18] Kevin Choquette: So there’s a question that I’ve asked quite a few people and somewhere between sweeping up Jipboard and then running a multi billion dollar family office, you go from looking for your shot and waiting for the phone to ring to the phone rings all the time.
[01:11:41] And there’s more inflow than you might literally be physically capable of navigating. It’s just like the world is found you and. Right. And you guys are unique.
[01:11:56] You have a flag in the sky. This is, we have money. I mean that generally creates a bit of inbound deal flow.
[01:12:03] How have you managed that transition in your life and how do you think about,
[01:12:10] you know, then and, and what that felt like and now where, where, you know, if there’s a challenge with opportunity, it might be that there’s too much.
[01:12:20] Bill Vanderstraaten: Yeah.
[01:12:22] So filtering things, you know, definitely is, is a challenge here.
[01:12:27] I do try to, you know, sort of pull from experience and particularly in my Harwood days,
[01:12:35] you know, most, most of what, you know, I did project leasing for existing office buildings that the team helped create.
[01:12:41] But also there were, you know, investment sales things that I had to go dig up and then there were tenant representation opportunities that I had to kind of, you know, circle up.
[01:12:55] So you have an appreciation for how incredibly difficult it is to be an operating partner when you think about the skill set, you know, for that person who’s, you know, trying to create a company of, let’s just say multifamily ground up developer.
[01:13:16] You know, they’ve got to keep a team going and fed and they’ve got a payroll to meet, but they’ve also, you know, got to go out there and find great sites and keep relationships with lenders and find equity and, and execute the construction perfectly and lease it.
[01:13:32] I mean it just goes on and on and on. It’s just mind boggling how difficult that is.
[01:13:39] So you, you have to,
[01:13:41] you have a full appreciation for that. And I think it does, hopefully it does reflect in how, how we interact with, with those, you know, partners. We’re all creatures of our experience and,
[01:13:54] and so that I’d say navigating kind of the world of opportunity. I try to always remember kind of how hard that is.
[01:14:04] And the thing they should always be able to expect from us is just basic respect. Right. There’s a lot of, there’s just a lot of different ways to make it in commercial real estate.
[01:14:20] You know, we’re just one, right, we’re just one equity source. There’s you know, seven or eight major different types of equity you can go access for, for your deal. But just, you know, we’re all dependent on each other too.
[01:14:34] It’s, it’s one of the things that’s been great about, about this industry is the, is the network of, you know, friends that you make along the way. And you know, each of these steps that I took in my career were, were, were a result of a conversation with a friend who said,
[01:14:51] you know, you’d be perfect for, for this and that’s an important thing. And again, you know, coach some of these younger,
[01:15:02] you know, students who are maybe getting out of school and getting into the, the, the business. And,
[01:15:08] you know, one of my pieces of advice is you really cannot over invest in your network.
[01:15:14] And ne network sometimes has a, a negative connotation like you’re, you know, not sincere in,
[01:15:21] in, in your efforts to, you know, to build it. But, but I think if you think of it as just your group of friends that, that are in the industry with you.
[01:15:29] Yeah, just, you know, reach out and,
[01:15:33] you know, you know, fill your schedule with, you know, breakfast, lunch break, you know, have a beer, whatever, you know, just interact with people because that’s what, you know, that’s, that’s how you learn and that’s how you see new opportunities both, both for yourself and your career path, but also your business.
[01:15:53] And it also makes it more fun. I mean, this is, you know, if we did, if we wanted to have no fun, we, we’d have, we, we try to be accountants.
[01:16:00] I probably couldn’t have been one.
[01:16:02] Kevin Choquette: Yeah, me neither. You know, we talked about it a little bit yesterday just on the short call we had with that, with the whole AI thing and changed. And we don’t need to go down that rabbit hole because it’s probably, it would probably be laughable if we listen to it 18 months from now,
[01:16:17] but.
[01:16:18] Yeah, or even six months.
[01:16:21] But I, you know, my role is very much in the human domain. Right. I have the GPS that you were just very deferential to. And I appreciate that because I often think that developers are underpaid for the risk they take.
[01:16:38] You know, they had to do all the things that you just said and they have to have the right timing with things that they can’t control, like the global bond market.
[01:16:47] Like,
[01:16:48] you know, let’s hope we could kind of get out of this one all right and do everything right and you might still just break even.
[01:16:55] But I keep wondering about,
[01:16:58] you know, how technology might, quote, unquote, disintermediate us in our role and to just sort of pile on with your idea around the network. Um, it’s a beautiful thing that the commercial real estate industry is still a people business.
[01:17:16] Like, it all flows through people and it’s, it’s fantastic. I mean, there’s, there’s a lot of other places where that’s long since changed. Right. It’s just, you’re on quantitative analysis and trading or, you know, this is a lot of stuff that just gets digitized and blown out.
[01:17:34] And I haven’t seen it happen yet. It doesn’t mean it won’t happen. But right now, if you, if you said, hey, I, I want a loan from Wells Fargo and you went into, you know, 1-800-wells.
[01:17:47] Fargo good luck.
[01:17:49] Bill Vanderstraaten: Yeah, right.
[01:17:50] Kevin Choquette: Like good luck. They don’t even know where to send you. No, it’s very much, you know, it’s.
[01:17:56] Bill Vanderstraaten: People oriented because there’s so much trust involved that you have to have some connection, you know,
[01:18:05] to, you know, to be able to kind of trust that other person with, you know, what, what are really pretty, pretty huge dollars, whether you’re a lender or equity or partner, operating partner or whatever.
[01:18:16] The other thing I think is really interesting about the business is it’s, it’s both super people oriented, but also very physical. Which, which is, you know,
[01:18:25] the, the fun, one of the really fun aspects is creating particular on the development side when you’re creating something that’s going to be there,
[01:18:34] you know, long after we’re gone.
[01:18:36] Kevin Choquette: Real stuff.
[01:18:37] Bill Vanderstraaten: Yeah. And it’s touch and feel and drive by and, you know, go inside, go outside. You’re, you know, it’s not, you’re not pushing paper around and, you know, can’t imagine coming to the end of your career and like, yeah, I push paper better than anybody.
[01:18:53] So being, being able to, you know, have a hand whether,
[01:18:57] you know, you know, we’re not architects or construction teams who really, you know, get it done. But even in the capital stack or, you know, ownership, you know, the creation of these, you know, physical environments is part of what’s really fun about our business.
[01:19:16] Kevin Choquette: Yeah. Where you could, I don’t know how old. Well, you said your son’s at Thackeray, so he’s obviously through school, but to take a son or daughter, put him in the car and say, hey, let’s go for a drive and, and be okay.
[01:19:29] 1, 2, 3, 4, and just point out things that you had some role in creating is pretty, pretty cool.
[01:19:37] Bill Vanderstraaten: Now I’ve got a daughter and a son and, and they’ve Both are. They probably had as much of that as they need.
[01:19:45] Kevin Choquette: No, dad, I’m not doing it again. I’ve seen it.
[01:19:49] Bill Vanderstraaten: Yes, yes. Not this again.
[01:19:52] Kevin Choquette: This might be a little odd question, but I gotta go for it. You go back to, like, the high schooler and the home builder next door, and your folks say, hey, go.
[01:20:01] Go work for him, and you’ve got that curiosity.
[01:20:05] I want to just drill in on curiosity, kind of how you view it. And there’s a visual that a friend of mine shared with me years ago. A circle with a bunch of, you know, symmetrical lines shining off of it.
[01:20:18] Like what we would do if we drew a stick figure, sun or sunshine, and then that same circle with a single line that’s the same length as the aggregate of the short lines that are the rays of the sun pointed in a single direction.
[01:20:32] And the caption to that is like, focus, right? So the curiosity is that bright ball that sees everything that’s like, what about. That’s interesting. And, hey, I wonder if. And it’s got a certain quality to it that is remarkable because it might allow you to assimilate things that would otherwise seem like disparate pieces of information.
[01:20:54] And at the same time,
[01:20:56] there’s work to be done, right? Like chop wood, carry water, and focus really is essential. I just wonder how that might have shown up for you from like, curiosity to, hey, I know right away 95% of what you send me isn’t going to be a fit because I’ve got a mandate,
[01:21:16] if that shows up at all. Like, how do you relate to that?
[01:21:19] Bill Vanderstraaten: It definitely does. And.
[01:21:22] And maybe it’s part of why we’re in so many different product types is, you know, we’re kind of curious about how all of them work and. And eventually someone will win us over on that.
[01:21:32] But, I mean, I do think it’s a personality trait that is important in our industry. And I mentioned to you, I’m super involved in the real estate department over at smu,
[01:21:45] and because my name’s on a bulletin board over there somewhere, I get a lot of them calling me and asking for direction advice, job ideas or whatever.
[01:21:54] The ones that, you know, are going to be successful down, you know, down the road are the ones that just ask, you know, a annoying number of questions because they’re engaged and they.
[01:22:08] That’s right. And I try to coach them up on that as well and just say, hey, asking a bunch of questions is a reflection of your curiosity about the business and your interest in learning and becoming better at your trade and you know, so you see that, you see you sort of the ability to be super persistent,
[01:22:29] you know, in a polite way. But, but you know, you can’t take the first four no’s in our business or, or you’re not going to be very successful. And the other would be just, you know, this kind of constant sense of urgency which, you know, for people who like to be chill and relaxed,
[01:22:47] that probably is annoying to them.
[01:22:50] But you know, the folks that I’ve seen in our industry that are successful usually have a high idol. I mean, they’re, they’re always asking questions, they’re always wanting to get something done.
[01:23:04] They, they don’t want to just sit, you know, and, and you know, pontificate. They want to go do, you know, and that’s, that’s a real common, you know, theme I think amongst, you know, my peers that I’ve seen, you know, kind of get, you know, get you become successful in their,
[01:23:22] in their sector. It’s those, those traits I think are, are similar amongst all of them.
[01:23:27] Kevin Choquette: I love that idea of a high idol. I mean, it totally resonates. I’ve never heard somebody use it that way. Yeah,
[01:23:34] day to day. Like I don’t, you know, I, I could tell you about my morning routine, which I hit maybe 55% of the time less than I’d like.
[01:23:45] I wonder if you have any routines or habits that,
[01:23:49] you know, get you in your best spot to, to sort of, you know, be in that state of urgency or be a high performer on a day to day basis.
[01:23:58] Is there anything that.
[01:23:59] Bill Vanderstraaten: Yeah,
[01:24:01] you know, I definitely try to be mindful about, you know, getting out of the office.
[01:24:07] And so that would be, you know,
[01:24:11] grabbing. You’re trying to grab breakfast, you know, two, three times a week at least, if not more,
[01:24:16] you know, set up lunches,
[01:24:19] grab a beer or whatever at the end of the day. Just, you know, kind of reflection of what we talked about already regarding the network.
[01:24:28] Even though those are usually informal, no agenda type visits,
[01:24:33] what you find out is a couple of weeks later, you know, come back to you, hey, based on our conversation, you know, I thought about you for this and it’s, it, it generates, you know, activity to just sort of almost force it.
[01:24:49] So that’s one. I mean, I think fitness is a pretty important,
[01:24:53] you know, piece of this, particularly as we all get a little longer in the tooth. It’s, you know, definitely one of those things you can’t take for granted and, and you get reminded about it more and more.
[01:25:05] So you just have to carve out time for that because, you know, if you’re, if you become immobile or if you become less able to, you know, get around, it definitely impacts, you know, just the quality of your life, you know, more than anything really.
[01:25:20] So,
[01:25:23] you know, for me, faith is a. Is, you know, important, you know, piece of the puzzle and try to be. Try to carve out time, you know, for that as well.
[01:25:33] It’s, you know, that looks. That looks like a lot of different things to a lot of different people. But yeah, I think that’s, that’s, you know, a good, A good discipline to have and whatever that looks like.
[01:25:48] So. Yeah, I mean, I don’t have like sort of a. I’m always up at 5 and you know, XYZ, it’s. It’s probably more organic. Yeah. You know, than that. But depending on what the schedule is pushing my way.
[01:26:00] Kevin Choquette: And look, you’re clearly a senior executive at this point and you just have mentioned quite a few things that probably kind of by default,
[01:26:12] using the Stephen Covey idea,
[01:26:16] sharpen this. All that would be getting out into the community and interacting with your network and having that curiosity and getting a bunch of deal. Flow of perhaps somewhat esoteric asset classes or business plans.
[01:26:32] Is there any other thing you do in your career to just kind of, you know, continue to learn and grow and expand? Any sort of.
[01:26:42] Bill Vanderstraaten: I mean, I think I’ve always been a joiner. And so by that, I mean,
[01:26:48] you know, if there’s a certain cause that sort of resonates with you, or in my case, you know, I’m on the board of trustees at smu, involved, involved at the university, you know, at pretty high level and then.
[01:27:04] But also have been on the Goodwill board and other, you know, there’s things that maybe along the way I’ve been on all kinds of those things. Right. So usually,
[01:27:16] you know, volunteer organizations are always needing more help and that besides feeling great about helping them out again. It’s part of. If you want to really connect with somebody,
[01:27:31] work with them on a project where neither of you benefit at all and that builds a team. You’re kind of in that foxhole together,
[01:27:41] but not because they’ve got something to win or you have something to win, but you know, together you’re working on. On something, you know, independently that can help, you know, a group or an individual.
[01:27:54] And then you look up and that’s one of your better friends, you know, so. And then they’ll do. They do anything for you and. And you do anything for them.
[01:28:02] And so you. It’s just, it’s just part of that. Again, you know, when I’m advising,
[01:28:07] you know, some of these younger folks in their career, I’m like, you know, join a bunch of stuff, you know, figure out what. Figure out what really you get a passion for or have a passion for where it doesn’t feel like work because you do it for free or,
[01:28:23] you know, you do it anyway. You do it to help somebody. And then that always comes back to you.
[01:28:31] Kevin Choquette: When you think about sort of like time, talent or treasure. Right in the give back. Um,
[01:28:39] my wife would laugh if she heard this.
[01:28:42] I sometimes overthink things and so I want to be your job, right.
[01:28:50] Bill Vanderstraaten: If you do a podcast, you have.
[01:28:51] Kevin Choquette: To overthink things,
[01:28:53] but I want to be thoughtful in like, okay, where is the place to put my one of those three time town or treasure?
[01:29:03] It maybe is sounding like you’re like, hey, just jump in and see and you’ll know. But I wonder for you, you, if you have.
[01:29:12] Obviously you’re good at extracting ROI on capital deployment within your day job, do you bring any kind of similar lens to allocating to,
[01:29:22] I’ll say a social cause? I think I’m using that very loosely and how to, like, get the most out of it.
[01:29:29] Bill Vanderstraaten: I mean, I think once you,
[01:29:30] let’s say you get involved in one of these organizations and I think you can’t help but become an advocate. And then once you’re an advocate, you’re trying to figure out ways that they can do more for more people or to, to be more efficient in what they do or whatever skill set that I have that I can help,
[01:29:50] you know, you bring to the table is. Is kind of what you. You end up doing.
[01:29:58] You know, the treasure is always the hardest part, honestly. And, and you know, they, you know, a lot of, A lot of those organizations, they, you know, they live on that.
[01:30:06] They need, they need that too. It’s. It’s easy to say, oh, I’m going to give you my. My talent and your, my time.
[01:30:13] They do eventually need your treasure as well.
[01:30:17] And so that’s what that makes it work. And then that’s. That’s always difficult because, you know, there’s always need way in excess of our collective ability to meet the need.
[01:30:28] But you just do the best you can. And so, yeah, I mean, I guess going back to the original question is, yeah, a lot of it is organic. You just get in and start paddling and, and you, I think you see the opportunity for, for all of that, you know,
[01:30:43] as you get into it.
[01:30:45] Kevin Choquette: Yeah, you and my wife would get along.
[01:30:50] Bill Vanderstraaten: Just go do it.
[01:30:52] Kevin Choquette: That’s right.
[01:30:54] So, look, I’ll, I’ll ask you a couple more questions. I’ll let you go. I appreciate you taking all the time for, for either you or the chief partners.
[01:31:08] What’s on the horizon? What do you see? And, or both, if you prefer. What are you seeing 10 years out? Like, where are you guys going?
[01:31:14] Bill Vanderstraaten: Yeah, so I’m, I’m sure 10 years from now my role will have been diminished, hopefully. Hope, you know, I still think maybe they’ll let me hang around, but,
[01:31:23] but, you know, like school. Yeah, yeah, exactly.
[01:31:27] Kevin Choquette: He’s still hanging around emeritus.
[01:31:30] Bill Vanderstraaten: Like, how do we get rid of this guy?
[01:31:34] No, it’s,
[01:31:36] you know, we’re, we’re kind of built the last. Trevor’s two sons are adults. You know, they’re in their 30s. They’re, they’re doing quite a bit with the business now and active decision makers in our investment committee.
[01:31:50] Brian and Liesl, you know, have been there for a long time already, so we’re all, you know, it’s, it’s. The business that we’ve built, you know, is capable of continuing, you know, today I think, without a lot of input from me, so.
[01:32:06] Which I’m proud of, by the way. I think one of the things that we all want is to be a part of something that, you know, that kind of keeps going.
[01:32:14] And I think we’re created for that as well. And most of our partners have the same sort of, you know, shelf life. So we’re excited to team with them and, and, and be a part of their growth and the change in their various skill sets and opportunities.
[01:32:32] But I mean, it’s, it’s fascinating to, to see what is the same and it’s also fascinating to see, you know, what is different about our business. And if you asked me even say four years ago,
[01:32:47] you know, anything about the data center world and I’d have, you know, looked at you just dumbfounded.
[01:32:52] That will change even more so probably in the next four years that we can’t, in ways that we can’t even, you know, predict. So, yep, there’s, you know, the interaction between our, our industry, which has been mostly, you know, physical and,
[01:33:07] you know, with technology, is, is, you know, really interesting and really exciting. And in fact, there’s, you know, investment companies that have been built only to invest in real estate oriented technology.
[01:33:20] Kevin Choquette: Yep.
[01:33:20] Bill Vanderstraaten: That tells you something right there. And they’ve been around for a while already, so it’s, it’ll be really exciting, I think. In the next, you know, five to six years to see or, or even much less than that to see how all that evolves and continues to change.
[01:33:34] You change our business.
[01:33:38] Kevin Choquette: And what about you? Do you have a sense of like, you know, what’s on the horizon for.
[01:33:42] Bill Vanderstraaten: You or as you,
[01:33:45] you know, I think I’ll continue to be involved in, in these outside groups that I’ve kind of become an advocate for from the business itself, you know, feel like I’ve, I’ve still got, you know, some Runway,
[01:34:02] you know, but as I mentioned, I think, you know,
[01:34:05] in a few years it’ll, it’ll wind down a little bit less. They’ll, you know, they’ll pick up, you know, more. I’ll pick up less. So I think that’s the natural, you know, natural way these things tend to go.
[01:34:17] And you know, sitting on the beach a little bit does is, has some appeal even. Even though I know I just spent some time talking about having a high idle.
[01:34:27] Kevin Choquette: Right. And you didn’t say workaholic, but maybe there’s some of that in there.
[01:34:32] Bill Vanderstraaten: Yeah, yeah, yeah, yeah, it’s. But, but, but, you know, take taking a break is also valuable.
[01:34:38] Kevin Choquette: Yes, totally. And so I’ll leave you with this. You’re, you’re obviously working with entrepreneurs all the time on the GP side, although you could argue if it’s Lincoln, it might be slightly different in their institutional partners, but they’re probably the biggest, you.
[01:34:53] Bill Vanderstraaten: Know, of our partners. So.
[01:34:55] Kevin Choquette: Yeah, and I imagine there’s actually I read one of your things online where you’re like, you know, some of these guys are, they drive around the pickup truck and that’s your partner.
[01:35:03] Yeah,
[01:35:04] so. And obviously you guys, one of our.
[01:35:06] Bill Vanderstraaten: Partners referred to them as a Joey Bag of Donuts.
[01:35:09] Kevin Choquette: So there you go.
[01:35:11] Bill Vanderstraaten: Thought that was a pretty good, pretty good fit.
[01:35:15] Kevin Choquette: You guys are obviously very entrepreneurial, just in what you just described with data centers. So any thoughts for either their emerging manager entrepreneur, the,
[01:35:26] the college kid who’s just getting a starter, or even a 20 year entrepreneur veteran who might be getting the **** kicked out of them right now. That’ll be the one word that gets us on the explicit side of podcast.
[01:35:40] Yeah, but any thoughts on, you know, like, words of advice like, hey, what,
[01:35:47] what, what might you share that you’ve learned?
[01:35:49] Bill Vanderstraaten: Yeah, no, I’d just say, you know, we all get involved in our, in our right in front of you business. You know, the, the stuff that, you know, you just, it’s on your head all the time.
[01:35:58] You can’t shake it. You Wake up in the morning thinking about, you know, the to do list for the day.
[01:36:04] But, you know, I think for. Specifically for entrepreneurs just to spend some time trying to look down the road a little bit and try to anticipate as much as you can, you know, what’s coming your way and know that, you know, whatever, whatever environment you’re in, it’s going to change good and bad,
[01:36:24] right? So you build your company,
[01:36:28] you know, to take, to take that on. I mean,
[01:36:31] I think it was Tom Carr at Car America that was describing, you know, he’s a big sailor and he would describe, you know, hey, you, you can’t control the wind and you can’t control the current, but you can control, you know, the kind of the boat that you’re sitting in and,
[01:36:47] you know, how much you trim the sails and how much, you know. So it’s, it’s, you know, it’s an analogy I always kind of remembered about, about our industry because a lot of it has to do with.
[01:36:57] With the ebbs and flows of capital markets and things that we really are out of our control. But you can control a lot of your environment by, you know, building yourself to be able to sustain, you know, whatever wind comes your way.
[01:37:13] Kevin Choquette: Yeah, I dig it.
[01:37:17] So, Bill, thank you very much. I appreciate you taking all the time. I know you’re super busy. I appreciate opening up and sharing all this with the listeners.
[01:37:25] Any listeners gotten this far. Obviously, you know, my production guys always want me to say this. Subscribe or like it or put drop a review.
[01:37:35] I’ll just say, thank you, Bill, and if you want to say anything else, it’s the floor is yours.
[01:37:39] Bill Vanderstraaten: No, I appreciate the time and thank you for reaching out. And, you know, if they do a review, make sure it’s a nice one.
[01:37:45] Kevin Choquette: All right, thanks, Bill.
[01:37:47] Bill Vanderstraaten: All right, thanks a lot.
